Time to be a founder?
No ideas just vibes. Why aren’t we all tech founders yet. What’s holding you guys back? Do you think I could fundraise on the side while finishing up my associate years lol.
Based on the most helpful WSO content, becoming a tech founder is a mix of timing, resources, and execution. Here’s what might be holding people back and what you should consider:
No Clear Idea or Product: Many people hesitate because they lack a solid, scalable idea. As highlighted in WSO threads, you need at least a prototype or demo that solves a problem better than alternatives to attract funding. Ideas on paper won’t cut it.
Risk Aversion: Leaving a stable associate role for the uncertainty of a startup is daunting. Founders often need to be comfortable with the high probability of failure and the financial instability that comes with it.
Time Constraints: Fundraising while working full-time is tough. Investors expect commitment, and splitting focus between your associate role and building a startup might not inspire confidence in your dedication.
Network and Resources: Building a network of potential co-founders, investors, and advisors is critical. If you don’t have a technical co-founder or a strong VC network, it’s harder to get started.
Execution and Traction: As mentioned in WSO threads, early traction (e.g., pre-sales, user growth) is key to raising funds. Without it, even the best ideas struggle to gain investor interest.
If you’re serious about fundraising while finishing your associate years, consider these steps: - Start small: Build a prototype or MVP during weekends or hackathons. - Leverage your network: Tap into colleagues, industry professionals, or angel investors who understand your vision. - Validate your idea: Test it inexpensively and gather feedback to refine your pitch. - Be realistic: Understand that splitting time between a demanding job and a startup will limit your progress.
Ultimately, the leap to founder status requires a mix of preparation, risk tolerance, and timing. If you’re just “vibes” right now, focus on refining your idea and building a foundation before diving in.
Sources: VC startup idea - PE or VC interest? Are these numbers viable?, Q&A: Leap from S&T Associate to Startup Founder, Want to build a startup & raise some money? Part II, Software Engineering seems like the best job one could have, Q&A: Venture Capital Co-Founding Partner
Being a founder is way harder than being a PE associate imo. Founding a company is like wandering in the dark wondering if you're adding value to anyone while working just as much as in PE. Most successful tech founders can also code or have domain expertise. PE obviously doesn't teach you to code and builds market knowledge but not domain expertise (i.e., can you explain the processes 3 clicks deeper than what's in the operations section of the CIM).
Yeah. Having done both, founding a company is way harder
Thanks! I definitely want to start my own thing but don’t know when I’ll be ready/ how hard it is to leave and come back
I dunno man, maybe coming up with the next Fartcoin is a better use of my time...
Having done both, (left PE two years ago and raised $2M to start a hardware as a SaaS company leveraging AI) I would say that founding your own company is way wayy more gratifying than PE.
But again, we had a successful raise and are doing stuff we love.
I loved PE, but the culture and the people seemed very hollow.
I'm willing to bet I would have made more money long-term if I stuck out the PE route; however, given the last year has been so much fun, if I'm able to pull this off, I won't regret it.
Thank you, sounds like you have a lot to be proud of!! I agree PE feels shallow and the people are bots. Maybe there are investing spaces that are better but the idea of raising & doing my own thing is so appealing. Specially now when we have no real family responsibilities… takes a lot of courage to leave tho
How did you get into that field or did you just string together some buzzwords and come up with a product after
Haha, it does sound like it doesn’t it!
No, we just use hardware that leverages computer vision to take in information and we use other AI models to apply it for different use cases.
Being broad on purpose here since this is a forum.
Congrats! Did you leave PE to focus full-time on your idea? Or did you start working on it while in PE?
Hi, no I actually left to start an independent sponsor gig and stumbled upon the idea as I was trying to buy a company. I knew that the traditional PE route was going to be a slog and I felt my life falling away, even though I was a top performer (did more deals than anyone else in my class-- not trying to be cocky, but wanting to make the point that I wasn't unhappy because I didn't like PE or didn't want to do the work-- I enjoyed both.. the culture was just soulless and unforgiving to any meaningful personal life milestones that you'd regret when you die, that's why I ended up leaving).
