Abandoning Private equity
I have now spent 3-4 years at a topBBfollowed by 2 years at a upperMM私人产权fund. Making about $500k all-on cash comp and just starting to get carry. Likely going to give that up to do business school (interview withHBS和等待从’)。后业务school I want to do something more entrepreneurial (either founding a start-up or some form of financial roll-up / search-up). There is just so much capital out there right now and feels relatively easy to secure funding.
我为放弃自己努力工作的立场而疯狂吗？我只是不想把它磨碎PEpartner but rather do something for myself. In short I feel like a 5% chance of making it big outweighs the 60% chance of successfully grinding it out toPEpartner (and being very well of but not crazy well-off).
有人处于类似位置吗？
Comments (26)
我想您回答了自己的问题人，您不需要任何人的许可，只需去做吧
同一条船在这里
Sounds like a classic case of sunk cost fallacy. If you don't see yourself becoming aPEpartner, and would find more satisfaction doing something entrepreneurial, then no you are not "crazy" to give up your position. Besides, all of those years are not wasted - I'm sure you have quite the rolodex and toolkit.
IMO it sounds like the real question is how risk adverse you are. If you don't have the balls to pull the trigger then there's no point debating - sorry for being blunt.
确实是沉没的成本谬误！虽然我觉得学到了很多东西，但我仍然觉得我的许多技能会浪费，还有一个非常舒适的固定薪水/奖金。我会说我很冒险说，所以我倾向于只是为此而努力（根据需要有节省 +从朋友/家人那里的支持）
Currently an incoming analyst at a topBBinTMTand am already thinking about some of the same questions that you are in now. I am very entrepreneurial by nature and know that I want to start something around theMBA等级。我想问，你觉得PEexperience helps in terms of entrepreneurship and/or operations/strategy?
I have received advice that if I know I want to do entrepreneurship, I should look at operations/strategy roles at startups after my analyst stint inIB。Or at least GE. Any advice?
I personally have foundPEvery helpful to develop a broad skillset both operationally, financially and from a general leadership experience by interacting directly with successful management teams. If I could do it all over again I would consider growth equity as it is typically not as sweaty as large cap buyout and you get to work with companies that are earlier in the development stage (hence closer to what you are likely to start if you pursue entrepreneurship)
Can you highlight some of the operational skills that you learned in PE? I might be potentially trying to help a friend get a small business off the ground and would love any insight.
"There is just so much capital out there right now and feels relatively easy to secure funding."
So? This is not specific enough. How will you benefit? Do you have a plan or business idea that you know will work? Also, realize the macro-level business environment will have changed with 99% certainty in 2+ years from now when you will be leaving business school. I'm not saying entrepreneurship is a bad idea or it's something that you shouldn't pursue. What I'm saying is "there is so much capital" is not a well-thought-out enough plan. Just to level-set expectations, more likely than not, you will not be making 500K all-in for many years if you go this route.
Fair comments. I do have a couple of ideas that have a reasonable chance of success. I agree with your point on earnings, but that is the entire point of this thread. It comes down to the fact that I would rather have a tiny chance of making it big and doing something meaningful with my life rather than wasting it in financial services
What is business school for if you're just going to do entrepreneurship after? Why not use that tuition $ on the business instead and start now (plus 2 years sooner in good capital market, who knows where we'll be in 2+ years).
我的想法是,我可以扩大我的网络time to develop my ideas, and get a bit of a break from an intense job with something that still looks good on my resume (assuming I get into H/S)
Talk about a first world problem lol, you lucky b*stard.
What a lot of people don't ask themselves is why doesn't my boss or boss's boss at saidMFlaunch their own fund? The answer is that because the nature of that seat is that you can personally put BILLIONS of dollars to work… that spins off a ton of wealth creation. Run the monkey math on how many search fund investments you'll need to do, returns outcomes, and how much capital you'll need to be able to raise, how much of an organization you'll need to scale about around it (and resulting dilution of economics) in order to generate the same wealth creation. Don't forget investor meetings increasingly taking up your time instead of actually assessing/making investments.
The reason to set out on your own instead of cashing in on the golden ticket that isMFPEis one or more of the following: (1) you don't believe in the long-term durability of the strategy AND think/know you have a better approach; (2) you want to have the entrepreneurial experience (cuts both ways, someone needs to order furniture, and manage payroll, and capital calls, etc).
