What To Do With Life
Quick context - I'm currently an associate working in MF PE. I'm on Y3 with 75%+ confidence I'll be looking for a new job next summer (firm has "hard ceiling" 3-year associate program) and I previously worked in a top IB group and attended H/Y for undergrad. Business school is out of the picture this year as I missed application window.
I also grew up in an extremely fortunate upbringing. I have a $25-30M trust and I have made about $1M in career savings since college, providing ample financial flexibility. With this financial cushion... and with my resume backdrop... I don't have much idea what to pursue at likely end of MF PE associate program
#1 - Venture seems devoid of quanitative rigor
#2 - MF PE feels exhausted with return compression and no real path to partner promotion
#3 - Not interested in SMB roll-ups as it's too sub-scale / operations-focused
#4 - HFs feel secularly challenged & declining industry
#5 - Would contemplate entrepreneurship, but don't have idea for company
Solving for 70-80hour work weeks. Want to avoid Apollo working 120+ hours but think I'd go crazy with lack of stimulus within 9-5PM corp development role. Moreover aiming for high econonic upside to take big swing and hit a "higher level" type of NW if possible. This latter statement might sound shocking, but SF / Palo Alto HCOL leaves much more to be desired. I generally feel directionless.
Hey man - in a very very similar boat. I have a few thoughts - shoot me a DM
Also in a similar position / have similar views on each of the typical post MF PE paths. Happy to DM but think might be helpful to share any thoughts publicly as well for everyone’s benefit
OK i'll bite. After doing a lot of thinking, I split the decision into two primary considerations: 1) What you enjoy / find meaningful and 2) What your risk/reward appetite is.
1) is most important because you get one life and should spend most of it doing something you relatively enjoy. You will also only be able to be really good at something if you enjoy it, and most of the money in any field comes from doing it for a long time and becoming good at it.
2) is the primary way to benchmark these opportunities in the absence of enjoyment. Opportunities are all fairly priced in, with the ranking of highest risk/reward roughly as follows: founding a startup, doing a rollup, joining an early startup ---> hedge fund ---> venture capital, growth equity, private equity, investment banking (pe portco / corpdev sits somewhere in this bucket too). The closer you get to PE/IB, the narrower the band of outcomes is, both positive and negative. You can also go to a smaller/startup fund to shift the scales to higher risk/reward. General net worth estimate for the large-cap PE/IB band is ~$30M let's say for the current class of associates, assuming you make it to the partner level and sit for a few years.
I think the right approach is to talk to as many people as you can in all 5 of these ops you laid out and then figure out which sounds the most enjoyable (and you already know the IB/PE life). And then layer on your personal risk-reward as another consideration and make sure it aligns with your personal tolerances. The worst thing you can do is sit - as long as you commit, even if you don't end up liking it, it's better than sitting in a role you are frustrated with and not moving forward.
Also a few responses:
#1 - Venture seems devoid of quantitative rigor - generally agreed, but it rewards having access to top founders, being able to assess technological evolution, having vies on what new markets will be created, and making decisions in the absence of information (like HF)
#2 - MF PE feels exhausted with return compression and no real path to partner promotion - this generation is worse than the last, which is also worse than the 1980s generation when PE was founded. Retail inflow might prop the sector up a bit but it's probably a LSD/MSd growth industry for our generation. Really good career for people who are ultra risk averse, love the work itself, are strategic thinkers (e.g. thinking about what large companies would fit well together, building mgmt. teams, etc.), manage bureaucracy well, and do not mind long hours
#3 - Not interested in SMB roll-ups as it's too sub-scale / operations-focused - highly disagreed on this point, I think it is a unique opportunity because most MFPE associates and VPs have the skills after a few years but not the risk tolerance to do SMB roll-ups. It's by no means easy, but if you find a fragmented industry with large platforms to exit to, find the precedents on sales to these platforms, and just make sure you are buying at a discount to the precedent multiples, there should be multiple arb there. AI is a new value lever here and could make fundraising easier. Several precedents of platforms with successful outcomes as well in recent years which proves the poitn
#4 - HFs feel secularly challenged & declining industry - generally right but also the highest immediate comp for juniors, priced in by the short average career length. Even more so than the other opportunities, need to love the work itself to last a long time
#5 - Would contemplate entrepreneurship, but don't have idea for company - I have the least thoughts on this one, but TBH most of my founder friends are also the ones who enjoy their jobs the most. I think the idea is actually a lot less important than you think, given all my friends with successful exits have switched their ideas 3-5x before finding PMF. But you have to be ready to take a huge comp discount, and assume the 95% scenario holds where you will make less than a career in IB/PE/VC/etc. (with the upside case being far higher than any of those said careers)
Go work for a top tier AI startup
Where does one find a job at a top tier ai startup
If you’re interested in entrepreneurship but don’t have an idea this is a pretty easy case of go join an early stage company. Since you have the financial backstop to basically never have to work a day in your life I’d suggest Series A/B stage assuming the company has PMF.
