Need advice on a very particular situation…

Recently got offered a position to lead a VC firm being stood up in Southeast Asia. LPs include some big names and Fund 1 AUM will be ~$50M USD.

Currently based in the US with limited language skills. Only got tapped for this because one of the major investors is a close friend and his family is one of the wealthiest in the country.

Crazy for considering this? What should I even been asking for in terms of comp and carry?

like
Posting as :
works at
You are currently posting as works at

I don’t think you need to quit your day job right away. I’d do everything possible to delay that until you absolutely have to.

$50M is pretty normal starting point tho. From my experience that seems to be the pretty standard minimum size for a “2guys and a laptop” fund.

You’re looking at $1m as your operating budget for the fund, assuming the standard 2 & 20 model in VC.

20 is the % of profits that the VC gets above a certain threshold of profits. Don’t worry about that for now.

As VCs you’ll charge LP’s 2% of AUM as an annual administrative/management fee. Being small/new you might be able to get 3-4%. But I’d be pretty judicious about that. There are plenty of ways you MIGHT be able to convince the LP’s to take on more of the administrative overhead costs, but let’s just be conservative and assume you’re looking at $1m. That’ll need to cover any costs associated with running the fund. So how many people are going to be involved in running the fund? If it’s really just you then your salary is $1m minus all other costs.

To get a sense of what those costs are theres plenty of industry reports that show the admin fees behind running a fund.

Personally, I’d be budgeting max of $250k as my comp and ring fencing 50% as min op-ex. Spend big on marketing/diligence and being everywhere in the market that first year. If you’re living in a LCL country then you can get by on much less.

The real money here is going to come via carry on your winners. Don’t hamstring the fund performance by taking a big dip for yourself.

You’re a new fund so you’re going to have to work harder and spend more to get noticed and find deals.

I can refer you to a firm that can offer good back office / controller services and shadow accounting. There are quite a few out there…

If I were you, I’d push very hard to ensure that you are finding credible professional services to augment staff and provide tight financial controls. That’s #1 and if the fund is bringing you in to be the “leader” then you need to protect yourself from becoming a “fall guy”.

Pay for quality tax/accounting/legal. Don’t use people that your buddy knows in country. Go to any top50 firm in America and they’ll have some sort of partner in country. I would want to be paying a US firm (or whatever locality you reside in), even if they are outsourcing the work to a local. It’s about preserving some power for you. You’ve got to be able to have some allies/advisors you can trust who are loyal to you.

Don’t use your buddy’s contacts in banking or professional services…If you make this mistake, then his family will own you. If you are leading you get to make those decisions.

Go through US Dept of Commerce and have these LPs and your buddy’s family/businesses checked out before you start. This will cost you a couple grand but it’ll be worth it.

Document everything. Make sure that you have investor reporting figured out before you take $. Keep it as simple as possible. Don’t allow for a complicated cap table.

In a nutshell, I’m trying to urge you to go above and beyond to be well organized and show them from the start that you aren’t going to cut corners. If they are legit, they will look at all of this as a sign that you know what you’re doing and a valuable asset.

If they don’t go along with this kind of stuff then, I think you have to start questioning things. If you’re going to lead then you need to be able to lead.

For me, I’d always be willing to take less cash in comp if it meant generating high performance and reduced headaches.

A day will come at some point when all of this will actually matter and you’ll be glad you did it.

Some other questions…

Are the funds actually committed or verbal? Is the guy recruiting you willing to take less or equal pay than you? When would you move there?

What’s the investment thesis ? Is the fund only investing in-country?

Sounds like a fun opportunity and happy to chat more.

likehelpful

These are amazing insights - I’ve saved down this post and read through it a few times. Points on prioritizing American financial services partners make sense but would not have been intuitive to me.

As to a few of your other questions - these would be in-country investments and I have some time to decide, likely up till EOY 2022. The Covid situation still hasn’t been resolved here. Right now, still in verbal commitment stage, but would say of the things I am skeptical about, I’m not skeptical about his ability to close capital nor his current intentions (we’ve been close for 10+ years). I would love to loop back with you as things move along.

The other partner isn’t in it for the money, at least in direct sense. He’s just exited a business his family owns with a megafund, is the direct heir to the family’s assets, and sees this as a mechanism to further elevate his legitimacy and quite literally make the parents proud. A happy outcome for him would be a reasonable return on capital he’s invested himself, but more importantly a legitimate brand/business (e.g., ability to raise fund II) in a way he can say was of his own initiative.

