When can I launch my own fund?
Do you typically have to be at partner/senior MD to launch a fund? Senior VP? Principal the earliest? I'm not tryna work for someone else the rest of my life and want to get on my own ASAP... but also know I can't jump too soon. For background, I'm going to a top ib group and plan on going on cycle next year. Thanks in advance for the advice
Whenever you feel you have the adequate network, experience, savings, and credibility to succeed. Most don't jump at a junior level due to lack of funds/network - not to mention being able to survive X amount of years with little to no income.
To add to this, if want Institutional captial then you’ll need to get through their diligence process - an important part of which is deals you sourced, created value in and exited. Just based on this criteria you can see most investment professionals would have 10-20 years of experience.
However, if you are ok to deal with family offices, friends and family money. You can start much earlier.
Bump
You need a solid track record that stands on its own, and the network of potential LPs to give you capital.
As stated above, the biggest hurdle is getting LPs to trust you enough to give you capital. The two instances I've seen of guys that were able to go out on their own without grinding up the ranks of an established fund both had a significant amount of family money / connections to seed their first funds.
how much money are we talking here? Would 25MM be enough?
I've seen people as junior as Senior Associates start fundless sponsors. If you let people evaluate your stuff on a deal-by-deal basis, it's a million times more derisked for LPs than "let me give this guy a huge check to blindly manage"
If you're looking to raise committed capital... Senior VP / Principal is probably the most junior you can do. It's a lot easier if you jump after being MD for a few years for a few reasons... some LPs categorically will only work with former partners, some firms may not give attribution to anybody more junior than MD, and the incremental benefit of an extra couple years can be high (i.e. you've seen a fund through a full cycle, been involved in more investments from end-to-end, had more exposure to IC dynamics, portfolio construction, etc.).
what about jumping after senior asso/early VP to do fundless sponsor, do 1-2 deals, then launch a fund and try to go up market. Is this feasible? Should I try instead to build my track record at a solid buyouts shop?
This is not common, especially swimming up market. People are rarely successful at doing their own thing before MD, and doing 1-2 deals is nowhere near enough so you'd be at the fundless sponsor stage for years. Unlikely you'll have a massive network that trusts you before the MD stage.
And someone leaving a big MF at aso/VP to do their own thing kind of invites questions as to whether you were getting promoted, doing well, etc. Your track record needs to stand alone, not behind the name of your MD or big famous firm
Love the energy and hustle but I think the best seat for you is at a name brand large buyout shop. Maybe move once or twice to grow your network, but the most successful guys starting their own fund have several years of MD under their belt first
I really fuck with the energy man. Nothing invigorates me more than the thought of going out and building a product or company myself. I hope you keep that fire. Don't let anyone tell you otherwise.
Respect, hope you make something of yourself too
What type of fund? Hopefully not PE or vanilla HF as those markets are pretty saturated…
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