PE/VC Associate Seeking Advice
Hi Guys - just made this account. Been an occasional lurker previously.
As stated in the title wanted to get some thoughts on a few things as I think about an inflection point in my career.
I'm currently at a family office PE shop where I focus on venture and growth investing. Graduated from a target and did two years in MC/IB prior to this gig. The partners here raised a new small fund (sub $100m) from their relationships for this strategy. Previously, the partners were doing opportunistic investing in direct PE co-investments and some FoF. I'm an associate and there is a VP/Principal ahead of me in addition to the partners, so it is a lean investment team.
I definitely enjoy the venture and growth space day to day but worried about where I go from here. There is room for career growth in becoming VP and eventually partner but unsure I'd be satisfied with the compensation, timeline, trajectory, opportunity cost of other pathways, etc. and wanted some help evaluating my options. My all-in comp is $150k - 175k and also get carry in the 2-3% range. If the fund is successful and I get promoted (2-3yrs away) and they are able to raise another fund then maybe all-in comp goes up a little bit and higher carry as well. Lifestyle is okay maybe 45-55/60 hrs a week, depending on how busy i get. I also like the work compared to IB / PE in that there's less nitty-gritty modeling and the team is okay as well.
First, for those of you at other growth shops, I wanted to get if sense of the comp / comp trajectory makes sense for this type of role to see if I'm being underpaid realtive to the market? What are you guys seeing at your shops? I know I'm way below traditional PE / HF compensation so I'm slightly worried about getting stuck here and becoming unsatisfied with the comp scaling in a few years.
Second, I had put some minimal thought into is moving to a HF as I enjoy the public markets as well, at least on PA level. Maybe trying to jump to a HF that has a private growth team would make sense as I see a lot more HFs raising committed pools for private venture strategies? Anyone have color on these kind of funds?
Last, I also have an inkling to do other things maybe more entrepreneurial and get a technical degree (machine learning / engineering / software / quant etc.). I know that will require some investment up front in terms of education, opportunity cost, etc. as my undergrad was in business. Has anyone here successfully switched or know someone that switched to a more entrepreneurial or technical career path after IB / PE?
Any thoughts on the above situation would be appreciated, especially from those who have had to make similar decisions.
I think you have a lot of thoughts percolating and probably need to distill that down. You basically have a bunch of general routes you are considering, and you need to cull that down to like 2.
Your role is interesting in that there might be an opportunity to explore some of these paths within the context of your current role - if you do primary investing into new funds or co-investing into deals, perhaps you can get connected to people in roles that you would potentially consider.
Regarding the technical route, I do know a guy who did IB, HF, then did some code camp and now is a developer at a FAANG. Perhaps you can dip your toe in the water here by taking an evening or weekend class to see if you really like it, or if you just liked the idea of it.
Thanks CHItizen appreciate the response. I definitely enjoy the role most of the time. My role is primarily on the direct side doing growth equity investments but i do help out a bit in investing into co-GP / co-investments which is a tbh a great experience. I'll get to participate if I want to put in money into co-investments in situations that allow it, however the partners take the majority of the economics in those deals negotiated with our firm so I'm not sure I'll see much upside on that side of the business long term unless I bring something in myself.
My concerns are more around i) cash comp scaling meaningfully like my peers in other shops and ii) being attractive to other shops should I decide to leave later on in 3-4 years on versus now. The longer I stay, i feel the less leverage that i'll have. Obviously leaving as a junior person is a lot easier than someone mid-level. Do you have any thoughts on the comp based on what you've seen in the industry or with friends at similar growth shops?
Another aspect is that most of the LP money comes from partner relationships and UHNW individuals. I'm concerned that this may come back to bite me later down the line as the guy with the relationships and the guy closest to the source of capital is always the most valuable. I'm wondering if the dynamic would be different at place where most of the LP money is institutional capital?
Good idea on the technical skills - maybe it's something i learn on the side. I think the guys with the good technical ability always have flexibility to be able to able to define their own path or use their skills to move into a variety of different industries / area better than guys with just corporate finance or strategy consulting skills. How does your friend enjoy his FAANG role and does he feel the bootcamp was enough for him to do his job?
2–3% of carry looks like a lot to me, WSO reports and forums usually say 15-25bps of carry as an associate. I’d guess that they want to keep you there for the long term.
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