Leaving new Tiger Cub hedge fund for startup

Hi everyone, 

I currently work at one of the tiger cub spin offs (D1 Capital/Anomaly Capital) and was wondering if I could get career advice from anyone of the older audience on here. 

I was able to join one of these funds at the ground floor. I'm currently an analyst and have a clear path forward towards being a PM. I recognize how lucky I've been in my career, but I also recognize that I'm not necessarily happy either. I don't like having to live in New York, the work itself is boring at this point, and the thought of doing this another 15 years just doesn't excite me.

I recently received an offer to join an early stage startup (less then 10 employees) as head of strategy and development. The startup is located in Colorado, has a very vetted founding team, pays about 25% less, and seems genuinely interesting to me. I will receive equity in the startup as well. 

So am I stupid for considering this? There is a very clear path at my hedge fund to make PM and then make real money. I have a great relationship with my team and the founder, and it is a very defined path going forward. Obviously the startup has none of this. The startup seems vastly more interesting though, it's in a place I would like living, and the startup scene in Colorado seems to be thriving with plenty of other opportunities if this one would fail.

I genuinely have no idea what to do. I don't want to completely ruin my career/life and was wondering if any of you have been in a similar situation or if you have any life advice in general? 

Thank you in advance to anyone who replies. 

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Comments (25)

  • Intern in IB-M&A
May 27, 2021 - 7:16pm

I think you're stupid if you stay in the job you hate, but that's just me.

Money isn't everything. Yeah you're in a lucky position and many people would kill to be in the position you're in, but would YOU kill to be in the position you're in? It sounds like you wouldn't. If you'd be happier elsewhere, you're dumb for not pursuing that opportunity.

As far as you know, the tiger cub blows up next year and you're out of a job anyways. I guarantee Bill Hwang never saw it coming (despite his insane leverage), but it happens sometimes. Then where's your path to PM?

Again, it's not about the money - it's about being happy and living within your means. You could wind up rich at this startup and more fulfilled than ever. You could also realize you love the HF job and wind up more fulfilled than ever in 3 years. It's up to you to do the self reflection necessary and decide where you want to end up. 

  • Research Analyst in HF - EquityHedge
May 27, 2021 - 7:22pm

This thread doesn't make sense on so many levels. D1 and Anomaly don't have PMs as they are single managers. Maybe you're referring to something like Junto or Steasfast which have pseudo-PM roles, but those funds have been around for a decade or more. 

Further, if you had a clear line of sight to PM,  you would be making 7 figures, as the high performing senior analysts do in these funds. You'd need to do this job for another 5 or 7 years to retire, not 15. How is the startup only a 25% pay cut? 

The fact pattern does not check out to me. I would have a hard time turning down 7 figures for a startup job. Entrepreneurial spirits can wait a couple years until I've amassed a fair bit of wealth, IMO. To each their own, though. 

May 27, 2021 - 8:25pm

D1/Anomaly are in the process of building out the investment team to mimic the structure of Viking Global. Basically allowing for a handful of PMs to run a book on their specific sector with an analyst underneath them. 

The 25% pay cut is based on my current take home as an analyst. This pay cut obviously increases drastically the longer I stay at the fund, which is the one thing that's weighing the most on my decision to leave. 

Like you said, there is a clear path to wealth creation at the fund. At the same time, if the startup gets bought out there's also the chance for wealth…and I'm assuming the startup path to money is significantly more fun than the hedge fund path is. 

I suppose I'm also looking at long term prospects as well. In my opinion it's getting harder to justify the long term outlook of the hedge fund industry compared to tech. Factoring in the cost of living in New York, raising a family here, home buying etc… even though my role pays well, the money doesn't really go that far here.

