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.