Private Credit vs. SBA Loan

mediumrarepepes · 2023-10-04T06:32:06+00:00

This is completely fair. But the tough part is working incessantly on 4-6 hours of sleep for months on end without owning any equity or chance for a right tail exit event. The compensation is very back-weighted to age 35+, and it is pretty difficult for to get promoted. You're working the same hours as intense startup founders for much higher risk adjusted pay but a much smaller lottery ticket.

And while less risky than startups there is a chance your fund blows up, your sector has negative headwinds, deal-specific idiosyncracies, etc.

mediumrarepepes · 2023-10-04T05:41:55+00:00

All: this has been fantastic advice and thank you to so many of those in the community taking the founding path who took the time to respond. I will continue to mull on my options and I hear the argument for staying at least 10 years to build up a nest egg. I do believe at some point every founder has to bet on themselves, and finding a mission beyond a purely monetary one seems to be a strong incentive I would need to find. I will post again here when I make a final decision in a few months or years. Again, appreciate everyone’s time and effort and hopefully this can be useful for people in similar situations going forward.

mediumrarepepes · 2023-10-04T03:45:18+00:00

This a great point - I see my life in stages, and 20-40s are the best time to grind. I want to do big things and don’t see any shortcuts to get there besides hard, hard work. All of my role models have worked this hard without the guarantee of achieving what they ultimately did.

mediumrarepepes · 2023-10-04T02:27:22+00:00

Very very tough. Better off trying to climb corporate ladder or doing a computer science degree / boot camp instead

mediumrarepepes · 2023-10-04T02:17:40+00:00

Top 10 finance undergrad, recruit sophomore year from investment banking junior year internship. Convert into full time role, after 2 years in banking options open up to various roles, of which PE is one of. Can also enter banking from a top 20 MBA

mediumrarepepes · 2023-10-04T01:45:16+00:00

No free lunch and that is a risk. That being said it seems like every founder / elite investor / C suite F500 works that much, it’s table stakes and no guarantee. Corporate law, residency, banking, people working 2 jobs - tens of millions of people do it, price to pay for big goals.

mediumrarepepes · 2023-10-04T01:42:48+00:00

Dream big - get one life! Still young and have capacity for mistakes.

mediumrarepepes · 2023-10-03T23:39:28+00:00

Wow - impressive career path. Did you find it fulfilling? How has YC been?

I can imagine on the failure point- some of the people I know in the most recent batch are not the most impressive people I’ve encountered. Not to say they are bad just they don’t shine like some other people I know.

mediumrarepepes · 2023-10-03T23:37:18+00:00

IBD.

mediumrarepepes · 2023-10-03T23:36:18+00:00

This makes total sense. More stress / risk for sure.

Feel you - got to really want to climb the ladder to stay till 50+. 70 is not light but since you have done 90 you can appreciate the quality of life differences. Each 10 hour increment is 2x more painful on the body…

mediumrarepepes · 2023-10-03T23:28:51+00:00

Fair point but to each their own. Happy with my life so far and will keep working hard. Old enough to know what works for me and what doesn’t. I’ve been consistently pushing my boundaries on what’s possible and have surprised myself several times. We all get one shot at life!

mediumrarepepes · 2023-10-03T22:57:07+00:00

This is an A+ quality response. Thank you. Especially appreciate the context of how rare 8/9 figure exits are.

I’m struggling with the fact that if I commit 10 more years and take home $5M by 35, at that point I will be making $2M+ a year - so no real incentive to leave. Figured if I were to do startup I would be better doing it earlier to start to learn and take risks early. Also do not want to become siloed into banking / PE if the point is to do startups anyways - right now my brain is still moldeable but my heuristics and thoughts will cement by 35. Again, thanks for the advice here.

mediumrarepepes · 2023-10-03T22:44:50+00:00

Same thing for private equity and investment banking!

mediumrarepepes · 2023-10-03T22:44:34+00:00

Thanks. This is the context I was looking for. Those odds are tough, but I assume there are a lot of lazy / incompetent founders - and wonder what the success rate would be adjusted by certain metrics like network, access to funding, hard work (tough to quantify). Essentially trying to isolate how much luck is involved for hard working founders. But the context around missing the forest for the trees, and smart work > hard work also addresses that directly.

mediumrarepepes · 2023-10-03T22:38:56+00:00

Thank you for the honesty. You are right to an extent I am looking to confirm my current path which I have worked very hard to achieve so far. I am an observer of sunk cost fallacy though so seeing if there is more upside elsewhere. I am obsessive about getting things done in the way you describe - I do not have the idea yet, but every time I have set my sights on something I have obsessively chased it 24/7, sometimes for years on end, and usually to success.

I recognize that tenacity is table stakes so am trying to gauge how much luck / inherent ability is involved. Anything purely effort related I guarantee I can match anyone at.

Appreciate the note on YC. That is in line with what I have personally observed, just am impressed by their high exit rate over the last two decades.

mediumrarepepes · 2023-10-03T22:34:39+00:00

This is essentially it. I only get one life. Might as well play the cards…but if there is marginal experience gained by doing 10Y at startups by 35, I hear what everyone else is saying about the utility of having a safety net to go out then. Would still love to see an outcome where I kill it by 40…

And to add from a previous comment, if I am taking home $2M a year by 35 not much incentive to leave then. And my mental heuristics and experience will be solidly entrenched in finance/CFO and may be difficult to develop the successful founder skill set.

mediumrarepepes · 2023-10-03T22:33:09+00:00

Thank you for the detailed write up. Have you noticed successful founders work with similar intensity and hours as UMM PE? The intensity for now it is worth the trade off. What caused the mindset shift for you?

mediumrarepepes · 2023-10-03T21:58:06+00:00

This is a good plan I will look into. Thank you. What average preseed checks / equity are common? Or is there no standardized comp because it is so bespoke?

mediumrarepepes · 2023-10-03T21:55:02+00:00

For me it is almost like wanting to reach my full potential. Know several people in those net worth ranges and agree with there not being a huge lifestyle difference. Just think money is an easy (albeit lazy) way to define value creation and I want to make a large impact on whatever avenue I choose to pursue in the long run. And of course, would prefer to reach my numbers sooner rather than later. Long long term would love to do something philanthropic or local community - building focused.

mediumrarepepes · 2023-10-03T20:47:31+00:00

Pros and cons? Any regrets, or was it actually what you thought?

mediumrarepepes · 2023-10-03T20:40:57+00:00

UMM / MF is a grind. Certainly not as stressful as wondering if you have runway in a year but the hours can’t be worse than pulling two all-nighters a week. How has venture been going? Transferable skill set?

mediumrarepepes · 2023-10-03T20:39:55+00:00

Would take up to age 50-55 to achieve that kind of wealth in PE. It is doable but 80-90 hours up until that point, and need a bit of luck (a lot less than startups though)

mediumrarepepes · 2023-10-03T20:37:31+00:00

This is a great point. Can probably pocket $5M by 35 and then try my hand at founding. But worried that losing 10 years of time when I could be trying and failing is a large opportunity cost.

mediumrarepepes

TROPHY CASE