Start-up: Leaving at the end of A2 to found a start-up? What are the risks?
At a top 3 US BB but want to explore something based on a problem I've seen working within my coverage group.
Could I potentially work on this during the side whilst ASO1 or if I did indeed leave to pursue it full time and it failed, would it be possible to ever come back to banking/PE or would I be stuck outside of finance and on a much lower salary?
Would be grateful to hear anyone's thoughts, especially if they've done something similar. Thanks!
Bump
If it is finance related or requires significant hours, you probably won't get it approved as a OBA.
Why is it IB or nothing - what about moving to a lower hours job like corp dev, where you could build your startup on the side? Give yourself 2 years and take it full time if it's doing really well and you're at the point it replaces your salary. You could happily go from corp dev back to banking, but going to be a tough sell if you take a year or two totally off a traditional job and are ultimately unsuccessful. You might be busting your ass with the startup, but that is hard to audit and some will view that as a career break.
Would be a healthtech startup (currently in HC coverage) so not sure how it would be perceived - haven’t told MD/ HR yet for obvious reasons.
Reason I didn’t consider Corp dev is because a lot of jobs seemed boring and I thought if I’m going to take the pay cut might as well go all.
Appreciate the advice, gives me another option to think about.
Anecdotally do you know anyone who made a similar move?
Thanks!
Probably no to being approved then.
I would just caution you against going from 100 to 0 on "real job" / pay, unless you come from significant wealth. Rent is due every month and you are likely not going to be turning a profit for a while. It will also make it a lot harder to get back into IB (PE would be out) unless the startup made it huge and was sold for 7 figures - an unlikely situation even if your idea is great. SO much luck involved.
The benefit of corp dev is it's a very solid paycheck for what's usually a 50h work week... leaves a lot of time to work on your own idea. Go work at a larger, more acquisitive company if you want a more fast-paced team but that will also come with more hours and less time for your startup. If your company gets off the ground fast, leave after a year - but you have a very easy safety net here, I would take it.
Not a ton of founders come out of IB/PE because it's a pretty risk-averse population who is happy working in a big company for a steady and substantial paycheck, so I don't know anyone personally but I'm sure they exist especially in the TMT side of things
Also just wanted to echo my thanks again, sometimes can be very tricky to get some advice so I really do appreciate it! :)
I don’t think it’s reasonable to work on a real startup, meaning high growth business not a side hustle, and do IB. Obvious reasons are the time commitment and internal approval needed but the other is that working a high paid job full time is a huge disincentive to grinding through the tough times while building your company. Trust me that they will come arising from challenges related to your product, company growth, or the market.
More important than your idea and vision is self belief and while you might have a lot of that right now, it will be challenged and your high paid, full time W2 job at a functioning company with all its support and infrastructure will only compound self doubt when it arises. It’s a distraction and a business risk.
I’ll caveat that everyone is different and you could have the most rock solid idea, unbreakable motivation, and enough additional time to work on your company, and in that case, ignore my statements. However, the more logical choice for most people concerned with personal cashflow is finding a part time or fractional job while working on their startup. Another option is finding a low intensity full time job that you would never be interested in working in long term with less than a 40 hours/week requirement. For me, that would be a siloed FP&A role at a big company.
Last thing is that no investor is going to take you seriously unless you fully commit to your startup. So while you could get the idea off the ground while having a second job, you will have to fully commit at some point and have enough savings to pursue building your company while fundraising.
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