To Stay or Go?

I am a VP at a LMM fund. Based on culture don't think I want to stay here forever. Have a liquid net worth of about $1m. Another $300-500k of theoretical vested carry daw. Have a business idea i want to pursue but I am debating timing. Have a ~$1m tranche of carry DAW that vests if I put in 1 more year. Would take my theoretical net worth assuming carry payouts to an eventual ~$2.5m. Should I wait it out or just go start a business now? 

6 Comments
 

Based on the most helpful WSO content, here are some key considerations to help you decide:

Reasons to Stay for Another Year:

  1. Financial Upside: By staying an additional year, you secure the $1M tranche of carry, which could significantly boost your net worth to ~$2.5M. This financial cushion could provide more security and flexibility when starting your business.
  2. Risk Mitigation: Starting a business is inherently risky. Having a larger financial safety net could reduce the pressure and allow you to focus on building your venture without immediate financial concerns.
  3. Optionality: If the business idea doesn’t pan out, the additional carry could provide a stronger fallback position.

Reasons to Leave Now:

  1. Passion and Timing: If you’re deeply passionate about your business idea and believe the timing is critical, waiting another year might dilute your enthusiasm or miss a market opportunity.
  2. Burnout or Culture Fit: If the culture at your current firm is negatively impacting your mental health or productivity, staying another year might not be worth the financial upside.
  3. Opportunity Cost: Delaying your entrepreneurial journey could mean missing out on valuable time to grow and scale your business, especially if the market conditions are favorable now.

Key Questions to Ask Yourself:

  • How confident are you in your business idea, and do you have a clear plan for execution?
  • Can you afford to wait another year without losing momentum or market opportunity for your business?
  • Is the additional $1M in carry worth the potential delay in pursuing your passion?

Suggested Approach:

If the business idea is time-sensitive and you’re ready to commit fully, leaving now might make sense. However, if the idea can wait and the additional carry significantly strengthens your financial position, staying another year could be the smarter move. Ultimately, weigh the financial upside against your personal goals and the timing of your entrepreneurial aspirations.

Sources: Overnight 23-year old BTC Millionaire? Life Choices, Why You Should Reject that Start-Up Job, Overnight 23-year old BTC Millionaire? Life Choices, Staying a third year as a PE associate vs. doing something nontraditional, Join startup HF or pursue MBA? Seeking advice..

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

All of the carry vests immediately in 1 year? I would just stick it out if that’s the case. That plus your cash comp should give you a meaningfully higher net worth. You might also feel like you have more of a cushion when pursuing your biz. 

I have a similar urge to go a buy/operate a biz and am in similar NW position. But it’s hard to turn down a chance to double your NW at that size for sticking it out 1 more year. 

 

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