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I spoke today with a very successful entrepreneur. He worked in very senior strategy roles for a F50 company where he admitted to earning well over a mill a year all in comp before leaving to join a start up that offered him 1/10th his previous pay and stock options which at the time were worthless.

I asked him, what about that start up gave him the motivation and inspiration that he believed in it so much to jump ship.

His response was that he never had a choice. He was so enthralled, so obsessed and in love with the business idea, he had to do it. His advice was that if I was ever considering joining a start up company, and I think I have a choice, don't do it. Go to the biggest, baddest firm you can with the most powerful people and network. But once you do fall in love with a company and can't help but go join it, God help you, may you be stronger for it.

Just wanted to share, and see if folks had thoughts on entrepreneurship in general, and what to think about before joining a venture.

Comments (43)

  • HarvardOrBust's picture

    Depends on the risk/reward. The start-up opportunity out of college would have to be very attractive for me to not pursue IB.

  • gsduke's picture

    This is going to be my one serious post on this website:

    At the end of the day the world is still correct in that it rewards entrepreneurial talent, or taking risk that pans out correctly: Google, Microsoft, etc. were all once startups, and today their founders have an obscene amount of wealth. The founders were not afraid to stray off the conventional path. The most successful people in the business world are not content to work at successful companies. They want to create the fucking successful company.

    That being said, it is the thrill of the business idea that has to captivate me. A lot of people on this forum can twist their little penises into a knot about risk and reward and projected free cash flow in a start-up or whatever bullshit fundamental analysis they can string together, and I can bullshit better than most of them.

    What is beautiful about entrepreneurship is that you can change the world by supplying a need to people who didn't know that need existed in the first place. You might even make the world a better place. I'm sorry, but charging a fee to some jackass while pulling off a transaction is nowhere near as high on the list of Shit That Matters, i.e. making a positive difference in the lives of people around you. Yes, maybe one day I'll stop being a hypocrite and break the golden shackles I have created for myself and maybe start my own hedge fund (as entrepreneurial as it gets in finance) or maybe just find a business I believe in and help it grow into something meaningful.

    What separates America from the machine-like efficiency of the Asian academic system is that people are not afraid to take massive amounts of risk: Bill Gates was a Harvard-dropout. Matt Damon was a Harvard-dropout. Granted, there are plenty of successful Harvard graduates, but it's passion and luck and hard work that will make you 'successful,' not some business card you show to some brain-dead pussy on legs.

    I am willing to bet that none of the kids that get an erection to the notion of working in IBD would drop out of Harvard. The one thing that pisses me off about America right now is the fact that so many people want to end up as doctors or lawyers or bankers: these are all service industries that just require some tolerance for bullshit. Very few kids and top universities want to take real risks that are intelligently thought out. Even things that have their roots in good causes, like TFA, just turn into a prestige circle-jerk. Even "Entrepreneurship" clubs at universities just turn into resume-building pit-stops that completely destroy the notion of starting out on your own.

    In the end, I am patiently waiting for the day I can proudly call myself an entrepreneur. Hopefully that killer business idea comes before I get too attached to the notion of working in high finance.

  • HarvardOrBust's picture

    gsduke,
    If you want to drop out of college, chances are, you should have a very good reason for doing so. If I somehow don't run into a once in a lifetime opportunity or develop one myself during college, why should I risk losing everything for something that isn't there yet? Even you aren't willing to quit your college/job until you find the right time to do it. There's a lot to learn from entrepreneurship, but clearly it's not for everyone.

  • gsduke's picture

    Fair enough, but please kill me if I spend the rest of my life doing more or less the same jackass shit that my unquestionably prestigious job entails.

  • monkeysama's picture

    What no one manages to factor in is the price of failure. For every Bill Gates there are a thousand kids who dropped out and there lives went down the toilet - no money, no girl, living at home with no future prospects.

  • gsduke's picture

    well they clearly took the wrong risks. i'm glorifying intelligent risk-taking, not trying to quote a price on failure. and plus if those fucks are worth half of a cockroach's ass, they would try to find the next venture instead of moaning about their failure

  • In reply to gsduke
    ck123321's picture

    gsduke wrote:
    well they clearly took the wrong risks. i'm glorifying intelligent risk-taking, not trying to quote a price on failure. and plus if those fucks are worth half of a cockroach's ass, they would try to find the next venture instead of moaning about their failure

    You talk of "intelligent risk-taking" like it's the safe version of entrepreneurship. The wrong risks? Man, all the risks entrepreneurs take are basically risks of total failure. The thousands of people that failed where Gates succeeded took the very same risks, Gates just got lucky (ok, maybe not all luck). And for every entrepreneur and for every successful idea there are 9 failed ideas. My point is that you can't just glorify successful entrepreneurship, failure is just as integral to the concept "entrepreneurship". Just ask any real entrepreneur.

