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

throaway92's picture
Rank: Chimp | 5

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 <2 years, Principal in <4 years without an 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.

Comments (4)

Jan 21, 2019

Hi throaway92, any of these threads helpful:

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  • ??!?">More suggestions...

You're welcome.

Feb 8, 2019

Also interested.

Feb 9, 2019

Bumping so I'm notified

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Feb 9, 2019
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