Which offer would you choose?
Hey guys. I'm struggling to pick between two offers and wanted to get some input.
Option one is a traditional MM investment bank M&A analyst position in a T1/T2 city. I feel like the pros and cons of this one are pretty obvious. It's hard to ignore the great salary, but it comes with all the typical IB cons, plus it's a huge bank so the culture isn't really great. I don't really know what else to say about this one, but I'm incredibly grateful and fortunate to have this as a choice, but find myself always listing $$ as the main driver, which I fear will not leave me as satisfied later on.
Option two is an almost brand-new firm in a T2/T3 city (15-20 people, started 1.5-2 years ago) in a very niche PE/lending space that has had incredible success in its early period. They are already at the top of their industry in deal volume, even with such a small team, and are in the process of raising their second >700mm fund. I interned there and absolutely loved the flat/friendly culture, people, etc. and felt like I really connected with the team. The partners have great avenues for expansion (new funds, etc) and informed me that they will be promoting internally and that basically getting in early will open up a lot of doors for leadership down the road. Cons compared to the M&A position would be less diverse exposure, less $$, and maybe less stability since the firm is in a small niche currently (although they are looking to expand out, and the partners are looking to totally shake up their industry). Way less $$ at the start as an analyst, but seemingly more opportunity to move up the ladder as the firm grows (with the SMD's there making over 1.5mm at like 35-37 years old). Riskier.
As I'm graduating this year, I'm having a really tough time deciding between the big $$ M&A and the (maybe riskier) smaller firm where I *could* move up. Other thing Idk whether to consider: say I take the smaller firm option and for some reason leave the company after a couple years. I fear my experience only being in that very niche space could harm me searching for other positions, whilst leaving an established MM wouldn't carry that risk.
Help a brother out!
Without reading anything you wrote.. option 2!
1
Thanks for the response. Can you elaborate why you think so?
Quite obvious your heart is with option 2 so just roll with it. Although you say it’s a successful place and people in their thirties are making 7 figures, so why are they so cheap to their analysts?
Thanks for the response. Yeah, I honestly really did like it it's just such a hard pill to swallow giving up the huge M&A salary.I don't really know why they pay their analysts low. I think this forum has warped my monetary views. Their A1s (of whom there are like 4 right now) make around 70-80 in a LCOL city. To me, that's still a great starting salary for a 22 year old, but having that 100 (before any bonus) looming over me makes me anxious.I think part of it stems from the founders/partners being big on the "prove yourself/earn your spot" mindset. They seem pretty set on their analysts working to move up and not getting a ton early, if that makes sense. I didn't ever really feel comfortable asking about the salary while I was interning…
When I read this it's crystal clear to me- you need to take offer 1. It's not even close between the two.
edit to add why I've responded this way: I'm older- 42- I've lived through a downturn. Option 1 gives you many more choices and layoffs are coming you will be safer in option 1 with more exit opportunities and chance of career growth. Now is not the time to take big chances. Best of luck to you.
Thanks for the response; can you elaborate why you think so?
I edited with my rational. Feel free to PM me. I'm on WSO to help others as I'm a VP and here to help.
I’ve go with Option 2 however make sure that there’s opportunities to progress within the company and that your compensation will be on par with Option 1 as you become more senior and achieve a potential promotion
Is the second option PE / credit fund type of thing? Or is it like fundraising for PE or some secondary market that serves the buyside? If it's the second thing I described, I would probably do #1 as that will increase career mobility in the long run having the banking notch under your belt....
This is correct- and speaking from experience. Option 1 gives you the best chance on being well rounded and better career options.
It is more like the first thing you described
Gotta go with EBIT above. More optionality, better training, less "explaining" if you leave option 1 vs. option 2...
And what's the option 2 attitude -- "You gotta prove yourself to move up?" I mean, that's the way it is with any job, but the way it was expressed , sounds like they're almost rooting for you not to be able to "hack it." But if you interned there and you like/trust the people, I get how it's a viable option...
Still, if you take option 2, you may have to explain to banks in future (if that's where you might want to go) (1) why you didn't go with a bank initially, and (2) why you worked for such a small/unknown firm and (3) why you were in tier 3 city. I mean, you probably won't have to explain why you were in a tier 3 city, but it might be a subconscious stigma that some will hold against you.
Thanks for the response. I might’ve phrased it poorly- that attitude was evident, but they did heavily stress supporting the analysts and pushing them to be their best. You (and EBIT) hit the nail on the head when it comes to my concerns about diversity and exit opps. Also for the city thing, ik what you mean, it’s also my home city so that could be an explanation (Lol).
Yes, home town is totally legit. reason for working in small market.
In the end, go with your gut... and picture yourself in the future, and imagine which would would you regret not taking more.
Del
This is a tough decision, as option 2 has a much much much higher upside, but much higher risk? Is the business recession proof? If not, how will an economic downturn impact them?
Option 1 is super vanilla and you know exactly what you're getting into. Option 2 could lead you to perpetually ask yourself "what if" in the event you choose option 1.
Personally, as long as you believe in Option 2, that is what I would choose. Later on in life you can always return to the MM IB space, but option 1 seems truly unique. The only caveat would be that the next few years will be rough and you need to ensure you wont get laid off.
Thanks for the detailed response. I’m planning on setting up a meeting with the partner that recruited me and asking some of those questions you mentioned about recession-proofing, projected stability, etc.
Just go with what you want deep down, and it clearly sounds like you already decided on option 2
^ yeah no point in debating
There are already some good perspectives and you probably already have a good grasp of the pros and cons at this point So I just want to say what I think when it comes to the decision making.
I personally think when you are younger, especially when this is your first gig, it's exactly the best time to take risk. Cause what are there to lose? You will be given so much more leeway if you end up leaving the company; you haven't accumulate enough capitals and connections that any step is a step forward. Sure, if you don't plan to take any risk at all for career then none of this matter. But if you do have thought about trying something riskier out, now is arguably the best time.
Try to consider a third (possible?) way: work 2 years in M&A and then switch to the PE firm.
Try to talk with the PE seniors to understand if it would be okay for them.
Of course, tell them that the M&A experience would provide you great skills that you will be able to translate there etc…
Spend 2 years in IB, enjoy an actual structured learning environment, and then think about going to option #2.
Do they know about your other offer - maybe gently bring it up and the comp differential as you think about it. If done right, it probably can't hurt? Although I wouldn't normally recommend negotiating for the first job but depends on how close you are to them etc - its not like you don't know the group given you interned with them
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