  • In reply to PuppyBackedSecurities
    gsduke's picture

    I lied and this might be my second serious post on this site.

    PuppyBackedSecurities wrote:
    ...romanticism imo... all romanticized, glorify the failed entrepreneur and ill believe you

    Hahaha the concept of 'at least he tried' or noble defeat is really Western, and defending it seems like a cliche Philosophy 101 final. I won't try to defend that notion, because my industry is one with an attitude of 'well you blew up and lost a metric fuckton of money.' Most of the people reading a defense of that will point to that aforementioned notion. Wall Street is all about how much money have you made lately, with a few smarter people being able to accurately assess the viability of sustaining that.

    The only crowd that the failed entrepreneur would appeal to is the people that subscribe to the notion that going out with a bang is far more interesting than languishing in mediocrity. In the end, in our brilliant lingo, they are the sucker on the losing end of a trade. Isn't there some value to the people who get Darwin-ed out though? At least the rest of us can learn something from their spectacular fuck-up, which makes for more efficiency.

    What I find particularly interesting is that finance is the derivative of entrepreneurship, and we have the luxury of basically facilitating their transactions or betting on businesses we have a real opinion on. When finance mistakes itself for invention instead of innovation is where the industry gets into trouble: we are so convinced about our own bullshit that we do shit like LTCM/subprime mortgages/etc. (Hey we're creating market efficiency by levering up 100x and betting on convergence patterns in fixed-income securities! Hey somebody wants to buy the pieces of my shittastic CDO so obviously I can justify my existence and charge a fee, and now I'll lev the shit out of this process and earn more fees!)

    So by staying in finance, I think we are romanticizing second-rate entrepreneurs that have the luxury of still being around. Now that REALLY sucks.

    I apologize for this raging drunk rant; I am an Internet menace in this state.

  • In reply to gsduke
    jameson22's picture

    gsduke wrote:
    I lied and this might be my second serious post on this site.

    PuppyBackedSecurities wrote:
    ...romanticism imo... all romanticized, glorify the failed entrepreneur and ill believe you

    Hahaha the concept of 'at least he tried' or noble defeat is really Western, and defending it seems like a cliche Philosophy 101 final. I won't try to defend that notion, because my industry is one with an attitude of 'well you blew up and lost a metric fuckton of money.' Most of the people reading a defense of that will point to that aforementioned notion. Wall Street is all about how much money have you made lately, with a few smarter people being able to accurately assess the viability of sustaining that.

    The only crowd that the failed entrepreneur would appeal to is the people that subscribe to the notion that going out with a bang is far more interesting than languishing in mediocrity. In the end, in our brilliant lingo, they are the sucker on the losing end of a trade. Isn't there some value to the people who get Darwin-ed out though? At least the rest of us can learn something from their spectacular fuck-up, which makes for more efficiency.

    What I find particularly interesting is that finance is the derivative of entrepreneurship, and we have the luxury of basically facilitating their transactions or betting on businesses we have a real opinion on. When finance mistakes itself for invention instead of innovation is where the industry gets into trouble: we are so convinced about our own bullshit that we do shit like LTCM/subprime mortgages/etc. (Hey we're creating market efficiency by levering up 100x and betting on convergence patterns in fixed-income securities! Hey somebody wants to buy the pieces of my shittastic CDO so obviously I can justify my existence and charge a fee, and now I'll lev the shit out of this process and earn more fees!)

    So by staying in finance, I think we are romanticizing second-rate entrepreneurs that have the luxury of still being around. Now that REALLY sucks.

    I apologize for this raging drunk rant; I am an Internet menace in this state.

    Make sure you wipe off the computer when you've finished masturbating to yourself

  • In reply to gsduke
    jameson22's picture

    gsduke wrote:
    I lied and this might be my second serious post on this site.

