Urgent: PE Offer after being fired

I just received an offer from an upper MM PE shop in NYC for a summer 2020 start.

The worst part of the situation is that I was fired from my current bank (with 1 month given for the transition). Given I'm technically still employed at the firm, I didn't volunteer this information while going through recruiting as it would have precluded me from potential opportunities.

I definitely want to take the offer, but would have a 3-4 month gap before the official start date - has anyone run into a similar situation prior to starting their PE gig or have any advice to share??? Really don't wanna blow this and quite scared...

Comments (46)

Feb 4, 2020

Why were you fired from your bank?

Feb 4, 2020

The group was downsizing and likely wanted to trim from the underperforming group.

Feb 4, 2020

Sounds like you were laid off. Just curious, do people view being laid off (for downsizing) vs. being fired (doing something egregiously wrong) in the same light?

Feb 4, 2020

Being fired is much worse than being laid off, but neither is good. Either way, could cause them to rescind the offer, especially as this wasn't disclosed earlier. I'm assuming they'll ask for references, so it will come out one way or another.

Feb 4, 2020

The people I'm providing as references aren't aware of the situation and think that I'm voluntarily leaving the firm in the coming month - should I still be worried?

Feb 24, 2020

"People" as in "people in PE"? I have never worked in PE, but have been laid off twice (companies underperformed and no longer had the cash or debt capacity to fund M&A), and no one in corp dev ever cared. I am sure some employers are different.

  • VP in PropTrad
Feb 4, 2020

i wouldn't be worried....they are hiring you for what you are right now. They liked you and hired you. You could quit your job right now and go hiking for 3 months for all they care.

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Most Helpful
Feb 4, 2020

You're out of your current job either way so I see you in 1 of 3 boats:

  1. Don't say anything, take a 3 month break, start at PE in summer. Nobody ends up asking or caring how the last 3 months of your life went, you hit the ground running at the PE shop (least likely).
  2. PE shop reaches out to the references, the PE firm looks stupid for not knowing the full story, the references look stupid, they don't deal with your BS and rescind the offer (either next week or in 3 months right before your start date).

3.You reach out preemptively and explain the situation. Say that you were not aware of the downsizing when interviewing and do not want it to come across as something you did in bad faith. Assure them the lay off was not directly due to you or your work and that you'd love to work there, whether it is in the summer or if an accelerated start date can be worked out. This has a few outcomes:

  • a. They're fine with it and tell you to start in summer 2020
  • b. They're fine with it and allow you to start early
  • c. They're not fine with it and rescind the offer right then and there.

In boat 1 you're fine though I'd argue it's the rarest outcome. In boat 2 you're fucked and either out of a job now or in 3 months. In boat 3a you're fine and start at your normal time, chill for a few months or work on something personal. In 3b you're fine and if you want to start early even better. 3c you're fucked but at least you know now. The difference vs. boat 2 is that you have another 3 months to try to get something else lined up. In boat 2 you may continue to live life under the assumption you'll have a job come summer and then have that pulled out from under you, wasting months you could have been looking for something else.

I say tell them now but you can assign your own probabilities and perceived utility from each of these outcomes and figure out for yourself.

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Feb 5, 2020

Good framework. As for the probabilities to assign, I'm a little more concerned about 3 vs 1. Personally I'd assign a higher probability to 1, my gut just says it doesn't feel very likely that someone will ask about it. Also, I'd assign a lower probability to the #3 scenario where the PE shop says "oh its all good, you're an honest guy for telling us." Decent chance they'd react that way, but also decent chance they're skeptical of "downsizing" . . after all, why was this analyst fired and others not fired? I'd be skeptical to be honest. Unless most of the class was cut, I'd be concerned that I got an underperformer.

Very tough choice. Being pre-emptive and fessing up always feels good intuitively, because it has the most upside (i.e., you might get told everything's fine and you enjoy your time off without worry). But it guarantees they find out, and I'm not so sure they were ever going to.

Probably helpful if some current PE associates/VPs weigh in on the odds of discovery.

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Feb 5, 2020

Agreed,

I don't know how to rank these probabilities given I'm not in the space. I think the trickiest part is that there have been references included that you aren't sure how they'll respond to questioning (or going up to them and asking not to say anything).

I think there's a solid argument for not saying anything and if it does come up just say "at the time there was no indication of leaving the firm and I did not feel I interviewed with you in bad faith. I had planned to leave to pursue (XYZ) regardless shortly before the switch and felt that the timing worked out in my favor"

Again, nobody will have a better feel for the situation than the people you trust to talk to at the firms in question so if there's anybody you can talk to then I'd recommend doing so.

