Should I leave my job to help a family friend start up a family office

Looking for some advice from some family office peeps. I have a great gig now but this opportunity feels too good to pass up. A close mentor and friend asked me to leave my job and help him grow/manage his personal investments. He has told me he wishes his kids (who I am pretty close with) were involved in his companies - they each have their own hobbies/businesses. He said he wants to essentially set me up in his businesses and give me some participation in deals. It feels like he is putting me in position to manage his investments when he is ready to retire and live easy.

His investments are pretty diverse - he has around 3000 multifamily units (and growing) that he owns and manages through a real estate company he owns in addition to some opportunistic investments where has taken an active role. He mostly runs an industry leading company grossing over $1B in revenue but this organization has thousands of employees and runs itself - my involvement here would be minimal. He is in his 60s and shows no signs of slowing down on the investment front, if anything he has made some of his biggest investments in the last decade. His net worth is in the low nine figures.

His team is essentially non-existent. There is currently one other person working for him. It is not clear exactly how he'd bring me into the fold but there is definitely no shortage of work. He expressed that he's looking for a business mind with analyst abilities but I imagine at least part of the role will be administrative. Fortunately he has a personal assistant so I am optimistic that he won't turn me into a paper pusher.

I am wondering if anyone here has experience stepping into a start-up family office with a limited team and what this experience was like?
What is the common trajectory of a small family office set-up like this?
What is the common trajectory of an early hire in a set up like this?
What are the exit opportunities if I decide to walk? He has a great name in this market and is pretty well known in his primary company's industry but the name itself doesn't hold as much cache as some of the more well known family offices.
What is common comp structure? I am in a tier II/III market.
How do I avoid getting loaned out pro-bono to family and friends?

There is a lot of professional experience in this community. I welcome any general thoughts or experience around this. Thanks for reading.

Comments (6)

 
  • Anonymous Monkey's picture
  • Anonymous Monkey
  • Rank: Chimp
Jun 30, 2020 - 5:41pm

I previously worked at a small MF developer & operator. The team was extremely lean: example: two principals, an analyst (me) and a secretary/administrator. We typically developed or invested properties in the $10 - $50 mm range. It was a great experience. I wouldn't put too much emphasis on comp as you will be exposed to so much more than the normal candidate in the RE industry and as a result will set you up to run/expand his portfolio, run a shop like the one I had worked at or even start out on your own.

Of course dealing with family friends, whatever you do, get everything in writing before committing.

 
Jun 30, 2020 - 5:54pm

Sounds like an incredible opportunity!

Still - I'd want to make sure everything is in writing and firmed up before you take any steps on leaving your current employer. Knowing from myself and many close to me, you can get burned easily with your family & friends.

Array
 
Jun 30, 2020 - 7:37pm

Man that sounds amazing. You can learn from him, build relationships using his credentials, and maybe he might even give his portfolio to you or loan you some money in the future to start your own portfolio!

No comment about comp or trajectory, but I'm guessing you'll probably get paid market rate and the trajectory would be you can eventually get some equity in future acquisitions.

 
Jun 30, 2020 - 8:49pm

Hey OP, this sounds like an amazing opportunity! I am in sort of a similar situation myself. My family's business is in real estate investing and development (no where near the size of your friend's) and it has always been my goal to take over and expand the portfolio. I've been taking a much larger role in my family's business lately, so I guess there are two main questions you should ask yourself. The first is are you ready/have the experience for a more entrepreneurial role? Your title says Associate 1, which is still a junior level role where you take orders from your boss. If your friend wants you to help manage his capital and investments, is he expecting you to source deals and finance them? Or will he treat you more like an associate and give you OM's to model out? Because being the person who actually manages his capital, source deals, and determine whether the investment is good or not is very different than just running numbers and sending them to your higher ups. If you fuck up or miss something, a lot of money is on the line.

My second question is sort of related to my first question and it is, what value do you add? A couple years ago, I asked my dad about joining the family business and taking over. My dad basically asked me, "what value do you add for me to justify paying you a salary?" And I did not have an answer. He didn't need an analyst building financial models for him. He needed someone who could come up with an investment strategy, source deals, finance them, and ultimately execute. At the time when I asked him, I did not have the experience I have now. Since that time, I have come up with a strategy, obtained financing, and now we are about to close on our first deal and hopefully be able to execute our value add plan. If your friend is expecting from you what my dad expected from me, then you really have to ask yourself if you are ready and are able to add value. Do you have an investment strategy? Do you have a network of agents and investment sales teams to source deals? If you are joining your friend as an associate and he is training you to eventually take on these responsibilities, then how long is that training period until he expects you to basically be a managing director/partner? And of course as others have mentioned, make sure every possible situation is addressed in an agreement when doing business with friends.

That being said, regardless of what your answers are, if I were in your shoes, I wouldn't hesitate to jump on this potentially once in a life time opportunity.

 
Most Helpful
Jul 1, 2020 - 8:20am

Fred Fredburger:
A couple years ago, I asked my dad about joining the family business and taking over. My dad basically asked me, "what value do you add for me to justify paying you a salary?" And I did not have an answer. He didn't need an analyst building financial models for him. He needed someone who could come up with an investment strategy, source deals, finance them, and ultimately execute. At the time when I asked him, I did not have the experience I have now. Since that time, I have come up with a strategy, obtained financing, and now we are about to close on our first deal and hopefully be able to execute our value add plan.

Your dad sounds like a good dude

Commercial Real Estate Developer

  • 3
 
  • Associate 2 in RE - Comm
Aug 20, 2020 - 3:31pm
Start Discussion

Popular Content See all

Student-run private equity funds?
+36IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
I wish I was an airline pilot
+23OFFby Vice President in Investment Banking - Mergers and Acquisitions">VP in IB-M&A
BMO fired all of its Houston Bankers (~60 people)
+21IBby Intern in Investment Banking - Mergers and Acquisitions">Intern in IB-M&A
Do I quit IB for YouTube
+17IBby 3rd+ Year Analyst in Investment Banking - Industry/Coverage">Analyst 3+ in IB - Ind
Zoom events are cringe as hell
+17OFFby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A

Total Avg Compensation

December 2020 Investment Banking

  • Director/MD (18) $713
  • Vice President (53) $337
  • Associates (275) $227
  • 3rd+ Year Analyst (39) $161
  • 2nd Year Analyst (153) $153
  • Intern/Summer Associate (141) $139
  • 1st Year Analyst (595) $130
  • Intern/Summer Analyst (568) $82

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.4
2
Jamoldo's picture
Jamoldo
98.3
3
Secyh62's picture
Secyh62
98.3
4
CompBanker's picture
CompBanker
97.9
5
redever's picture
redever
97.8
6
bolo up's picture
bolo up
97.5
7
frgna's picture
frgna
97.5
8
NuckFuts's picture
NuckFuts
97.5
9
Edifice's picture
Edifice
97.5
10
Ricky Rosay's picture
Ricky Rosay
97.3