I recently left a large hedge fund that is not doing well, but I have an offer coming at another large fund that will be in the $500K neighborhood (which is very frustrating after 12 years in the business, but I have had a hard time getting someone to give me a shot atmostly due to my cost at this stage of my career).
On the flip side, someone I know very well is starting a fund with two other people. The person I know well is very credible and highly respected in the industry. They are thinking of bringing me on board with an equity stake as someone who will be very useful for understanding quant finance/statsitics/technology/finance in general/etc for a this new quant fund. My wife is shockingingly open minded to this even though we have a son - we are prepared to move to a one bedroom apartment in Jersey City (The other partners are already rich) so that we can afford to live on maybe 100K plus whatever my wife can scrounge up (could be 100k if we are lucky).
There is a good chance that we can have $250 AuM by next year when trading should start. What is a reasonable equity stake to expect - where is the boundary between a tough decision between the more stable $500K job and the equity stake that could make me rich. These guys are the kinds that could raise real money absolutely - could be multibillion in 3-5 years, but performance must be good in the first year of course. The quant ideas are novel too. Not the BS lazy vanilla trend following stuff that will be part of the next quant quake.
The downside in the event of the fund not taking off is that I can expect to add a LOT of other quantitative topics to my resume and a lot of doors can be opened working with these very well respected people - so not unlike going back to grad school, but with real upside - I have been craving positive convexity since I entered the industry instead of figuratively selling loads of teeny puts my whole career.
oops - forgot to ask about what could a feasible equity stake be. An equity stake is on the table, but the size is not clear right now. If it is only 1-2%, then I am out. Three co-founders already involved - one has been doing key CIO work for the last couple years, another will be able to raise capital and do a lot of risk/portfolio construction, while another will be CTO - then there would be me.
I bring a very well rounded skill set, but these guys are definitely the types that were MDs a long long time ago. Just using that for context on sizing me up. The guy bringing me in has a strong appreciation for work he has seen me do in the past - creative ways of representing new and extremely interesting data sets that nobody else has for our quant models.