CFO route or LMM IB route (2 offers)

Hey all, hoping to get some perspective on a few offers I have. 

You can read more of my story in this post, but the summary is this: did 1 year of IB at a brand name shop out of college and spent the past 4 years in startup roles (mix of M&A, strat fin, product management and sales). I'm in a tier 2 finance city (Chicago/LA/SF) and my goal 4-6 months ago was to make the move to LMM private equity. I like deal work, I like analysis and I like sourcing, and I hate big corporate stuff (plus PE comp scales well even at small sizes). Since then, I've had maybe 8-9 first round interviews and have gotten to the final round with 3 funds but haven't gotten the illusive buyside offer yet. 

This week I was lucky enough to get 2 offers, though neither is in my dream role of LLM PE. Here are the two offers:

  1. Director of Finance at a Series B startup. $180k base, $20k bonus, some equity (though I have to assume it will be worth 0)

  2. Joining a boutique investment bank in a junior role (title currently undefined) that's half sourcing, half execution. $80k base, $120k bonus with expectation that it will scale up soon (as soon as 2024)

The key differences between the offers are obvious: the type of work, and the comp split between base/bonus. 

I'm much more interested in the work that the boutique IB offers. I'm eager to build a book of business / manage relationships and I've had some past success at it at startups. I also exercise some of the analytical muscle through deal structures / modeling. 

I also am more excited about the comp scaling on the IB side. At the MD level the unit economics of LMM investment banking are pretty compelling. On a $75m transaction, for example, it's not unheard of for a 5% fee which equates to $3.75m. Even with a 50% expense ratio (you can buy a decent amount of support with $1.875m) you have a pretty decent payday. And while it's not like there are $75m deals growing on trees, you don't need very many of them for pretty solid comp. Even if I don't make it 10 years and split out on my own, this role also probably sets me up to transition to private equity in 2-5 years if things for some reason don't work out. 

The Director of Finance role is much more secure as it's well-funded, high growth, brand-name VCs, etc. with a stable base salary. I don't like the day-to-day as much (like many here, I get bored without intellectual stimulation). Also, the CFO comp doesn't scale as well - even in the best case, MM or well-funded late-stage CFO comp usually tops out around $350-500k per year cash. 

The final option is to decline each of them and take another 3-6 months to find the PE gig as per my original goal. Part of me thinks I'm giving up just a bit too early as I came so close to getting an offer a few times. I could probably get another half dozen interviews in the next few months and hopefully convert one, but that's obviously an unknown. I also have a few consulting clients paying the bills now so I'm not dipping into savings in the short-term. 

Anyone have thoughts here? Am I crazy for giving the IB a fair shot even though $80k base is comically under market? 

 

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