For context, I've been with my firm for several years - lean small cap PE - and have managed to work my way up to running my own vertical. We're raising another fund that would bring the AUM close to $1B in my vertical if all goes to plan within a few years.
I've been juggling the idea of working with other groups … I recognize there are pros and cons with any firm, but the grass has looked greener on the other side and is tempting me to pursue something new.
On the one hand, we are set to be very well off if we successfully execute our business plan (and exit) - I was given a sizeable equity chunk in the venture for leading it. My direct team is fantastic and great to work with - we have developed friendships outside the office and enjoy working on deals together.
On the other hand, it's the same day-to-day and I am well within my comfort zone - in my opinion, fully complacent - and not challenged (which is my primary drive). The projected carried interest is just that - projected - and not due for a few years. The greater firm's culture is not conducive to success and I struggle to connect with the folks in other verticals on the level I do with my team. Senior leadership does not offer mentorship and is never satisfied, constantly reminding me that what I have accomplished isn't enough.
I realize that I am in a fortunate position, well-comped and effectively running my own business in my mid-20's, and am very thankful and appreciative. Yet … I yearn to try something new - so that I can be challenged and learn, so that I can meet new people and further my personal and professional growth.
Has anyone toughed it out to take the (potential) payday in a couple years? How did that pan out? What about the flip side? I'm all ears (and very appreciative) for stories/advice either way.
This doesn’t answer your direct question. But no harm in looking at new opportunities. Maybe you find a team and firm you like and have the same pay (or more!) no need for it to be black and white
what’s your current and future project compensation if plan is executed
projected *
Gonna need to see some numbers for what a mid 20s guy considers golden handcuffs
We talking 1m or 5m?
It kinda depends on the golden handcuffs. If you are raking in amazing money it might be worth it to stick around for a while since you are young. If you get a very sizeable check, that could open up more opportunities in the future and be worth sticking around for. However, if your version of golden handcuffs is 300,000 a year, look elsewhere for other opportunities if you are driven away from your current situation. Just make sure you are aware of the benefits you currently have and where they stand in terms of other careers or shops.
Thanks for the thoughts.
To your last point, my concern is that I could get pigeonholed into this space very easily if I don't make a move now, given the firm is small and has no reputation with other shops that would be of interest. Perhaps I have a flawed perspective, but it feels like the longer I stay the closer I get to my promote, which is great from a financial perspective, but the further away I get from continuing to develop and doing anything else in my career.
Is this really real estate PE? Because I feel like it's hard to get pigeon-holed as a PE professional in real estate, underwriting is underwriting and your skills are highly transferable regardless of vertical. If you're doing something that only tangentially related like property management tech or something then I could understand your concern, but real estate careers are long, and staying at the same firm from your mid 20's to your late 20's probably isn't going to harm you in any way.
The numbers are all relative, but as someone who is older and has received several of those promote/carry checks, there is a place where your personal life outweighs the money. Only you will know where that is (and honestly you will probably pass the mark and not notice it until later).
It is hard to plan 3-5 years in the future, but if you are thinking spouse, kids etc., even if you don't have them now, you should try and take those things into consideration to make sure you are working towards what you want career wise, but not having to completely put your personal life aside.
Thanks for the response - I sent you a PM.
No harm in looking at new opportunities (unless your projected promote is like $5M in 5 years). How much do these golden handcuffs work out to?
One thing I'll say is you mention a lack of mentorship from senior leadership - I would not use that as a driving reason to leave. I would say 95%+ of shops out there have leadership teams that have no idea how to actual lead and mentor, its a very rare skillset in deal-driven industries.
The promote could very well work out to more than that number ... but again it is projected (and I'm not counting my eggs until they hatch).
Your take on leadership/mentorship capacity being so rare is interesting - I figured my group was in the minority, not majority - is that not the case? I've not had any experience outside my own firm, which is another reason I've considered going elsewhere.
It really depends - I consider training and mentorship to be two very different things. Banks and big shops like mega funds have rigorous training programs to teach you the fundamentals of the industry. But in terms of mentorship, finding somebody you can go to with questions all the time, bounce ideas off of, and who will proactively act as a mentor in the workplace by involving you in things above your paygrade (at junior levels this could be as simple as letting you sit in on meetings/calls as a fly on the wall) is wayyyy more rare.
It's a very common phenomenon in deal-oriented industries and in services based industries like banking or law. The people drawn to those types of roles are generally attracted to the transactional work and are always focused on the next deal because that is their job. They purely focus on the transaction and not on the operations of the organization, which makes them less aware of the employees around them and their development.
I'm not saying it's not possible but its not as easy as in traditional corporate desk jobs.
If you're in a position at your age where you have a legitimate shot at the equivalent of $1M/year in carry that will pay out in the foreseeable future, IMO it would be pretty stupid to walk away from. You will NEVER find that type of profit sharing at any other organization in your mid-20s, that is late career-type money. That being said, I'm assuming your shop has a good track record and conservative underwriting practices so that those projected numbers are actually in the realm of what is possible.
You can always find a mentor outside of your current organization.
Do you have enough free time to find a challenge outside of work?
You're running your own investment vertical in your mid-20s and the firm AUM is $1bn? Outside of running your own shop, there won't be a whole lot of options that top that working for someone else at this stage in your career.
What sort of role would you ideally want to jump to?
You seem really naive. You have significant carry at 25 but want more mentoring and challenges? That’s what the money is for, man.
I don't have a ton of insight into everything else, but there are a couple points here to note.
First off, is it true that "being challenged" is your primary motivation? Because if you don't care about the money as much as the stimulation, there are a lot of options out there. I just think it is important to be honest with yourself - it sounds like being challenged is your motivation because you think that's what you are lacking at the moment.
Moreover, why do you care about "connecting with other verticals"? I'm not saying you shouldn't want that... only that it seems gratuitous. The people you work with, you like and get along with. You can't be all things to all people, so why not be satisfied with the fact that the people with whom you'll spend the vast majority of your working time with are on the same page? And while senior leadership may be pushing you... it sounds like you're in your mid 20s and in a relatively senior role. I'm sure I'm wrong, but maybe there is a chance that you haven't accomplished as much as you think? You wouldn't be the first person to claim an outsize influence on what you're doing, and take more credit for success than is due. Perhaps your senior management thinks they're the ones raising all the equity and sourcing all the deals, and you're just executing? Because at the end of the day your role should eventually be about doing those things, and not the day to day of underwriting deals.
Just a thought.
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