Banking to Startup?
my buddy from Goldman told me about this ny startup, yipit, that is looking to hire banking analysts for a data product analyst role.. basically the company aggregates all daily deals and in addition to a consumer facing business, they also sell their data to the investor community and most daily deal companies. i think they're looking for a person to take on equity research type responsibilities. sounded kinda cool and probably a good experience for someone looking to start their own company down the line, which is definitely my goal.
supposedly the founder is harvard / Blackstone.. do you guys think he took a misstep going the startup route?? prob coulda went to a killer hedge fund or something.
i'm considering applying for the position, but feel feel a little iffy... what do you guys think?
I'd recommend the safer route i.e. Banking => VC => B-School => VC => Start-up
At least have a safety net of $ before you dive down the entrepreneurial track. Also, do remember that 9 out of 10 businesses fail, and that last one may not be doing well either. Its a measure of risk/return. For all you know, the founder might have already accumulated his funds so even if the business fails, it wouldn't significantly affect his standard of living. Just my 2 cents.
The start-up route is great for many people. If you decide to go that route, just be careful where you go.
Yipit isn't a new company, and the underlying companies that it is aggregating are likely going to face a world of hurt over the next 18-24 months.
I'm not going to hate on going to a start-up. Would love to do it myself, but be sure you know what you are getting into.
To echo TechBanking...at this point in your career (since you are relatively young, etc) if you were to jump to a start-up, I would recommend joining one with adequate funding (ie just complete a new round, or recently raised substantial capital) so you don't have to worry about failure 6 months in. Of course, there is no guarantee of success with sufficient capital, but you get the point.
You don't want to be in the situation where you leave banking --> failed start-up and then searching for another job in this market.
They raised 6 million in June. http://techcrunch.com/2011/06/21/yipit-6-million/
Starting a company is not a misstep it's a big risk/opportunity. But, you may never get paid at this particular start up what you would be getting if you stayed put. It's really a personal decision if you're willing to take the risk, jump.
banking-->startup? (Originally Posted: 11/02/2010)
If you knew that you wanted to found a company after your banking stint, what group would you choose to be in? I was thinking something like retail or consumer but wanted to get feedback from you guys...
Also, how bad is it to quit after your 1st year instead of doing both?
Thanks again.
It would depend on the type of company you wanted to found. If you knew it would be an internet company, the tech group would be most helpful. Consumer group would be most helpful for a consumer products or restaurant company. Don't underestimate how much industry knowledge you'll gain in banking.
If you don't know what industry you want to be in, the best would be a generalist group that lets you survey businesses in different industries and learn the "truisms" of business regardless of industry.
Banking/Finance --> Startup/Biz Dev/Strategy (Originally Posted: 09/22/2008)
Just thought I would write a post on this potential move, one that is probably being considered more and more as wall street becomes a less stable place to work, but still is overshadowed by the typical PE/HF exit opportunities. Here are "popular" notions regarding startups that I have personally heard:
1) Do not pay well 2) Unstable 3) More suited for ex-consultants 4) Good thing to do "later on down the line", after established doing banking/pe/etc
Here are the realities, at least as I have found them over the past year or so:
1) Startups do not pay bonuses the way banks do, this is true; that said, salaries in biz dev at many established, VC-backed startups can easily be $70k-$80k+ (developers can def make more); also, there is an equity component to most compensation packages, that draws from an allocated option pool that the company issues, typically along with their first seed financing. The upside here can obviously be tremendous.
2) As www.leavewallstreetjoinastartup.com mentions, wall street is clearly not stable, compared to the startup world right now. Especially in working with a strong VC-backed startup, you do not have the fear of disappearing overnight from being over-levered. What you do have a fear of is not putting out the best product/service/etc out there; at a startup however, this is something you have a direct impact on at any level. As a junior analyst at a bank, you have no real such comparable impact. I'd rather have/feel safer with the former than the latter.
3) Ex-bankers/pe analysts/associates have great modeling skills, which helps with everything from putting together business model, to being more realistic on valuation assumptions (helps especially when pitching to VCs), etc.; there is a ton of value-add in having a high level of comfort with finance and accounting. Also, in looking at term sheets, it helps to have seen these types of general deal structuring agreements in the past (on any level; it has def helped me).