  • Research Analyst in HF - EquityHedge
May 27, 2021 - 10:06pm

Interesting strategy to replicate Viking structure, makes sense given heritage. I struggle to reconcile the modest pay cut and clear path to PM. If it's a modest pay cut then probably wouldn't be that clear path to PM, in which case going startup route makes sense given your desired interests and preferences. However if you are actually in clear line of sight to PM (in my view, that means you are a proven money maker and you and the fund needs to perform well for 1-3 years), then I would have a harder time leaving the $. It kind of sounds like you're still a relatively junior analyst, and as a "PM" you'll get to manage money more similar to a senior analyst at Viking, not a PM. The startup outcome to monetization is still much lower probability.

There's more to life than money, but financial security definitely opens up your options when trying to pursue careers that maximize personal interests and fulfillment. 

How long have you been at the fund? How long have you been feeling uninterested / disengaged? If you've been feeling this way for a while, maybe it's time for a change. 

  • Analyst 1 in IB - Gen
May 27, 2021 - 10:17pm

You said joined @ ground floor: D1 had a monster year last year, and I'm sure a lot of low-mid 7 figure checks were written out to analysts (right??). If there's a clear path to PM, and you're at or close to the 7 figure mark now, just imagine where you'll be in a decade. Probably mid 8 figures new worth, if not higher. If money is a big factor, but you're also worried about the startup risk, I think HF is a no brainer. HF seat you have rn is incredibly sought after, and it's one that, if you do your job well, will reward you incredibly well. Can't say the same about the startup, it's more of a "who knows". 

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May 27, 2021 - 8:54pm

If the startup is funded by real people / has potential, I don't think you should underestimate your ability to create long-term wealth going that route if you walk in with a fancy title like you mentioned. Even if that startup doesn't go well itself you will probably be able to get a similar to better role at another startup or go the VC route if you make the right connections (hence the "funded by real people" comment). Especially if that makes you happier go for it IMO. 

  • PM in HF - Other
May 27, 2021 - 10:33pm

"the work itself is boring at this point, and the thought of doing this another 15 years just doesn't excite me..." 

This is literally the reason funds have high turnover, very bright people that are good as analysts/other aspects of the job but the endurance to survive drawdowns / reallocation of risk is a totally different skill. Not saying you should do 1 or the other, but you think your job is boring/challenging now managing risk is totally different beast.

  • Analyst 1 in AM - Equities
May 27, 2021 - 10:47pm

OP, do what you will find most fulfilling long-term. It is clear that making $300k+ isn't enough to solely motivate you. Therefore, I would say go for the startup because golden handcuffs are real and if you get closer to PM, there is no way you'll take the pay-cut. 

May 28, 2021 - 8:09am

I'm the co-founder/CEO of a Denver based Series C stage start up. Feel free to DM me as I know many of the founders in town as I've been at it for nearly a decade, and it's a fairly small community. 

  • 5
May 28, 2021 - 3:52pm

Feel free to DM me I am Jeff bezos and had this decision to make 

  • 8
Most Helpful
May 29, 2021 - 1:48pm

IMO if you are primarily motivated by accumulating wealth, stay at the fund b/c it offers a higher probability outcome for wealth creation than the odds of cashing out meaningful equity at startup number 1728346. Caveat: statement only applies if you really do have a path to a more senior level at the fund, as it sounds like you are currently a junior there.

Also don't underestimate how many startups are out there and how hard it is to sustainably scale & differentiate your business. Please do a lot of diligence on the business before jumping over. The odds of cashing out with real money are only even worth thinking about if you are 1) backed by blue-chip investors from the getgo 2) management are blue-chip founders with a track record of scaling businesses to successful exits 3) you are an early employee (read: you are granted a chunk of the company). If boxes 1-3 are not clear checks, you shouldn't even factor in any equity package into the calculus of your potential compensation, as most startup equity that's granted is just monopoly money.

May 29, 2021 - 11:30pm

Dude eff the startup.... continue being an analyst at Ur hedge fund and do the bare minimum to not get fired (don't stay up late if you don't have to, do the bare amount of idea generation, leave the office as soon as you can, etc)  and keeping collecting those checks $$$. Do this until u get fired or ur fund fails....then maybe look for another job 

Sep 22, 2021 - 4:52am

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  • Analyst 1 in IB-M&A
Sep 25, 2021 - 9:02am

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