Reneging on Aso offer after failed raise?
Received an offer in March-April of last year that would start in August of this year. Was told that they were in the middle of raising a ~$1B fund but I’ve learned that they’ve failed to raise anywhere close to their target and have stopped/paused on it. Would it be worth it to renege and stay in IB to re-recruit? Or would it be better to avoid burning bridges with the recruiter and getting some experience there before lateraling instead? Just not sure if I want to join (what seems like) a sinking ship or if the experience at the PE shop will be seen as better than IB for recruiting
Based on the most helpful WSO content, reneging on an offer is a delicate decision that requires careful consideration of both short-term and long-term implications. Here are some key points to weigh:
Burning Bridges: Reneging on an offer can damage your reputation with the firm and potentially with the recruiter who facilitated the process. This could have long-term consequences, especially if the recruiter is well-connected in the industry.
PE Experience vs. IB: Private Equity (PE) experience is often viewed as more relevant for lateraling within PE compared to staying in Investment Banking (IB). However, if the PE firm is struggling (e.g., failing to raise their target fund), it could limit your deal exposure and overall experience, which might not be as valuable for future recruiting.
Timing and Lateral Opportunities: If you decide to join the PE firm, it might be better to stay for at least a year before exploring lateral opportunities. Jumping ship too early could raise questions about your commitment and judgment, unless there are extenuating circumstances like geographic needs or the firm winding down.
Sinking Ship Concerns: If the PE firm is indeed in trouble (e.g., paused fundraising efforts), it might be worth considering staying in IB to maintain stability and re-recruit for a stronger PE opportunity later. However, this decision should also factor in your current standing in IB and the likelihood of securing a better PE role in the future.
Ultimately, the decision depends on your risk tolerance, career goals, and the specifics of the PE firm's situation. If you choose to renege, ensure you handle it professionally to minimize reputational damage. If you stay, focus on gaining as much experience as possible to position yourself for future opportunities.
Sources: Current IBankers: What would you do if a summer candidate reneged another offer to sign with your firm?, Is Reneging Actually That Bad?, Reneged HF, then recruited for UMM PE and realizing reneging might've been a massive mistake., How exactly should I renege?, Reneging BB SA Offer?
Should renege as you have good grounds to. Not worth going to a fund with no capital.
From an ethics and morals POV— I know it can be tough, but you should not hesitate to renege here. If it benefited them in the slightest, they would rescind your offer.
There are a few nuances here that will be hard for us to know, but if you truly think the fund is on a decline , you should definitely renege without thinking of the relational components.
One of these nuances is what PE recruiting has been like for you — what kind of bank are you at? What kind of looks were you getting from PE shops before? When you say they fell below the target, are we talking 100m or 900m? Etc etc
Would definitely renege. I'm usually against it (especially for the people doing so for tiny upgrades) but this is not going to be a good situation, and far better to just do a third analyst year and scoop up any immediate start opportunities.
If they raised $700m instead of $1bn, that’s probably fine and you can still go there. If they raised $200m, reneg. Plenty of first time funds miss their target but still get enough to be a “real” fund, and $700m would qualify in my opinion.
Its a material occurrence which changes the calculus. Renege, as others have suggested. They would expend of you without remorse. Just business.
Culpa voluptatem est reiciendis non vel ipsam totam quibusdam. Asperiores ut error sequi qui explicabo minima. Facilis laborum voluptatem cupiditate. Aut et id doloribus veniam cumque. Rem culpa deserunt placeat ut ex ut aliquam. Ullam sequi minima sunt blanditiis quaerat.
Perferendis optio veniam quas ipsa officiis. At placeat eum recusandae nam. Mollitia soluta magni aut voluptas et itaque assumenda. Magnam magnam sunt exercitationem sed.
Sit iusto eveniet saepe deleniti quia. Eligendi sapiente aliquid quam quae et. Vitae nulla qui iure. Tenetur sequi reprehenderit aliquam ea. Debitis quae et quisquam.
Sed sit aspernatur sit exercitationem aliquid voluptatem. Consequatur unde alias odit inventore non quisquam. Est reiciendis vero rerum perferendis quibusdam repellat nesciunt voluptas. Est nisi molestiae soluta quaerat.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...