Since I had already left... I had the freedom to explore the idea. My friends became my cofounders and knew their parts of the business. I raised the money and we put a team behind it. Was and has been honestly super fun.
Congrats! Thinking of doing a similar thing. How did you go about finding technical cofounders? Wou how did you think about leaving and formulating your idea while looking to buy a business?
I studied engineering, so I started there— saw who went on to work at startups.
Engineers are harder because they are hard to assess up front and they are less networked than PE folks. So they don’t all know each other and who’s good and who’s not. That said, you can spread a net wide enough and assess vs each other.
You want to find someone who is very scrappy/capable. However, the most important thing is that you can communicate with this person. We take for granted communication skills since everyone is so well rounded in PE.
You need someone who will understand the vision and the customer of what you’re building.
Then, just because you have a technical lead, you’re not done. You’re going to have to be meticulously involved in making sure the product you’re developing embodies what you’re wanting it to be.
Congrats and very happy for you! It’s definitely inspiring to learn that someone has successfully done this. I come from a similar background (engineering + PE) and am considering doing the same. Could I DM you with a few more questions? Thanks!
Furthermore, the people who say you need tech skills or industry expertise -- that's bull s***
The skills you learn in PE (if you worked a shop that did real due diligence, not just process work) prepare you very well to learn about an industry, find valuable insights, hire a good team, and get ahead of competition. You'd actually be surprised how low the competition is in certain sectors.
You can founder your way into a significant amount more freedom and value creation than you can working your way up the PE ladder. The risk, though, is something you have to actively manage, whereas the only thing you manage in PE is your boss's opinion of you.
Yes that’s what I was thinking as well! My firm does a crazy amount of diligence and we’re super hands on so feel like I have a sense of what’s needed.
Also can I dm you?
You can for sure DM me. I'll DM you since I'm anon
Bump
How difficult is it to raise money while also working in PE?
Being wfh 2 days a week makes it a lot easier. And it’s kind of similar workload to interviewing while working.
It would be doable.
Very different skill sets and a huge mental shift. In PE, especially at a huge fund, you are a glorified process manager.
As an entrepreneur you own every single thing end-to-end. It continues that way until the company is quite large, probably into 9 figures of revenue.
There's also SO much luck involved.
My friends running brands doing $200m+ are not any smarter than the guys running brands doing $20m. Usually it's great PMF and TIMING. Two of them built 9 figure brands off excellent customer acquisition costs during COVID because the other category competitors stopped marketing effectively. There's more to it than that, but you get the idea. I know a few VERY dumb founders doing ~$30m+ in revenue with 20%+ EBITDA margins all boostrapped and relatively young - under 35 or so!
Conversely, one of the smartest guys I know owned a furniture company during COVID. Their freight costs became INSANELY expensive. Demand was up, but their costs made no sense, and it wasn't their fault. Then, post-COVID demand fell off and the brand basically meandered since ~2020.
He's a great operator though, and that has very little to do with HIS performance specifically.
Where am I going with this?
Well, if you decide to be a founder and start a company, don't be upset if the first company or the first five companies fail or even meander. You just need good PMF + good timing...and sometimes it takes a few tries to get there.
I've personally been lucky a few times but I have also been very unlucky other times. It's just part of the game.
nice. Personally now is THE time to do a startup - what has traditionally been white collar services role can and will be starting to be replaced by AI in the next few years. That is a hugeeee market - think about how much humans cost vs compute (unless it’s o3 rn hahah)
Anyways upside is also huge look at anysphere, mercor, etched, Mach, etc. all fucking college kids. We PE people are the least ambitious ambitious people who have lack of initiative and we need to change that
What kinds of brands are your friends running? Other than external factors like competitors not marketing, do you think their was anything special about your friends' brands that helped them succeed?
Because people in Finance are risk adverse and no one on this website will ever tell u to take a shot and bet on yourself vs taking a promotion until you're like 40yrs old. Its definetly a mature take but imo it's a lame as fuck take too.
It's the ultiamte midwit take too since doing things young = unlimited risk tolerance.
Even if you fuck up horribly and have to BK...what are you losing in your early twenties? :)
The arrogance of the private equity employee astounds me.
