I have spent 5 years at a top BB (which included some PE experience) and I may get an offer to join a startup. It's not a total startup, it has US$500mm in PE funding and 1000+ employees and a well established business model, so I am not too concerned that it will go away, on the contrary, I am reasonable confident that they will either get bought or go IPO in the next 3-5 years, maybe sooner. But I am concerned whether this is a good career move. The role sounds interesting but it will certainly be unstructured, involve a lot of travel and probably have zero job security on top of working long hours. Culturally I think it would be a good match from the people I have spoken to so far. They keep asking me what salary I am looking for and have of course indicated that I would not get what I used to make in banking. I have so far avoided throwing out a number because I have very little insight into what would be a reasonable number to give. Has anyone on here worked for a reasonably successful startup? What kind of salary is reasonable to expect? If this doesn't end up working out for me, would it look shitty on a resume to quit (or get axed) after a year? What do you do after an experience like that? Is joining a VC or PE fund a realistic "exit opp"? Is it possible to get back into banking? Thanks for any comments.
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If I were in your position, I would leverage for some equity. Given that you are giving up a good chunk of money to join a job that pays less and has little to no job security, I would look to own a part of the company. Given that you're already looking post start up, I'd say you don't sound sold on the idea. Not a bad thing actually. Not everyone wants to take the risk of joining a startup.
If it's PE-backed and over a 1000 employees, sounds more growth stage than startup. Either way, just like redivider said, ask for some options/grants since you'll probably take a pay cut. I'm currently at a ~$100M market cap growth stage company, my comp is probably 2/3 of the a 2nd year WallStreet analyst, but I've been comped in equity for not taking a higher paying job.
Tenure: Getting axed wouldn't be bad, it just means you're not cut out for multiple roles, which is typical in a startup/growth stage company; if the company doesn't end up working out (which probably ours will not), that will only look bad if you were a part of the downfall or increased cash burn rate.
Exit opps: With experience like I had, fortunately, I've had the privilege to receive an offer with a startup that a few of my current execs are working on. Depending on the PE/VC, you'll most likely be useful for some of their other portfolio startup/growth stage companies (I've had offers from other board-owned portfolio companies to join them).
Back to banking: Not sure.
how did it pan out?
With already 1000+ employees, just how likely are you to get equity?
Yeah looks like you'll be pooled with all the people who just get options..
Silly me for thinking a startup had less than 100 employees, let alone 1,000. Also wasn't aware a company with a multi-billion dollar market cap was considered a startup, too.
I dunno dude - joinging a 1,000+ person "startup" that is guaranteeing to pay you less, force you to travel, work long(ER?) hours, all because ... what? Presumably you think the job is or would be more interesting or would just be fun to switch roles? I get that. But practically speaking, you have to focus on moving UP, not out or down. If you can't get one level below C-level, and there is no equity ... and no job security ... and less compensation ... I guess I just fail to see how this would make sense strategically on any level. You are obviously smart so there must be a reason but based on the info provided I don't see it.
Pretty much my thoughts exactly. What tempts me is really the chance to do something different that has the potential to be very interesting, but if the pay is like a 2nd year analyst, then that would mean a >50% pay cut for me, which to I do not see the point for. There are quite a few ex-bankers that have joined this company (I shouldn't have called it a startup, growth stage is a more accurate description), but I suppose one really needs to have serious passion about working there in order to do it, which I am not sure that I do.
You ask for what you are worth, if they can't afford you it's a sign you shouldn't be working there. Given your situation it seems like a bad move. You should be getting an MBA, moving into PE or staying put. Not joining some underpaid start-up.