The fact of the matter is as a start-up you'll probably never scale to be able to personally deploy as much capital as you can out of aMF。不仅这样MFPE。
UNLESS you believe that either your strengths or where the industry is going is oriented in a way where you're better off starting from scratch on your own.
Before you do anything, do the math on how much capital you can realistically raise today, what the return profile will realistically be, how much wealth that creates for you (AND your team)… then compare that to a successfulMF职业轨道。
Although not totally off, disagree for several reasons.
1. There's also the job satisfaction component that might be higher in trying yourself.
2. Going from 2 years intoPE在合作伙伴座位上产生世代相传的财富很远。这意味着资金继续执行，攀登政治阶梯，运气，当您处于交易成为“您”交易的位置时，市场是正确的（2006/2007年有许多聪明的人现在已经30岁了由于“他们”的往绩不佳）。从这些职位中产生真正的财富可能需要15年，因为您直到30年代初到中间才进入“高级”席多年以实现它。如果您跌倒了，回报率很低...
3.您可以通过找到一个好主意并自己执行它来产生真正的经济学。那里are由于能够以较小的规模创造实际价值，因此一群30岁的年轻人在今天筹集了吸引人的HNW资金（20-50m范围），而不是20％。如果您要购买妈妈和流行音乐，那么真正被低估了，并在25mm的5年内浏览了业务，并在5年内生产3倍，那就是20毫米。并不是说这很容易，但我认为您高估了只能骑行的能力PE席位成为高级合伙人。
OP, I don't think you're wrong, but I would be more specific about the path, investment criteria, business plan, etc. before making a decision
Oh, so all you have to do is raise $25m four year out of school? Convince your LPs to pay you 40% carry. Compete with established at-scale lower middle marketPEfirms to buy a heavily banked $50-75m TEV asset. Triple your money in 3 years… and do it all with a smart and capable team that came to work for a 26 year old without any expectation of meaningfully participating in the upside? Why am I just now hearing about this.
As I said above, sketch out areasonablescenario with a healthy dose of prudent conservatism. If you can sketch out a pretty muted and conservative case and it looksverycompelling, that's usually a good bet. If you need to have a 6-game parlay bet to go your way… you're doing typicalWSOmath.
My rough math back in the day was that if I could raise $5m (no easy feat unless you have real family money) and hit 2-3x returns… the first few funds are just to get a track record and get to critical mass. If those 2-3 funds (10-15 years) were consistently strong, then the 3rd or 4th fund would be where the real money kicks in. And it was about what you'd make as a partner inMFPE。
People are pretty smart and economic animals and the market is pretty efficient. If the wealth creation from launching your own fund was that much better than aMFpath… you'd see more people doing it. A decent (but not a rockstar)MFpartner can probably launch with $500m. That's real scale. And yet they don't… I guess they're just lazy and uninspired.
5. Prestige vs responsibility
A couple of years out of college I was talking to a close mentor who had finished hisMBAa year before. He told me something that always stuck with me: "of the people I graduated with, a year later the happiest ones solved for responsibility at the expense of prestige, and the unhappiest did the exact opposite". I honestly didn't understand it but now I very much do. Rarely can you have both prestige and responsibility early in your career, in fact I've found them to be quite inversely correlated. It takes confidence to forgo prestige but it can be so worthwhile when you do.
Couldn't agree more. That's exactly where my career path led me, albeit more by fate than my own personal doing, but I wouldn't have it any other way. I'm not bringing in $500k a year like most on this forum, but I just broke into my thirties and I've been VP, Finance for twoPE现在个人电脑。PEsponsors had me take over for the Co-Founder/CFO in the first play and replaced a short-termed CFO on the current gig. So far both of the deals have been relatively small, Military -> Non-target Liberal Arts College (BBA Finance, BBA Accounting, MBA) Public Accounting -> Industry (Controller, O&G) -> VP, Finance for PC
If you can't be happy on $500k a year you won't be happy with $5MM a year
解释？
I'm in a similar boat except I'm a 2nd yearIBanalyst. I have an idea for a consumer tech company that I think i should quit & launch. I realize this sounds crazy, but I have a background in both coding & finance so I know the potential is there. A coupleVCS表现出兴趣，但我不能挥舞奖学金 +IBanalyst workload at the same time.
成为独立的赞助商，做到这一点。你能行的！
What fund (comparable names work as well) are you working at where you get $500k all-in after 2 years...?
He did 4 years in banking, so probably came in at a Senior Associate level.
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