My question is what is the game you are being asked to play and is it winnable?

Are you managing the operations? The investments? Growing the AUM/fundraising?

In short, how will they measure success?

If you have no experience running or even working at a fund it might be a very steep learning curve.

Also, for them, if it doesn't work out, they replace you and you left the Partnership and are looking for work and they will brush it off and still be the richest people around.

like

I have 0 experience running a fund. I worked at a MM PE shop for a year a long time ago, but have been otherwise focused on growth strategy and tech for most of the last 10 years.

My understanding is that key benchmarks in the first year will be about effectively spending the money, as $50M is substantial AUM for this country. The “legit” startups tend to be crowded trades and shy to foreign capital while there are many seedy companies that are bull shit or even borderline fraudulent. The thesis pitched to me was that co-investing with a local who knows which people are legit added to a partner with good tech/operator experience from what they would consider a prestigious background could be a winner…

Of course, I don’t have a good bull shit detector here. I don’t see any incentive for ill intent but I would only sign up if the economics made sense or if there’s a real opportunity. I guess at this stage, I don’t even know what an unreasonable ask would be… like what’s a reasonable carry ask for a 2 man shop for a fund of this scale?

Not my domain at all, but how much money can you reasonably expect to earn when AUM is only $50M?

like

Was top of mind for me too - I’ve heard growth rates for startups here at just ludicrous…

But that’s part of the question. Apparently $50M is a very respectable size for a new fund in this area. I don’t know what a reasonable ask is.

like

Do you have experience in the region? Can you refer me? 😉 I’m from south east Asia living in the US right now.

Lol which country

Set it up in Singapore, you’ll be fine from a language perspective. Lots of VCs in Singapore investing across the region- check out the Hustle Fund

Which country? Indonesia?

What do you have to lose? Sounds like a fun and good experience. Worse case you can come back! My advice, don’t focus on short term financials rather on what you will learn

Take me with you. Seriously.

I set up and managed a USD30-50Mn AuM fund about 10 years ago. DM me if you wan to know more.

Related Posts

like

Applied for Data Engineering role and the CTO and founder sent me an email asking if I wanted to build data pipelines/warehouse or wanted something else. My previous roles are a bit different but my education and experience are relevant. What do I say?

like

Looking for some perspective in negotiations.

2nd year at midsize firm making 150k with 1700 billable hour requirement.

Got an in house offer at global company for 130k, $5000 signing bonus. They know I make 150k.

What’s the appropriate counter offer? Don’t want to be offensive because I really want this job, but also want to look out for my best interests. Boston market, IP counsel position.

like

Is anyone wondering what life will really be like for all the new Diversity, Equity, and Inclusion executives that many companies are hiring and bragging about now? I wonder how much power they will actually have to effect change. I wonder how long the trend will last.

like

I’m thinking of leaving audit after my second busy season. My main interest in accounting has always been forensics /fraud . Also thinking of going the CFE route instead of CPA. What position should I apply to or transfer into ? Also do I look for a senior position or just an associate. Please any input will be helpful . Thanks in advance

like

to there anyone from Bayer or AstraZeneca ?
I need Job referral. I have a job ID.

Thanks in advance

like

Hi Bowlers,

Had a few job offers on the table from CPG and Tech (non-FAANG) companies for Senior Analyst type roles.

Without negotiating it seems like Tech pays more, is that true? Or can I still negotiate more with CPG companies?

Thanks,

like

I’ve been offered a position that I’m really excited about. Their initial offer was 10K more than the top of the salary range they gave me for the position when I asked during the interview process and at the top end of the salary requirements I set for myself. My partner thinks I should still negotiate for more even though I’m happy with the offer. Am I an idiot if I don’t negotiate in this case? Realistically, I don’t think I’d get much more than that, but should I negotiate out of principle?

Cadence hiring for Physical Design, ASIC Verification, PDK validation / Parasitic RC extraction for Noida and Bangalore

Post Photo
like

I wanted to spread a little positivity this Friday afternoon. I just started a new job after casually interviewing for several months at the start of the year to do a little research on the marketing job market, and then seriously interviewing/searching since May. After coming close with several other jobs but something always going wrong (low ball pay, role put on hold, etc.) I finally got THE job. I’m excited about it, I’m paid well, and fully remote. So don’t settle, and don’t give up! ✨

like

Hi guys...
What salary should I expect in the market currently
I have a total of 5 yoe in python(data analysis,warehousing,pipelines)/ETL and almost same experience in ci/cd tools and databases(single store and Oracle) i have good financial domain knowledge too.
My current CTC is 13.5 all fixed
My current organization wants to retain me and they have confirmed for my Canada on site over mail...
I am not that interested for Canada

Please suggest what package should I be looking for
Thanks

like

Is it appropriate to ask the interviewer why the previous person left the role?

like

what is salary band for AVP?

