Small PE firm - how to evaluate
Would you consider an offer from a very small PE shop as a senior Associate at a BB in banking trying to gtfo? MF is seemingly not an option for me and don’t think I’d want banking 2.0 if offered. Think 5 total employees and out of a we work. Fund size ~500 million and growing and founder has a seemingly good track record. Is it possible to lateral if it does not work out?
Pitch is: entrepreneurial and wear many different hats (investing, fundraising / IR, involved in businesses operationally, etc), good group of people and wlb / flexible wfh, more responsibility earlier in career, etc. Up front about cash comp being lower but having higher economics.
Would love to hear the pros and cons. Don’t have exact comp #s and obviously there is a cut off where it’s not feasible.
In the same boat. I guess you asked for carry?
Don’t think I’d consider if not, but someone tell me if I’m wrong
Laternal to?
If you are joining a small fund and taking career risk then things to argue for are: above industry carry for your level and an agreed promotion at the next fund raise.
Also worth understanding LP base. $500m is decent but given the fundraising climate you want to make sure there are some long term LPs.
One thing to consider is the WLB pitch. If you are doing a bunch of additional tasks on top of sourcing and portfolio management then that doesn’t seem logical. If the founder is too laid back / not hungry because he has made his money then is that the environment you are looking for / want to learn from? Maybe not the case here but just something to think about.
These can be very attractive situations if you end up at a good firm
$500MM for a fund is a decent size, that's at least $7.5MM in management fees a year (assuming 1.5% fees with some LPs getting a discount given this being a first time fund) surprised they're working out of a WeWork. What are the partners background? What is the comp package like, and I would definitely ask for carry given that you're taking "founders risk" and joining as an early employer. Opportunities like these can be incredibly attractive and lucrative if things workout, therefor I would try to hash out a lot of things early on. How are you feeling about the opportunity?
Do some LinkedIn searching to find people who have worked with the founders in the past, preferably as junior team members. Direct message then on LinkedIn and ask for their advice / feedback on working with them. That’s the best way to understand what type of role and culture you’d be stepping into.
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