Mid-career crossroads help

I'm at something of a career cross-roads. I'm ~30, been in the L/S industry for ~6 years with mixed success. Started out at a large fund, then joined and left two startups that didn't work out. In one of them I had directly managed capital and a really strong track record. Now I'm faced with a few choices:

1) A few opportunities at big ($3B+), stable HFs
Pros: big, stable, decent lifestyle (go home by 7PM)
Cons: Heirarchical, i'm just another senior analyst, pay is good but upside is capped

2) One really hot startup. Founder is a big deal and think they will be $1B+ with any decent performance
Pros: might be more upside, still okay lifestyle
Cons: founder has done well over time, but not fully comfortable with style (takes big swings). Also typical hedge fund ambiguity with pay, etc though I think founder can afford to pay really well

3) A very imperfect portfolio manager job
Pros: call my own shots, this is what i ultimately want to do
Cons: relative lack of job security. Risk limits are a bit tighter than i like so not sure i'd kill it here

Option 3 is very much about whether I want to really pursue the path of managing money, even if the near term EV is probably lower (capital i'd start off with would probably lead to a good year being about the same or not much better than option 1/2 financially for the first year or so. Obviously I get to build a track record that could maybe get me a bigger book later). What I don't like about this option is that the constraints are definitely tighter than ideal for my strategy

Option 2 is potentially awesome, but after 2 startups that didn't work (largely b/c the founders made obvious mistakes), I'm a bit hesitant to sign up for another one, even though the founder is a real bigshot (more so than the previous 2) and has been highly successful over time

Option 1 is probably the safest, but feel a bit as if it leaves me in HF purgatory (yay I have a good analyst job where I get to do writeups and build models. What now?). I do worry that if I have another startup/ PM type failure it will foreclose ever going back to this type of job (safe and easy) b/c hedge funds like this don't like ppl that move around. Also, now that i'm leaving my 20s might be a good tiem to settle for stable money (I've done okay so far but its been highly volatile)

I know its hard to answer these types of things w/out way more detail than i can probably share on here, but would like thoughts from some industry veterans on how I think about R/R and career progression here

 

I'm a noob but who cares.

Do you feel confident enough to generate sufficient returns in this type of environment?

How much will you be managing as a PM, do you think your strategy can handle it?

Are you aiming to make a name for yourself and achieve stuff or looking for a comfortable well paid job?

Absolute truths don't exist... celebrated opinions do.
 

If you have the chance to be a PM - take it. Come on it shouldnt be a tough call. If you believe in your ability to make money make the transition now to being a PM and build a record so you can market yourself to future employers as a PM. If you want to be conservative take option 1- good money, stable, and a quiet life. But if thats what you want, join a long only.

 

To be honest, his considerations are very smart. Why would you want to join a place where you know you'll experience structural headwinds (e.g. the restrictions imposed not co-existing well with the type of strategy you employ), which further decreases the probability of success in a field where even with everything aligning in your favor, it can still be very hard.

 

Some great options. I'd probably pick #1 over #2...just don't understand if this hot-shot startup opp is so great, why is it falling in your lap? Unless you have a history w/ them, no reason to put so much trust in them vs a more stable firm where you'll be doing the same thing. The contrast w/ #3 is more interesting, and at some point you want to decide if you want to run your own money and/or go the entrepreneurial route then that might be a great accelerating step to that. The other option with #1 is to bank a few years to build up cash, and then if you want to go off on your own you can have more staying power. #1 is probably highest NPV / EV and I'd choose that, unless you are financially closer to having staying power and building a business (and assuming you really have that itch to do that) then maybe time is right for #3.

 
Best Response

To be honest, don't have much to contribute. I think a lot depends on whether this start-up is truly different this time round versus your previous experiences? You can never be sure, but it helps if you have 3-5 factors going in this new start-up's favor versus the previous two. I feel that #1 is still pretty much always available given the number of shops looking for experienced senior analysts - if you have the pedigree / reputation these are probably the easiest to land anyway versus getting in early with a legendary start-up. PM track - if you'd have to change your thinking / style of investing considerably to fit into what they want you to do, I'd say don't do it since if you start feeling uncomfortable you'll just be setting yourself up for failure. So for me it's still #1 or #2, depending on what you crave more right now - slightly more mindless work knowing full well that you will get paid within a certain range or do you want to push for partner / contractual payout at the start-up even before you sign and take the plunge from there. Make sure you're compensated in some way from the get-go for taking the start-up role if you go down that path again - not a carrot on a stick person myself.

 

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