Agreed completely.
I used to be one of them. I thought I was the hottest shit too (went PE straight out of undergrad).
It wasn’t until I bought the n-th business from a humble, hardworking, and aspirational founder when I realized their life was more full than all of my superiors.
I mean— they negotiated a jet in the deal so they could be home AND made a ton of money.
this just inspired me so I started looking for opportunities.
The problem is that the percentage chance of bootstrapping (or even using funding) to build a business so profitable that you can negotiate a jet as part of your exit is extremely low. I would argue that making MD is much more likely and less volatile.
Would you consider applying to an alternate MBA program where you are paid $100k salary for 2 years and given support to start and/or acquired a venture of your choosing?
i did launch a startup in college, which got sold to the college, and it was definitely a lot of fun, but it made me realize that there is a lot i need to work on and earn before i can make that a FT career, so i'm currently doing the ib --> pe --> hf path until i feel ready to launch another startup.
How would the IB --> PE --> HF make you a better startup founder? Lol. Just admit you're chasing comp upside (nothing wrong with that).
im learning a lot, but there's definitely going to be a point where i get stuck in corporate hell - when i got more than enough money to live the life i love, have good enough skills to start my own company and scale successfully, but am having too much of a hard time with upward mobility - that is the point i hope to leave.
of course, a lot can change in many years, and i may finish my career at a certain firm, but i definitely never want to be stuck in corporate hell.
starting and selling a company in college was so much fun, but admittedly, i did have a safety net in a way i do not now, as failure of the company would just mean that i just go back to my studies and post-grad job after.
even if i do become a founder, if i sell the company, it will no longer be mine, as the company i co-founded in college is now run by an entirely different group of execs.
I left PE a year and a half ago for a startup to learn the ropes of starting and running an early-stage company. This has been the most transformative time with some of the most valuable learning experiences and the biggest frustrations in my career. I'd rate my understanding of what I have to do as a founder and my potential risks & opportunities as very solid vs. effectively zero when I first left PE. I am 100% ready both skill-wise and mentally to go out on my own.
So what's holding me back? I don't have an idea. I don't want to start "just anything" - the company must have a large-TAM, be scalable, build on technologies relevant in today's changing world, etc. But finding that fit has been a massive challenge, which has made me feel like a worthless neanderthal with zero creativity. As soon as I find that idea, I'm putting every ounce of strength I have into developing it. But when that happens remains to be seen.
How did you approach your time at the early stage startup? How did you pitch yourself? What type of role / function did you jump into?
Considering this path and am in talks with a few early stage companies. Want to eventually do my own thing and feel this is the best path going forward for the next few years.
Joined as Chief of Staff to the founder. I was direct that I want to be an entrepreneur and am here to learn the ropes. This resonated with him, but I wouldn't recommend saying this in all situations.
My role still skewed towards finance by virtue of my background, but I was clear I wanted other responsibilities, which the founder was happy to provide. I stood up a new sales team, rebuilt all sales incentives from the ground up, created marketing campaigns, managed headcount, and led exit planning. We were small enough that I actually lead each initiative and did the lion's share of the work vs. meddling in a functional team's business. I also developed a relationship with our Board and was looped into corporate matters as the only non-C-level with a board observership. This was about as much of a well-rounded experience as I could've hoped for. I also developed soft skills around managing execs' expectations, negotiating, navigating corporate politics, and running org-wide projects that PE wouldn't have given me until a more senior level.
I recently took over the entire finance function, turning into a CFO-in-training. The recognition is nice, and the comp boost is much-needed - my old role paid a little over half of what I made as a PE associate. But my role is now narrower, plus I don't want to lose track of my ultimate goal to start a business. Between a finance career as startup CFO vs. PE, I'd go back to PE. PE wins on money and relative certainty, plus finance outside of investing is a mind-numbingly boring back-office support function with little travel or perks that I've actually come to like in PE. I'd argue the difference between founding a startup and working at one is massive, and few people overlap between the two.
Have tried (not enough) and realized a lot of value comes from inspiration from existing products and making them better or bringing a product from a similar market / country to your specific.
Not always about reinventing the wheel at all…
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