I've cleared interview process for Sr. O365 Administrator at Qualcomm HYERABAD, my industry experience is 11 years. What should be the salary expectation?

Thinking of switching from sales to a sales engineering role. Biggest difference is going to be higher base (plus bonus) with no commission or quota to carry. Curious as to what is a fair salary in todays climate. We’re a series C fintech company based in NYC. I’m being considered for the role because I’m one of the strongest presenters on the team. It will still be in individual contributor role with supposed path to leadership. Curious the range as well as equity to expect/ask for.

like

Hey fishes

Can anybody tell me how much time it takes for HSBC Bangalore for salary discussion. My last round was positive and was told HR would be in touch for salary discussion and formalities. I've cleared all rounds and last round happened 7 days ago.

like

McK 🐠: can you pls confirm if McK is currently hiring at EM level in UAE? Also, pls let me know if you’d be open to referring - 10yoe in Strategy consulting with relevant ME public sector / mega projects experience. Thanks 🙏

like

FTI Consulting vs Health Advances: Have offers for the summer from both (very similar except one has a smaller signing bonus). Genuinely don't know what to do. If any current employees could tell me what they like/dislike about their firm, that would be amazing! TYIA

Normal to not hear from recruiter or hiring manager for weeks / month+ after conclusion on all interviews?

like

After Apple hiring manager expressed intent to hire, what's the elimination rate to get a denial from compensation group?

like

More Posts

How do you feel about mock PR Headlines?

Any Referrals for KPMG Kochi ? Looking for manager and above roles

like

I consider myself a liberal dem, but I’m really struggling to understand what the game plan with the impeachment inquiry is. Can someone help me understand how this helps win 2020?

like

Brooks brothers or Suit Supply if your price range is around $700? So comparing the The 1818 with the Lazio, respectively.

Any advice about class management in a desk top computer class? My class was very loud with so much calling out for help. I tried to create class helpers but there was so much walking around. 2nd yr

Guys anyone interested in below opportunity? DM me for referal in Infy

Post Photo
like

ECD salaries? I have literally no context. At 275 plus 15% bonus. Up in Canadia.

like

Consulting, up for M this year. Making 128K + bonus.
Have an offer from a tech company. It’s 160K + stock, all in 220K.
Should I go for it?

likesmart

Hi everyone! I'm looking to move from Dallas to Denver. I know there are PLENTY pros to the move but what are some cons?

like

Are you good with decks?
Mmm..Yes.
Ok, need this in an hour.
Me:

Post Photo
likefunny

Can anyone say what is Package Implementation in LTI

like

AlixPartners What’s the score you need in the cognitive assessment tests?and does anybody have any experience with Excel case study interview?

like

Has anybody ever accepted a job and realized you needed more money once you started working? How did you go about this?

like

Amerisourcebergen hires managers who harass you and Corp protects them even when you have hard evidence of being harassed.

likehelpful

How do you negotiate an offer the correct way

RANT: When you’ve been looking for a new opportunity for seven months (granted selectively, not just going anywhere), made it to two final rounds and didn’t get the offer. Networking like crazy, asking favors of friends (references, referrals) and am starting to feel terrible about it. I have helped SO MANY PEOPLE find jobs in my career. Wishing karma would come my way.

like

Hey folks how interview and onboarding process happen in HCL Technologies i have a notice period of 90 days and cleared all the rounds had my salary discussion what next ?

After salary discussion how much time usually HCL Technologies take to release offer i am asking because i am waiting for the offer letter so that I can resign.

like

If the prospects and clients were there, which city in the US would you want to live & work in?

like

Anyone sent email regarding salary revision to manager/HR & got expected salary ? Yes, Plz share email template :)

like

Any IPS advisory folks here ?

Additional Posts in Partners Only

How do you lead and inspire others when you’re depressed or lacking inspiration?

I feel like I am paying way too much in income taxes. I live in high state tax state so it adds up. What are some creative ideas to minimize my tax liabilities? MD here, so salaried employee.