4) Joining a startup and getting operational experience is always better the earlier you do it; you're also more in tune with trends in the space, which is helpful the earlier you get into that space. It is tough to just jump into digital media, for instance, when you've already spent 4-5 years looking at plastics and rubber companies at xyz PE shop (again, not to say that it can't be done; just tougher). The thought process and concept of what works is just totally different; better to get acquainted earlier.
additionally: 5) The connections you can make and the responsibility you get at a startup is on a completely different order of magnitude, compared to any kind of analyst/associate experience you could have in banking/pe/hf/etc. This I can say confidently, even from my own experience. For instance, just last week I personally (just me) met with the VP of Fox Digital Media Strategy; this simply just does not happen in banking, where your MD is the one taking this type of a meeting. The connections/responsibility aspect makes working at a startup a) a ton of fun (I LOVE my job), and b) far more rewarding professionally/career-wise. It's an issue of where you want to be 5-10 years from now, as opposed to simply making $400k/yr at Blackstone today, which is simply a different type of career path.
6) Building something real from scratch (virtually) is extremely satisfying; it is amazing to see your company go from one room and $250k of funding, to an established office space, and 000ks of users/customers, all directly correlated to your efforts. Getting your hands dirty and actually creating something that establishes value (as opposed to just managing value) gets almost addictive, and positively so. I would say this is one of the most attractive points about getting into a startup.
Please PM with any questions, and visit our site if you are thinking of making this transition; I will have more thoughts on this going forward, which I will post to our site (still being built out).http://www.qonnect.me Qonnect.me - a simple resume consultation service for entry-level jobs in finance and technology
You make some rather bold statements about how much greener it is with few data points to back it up.
Leaving Banking for VC funded startup (Originally Posted: 04/08/2010)
I'm an M&A analyst - long story, short - first year analyst at a well known shop, nothing crazy prestigious but decently strong and with decent exit ops.
I've realized banking isn't for me - I can appreciate the learning curve, but I am really after something more entrepreneurial and something more exciting I suppose.
I've been interviewing, and just got an offer at a well known startup, with an impressive management team and strong funding by two high respected VC funds. Its a well known startup, but more importantly to me, the management team is impressive and I would be working with a few of them.
I basically know I'm accepting, but was just hoping to get some advice from maybe the more experienced monkeys here, on how to think about this, either in regards to leaving banking early/burning some bridges, or if any other former analysts left banking to maybe do something unlike PE/corp. dev.
Really just looking to see if anyone has maybe made this transition, and could provide some perspective.
How can a start up be well known. Surely that's entirely paradoxical.
So what kind of role is it ? Business Development ?
if you want my advice, you should do whatever is fun for you. Are you under 25?
Do it. Start ups that are blowing up are exciting. When their product is flat in terms of growth, it can blow/be scary. Remember VC's invest in management teams, not necessarily the product. So if these guys have the trust of funds like Bessemer, First Round, Foundry, etc you'll be working with a solid crew.
Its well known in that the business is well known by the public and the VC community. I'm 22, the role would be focused on growing the business, ie. looking at various initiatives to develop the business and how to improve existing portions of the business. Admittedly, to the person's post on startups being well known, this place is probably becoming less of a startup, given the tremendous growth and the fact that most people wouldn't consider it a startup, even though it received a significant amount of series A funding less than a year ago.
Westfald - thanks, the VC funds are a similar level as the ones you mentioned, and the mgmt team is second to none, esp compared to similar startups in this environment, which does add a bit more confidence
thanks for the feedback guys
Startups can be well-known. Twitter is still a start-up - they haven't made money or gotten sold yet. But that's an outlier - other startups can be well known too, like ShareThis. ShareThis is still a startup (DFJ on their board - http://sharethis.com/about/team) and most people who go online a lot would recognize their product.
I know this startup is profitable - and while I'm still young, my experience in banking has given me enough confidence in that this company will go public or get sold in the next few years.
Even if it fails, I feel strongly that the strong management team will have provided a great learning opportunity. Not to disparage banking, but I was flat out miserable in M&A. Even if it was client contact, modeling, building CIMS, etc. I just never found that much excitement in the job.
Thanks for the responses
my boss specifically recruits solely from startups. He doesn't even look at goldman/mckinsey unless they have startup experience. then again, he's a stickler and it's just one firm.
btw if you like the quant aspect of IB then VC isn't for you. Much more qualitative
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