Looking for some quick opinions..
I currently work as a credit analyst for a large, global energy trading shop and have an interview with a start up PE company. What are the pros/cons of working for a small PE company? I've been working in credit for a year, does it make sense to leave this early on from a larger company and take a chance like this?
negatives of a startup fund - may not have established network for deal flow, and or deep relationships with bankers to win deals. Pressure of having just raised first fund and needing to perform out of the gate, fund might implode and not be able to raise second fund. Starting an office and having to nail down processes, procedures and other admin stuff is boring. Bonuses and comp will be scrutinized first couple of years.
TippyTop gave a good rundown of all the potential downsides, I'll do some of the upsides.
Pros:
Work should be much more interesting and at a small firm you'll likely work very closely on transactions with the partners. You'll get to do pretty much everything from sourcing all the way up to closing deals and working with the companies post acquisition. Comp should be higher and you should have the opportunity to really make a lot of money if the fund grows and performs well. PE, even at a small shop, also gives you the opportunity to move into a bunch of other interesting careers.
Cons:
Only other con I can think of is work life balance might be rough in the beginning. It depends on what the senior guys are like but if you're one of few associates you're going to get crushed.
I'd run hard at it and see where you end up. I'd make sure to do your own diligence on the size of the fund, background of the partners, their vision for the fund, partners thoughts on dealflow, paths to promotion, etc.
Fully agree. Though the one slight modification is comp could be higher with the assumption that you should get higher carry for being in the fund early, but upfront annual comp will likely be low and total comp is heavily based on fund performance.
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