Does McKinsey do organization/talent/leadership development consulting? How does the practice compare to firms like Deloitte or more specialized firms like Korn Ferry?

likehelpful

I’ve been asked to serve as chair for a non-profit. I don’t have time and this is a dysfunctional board (many board members with a tie to the mission of the organization but w/o relevant experience). However, there aren’t many options and I feel obligated. I’m considering it, *if* I can put some guardrails in place to minimize the dysfunction and stay out of the weeds. That’s a huge if. Any advice?

Huge thanks to all who weighed in on my weight loss post. Have peloton-ed and cut late night food and can see results - with Wegovy as a backup. Thanks to all who commented. Next question - has anybody with larger male body (big shoulders barrel chested long torso short legs wide feet) found high end clothing that fits? I find luxury brands are limited, made for 5’5” androgynous 125 lb men. Tired of wearing overly baggy stuff. Ralph Lauren has been best so far with XXL slim fit. Thoughts?

like

I feel a little crazy saying this, but more money at this point doesn’t resonate. I see a ton of exit planning and boomerang threads here, but I’d take a 50% pay cut (or a 50% raise) for an exciting role. That’s totally privilege talking, but I just can’t imagine chasing extra money in PE or lateraling just for the money. No virtue signaling here at all. I actually worry on some level that I’m somehow a moron for not giving a thought to maximizing earnings.

likehelpful

What is the maximum compensation senior most Partners of consulting firms make in APAC consistently (not one off great year)?

likehelpfulfunny

I forget newbies can’t be entirely left to their own devices at times... Too old for this

likehelpful

We are at a level where by making 5% returns on our net-worth we can sustain our current lifestyle.

What should this mean from a lifestyle perspective? Keep it the same (but then why work), step/up a notch (but once you increase you cant go back), or make one off splurges as excess cash accumulates? How do others things about it?

like

Is there a general expectation that a Partner has an MBA?

I doubt it's required at most firms but I'm a pretty senior staff and when I speak with Partners, they seem to speak with an MBA level of business knowledge which extends past their technical skillset.

I realize that's what makes them good Partners but it makes me wonder if I realistically need to get an MBA to keep growing and hit Partner.

funnylike

Partners, those of you that have successfully switched employment to another consulting firm as a partner, how did you navigate your non-competes?

helpful

What’s your % benchmark for annual household spend (total expenses/gross annual income). I feel we don’t spend that much money (25%), but I don’t really see our “wealth” dramatically changing yoy, so I am wondering maybe I am just off or something I’m missing.

like

Recently single with three kids under the age of 10. Ex is nowhere to be found. I have a daytime nanny but am really struggling to find someone for overnights when I’m on the road. As you know our client travel sometimes is not optional. Have tried the usual website like Care with no luck. Any other suggestions?

like

Being given a PE ops role which would put me on a 6 year track to partner vs 3 year track if I stay in consulting. Pros/Cons of taking this role?

like

I have an underlying disdain for any incompetence and I generally write people off if they don’t show improvement. I lose patience (never react but I wouldn’t staff on projects). Any tips to improve?

Tax question - if partners have to file in all 50 states, does establishing your primary residence in a tax free state like Florida or Texas provide any state tax advantage?

like

Any insights on Slalom? Compensation, work culture, pros and cons? Why (or why not) join them?

like

Anyone looking to bring on a manager who can build out a cybersecurity offering (not the technical aspect, but the human-centered awareness and learning component). Im friendly too

likeuplifting

Is anyone here member of Tiger 21? Can you share your experience with the organization?

like

Thoughts on leaving Big 4 to go to a smaller firm (eg ATK, OW). Proposed role is great, more collaborative culture with less sharp elbows and a metrics first attitude... impact to personal brand?

like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the
Fishbowl app

See what’s happening in your industry
from the palm of your hand.

A phone with Fishbowl app

Send download link to your phone

OR

Scan your QR code to download
Fishbowl app on your mobile

By continuing you agree to Terms of Use and Privacy Policy.

Messaging rates may apply

Download app

Sign up for free to view this conversation on Fishbowl

By continuing you agree to Terms of Use and Privacy Policy

Already have an account? Log in

Sign up for free to continue using Fishbowl

By continuing you agree to Terms of Use(New) and Privacy Policy(New)
Messaging rates may apply

Already have an account? Log in

For account settings, visit Fishbowl on Desktop Browser or

General

Legal