    PuppyBackedSecurities wrote:
    ...romanticism imo... all romanticized, glorify the failed entrepreneur and ill believe you

    Hahaha the concept of 'at least he tried' or noble defeat is really Western, and defending it seems like a cliche Philosophy 101 final. I won't try to defend that notion, because my industry is one with an attitude of 'well you blew up and lost a metric fuckton of money.' Most of the people reading a defense of that will point to that aforementioned notion. Wall Street is all about how much money have you made lately, with a few smarter people being able to accurately assess the viability of sustaining that.

    The only crowd that the failed entrepreneur would appeal to is the people that subscribe to the notion that going out with a bang is far more interesting than languishing in mediocrity. In the end, in our brilliant lingo, they are the sucker on the losing end of a trade. Isn't there some value to the people who get Darwin-ed out though? At least the rest of us can learn something from their spectacular fuck-up, which makes for more efficiency.

    What I find particularly interesting is that finance is the derivative of entrepreneurship, and we have the luxury of basically facilitating their transactions or betting on businesses we have a real opinion on. When finance mistakes itself for invention instead of innovation is where the industry gets into trouble: we are so convinced about our own bullshit that we do shit like LTCM/subprime mortgages/etc. (Hey we're creating market efficiency by levering up 100x and betting on convergence patterns in fixed-income securities! Hey somebody wants to buy the pieces of my shittastic CDO so obviously I can justify my existence and charge a fee, and now I'll lev the shit out of this process and earn more fees!)

    So by staying in finance, I think we are romanticizing second-rate entrepreneurs that have the luxury of still being around. Now that REALLY sucks.

    I apologize for this raging drunk rant; I am an Internet menace in this state.

    Make sure you wipe off the computer when you're done masturbating to yourself.

    "So by staying in finance, I think we are romanticizing second-rate entrepreneurs that have the luxury of still being around. Now that REALLY sucks." Really? You really believe that. Go fuck yourself.

  • PurpleTurtle's picture

    The average case in business is failure. Entrepreneurship is a side-effect, an emergent property of a great deal of thought, planning, passion and hard work. If you are joining a start-up simply to be an entrepreneur, you will fail.

  • vikram_eda's picture

    Part of the reason people want to work for an IBD is its signaling power. Remember job market signaling? Michael Spence?

    Signaling helps solve the coordination problem. WHO has the best information and skills to do a particular job? Then there is motivation problem - the why part.

    A stint in IBD signals the liquidity of the labor resource. That the resource (labor) is acceptable to some of the most COMPETITIVE minds (supposedly) in the business world as a highly productive resource. That the resource (labor) is not without choices (means valuable) and that the resource (labor) is attempting to reduce the bidder's search & information costs by signaling and that the resource (labor) will need least amount of policing and monitoring because the resource (labor) is used to working hard and in intense manner.

  • CharmWithSubstance's picture

    I went in VC thinking it would give me insight into how businesses develop and grow so that one day I can do the same with my own company. The longer I stay in the industry, the less attractive entrepreneurship sounds. What people are forgetting is entrepreneurship isn't make it or break it. If it were that way, I'd be much more inclined to do it (unless you're totally broke after a failed venture). You make it rich or you fail, and if you fail, get up and do it over again (whether it's another company if you can actually get funding or be in corporate).

    But sometimes you DON'T KNOW. What people don't think about is there are many more cases of companies "in limbo." Their revenues are flat year over year, you barely break even, and because you're trying to be capital efficient you pay yourself and your employees below market. This goes on for 3 years, 5 years, 7 years... what do you do? Do you fold? It's still a viable business and you need to feed your family, but this is clearly not going anywhere. Do you have the courage to walk away from what you built and put significant amount of time and money into? That, I think, is the most frustrating position to be in.

  • In reply to monkeysama
    econ's picture

    monkeysama wrote:
    What no one manages to factor in is the price of failure. For every Bill Gates there are a thousand kids who dropped out and there lives went down the toilet - no money, no girl, living at home with no future prospects.

    I have to disagree with this. Sure, there are a lot of people who tried and didn't make it rich. But I wouldn't call them failures, since at least they have balls and took a shot. Not to mention, I bet they learned a great deal (much more than an MBA program or analyst stint at an IB, in my opinion). And companies notice that, at least I think they do. If you come into an interview and can talk about your experiences running your own company, I'm sure you'll blow a lot of the other applicants out of the water -- it shows you will take risks, make sacrifices, have balls, are a go-getter, are passionate about business, willing to learn, etc. Anyway, just my two cents.

    P.S. OP, thanks for posting this. I've been thinking a lot about entrepreneurship, in general, lately. So, this post was right on time.

