Startup Fund Out of Undergrad - Next Steps
Looking for advice on my situation/possible next steps.
Background: Currently a second year analyst at a very small, startup shop. The firm officially opened up ~24 months ago and I was the first (and so far only) analyst hire with a VP of Ops and two partners above me. I interned for the two partners at a previous firm during undergrad with the knowledge that they would be opening up their own shop, and so once they did I decided to take a chance on them and forgo the traditional IB path out of undergrad in hopes that I’d be gaining some pretty differentiated experience with potentially great upside if everything works out.
Fast forward to now, and things haven’t really gone as planned. Up until a few months ago, we had essentially been operating as a fundless sponsor, raising capital on a deal-by-deal basis targeting significant minority/majority stakes in distressed, unprofitable venture-backed tech companies. Given the fast-paced nature of the deals we’re looking at (ie these companies need money now), having to raise $$ for every deal meant we were losing out to funds that have capital ready to deploy immediately. We’re now in the process of raising a small fund (<$100mm), but fundraising hasn’t been looking great – less than two months out from first close and we’re only at ~20% in what I would consider pretty soft commitments from family offices in the partners’ network. We have also yet to close a single deal this year, largely due to the timing issues mentioned above (closed three deals last year, sold one asset where we effectively took on the bankers for ~5 months). Note that deal flow has not been an issue.
Comp is also very low - $70k base (less worried about this, sort of just comes with being at a startup), no bonus last year, no insight into bonus this year, and minimal insight into what carry will look like on the fund we’re currently raising (though I know I will be getting something and think at this point I have enough leverage to negotiate a good deal for myself).
I plan on sticking it out in the near term to see how fundraising ends up playing out, but if that doesn’t work out I’ll find myself 2.5 years out of undergrad in a position with far below average comp and zero brand recognition.
I guess I have a couple questions: 1) What would you do in my position, and 2) Do I have any chance whatsoever at moving to a reputable growth shop (or similar) given my lack of IB experience? Assume my technical skills are roughly on par with your average second year IB analyst.
Thanks in advance.