Transition to Small Market PE/VC Fund. Thoughts/advice needed.

I apologize in advance as I am not sure if this belongs in this forum or the VC forum. It seems like there are more post in this forum so I figured I would try here. Mods – please feel free to most this post if you feel otherwise.

I have been in contact with a principal at a small start up PE/VC fund that is focuses on a small market companies in a niche industry. The first round of financing has been completed (all the money should be in by 11/1).

I am looking to ultimately make a transition into PE/VC from my current industry (AM, sitting for L3 in June '12). I am located in a small Midwest city (not Chicago, like my name suggests, I have since moved). I spoke with the contact yesterday and he wants to work with me on a no-pay (upfront at least), part-time project type basis at first. I would be working on creating a risk analysis dashboard to use when sourcing. It would consist of 5 – 10 questions that could be asked which would give a rough estimate of the company's value. Then, once the LOI is signed, I would perform a full blown P&L analysis.

The plan is to work on 50 – 100 deals at a minimum. I would be doing this work after hours of my normal job, with ultimately I believe a full-time position at the fund. Has anyone ever done anything like this before? I know it's not the traditional way of getting into PE/VC but it sounds doable. I'm worried about the time that would be required, and the possible failure of the fund. I have a stable (though, not much growth potential) at a very solid company, and my wife is pregnant. So, the stability is nice, but it's not the most interesting work.

Any thoughts on the best way to negotiate pay in a situation like this? As well as, the best way to judge how likely this fund is to be successful? Like I said above, 1st round financing is just about complete. Thanks in advance for any comments and help.

Comments (5)

Oct 6, 2011 - 10:33am

Not sure I understand completely. You will be working 50-100 deals, for free, in hopes of this guy eventually picking you up for a full time position? If that is the case, sounds like you are about to get hosed.

But if you are that naive, I have some yard work I need someone to do. Why don't you come over and provide 50-100 weeks of service for free (so I can make sure you know what you are doing) and we can discuss some sort of full time after that.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.
Oct 6, 2011 - 11:07am

I wouldn't be working for free on 50 - 100 deals. That would be what he is planning on doing next year. I would be paid and transitioned by then. The transition, pay, etc. is obviously something that would need to be worked out. That is why I was asking if anyone had seen anything like this before.

Oct 6, 2011 - 11:55am

He's going to do 50-100 PE deals in a year? Ambitious for sure, but the likelihood of actually doing that with any level of real diligence = zero. You'd be closing a new deal every 3-6 days.

Oct 6, 2011 - 12:21pm

He's going to do 50-100 PE deals in a year? Ambitious for sure, but the likelihood of actually doing that with any level of real diligence = zero. You'd be closing a new deal every 3-6 days.

I agree that 50+ would be quiet ambitious with little due-diligence. However, it is a fund that focuses on making investments in small capitalization (

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