  • In reply to CharmWithSubstance
    HarvardOrBust's picture

    CharmWithSubstance wrote:

    But sometimes you DON'T KNOW. What people don't think about is there are many more cases of companies "in limbo." Their revenues are flat year over year, you barely break even, and because you're trying to be capital efficient you pay yourself and your employees below market. This goes on for 3 years, 5 years, 7 years... what do you do? Do you fold? It's still a viable business and you need to feed your family, but this is clearly not going anywhere. Do you have the courage to walk away from what you built and put significant amount of time and money into? That, I think, is the most frustrating position to be in.

    Very insightful and relevant... I personally know someone in this position, and it's hard to say what will happen. It must be incredibly hard to quit something that you invested so much time and effort into just because the business doesn't live up to expectations. If you aren't capital sufficient or you don't have peers who can support you through tough times, then I can see where the dilemma lies.

    After reading through the one thread about Gladwell's articles, I've been reading a lot of his articles that pertain to some of the threads that have been coming up lately.
    http://gladwell.com/2008/2008_10_20_a_latebloomers... - an article investigating artists who develop great art later than earlier, very similar to the entrepreneur's experience.

  • MrDouche's picture

    I can only speak from personal experience, but owning a company is much better. Yes, I went to Stanford (although rejected at HYP) and worked at a BB (although rejected at GS). I earn a lot more--and have a substantially greater net worth--than my other cohorts who did the typical IB>PE route, I enjoy my life and have a wonderful family and huge house, and was able to do a PhD and I'm still 31.

    Why join a start-up? Start it. Don't have any money.

    Investment banking is good for 1 year and no more if you can make it in your own gig. If not, it might finance might be a good option. But if you're like me and didn't go to a top-target and got rejected at GS then your chance of mediocrity is pretty high in the industry, so don't hang your hat on being a New York big shot. You'll be lucky if you can afford a 2000 SF flat at 40. That doesn't sound too inspiring too me.

    If you want to work at a fund, start your own. If you're good, why not? If you suck, then you already know it by lingering doubts. Same with any business.

    I rich, smarts, and totally in debt.

  • onemanwolfpack's picture

    I have more respect for the owner of a 5-person company than any MD at a BB. No risk in climbing the corporate ladder and no glory either.

  • In The Flesh's picture

    Midas, you are the man. I'm trying to picture you in your mask trying to sit up straight while angrily typing out responses and finally ending by falling asleep on top of your keyboard. Just an amusing image that came to me.

    Metal. Music. Life. www.headofmetal.com

  • happypantsmcgee's picture

    As far as the failure being romantic notion, I think a lot of you are failing to realize one thing. It's not as though someone who drops out of Harvard with illusions of grandeur trying to start the next Groupon is going to fail and then throw in the towel on the next 50 years of his life. There have been many studies that show people who get into Harvard, Yale, etc. will succeed even without the degree. The type of people with the know how and drive to take a risk like that rarely land on their asses.

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to happypantsmcgee
    econ's picture

    happypantsmcgee wrote:
    As far as the failure being romantic notion, I think a lot of you are failing to realize one thing. It's not as though someone who drops out of Harvard with illusions of grandeur trying to start the next Groupon is going to fail and then throw in the towel on the next 50 years of his life. There have been many studies that show people who get into Harvard, Yale, etc. will succeed even without the degree. The type of people with the know how and drive to take a risk like that rarely land on their asses.

    Exactly. And, it's not like they can't just go back to HYP if it fails. Along similar lines, there's evidence that people who turn down HYP for the local state school, make just as much money in the long-run. Therefore, the success of HYP grads is probably more of a function of the type of people who get admitted, as opposed to the human capital of attending HYP.

  • In reply to In The Flesh
    happypantsmcgee's picture

    Pfalzer wrote:
    Midas, you are the man. I'm trying to picture you in your mask trying to sit up straight while angrily typing out responses and finally ending by falling asleep on top of your keyboard. Just an amusing image that came to me.

    Midas never commented on this thread...

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to In The Flesh
    mehp's picture

    Pfalzer wrote:
    Midas, you are the man. I'm trying to picture you in your mask trying to sit up straight while angrily typing out responses and finally ending by falling asleep on top of your keyboard. Just an amusing image that came to me.

    I'm confused, is gsduke midas or did he just steal his icon and has a similar wordy writing style?

  • In reply to mehp
    gsduke's picture

    mehp wrote:
    Pfalzer wrote:
    Midas, you are the man. I'm trying to picture you in your mask trying to sit up straight while angrily typing out responses and finally ending by falling asleep on top of your keyboard. Just an amusing image that came to me.

