Starting your own PE firm
Title. Curious the viability and your perspectives on the ability to perhaps move to a LMM or MM PE fund. Learn the playbook. And then start your own PE fund with like 1m saved up.
Love this question. Just to be clear, are you saying that you would want to spend 3-5 years at the PE firm, or build a longer career first? I am going to assume for the purposes of this response the former.
Think at the end of the day you have to consider: the investment management space is CROWDED. Why should someone give money to you versus an H&F , or a smaller firm with bros who have a long and storied track record of returns? Why should a founder, who has poured his blood, sweat, and tears into creating his business, sell to you versus more established firm? You need to have great answers to these questions to do what you're saying. Maybe you do, but I think the fact of the matter is these are tough questions to have answers to at 27.
Also, the economics of this for you would probably mean that you're not going to make much money for a while.
I think its a bit different if you're coming from a lot of money, but at the creating the fund stage, it becomes a lot more about sales and networking, which you're probably not going to have at that stage.
Thanks for the thoughtful response. Your responses make total sense. Re having answers to the questions, I imagine I start with 1 small business in a niche, and use that to gain credibility. In the niche I hope to have access to a network, which is a selling point. I will craft and develop my skills in being founder friendly. I also hope that one of the many qualified older bros who are too risk adverse etc to do this will partner with me. Im sure you agree those bros are out there.
Lots of ifs. You are right. But dare to dream and I like to bet on myself.
I also come from medium money. Not 10s of millions...
If I can start young and do this start-your-own-micro PE firm, I will make enough money- if all things go well of course.
Ya man it sounds like you want a search fund — that is definitely a little more doable at 26-27. Still not easy by any means, but not impossible .
I do commend you for thinking big also.
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