You want to take a big swing on equity upside and you’ll have to grind for sure (not more than 80hrs though). Trouble is a company this early won’t have a role that’s 1:1 with what you do, so likely will need to do mix of Finance/FP&A/Biz Ops or like Chief of Staff.
Eh, go do your MBA next year at GSB or HBS and network hard in the VC/Tech ecosystem. You’ll figure it out after that. You just need a break, clarity and fun in your life man. The next path will come soon enough.
This is very dependent on your family's connections and the professional ones you've made in your career, but starting an independent sponsor might be a way for you to find that meaning that you're chasing. It utilizes the skills that you've developed over the last few years in an entrepreneurial way. You would be able to scale at your own pace instead of fund raising and hitting the ground running, and with enough of a track record you should be able to raise a fund in the future should you find a niche that you thrive in. The IS model would allow you for high upside and be able to find companies in the size range and lifecycle that intrigues you (with obvious constraints on capital raise, but flexibility to structure the deals with seller notes, rollover, and mezz to supplement what you lack in senior and equity).
If you find a sector that interests you, you should network ahead of time for operations executives in that field and partner with them on the venture. You could take a step back from the operational aspects and sacrifice some of the economics to them while providing them the capital and deal structuring that they are lacking.
Not sure if you're willing or able to take that kind of risk in your life, but with a strong enough track record and connections that's what I would do in your shoes.
gay. go live on the beach.
Your reason for avoiding VC is the flimsiest of the 5 bullets. Either get comfortable with the lack of quantitative rigor in VC (who cares) or alternatively, find a way to bring some quantitative rigor into the role. Your other 4 bullets are actually pretty logical. I think you can find a way to make VC work and that can set you up with your company idea for entrepreneurship later.
dagestan and forget
Honestly man, I think you're in a great spot. First off, even with the wealth connectivity, I applaud you for putting in a couple of years to grind. Assuming you did banking pre PE, you've been likely working pretty hard for ~5 years now, so a good time to reflect and figure out what you want to do.
Personally if I were you, I'd go to business school to start. It's a great place to hang out for a couple of years, make some great friends, and take some time to explore and develop more of a perspective on what might be interesting. It's a massive opportunity cost for most, but if finances aren't the biggest of your concerns, it's a great way to expand your network, especially amongst your family office, UHNW peers. It might sound indulgent, but it's the way the world works and it's who you/your family are, so I'd lean into it.
From there, I think it's on your to carve out your own path. What did your family do to generate so much wealth? You don't need to answer that, it's rhetorical, but there's likely some connection that would allow you to expand on/grow that business/enterprise.
If I'm you, going to work for a run of the mill VC/hedge fund/corporate is kind of uninteresting to me, I'd leverage my network to see if I could be the owner of something more creative and take some bigger swings. There are so many family offices out there doing off the beaten path types of deals and at times, deploying big money into underoptimized areas of the economy. I'm biased, but doing something like partnering with a group to ... I don't know but a group of McDonalds, to combine two mid size timber companies in Canada, to own a bunch of shipping ports, etc would be more interesting to me than a Corp Dev job or even an analyst role at a ~$2B AUM single manager HF.
You have the unique opportunity to really be able to pursue something that interests you and you're able to both take risks and likely bring some capital with you to deploy. Why go back and be someone else's employee?
Just my 2 cents though.
How about partnering with someone via search fund? B-School would be a great place to explore; have insight from M2 if you want to DM.
You're basically in a situation where you, your children, your grand children, and your great grand children don't need money. You also completed early career training that will give you a professional and intellectual toolkit to excel at anything you put your mind to.
Go do something else with your life that doesn't involve accruing more money. Public service, non profits, journalism, medicine, physical therapy, acting, music, writing, comedy, etc. You have been given a very very rare opportunity to define your life by something other than making money and because of that you can have a very interesting life. The world is truly your oyster - why waste more time staring at excel, going to an office, and having a predictable life and career?
+1 to this.
Credit
On the VC point, why would 'lack of quantititve rigor' be unattractive? Not sure if the VP bootlicking thousand-row modeling is an empirically sound way of investing either.
Back in school the best modelers correlated with good investors (and I'm sure they got good jobs). But in practice, we've learned good investing means much more than the model. Relationships, timing, and conviction rule - especially (if not most) in VC. Plus VC has a lot of ambigious upside with the AI thing, and if you enjoy the Thiel / Anderson cerebral/philosophical stuff, I think VC would be much more interesting than PE. Doubt VC people are worse off investors because they don't know how to tweak CAPEX assumptions at 2 am.
More anecdotally, I was an engineer so I definitely idolized the quants and numbery people, since I assumed that was the most intellectually rewarding. Now I have much more respect for the thought leaders in the space. Give them a read!
RE.
Feel free to DM
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