Asking for carry - how and when to do it
I am a senior acquisitions associate at a small but successful development shop. I’ve been with the company four years and am now the CEOs right-hand man in many respects. He has repeatedly mentioned that I am very important to the company and that he knows I’ll be asking for carry at some point.
I think that day has come and I’d like to hear how others navigated this request. For those that asked for it and were successful:
- when did you ask (how many years in/what level)? I have no idea what is standard
- how did you ask? Did you prepare any sort of deliverable
- how did you know it was time to ask?
- how did you know how much to ask for? Did you make a specific request or just ask for carry generally?
Bump
Unfortunately promote/carry is one of the many things in our world where no “one size fits all.” It can vary greatly based on your experience, the structure of your firm (does your firm have a fund or do you guys source new LPs for each investment), how much equity your firm typically deploys each year / number of deals, etc.
I found myself in a similar position a few years back - feel free to PM me if you want to share some of those details and I might be able to provide some additional insight based on my experiences
PM sent - thank you
Any other thoughts from the community?
I wrote my boss a 5 page “request for promotion” highlighting my request and why I think I'm deserving. It contained a detailed self assessment and highlighted areas of potential growth with actionable steps on how to achieve them. It’s a bold move (albeit done in a respectful way) so I’m going to sit on it for a few days.
Another option or step in that direction is to ask for coinvestment opportunity as well - you are not getting the free and clear carry but you are putting your money where your mouth is and showing you believe in your groups projects and are willing to invest in them - also can make a stupid amount of money even if it has more risk than pure carry
I would recommend against a written submission, these things are better addressed with an in-person conversation; plus, bosses generally respect the direct confidence required to ask for a comp restructure. My advice would be to convey that you appreciate the opportunity to grow with them and would like to continue to help do so, but feel your contributions (list some succinctly from last 6 months) warrant a restructure of how you are paid. Carry varies wildly between shops but assuming it is a small company and you are not taking any partner level risk, 1-4% of the developer promote cash flow for the deals you work on is not unreasonable (aim high so you have wiggle room to negotiate). I would also try to do the same with your cash comp. It may be aggressive but if you provide logical backup for your reasoning grounded in your contributions to the company and market compensation data points, and are respectful/keep the tone of the conversation positive about the future, I bet you will make headway.
Bosses expect this kind of dialogue and negotiating is part of our business. Advocate for yourself, be aggressive and try to push the envelope within the boundaries of what is generally reasonable based on comparable data.
This is great advice. Thank you. Some one else in my company told me I was coming off super soft and that it was a no-brainer for me to ask.
I may still send some bullets in my email to them asking for an in-person meeting to discuss. It's my style and I think that giving them a heads up is helpful vs coming in hot.
I don't think its soft. I think by putting it in writing you are allowing yourself to drill down in more detail and mitigating the risk of leaving an in-person meeting with some detail left out.
Obviously - you are going to have a follow up in-person where you can be more direct etc which I know you are aware of...I'm going to be asking for a raise soon, so thanks for the idea. I'll be drafting something like this.
Good luck on your potential promotion
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