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Feb 6, 2020

I think OP is in boat one. They've already given him an offer so I think he's good.

Greed is Good!

Feb 4, 2020

Per the comment from @financeiswacc above, its a tough call whether to fess up. I think you should talk to as many friends in PE as you can to see what are the odds that nobody asks about this if you don't fess up. My gut reaction (per my reply above) is that I lean a bit toward not fessing up.

If you decide to go that route, a couple additional things:

If someone asks now while you're still employed, just say you're employed.

If someone asks during the time off, say you quit early to take time off. If that's too early to quit, say you needed surgery or some shit.

If someone asks after you join, I think you just want to stick to the story that you quit. As most older folks know, the lines become blurred between quit and fired anyway. Almost anyone who's "fired" actually signs something saying they quit. I have no doubt you did when they 'fired' you.

The big thing will be references. You'll want to sit down with them and explain that you plan to treat this as though you quit. Remind them that officially, that's what happened. You signed a paper saying you quit, and you gave up certain rights when you did that. You deserve the full benefit of the status that comes with someone who quit. Hopefully your relationship with them is good enough.

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  • Associate 1 in VC
Feb 4, 2020

Are you allowed to quit and take a couple months off before starting a PE gig you've had lined up for a long time, in general? Please clarify, thanks.

Feb 5, 2020

This would be totally situation / fund dependent. I've known people who convinced their future employer to let them quit IB early (spring of their second year) so they got a few extra months off before the summer start date

  • Associate 1 in VC
Feb 5, 2020

How and when would you go about asking? I want to quit now, take the GMAT, and go write a book for 6 months living somewhere cheap and exotic...

Feb 5, 2020

I can't believe the enabling of paranoia that persists on this forum, both on the side of the OP and the rest of the commenters.

OP, you got laid off. Look around you. Were the associates that were recently laid off last month at Evercore really damaged goods? What about many of the DB bankers in the past few years? Heck even go back to the layoff rounds 2008... The point is that I've rarely met any senior banker that at one point or another weren't pushed into a difficult employment situation that was completely out of their control. Layoffs happen and I'm more than confident that your new firm will understand this. You freaking out and contemplating the end of the world will be completely unwarranted and unhelpful.

Now for options, don't volunteer any information unless they ask. If they do ask tell the truth and mention that you did get laid off but that you also were going to make the pivot into PE eventually and that you saw being laid off as more of an opportunity to accelerate into your desired career path earlier. SPIN this into a positive.

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Feb 6, 2020

This too OP^
If they don't ask, don't volunteer information.

Greed is Good!

Feb 7, 2020

Well put.

When you're unemployed you have a lot of time to think. When you have a lot of time to think you second-guess yourself, even when you know the answer.

Feb 8, 2020

This is the right way to do it. Bottom line. I've executed this successfully. Definitely do not lie. You're smart enough to know how win using the positive facts.

Feb 5, 2020

how many of you have rounded millions of dollars off because it is "non material?" this is one of those. dont worry about it.

Feb 5, 2020

Hey man - look I don't know much about this, but those of you who are old enough may remember the infamous barclays analyst who got fired for his email and later had his offer revoked by the carlyle group...i don't know how he managed it but he was able to convince carlyle to keep him on and is still with the firm. you cant get more notorious than the poor guy on whose name a quick google search reveals all that one would want to conceal about himself...all the best

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Feb 5, 2020
ibd-london:

Hey man - look I don't know much about this, but those of you who are old enough may remember the infamous barclays analyst who got fired for his email and later had his offer revoked by the carlyle group...i don't know how he managed it but he was able to convince carlyle to keep him on and is still with the firm. you cant get more notorious than the poor guy on whose name a quick google search reveals all that one would want to conceal about himself...all the best

i remember that story. he still there??

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Feb 5, 2020

Yes, he's a VP now at Carlyle. Good for him. Have his critics a big slap on the face

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Feb 5, 2020

Maybe the most ridiculous firing story I've ever heard. Ridiculous in terms of how light the crime was. I can't find anything wrong with the email from an HR standpoint. Maybe some of the attempts at humor were lame but what was "bad" about the email?