Joining a start-up (Originally Posted: 05/30/2012)
Wanted to get everyone's opinion before making my final decision..... Currently an analyst with a middle market investment bank in the public finance division but recently ran into an opportunity to join a startup that has the potential to blow up and get big. What should I do? I hate my job and am not learning the skill set in the group. Btw if you want to do banking avoid public finance investment banking at all cost, trust me, it's fuckin bullshit. You will not develop any useful skillet nor have the opp to network and meet others...with that in mind should I quit and take a chancE? I'm 25 years old and I figure worst case scenario I'll go back to get my MBA and rebrand myself...I already scored 735 on the GMAT....please help am I thinking this the right way? YOLO - you only live once
go for broke
Couple of issues:
Once you leave inv banking, it will be hard to return especially having startup on your resume.
What you do have going for you is that you're pre-MBA and if the startup fails or founders you can always go back. Also think about exit opportunities from this startup. Don't think you can run back to IBD if this fails as that ship will have sailed once you join this group.
Startups are glamourized right now, especially given the facebook IPO, its post-IPO performance notwithstanding. What people really need to understand is that 95% of startups fail or founder. To think of hockey stick like projections and a sale or IPO to cash out with 10x millions of dollars is ludicrous. If you are not a founder of a startup, your equity (if any) will be very limited and your only cash out with those kinds of million returns is if the sale of the company is in the hundreds of million dollars.
Good luck. Ex startup guy - sold med device company and now IBD/restructuring Kellogg MBA / wharton ugrad
What exactly is Public Finance IB? Are you advising government institutions, such as city offices or budget committees? I'm sure there is some networking there, at least if you're looking for public sector exit-opps (light hours, excellent pension, etc). In terms of your decision to leave IB, I think it truly comes down to one thing...risk. How much risk are you willing to take? As the previous poster has mentioned, without a significant equity stake in the company, you could reasonably expect your salary to drop drastically. I'm sure you realize this. In addition, if the business fails, the only remaining exit-opp given your background would be B-School. From there, you could potentially go into Consulting, Public Finance, F500, etc. I think its important that you take a worst-case scenario approach to your decision, due to the high risk and high failure rates of start-ups.
735 on GMAT? Didn't know that was possible...
In all seriousness though, good advice two posts up
I mean, there's no magic answer, but some would say the writing is on the wall:
"I hate my job" "I'm not learning the skillset" "its fuckin bullshit"
How long have you been in banking, though?
Do it!
I'll take your old spot gladly:)
It's a win win
What is so good about joining a startup? (Originally Posted: 01/12/2013)
I have heard a very large number of people express interest in joining startups. People full fledged in finance, to those in B school, and individuals in many industries other than finance.
What exactly is so great about a startup if you aren't the creator or C suite?
Let's say you are just a more "normal" employee (I don't mean that negatively, so sorry if it seems like that), like you are in the marketing department, or sales, or accounting, or product development, and so on (basically, not C suite or high level management or corporate finance). What is the benefit to being in a startup, if there even is one? If the company goes big time, then is there really any bonus to the employees of the company in general?
The idea of joining an early stage startup usually includes being rewarded with some form of equity for taking a risk and joining the company. Yeah, if there isn't any equity, then you're just taking risk without reward which is pretty pointless.
I've found that lots of startups have the silicon valley vibe of a cool and fun work environment. Also rapid growth tends to be exciting as you can see the company you work for grow so rapidly.
Equity or gtfo.
equity is definitely the only rational reason to join one, but in general it is a different culture than wall street. you still work really hard and put in some long hours, but from my limited experiences of doing a couple finance and bus dev internships at startups (non finance-related) in college, it seems like people enjoy the idea of building something themselves, or at least being a part of that process. also the work feels more on your own terms
I'm looking into it because you get more responsiblity and the work has less of an "assembly-line" than it does at a huge corporation where you have to deal with bureaucracy or an otherwise gigantic machine in which you're a replaceable cog. Even at entry-levels, you'll be doing more analysis and have more of a hand in making decisions that significantly shape how profitable a firm is whereas for a corporation, you'll mostly just be closing books or doing trivial analysis on rudimentary stuff that has little impact (I'm speaking mainly from a corp fin perspective although I bet even in i-banking, you're doing a bunch of mindless work on pitches that might never go through).
