Smaller PE/VC Fund --> ??!?

PE/VC as an asset class has exploded in size over the past several years, and there are a lot of young and/or unproven funds in the market.

I thought this style of question might be of interest to others who are in the same boat or may face a similar decision down the road.

Background
- Sr. Associate @ $~200-500M VC/Growth Fund Investing in software: top tier LPs (e.g. major endowments), yet little to no brand name recognition
- On track to VP in MBA. Partners are happy with my performance and want to keep me on
- Portfolio, like most VC/Growth funds, is doing ok so far but with a wide variability of outcomes. Could be a 5x, could be a 2x or lower
- Next cycle of the Fund is about to be raised, and most LPs want to put in slightly more money. So I'll have 5 more years of runway at least.
- $210 all-in comp with half a percentage point of carry on the fund that I am vesting into over next three years. That will probably increase if one of my three investments is a hit

  • I broke into VC with pure luck - I had almost no name cred (not H/Y/P/S or equivalent) but based off of some niche operational experience I did for 2-3 years prior. Most of my colleagues have HBS/GSB/Wharton backgrounds but I lack a strong professional network in investing
  • If you're at a Sequoia/Benchmark/TCV, etc. - it's easy to pivot to new PE opp. or find exit opportunities if the fund doesn't do well. If you're at a smaller firm like mine, less so.

So
- Is the upside here so good that it's worth staying on and moving to Principal, even with the risk of not having a fund present in 5 years?
- What are the typical options for PE/VC folks at less recognized funds which end up being duds?
-The main question I'm contemplating: Is it worth diluting some of the upside (e.g. carry) by going to get an MBA at H/S/W? This protects the downside case and expands my network.

Leaning against getting my MBA and staying put here, with the worst case moving back to a VP Biz Ops/Marketing role (usually $180k all in) at a startup if nothing works out.

 

Hi throaway92, any of these threads helpful:

  • Resume presentation for self-taught skills (Big 4 to PE/VC) break into one of the smaller PE or VC firms in my area. I'm actually working on an IPO now for ... hope that it is possible. These aren't mega funds we're talking about. These are funds with ... from many of the funds in the area, based on the bio's of the funds websites. I plan on being ...
  • Please rip apart my PE/VC information Memorandum (attached) PE / VC firm. Find attached our Memorandum and rip me apart like a Monkey. Tell me the fund is ...
  • minorities and IB/PE/VC white majority at the senior levels. Looking at VC funds it seems as thought there are tons of ... asian/indians. Looking at PE shops, it seems as though it is a white majority. Hedge funds/ research tends to ...
  • Using Bloomberg to find PE/VC performance/analytics???? Hello everyone, I currently completing a case study for a PE fund of funds interview. Essentially ... I am to pick 2 of 6 PE firms to invest with if they were to raise a new fund today, so I am trying to ... find the historic returns and any other data I could use to compare the funds of these firms to PE ...
  • HSW Chances- Former Consultant/Currently PE-VC investment fund (e.g. Acumen, Unitus) for a few months- Currently work at technology-focused growth equity ...
  • Transition to Small Market PE/VC Fund. Thoughts/advice needed. fund that is focuses on a small market companies in a niche industry. The first round of financing has ... position at the fund. Has anyone ever done anything like this before? I know it's not the traditional ... required, and the possible failure of the fund. I have a stable (though, not much growth potential) at ...
  • Career prospects after doing Renewable Energy / Sustainable Tech PE/VC VC firm? Funds raised are worth 100-200m a piece (not sure how many currently though) and part of ...
  • PE/VC Conflict of Interest- Diversification Theoretically, the investors in VCPE funds are, like investors in publicly traded securities, ... sufficiently well diversified to ignore idiosyncratic risk. However, the actual managers of the funds are not, ... establish a track record to allow/facilitate future fund-raising Combined, the two financial considerations ...
  • More suggestions...

You're welcome.

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