Feb 5, 2020

WSO's COO (Chief Operating Orangutan) | My Linkedin

Feb 5, 2020

Yep

Feb 5, 2020

I'm currently a VP at a PE firm so here's my view: I don't agree with a lot of the stuff here. If OP lies (ie says he quit) or never brings it up, he'll be sweating it not only for the next 3 months but even after he starts. I think there's really only one viable option here that covers his bases and makes him seem honest and trustworthy without giving any pause to the hiring firm.

In the week following the official end date (ie after the 1 month transition), call them up and let them know that "this week there was round of layoffs in my group and I was one of the casualties since they knew I was leaving in the short-term anyway. They clearly conveyed to me it was not performance-related. The good news is I can start earlier at your firm, as early as in one month, or I can start the same time as previously planned, your choice."

I think there's a 95% chance you'll still have the offer in this case. 3 months is too low to care about. The only way it would matter is if they find out you were actually fired, not laid off, and since that's not the case and almost impossible to find out anyway, you're good.

There is a chance they'd ask for another reference from someone at your current (ie just left) firm but I'm assuming you'll pick a great reference who will say your official end date is at the end of the 1 month transition (which is true and you'll be good.

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Feb 5, 2020

Good advice, I agree with this subject to one question (which may still be too small a question to change the result, but here goes): would the shop dig in on the claim of a "round" of layoffs? In other words, would they ask around to see if indeed several analysts were laid off or was it just this one guy?

Its hard to disagree with your advice. I'm just stuck on the feeling that PE folks in my circle are hands down the most cynical people I know. And so I'm careful about assuming that they won't sharpen their teeth when they hear a casual story about a layoff . . most people would just take the candidate at his word but I know a few guys whose ears would perk up.

Feb 5, 2020

A "round" of layoffs is a minimum of just two people. And doesn't even have to be the same day, even a couple months apart can be part of the same round.

There's no real way for the PE firm to verify how many people were laid off, nor would they spend any time figuring it out. What I would do in this case as the hiring manager is require a reference from the current firm, and if that checks out, along with all the other info I have gathered on the way, I'd be fine. If this was 6+ months before he was due to start maybe I'd see more of a red flag.

    • 2
Feb 5, 2020

I think you guys are being WAY too optimistic here. Agree with Ptero, a real PE firm would dig in here. What % of the group was let go? What % of analysts were let go?

The real answer to this question changes my advice, but since it wasn't given -- the most likely scenario is also the worst-case scenario (i.e. only the OP was fired, or something similar).

A ~2 month gap before starting is normal & customary so we're really talking about an extra month or two here. If somehow it comes up, I would point to a 'family emergency' or similar.

Feb 5, 2020

If you didn't know, which is why you didn't say anything during the process, then quit and the narrative becomes you quit on your own accord.

If you knew and chose not to say anything, still don't say anything, because then you'll look like you were scheming/lying the entire time.

If you started the process and didn't know early on or at the time it would've come up, but then continued and landed it, I would say you have two options:

  1. Quit, and you quit by choice once you secured another position, not necessary to say anything. HR can't say, your team could say you were an underperformer, but unless it was heinous, no way they go as far as to say that. They're more likely to sympathize and understand you need another way to pay bills/eat.
  2. Disclose it. But be sure to let them know you found out late, and stick to the the firm line, "downsizing, outside of your control, many were affected", because if the PE firm circles back, they will find this to be consistent, but should also take something like this as part of the process. Make sure you emphasize your extreme interest and excitement for the opportunity.

If I had to pick for you, nothing good comes from disclosing this in most scenarios. End of the day, you didn't shit the bed, so take your fortunate 2nd chance and run away with it. Sounds like you can always claim you didn't know until later down the road anyway to hedge your bets.

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Feb 5, 2020

There are many interesting responses here. I have to agree generally with the ones that say or imply "don't say much" though kudos to @FinancelsWacc for an incredibly well thought out and thorough response as well as @FinancelsWacc

I am (as a fellow too honest Samurai) astounded by how much people here say one should be openly honest. I have learned in my multiple lives in this industry that the key is to SHUT UP unless spoken to (in general - I'm a social guy so I find that hard) and to have an answer ready if asked (and prepped and ready to spin).

Being open and honest in a pretty commoditized and brutally competitive industry in which people thrive on getting the slightest edge in any way possible (and filled with plenty of amoral people who will have no problem slitting your throat) is like being Ned Stark. You know what happened to Ned, right?