Even aside from equity, this feeling of actually doing more meaningful work is why I eventually want to work for a late-stage startup someday.
What you said makes sense. I could understand looking for that.
I very much agree with what pro's have been mentioned about working for a startup -- small, intimate corporate (office?) community and culture, ability to contribute to the firm's decision making and seeing the impact of your efforts and creativity, among many others, but as I prep for an interview with a startup tomorrow in New York, and basically am being offered minimum wage (if I do indeed get the "internship" position), I must admit I'm a bit disgusted with the nature of the business/industry (especially at this point in its evolution); I would certainly be willing to tradeoff a higher salary for a happier and more fulfilling career and work environment, but ...I have ivy league debt to pay off and sometimes need to eat...
does any one have recommendations with regards to negotiations about non-salaried benefits? perhaps assistance with student loan payments? Is that rather presumptuous and personal? I think I know the answer to that question, but it's frustrating to know that my ideas could be "equally valued" as a member of the startup's team, while receiving an infinitesimal amount of the CEO's net worth.
thoughts? pity posts? advice?
thanks! j -Recent College Graduate with a Soul
I don't have a ton of experience to work off of, so maybe my answer isn't legitimate. But, didn't you type "internship"? Since when are internships about what you are getting paid? Isn't the main idea behind internships is that it is setting you up for a future FT position either at that company and/or somewhere else that will appreciate you having completed the internship?
Unless you are talking about a FT job, even with Ivy league debt, I would say you just have to bare the burden at this point and go into the internship for the experience and resume benefits. Plenty of people do internships for nothing, so be happy that you are getting paid.
Oookay. Here's the thing about startups (applicable to those who have already raised a decent Series A or later). It's not that they don't pay well, it's that they are run extremely lean. Unless you've got some irreplaceable skill set, they're asking themselves how much value you can add in the near future. Most 23 year olds don't add all that much value. The CEO, especially if it's an external one the VCs installed, does...or at least needs to be paid enough to keep him around.
Think about it, even a $40K salary excluding benefits comes out to about $800 a week before taking into account the desk space and computer they're giving you. If you're constantly churning out overpriced coffee-based drinks at Starbucks, you're making at least that much for the company every week. Sitting around at a startup on the business side of things...it might be less defensible. Fresh grads in IBD jobs are just overpaid. Startups don't have the luxury to do that. They don't really care about grooming and retaining talent for the future yet since they might not have a future.
That said, if you're a competent engineer, you can totally find startup positions that pay decently. I have several friends making $100K+ at startups and they aren't founders or C suite. Most are less than a couple years out of school. They just happen to be extremely competent. Personally I occasionally do some contract work for startups and my hourly rate is also fairly high.
Oh, and, don't expect to be paid a lot just because you're a founder. Plenty of them actually take home less than the other employees. They just get more equity. The idea being that if they started the thing, they should at least believe in it enough to work for future profit.
As for "other benefits" see if you can wrangle housing out of it, especially if they have a company apartment. Are they offering equity?
Working at Startup =/= Saving the world (Originally Posted: 05/10/2013)
.
Honestly, I don't know anyone at a startup that thinks they're saving the world. Perhaps a little self-righteousness exists as they believe they are creating value. But self-righteous people are everywhere.
Consider yourself lucky then. Going crazy here in the Valley.
Startups are just a fad. There's no real demand for the majority of them.
Fuck you, dude. That's one tool of a title.
ya srsly - the amount of start up hype is kind of a joke. Tech bubble is long gone and that is certainly when this fad began.
THIS should be highlighted.
Working at a startup as entry level (Originally Posted: 11/27/2010)
Any idea how to find startups to apply to / how to get a job at a startup / do they even hire entry level analysts? Obviously, well-funded/VC backed startups would be where I'd want to work, but how do you even go about applying/finding these startups? Just looking on VC sites and their portfolio companies usually yields experienced hires not entry level. In addition to that, even if you did find a startup that needs entry level, it'd still feel like sending a resume into a black hole...
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