Quant researcher -> T1 VC

I am a QR at one of (Citadel Securities / DE Shaw / Jane Street) and was recently toying with the idea of trying to transition to an investor role with PnL cut at a T1 VC (not exactly sure what is considered T1, but something like Thrive Capital, Greenoaks, Sequoia etc.)

My main reasons for considering this switch is:

QR is very stressful, constantly having to maintain and come up with new alphas
I am an ~average QR, many people in my firm are smarter and work even longer hours. Likely there is a ceiling to my career as a quant
I previously worked in the tech industry as a SWE, overall prefer tech culture
Prefer low stress + medium comp >> high stress + high comp

I wonder if anyone has seen a transition like this? Can partners at VCs make 7-8 figures YoY or do they only get big bonuses if a portfolio company exits? Also let me know if this is a case of grass is greener on the other side :)

5 Comments

monkeynke

IB

9mo

what is comp like at these funds?

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VC

Investment Analyst in VC

9mo

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I'm a jr investor at a fund similar "tier wise" to Thrive/Sequoia so can offer my perspective.

To address a few misconceptions in your post:

You do not get a PnL cut at these firms as a junior investor (maybe in rare sourcing-related cases but not the norm). Your job is to source or work directly under a partner - both of which are generally 2/3 and out programs without a direct partner track. This does not apply to Sequoia/Thrive but does apply to the majority of T1/T2 VCs.
Getting a job at a T1/T2 VC is incredibly incredibly hard, harder than getting a job in any other type of finance. You need to either have an A+++ network, be very smart in a certain industry (I'm talking publishing research papers, etc), have phenomenal entrepreneurial exp, ideally multiple of these, and even then it might not be enough - you truly need to be exceptional. Also, go look at the headcount of KP, FF, Index, and other T1/T2 funds and check out how often they hire and from what backgrounds.

To be frank, I think making a jump to a firm similar to the few you mentioned is close to impossible, especially since you seem to be looking for a chill / relaxed job. You really need to love this stuff and have a passion for it. Also, the fact that you mentioned Greenoaks and speak to compensation/hours as points for making the transition shows that you don't know enough about the industry - would recommend you read as much as you can.

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Stock Splits 2022

pbandjpartners

VC

8mo

This is a perspective from someone who went from a quant adjacent role to running their own money - idk you can call me an angel investor or a boutique proprietary VC cutting small checks or whatever but I do have a systematic approach to things. Which makes me closer to a one man VC than an angel.

If it’s relevant info - I also used to run my own stat arb scheme for a while couple years back.

Couple questions you should ask before

Why do you want to be a VC? You should know that venture capitalists are entrepreneurs themselves. They start with a very specific goal they’d like to achieve and figure out that investing is a great way for them to spend 80% of their time and energy. No one really spends that much time thinking how their life will change because they’re focused on changing other people’s lives. This is the same whether you’re a small or a large VC - the mindset is similar it’s just the type of network and knowledge you bring to the table that’s different. Only leg up that larger older VCs have over small and new ones is larger older ones have knowledge and network from the past to fall back on. But AFAIK, every venture investor no matter their fund, need to stay on their toes a little bit and stay entrepreneurial.
Do you have what it takes to be mentally flexible and quickly adapt? The quant funds you mentioned are known to focus on short-tail opportunities - which requires scaled out infrastructure and running the same playbook. Very different from long-tail shops like HRT where you’re required to constantly find new opportunities to trade. Entrepreneurship is almost always about finding those long-tail opportunities and turn them into short-tail for the world. I think even partners at tier 1 VCs, actually especially them, spend a lot of time trying to understand how the world will change and explore undiscovered areas.
Can you handle some drama? Types of people who get attracted to new ventures are always either the worst or the best people. You’re gonna see some weird and ugly shit.

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When in doubt, use more peanut butter

thelntd

?

7mo

pbandjpartners:
This is a perspective from someone who went from a quant adjacent role to running their own money - idk you can call me an angel investor or a boutique proprietary VC cutting small checks or whatever but I do have a systematic approach to things. Which makes me closer to a one man VC than an angel.

If it’s relevant info - I also used to run my own stat arb scheme for a while couple years back.

Couple questions you should ask before

Why do you want to be a VC? You should know that venture capitalists are entrepreneurs themselves. They start with a very specific goal they’d like to achieve and figure out that investing is a great way for them to spend 80% of their time and energy. No one really spends that much time thinking how their life will change because they’re focused on changing other people’s lives. This is the same whether you’re a small or a large VC - the mindset is similar it’s just the type of network and knowledge you bring to the table that’s different. Only leg up that larger older VCs have over small and new ones is larger older ones have knowledge and network from the past to fall back on. But AFAIK, every venture investor no matter their fund, need to stay on their toes a little bit and stay entrepreneurial.
Do you have what it takes to be mentally flexible and quickly adapt? The quant funds you mentioned are known to focus on short-tail opportunities - which requires scaled out infrastructure and running the same playbook. Very different from long-tail shops like HRT where you’re required to constantly find new opportunities to trade. Entrepreneurship is almost always about finding those long-tail opportunities and turn them into short-tail for the world. I think even partners at tier 1 VCs, actually especially them, spend a lot of time trying to understand how the world will change and explore undiscovered areas.
Can you handle some drama? Types of people who get attracted to new ventures are always either the worst or the best people. You’re gonna see some weird and ugly shit.

Can I ask why and how did you switch jobs like that?

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What is VC?

pbandjpartners

VC

7mo

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Quant researcher -> T1 VC

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