Raising a significantly larger fund - reasonable to ask for a raise once closed?
Hi all - first time poster here. I currently am a 2nd year associate at a small tech-focused growth equity shop with 4 people and we are in process raising a fund (~$125-150mm) which is significantly larger than our previous ones. Do you think it is reasonable / acceptable to ask for a raise in conjunction with closing on the new fund to bring myself "up to market?" Any guidance would be much appreciated.
I would either expect to be raised to market or get some of the upside. LMM firms ofen compensate their employees in bottom quartiles in cash but give out pieces of carry. If they dont give either market base+bonus or some long term incentives, use the great experience and market yourself to firms that will.
I feel like it's generally pretty standard to re-negotiate compensation and title with new funds anyway. This seems even more significant given a material change in fund size. I would absolutely think it's appropriate.
Thanks for the insight @saconsult3 and @LeonTree, makes sense. At what point during the fundraising cycle do you think this conversation is appropriate? We are in the early innings of fundraising which will likely be a multi-month-long process, and my year-end review (and 2-year mark at the firm) is in December. Also, do you think that a senior associate promotion would be expected / reasonable to ask for as well?
Yes - I think your year-end review is probably an appropriate point to discuss that, but I think that I would prime your superiors a month or so in advance that you were hoping to discuss not just your performance, but your career trajectory and the ability to take on more responsibility. That will give them an indication of your expectations so they're not blindsided during your convo (not that this should be a big surprise though).
Make sure you have thought through your ask, and have examples, etc of how you have added value. Do your research to know when market promotions occur (like you are doing now), and know your comp expectations with reasonable backup to those expectations. Senior Associate is certainly appropriate, and I would also not be afraid to say that you want to be a VP here shortly and ask about timeline and performance required to achieve that.
Well, I think the question becomes would the new fund change the team structure in terms of partnerships or senior management. If not, then you should definitely re-negotiate a compensation structure that makes sense for you. I think it is a common practice to get a cut of newfound financial flexibility.
Otherwise, you have to evaluate the amount of value you are bringing to the fund and take it from there.
To echo PrivateMarketplace above, I would think there's a possibility that they are already expecting some re-neg to be voiced out by you others
Rather, the manner in which the re-neg is brought up might be key here
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