PE firms lie all the time. Deal negotiating and stuff aside (since I've never sat inside that beast), I've seen plenty of shenanigans as an allocator. The most common and egregious one is called "unrealized" value when pitching the new fund to investors so show some phony IRR to make it look like they are doing great so they can raise money. Funnily enough a number of those valuations come right back down after the final close...Hedge funds make up "competitive edge" and embellish CVs all the time. If these guys were that good there wouldn't be so many funds closing or not under-performing. All of this "embellishment" or let's face it, lying, is (very sadly) accepted fact by everyone involved in our industry.

OP - Who are your references? Are they senior? Are they allies? Are they good people? If they are your references they should at least tick a bunch of those boxes since they are the ones that will stand up for you. If you trust them, it may be well worth telling them as @FinancelsWacc mentions above to keep the story tight. If you sign something saying you quit and you did, well you officially quit. And hey you are still technically an employee who is getting paid, so as long as you aren't caught around walking in your jammy jams at 2pm on a Tuesday eating a half melted pint of Ben and Jerry's by the PE office who's the wiser?

Taking a break? You can spin it as personal. Spending time with family that you never saw because you were, you know, like banking all the time. Or de-compressing before getting ready to go full on at PE firm, or volunteering or whatever. But volunteer that only if they ask. After all you were in the process when it happened and didn't know. You got the offer and then it happened.

I am not suggesting one be dishonest. But you can have half truths and omissions. Someone who once said "silence is golden" was a genius. Words to live by.

Good Luck

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Feb 6, 2020

Appreciate it and having read some answers from those closer to / in PE I would agree to just not say anything. If asked spin it as you knew you were leaving and given timing / workload and your short term desires (family / travel / etc.) that it was an appropriate time to part ways.

The key here is you didn't negotiate / interview in bad faith and I think its easy to show that if it comes to it.

Funniest
Feb 6, 2020

dude, WTF are you talking about? You just got handed an opportunity of a lifetime and you're complaining about it? A 3 month gap, in the springtime??? Jesus H Christ man I'd give my left nut for that! Here's what you do - you buy yourself a ticket to Europe, LatAm or Asia, travel around, and live the adventure of a lifetime!

How many people do you think get paid an ibanker salary, lock down a PE offer, and then get to take 3 months off? Usually people bounce from one grind-you-down job to the next. Go out, get laid, get fit again, and live an amazing life! And come back and tell us all about the adventures.

Holy hell man, can we trade lives?

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Feb 6, 2020

oh and if you're concerned about reference checks - go talk to your old firm's HR. Tell them you really appreciated the opportunity there, and it's thanks to them you've lined up some great interviews. Do NOT under any circumstances tell them where you're going. Ever. Ask HR what their policy is on reference checks. Remind them subtly that they really aren't supposed to give much info except the dates you were there and your title.

Go back to your senior officers and repeat the process with them. Flatter them, thank them, and ask them to please keep the details re the departure quiet. Tell them you're interviewing at a number of PE shops and may become their client. Our work careers are long, and you want to part ways amicably, and hopefully do business in the future. They'll want you as a potential client, so they should not want to burn you, nor you burn them. Offer to buy them dinner to show there's no hard feelings.

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Feb 10, 2020

Going through this currently. I was laid off (and given severance) as my firm was downsizing/consolidating (i.e. I sat in a remote office that ended up being reduced and taken over by a larger, "hub" office).

I had been given 30 days notice and started reaching out/interviewing while I was technically still employed. During that time, I didn't share that I was going to be laid-off (different than "fired"). The interviewing process with one firm I was excited about took 7 weeks and by the end, I was no longer employed - and I had not told the new firm of my situation.

After the 7 weeks, I had signed an offer letter and had submitted my HR background check authorization. I got a call 2 days later and they asked me if I was still working for the previous firm. I told them my situation and explained that: 1) I was fully employed when I started talking with them, 2) I didn't believe that my lay-off in any way reflected on my ability to perform the responsibilities of the new role, and 3) I had several references (MD on my team/Sr. Dir/VP/AVP) of people who could confirm my ability.

Ultimately, they decided to rescind the offer. Their perspective ended up being that, lay-offs happen and, while they would have expected a strong set of references to my work quality, they had all known/experienced layoffs and that it wasn't that big of a deal. My not telling them was a huge issue though.

My $0.02 - tell the new firm proactively. Provide some people who can provide rock solid references and tell references about your situation as a prep if they get asked. You don't want to be 3 months from now and starting over. Rip the bandaid off. HR will be able to confirm employment dates within 7 seconds for the new firm.

Feb 10, 2020

OP I think this is your best data point here.

Feb 11, 2020
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Feb 13, 2020