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Hey MOICMarathoner, I swear if I had a silver banana for every lonely thread I posted too I'd be richer than @compbanker ...
You're welcome.
Around 5% would be my guess.
Any insight into what is market for vesting? In our prior fund, vesting for non-principals was 20/20/60 starting a year after the fund was raised. I've heard of up to 7 years, but vesting evenly. Hoping something in the middle is more standard.
So that’s $5-6m total carry?
Four years evenly is common as well.
Carry is a long term play anyway imo. If you’re looking to bounce after 3-5 then I wouldn’t consider it a factor in your offer.
What makes you say it isn't a factor if leaving in 3-5 years - if it's already vested wouldn't you ultimately still get the same amount of cash?
Not looking to bounce - fund size has doubled each of the last 3 funds (this will be the 3rd fund in 7 years so investing quickly) and has a great niche carved out in my opinion. More worried about the founder pushing a 7-10 year vesting schedule with a ridiculous non-compete which limits my options if things were to go south (see August Capital).
In the end, he can really offer whatever he chooses to. Do you have enough leverage to negotiate? Guess it’ll boil down to that.
Well if the firm is in compete harvest mode, then yes I would agree. Reallly depends where the firm is.
Two firms I had offers from (both middle market) were 6 year and 8 year linear/even vesting.
Couple quick comments, I'm in a somewhat similar situation from a fund and career perspective:
Vesting: my personal data point is 7 year linear
Carry: gut feel is roughly 2-4%. The Heidrick comp study for 2018 suggested that the middle 50% for VP carry dollars in $250-$500M funds is $900K - $2M, so on a $300M fund would be roughly 1.5% - 3.33%. So probably 2-3% is at least a reasonable guess.
Thank you for the reply. Any insight into cash (base + bonus) and how it evolved over time?
I would think that vesting should correlate with the typical investment period for the fund, straight-line. So if its a 7 year investment period, then vesting over 7 years would make sense, hard to argue against that - doesn't make sense for you to be fully vested before the fund is invested, then you could bounce while others do the work that you would benefit from.
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