    I'm confused, is gsduke midas or did he just steal his icon and has a similar wordy writing style?

    it's a new gimmick for the week and i will revert to my usual asinine self soon

  • In reply to In The Flesh
    Victor252's picture

    Pfalzer wrote:
    Midas, you are the man. I'm trying to picture you in your mask trying to sit up straight while angrily typing out responses and finally ending by falling asleep on top of your keyboard. Just an amusing image that came to me.

    So Gsduke=Midas?

    http://www.wallstreetoasis.com/forums/crap-that-pi...

    I see the same avatar pic bit there's different banana points and profile info. Is Midas leading a triple life now or has he used up an entire profile?

  • In reply to Victor252
    gsduke's picture

    Victor252 wrote:
    Pfalzer wrote:
    Midas, you are the man. I'm trying to picture you in your mask trying to sit up straight while angrily typing out responses and finally ending by falling asleep on top of your keyboard. Just an amusing image that came to me.

    So Gsduke=Midas?

    http://www.wallstreetoasis.com/forums/crap-that-pi...

    I see the same avatar pic bit there's different banana points and profile info. Is Midas leading a triple life now or has he used up an entire profile?

    absolutely not--i just chose somebody to imitate for the week on a whim and decided Midas (all due respect) would be fun. sprinkle it in with some of my own actual opinions and you have a recipe for something legitimate-sounding.

    regards
    gsduke

  • In reply to chubbybunny
    UFOinsider's picture

    chubbybunny wrote:
    entrepreneurship is for sissies. It's either IBD or bust.

    IBD is for sissies - Marine Corps / Navy SEAL was the standard in my family (this shit pays way better though). A family member of mine is an entrepreneur and turned out $600K+ in profits before even finishing college and is doing banking, well, I don't know why. I myself don't know why I'm bothering to go into banking....I guess, well shit, I just want to try it. You IVY kids really need to get out and learn about the world.....geniouses indeed

    Get busy living

  • In reply to gsduke
    UFOinsider's picture

    gsduke wrote:
    Fair enough, but please kill me if I spend the rest of my life doing more or less the same jackass shit that my unquestionably prestigious job entails.

    I'll take your place if you like.....seriously, start sending work my way and I'll transition in. When you have a JOB you work for your boss, when you start a business, you work for EVERYONE.....but if you aren't already working on something that's taking off, never leave your job

    Get busy living

  • In reply to UFOinsider
    gsduke's picture

    UFOinsider wrote:
    You IVY kids really need to get out and learn about the world.....geniouses indeed

    at least we can spell 'geniuses'

    regards
    gsduke

  • In reply to CharmWithSubstance
    txjustin's picture

    CharmWithSubstance wrote:
    I went in VC thinking it would give me insight into how businesses develop and grow so that one day I can do the same with my own company. The longer I stay in the industry, the less attractive entrepreneurship sounds. What people are forgetting is entrepreneurship isn't make it or break it. If it were that way, I'd be much more inclined to do it (unless you're totally broke after a failed venture). You make it rich or you fail, and if you fail, get up and do it over again (whether it's another company if you can actually get funding or be in corporate).

    But sometimes you DON'T KNOW. What people don't think about is there are many more cases of companies "in limbo." Their revenues are flat year over year, you barely break even, and because you're trying to be capital efficient you pay yourself and your employees below market. This goes on for 3 years, 5 years, 7 years... what do you do? Do you fold? It's still a viable business and you need to feed your family, but this is clearly not going anywhere. Do you have the courage to walk away from what you built and put significant amount of time and money into? That, I think, is the most frustrating position to be in.

    A lot of what you said seems to be geared towards mid to large businesses. I know several small business owners that never made it to be rich, but they never went broke. They pay themselves good and also pay a lot of their bills through the business. Also, guess what? They NEVER want to show a profit!

  • In reply to gsduke
    UFOinsider's picture

    gsduke wrote:
    UFOinsider wrote:
    You IVY kids really need to get out and learn about the world.....geniouses indeed

    at least we can spell 'geniuses'

    regards
    gsduke


    sarcasmm

    Get busy living

  • In reply to UFOinsider
    chubbybunny's picture

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    UFOinsider's picture

    Get busy living

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    gsduke's picture
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    UFOinsider's picture

    Get busy living

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    UFOinsider's picture

    Get busy living

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