| Topic Name: |
PE offer |
| Message Name: |
Need help!!(Clalonde & Others) |
| Date Posted: |
07/12/2004 |
| In Reply To: |
Based upon your qualifications I would say that this is a difficult question to answer. I also worked in the telecom world and corporate VC world for a handful of years before switching over to an independent venture firm. Your profile would seem to fit the criteria that most tech VC's look for, especially if the 3 yrs of mobile biz & tech engineering were with a start-up. The salary they are offering seems low - particularly if you are on the west coast or in the Northeast. I'm not sure about the midwest, southeast or Texas areas as I haven't worked there.
Starting with a low salary doesn't always mean it will stay that way. I took a lower paying job when I left the corporate VC world to join an independent VC firm b/c at the time I saw it as an opportunity to join a firm with a good track record and a firm with whom I could build upon prior experience. I am also of the mindset, and have found it to be true, that once given the opportunity to proves one's worth to an employer you'll be compensated fairly.
The 1 yr contract however seems a bit strange. Are you getting benefits or are you truly a contract employee? If you have no benefits (H/C insurance, etc.) then the deal certainly doesn't seem to be a good one financially. However the experience you will be gaining should also be considered as having some value.
Additionally, you should think about the reputation of the firm that has made you the offer. How many funds have they raised? What has their performance been to date? Then decide whether having their name on your resume will help your career as you move forward. There isn't a single firm out there that doesn't say they are top quartile - so dig deeper and look at their prior portfolio investments. I would also look into who the co-investors have been on the deals they have lead. When you say small, what are the assets under management? Remember that a VC firm usually has 2% of AUM in fees that can be used for their internal operations. If the firm only invests locally, has a lean staff but has a $150 million fund, then they almost surely have plenty of room to improve the compensation structure.
Finally, have you discussed what happens at the end of the contract year should you meet/exceed their expectations? Is it up and out regardless? If so, will they help you with intro.'s/reccomendations to other VC firms or portfolio companies? If it isn't up and out no matter what, is there the possibility of moving onto a partner track position? All of these should be weighed when making this decision.
Remember, part of being a VC is the negotiation of terms for an investment. So if you feel you can do better try negotiating for more.
I hope that this helps.
-C |
| Message: |
Thank you so much for your advice. I really appreciate your help.
I have a few more detailed questions for you.
Speaking a little bit more in detail about the firm, the firm is based on San Diego, Atlanta, and London.
60% of deals is based on Europe and 40% is based in the U.S. The firm has three GPs, a biz develope manager and a few advisors.
The Managing Director whom I would work with has a great profile(Finance Phd from London school of economics, Goldman Saches, Morgan Stanley, etc). The fund has plenty of money.(Mostly from one rich people). The business looks going on pretty well.
My offer letter is as follows.-------------
1) Employment
" The term of your employment with the Firm shall be for one year, with the first 90 days to be deemed to be a probationary period where your performance will be reviewed for satisfaction and adequacy. We expect that your employment with the Firm will be renewed each year on an annual basis at the election of the Firm; equity. It is our preference that we structure our relationship with you as an independent contractor rather than as a formal employee, but we will deal with that issue as we get you assimilated into the Firm and we assist you in processing your Visa documents needed to continue your U.S. residency.
2) Title & Fuctions
"You will be given a title at the Firm of ??private equity analyst?? and your duties will be that of an associate in a private equity general partnership firm. Since you will be resident in the La Jolla, California office of the Firm, the primary scope of your duties will be assigned to you by Dr. Darryl Laws or any other general partner in the Firm;"(--> my Q: Isn't this titel(PE Analayst) for an undergraduate candidate?)
3) Fringe Benefits(Health care)
"Fringe benefits to you will include those that are customarily offered to other employees and consultants of our Firm and which will be identified in the consulting agreement which will be submitted to you for review, including vacation time, reimbursement of legitimate business expenses and any healthcare benefits that may become available to all other members of the Firm."
Could you give me some more thought about this offer? I have concerns about the job security(Annucally renewed contract) and Job title.
Is this kind of annually renewed employment contract common in a PE firm? Is this 'PE Analayst' title for an undergragudate candite?
I am supposed to negotiate the offer shortly. So, your comment would be very much appreciated. Thank you so much in advance for your comment.
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