PE Fund Paying Half of Market/What I’m Worth - Advice?

I worked as an associate at a MM PE fund for 2yrs, last 7 months of which I was at a portco and then left at the end of the summer. I've been chilling for about 3 months while I consider my next career move and honestly just enjoying all the free time that comes with a break in the track.

Last week my old fund called me and asked me if I would come back to work for them for a few months to help with a few add-on opportunities they have under exclusivity for a platform I worked on. Something about not having enough resource capacity internally. I said sure - I like what I do and could use the money / fill the gap on my resume. I get the agreement and for comp they're only going to pay me $100k annualized... I reverted back asking for it to be marked to market and they came back with a possible 10% bonus.

So I'm torn here, I want to tell them to pound sand and turn it down, but like I said I could use the FCF. I think they need me almost as much as I need them since I know the platform so well and built the massive 100 location model that would take anyone forever to figure out how to update.

Thoughts? Advice? Motivation to tell them to fck off?

Comments (13)

Nov 27, 2019

What is your plan for the next phase of your career? You could totally leverage this opportunity and get a better gig to realize your market value. The FCF is nice to have too given you are off for 3 months. I have a friend who was chilling for a while and it took him a while to get back to the game because of the gap on the resume.

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Nov 27, 2019
Bullar Bear:

What is your plan for the next phase of your career? You could totally leverage this opportunity and get a better gig to realize your market value. The FCF is nice to have too given you are off for 3 months. I have a friend who was chilling for a while and it took him a while to get back to the game because of the gap on the resume.

I'm still figuring that out but I'm open to going a lot of different directions (portco work, corp dev/strat, continue in PE, startup, etc), it's really just a matter of what comes across my desk that really catches my interest. Had an interview with a semi-mega fund yesterday, next step is super day next week - would be very ideal to land that.

I definitely plan on leveraging it and see value in filling the employment gap, also shows well that a previous firm asked me to come back.

Had some sizable medical bills during my time off that ate away at my nest egg, so the FCF is more important than what you'd expect after only 3 months.

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Nov 27, 2019

Good luck man! Show those f*ckers how much you are really worth.

Nov 27, 2019

Some considerations:

Will you be a FT employee or contractor? Contractors will have to pay incremental tax

When you negotiated, did you actually put a counteroffer on the table or did you just generically ask for "mark to market"? Might be worth putting out an actual number and getting their reaction - otherwise their POV is going to be that they are just negotiating against themselves.

Might be too much effort for your timeframe, but if you're really in need of cash, maybe look into relevant freelance work. IIRC, I've seen some folks on upwork who basically specialize in making decks for startups looking to raise capital, and their rates seemed relatively lucrative.

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Nov 27, 2019
CHItizen:

Some considerations:

Will you be a FT employee or contractor? Contractors will have to pay incremental tax

When you negotiated, did you actually put a counteroffer on the table or did you just generically ask for "mark to market"? Might be worth putting out an actual number and getting their reaction - otherwise their POV is going to be that they are just negotiating against themselves.

Might be too much effort for your timeframe, but if you're really in need of cash, maybe look into relevant freelance work. IIRC, I've seen some folks on upwork who basically specialize in making decks for startups looking to raise capital, and their rates seemed relatively lucrative.

Contractor. And yeah I told them $200k which is what I was paid when I worked for them - they just smelled blood in the water when I told them I wasn't working anywhere else and are trying to get as big of a bite out of me as possible (2 shark metaphors, 1 sentence).

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Nov 27, 2019

If you were paid something like $100k base / 100% target bonus and their offer is close to your previous base, that's probably what they're benchmarking it to since contractors usually don't get bonuses nor do employees who leave before their bonus year is up.

If you really could use the money, maybe figure out what the target amount would be to get you to the same after tax take home amount that you had before (probably worthwhile to explain that calc to them), and then have some sort of explicit cap on hours? IDK if that would work for you, but in my mind that would be fair-ish since my view has always been that my bonus is compensation for all the extra shit that goes into jobs like this, so if you're not paying me a bonus then I'm not working more than 40 hours a week unless I'm hourly and get 1.5x (and while we're on that topic, you might propose different structures like hourly pay or per project pay - just throwing out ideas at this point)

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Nov 27, 2019

Seems too low if you're there on a short term basis. Contractors and shorter time frame workers usually get over compensated.

The only way I'd take it is if you're in desperate need of the money and you can work flexibly on whatever you're doing for them. So not in the office getting crushed, but more location agnostic project based type of work.

Nov 28, 2019

Why'd you quit in the first place? There has to be better opportunities than this. I wouldn't work anywhere that disrespected me like this.

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Nov 29, 2019

Do you have to work in their office? Or can you just do all of this from home?
If from home, you know the model and you can work a bit slowly. So essentially do 25% of the work, get paid 50% of what you used to earn - thus you win.
They don't know how fast you work - no one does.

That's what I would do

Nov 29, 2019

Given your "new role" is exclusively for a specific platform doing tuck in, it's not unreasonable the comp is now lower. I wouldn't expect the same as before. If you're sourcing the deals, maybe add a bonus if the deal closes, but given it's a short term role anyways that's probably harder to negotiate. End of the day it's got to tie to the deal/making actual money to the fund. If all you are doing is modelling or what not, or operational etc, it's harder to get a much higher comp I feel.

Nov 29, 2019

Almost, if not completely, equal to the comp is the time commitment, potential for scope creep and how that impacts your next search. If this is casual part time work where you can also focus on other things seems like a good opportunity. My guess is that more likely than not, this will end up being a total time suck and won't afford you any room to figure out what your next steps are - basically you're just temporarily fully employed.

Based on the limited info you provided, it seems that this time was meant to be an opportunity to figure out what you want to do not merely do you old job - ie you're unemployed by design. It will also be hard to stay motivated if you end up having to grind super hard knowing you're not working for a bonus. Long story short, think about how the actual work flow will impact your broader goals more than an incremental a 5-6k a month.

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Dec 1, 2019

If the comp is going to be lower but they'll be expecting less of you and giving you more liberty in your work/life balance and time-off then it makes sense. If they're going to try and slowly drag you back to the same level of responsibility and same work-flow that you were managing as a FT employee for much less money, then they can suck a huge one.

Dec 5, 2019
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