Have two offers: PE Associate vs. Finance @ Tech Startup
I did my analyst role at a PE firm and I've been recruiting for other firms (lets just say working conditions were shit) . I have two offers Im considering - 1) a PE associate role at a MUCH smaller shop (Im talking from 100 to 10 investment professionals so hoping they have more reasonable work/life balance) and 2) a finance role at a tech startup (over 100+ employees across the world). This is how Im thinking about the roles:
1) Give PE another try at a smaller shop to see if it was mainly my prior firm's culture (you had to be available 24/7, i was staffed on Friday nights, always stressed out because I never knew when a new project might come up...you get the jist). The pay is also higher than that at the startup role which is another consideration. If I leave the buy side is that a done deal?
2) Im really interested in joining this tech startup (work seems interesting, lots of growth oppts internally, and have offices internationally so I can travel there). I plan to use this role as a stepping-stone into VC. However, seeing all these tech layoffs is giving me anxiety. I am terrified of being laid off in this market and ending up without a job. The pay is also much lower than that at my prior job which is another con.
I understand no one can give me the answer other than myself on which opportunity to proceed with but any advice would be helpful as how to think about these opportunities.
It's definitely a tough spot. Personally, given the current economic situation, I would want to max on comp for the next year or two and just save aggressively while building more of a network. A caveat, just being a smaller firm doesn't mean better W/L, I'm at a firm with <5 on the investment team and still avg. 70-80hrs/week. But you could easily swap to a more senior role at a tech startup after just a year or two as an associate in PE. I have a colleague who just left earlier this year after finishing ASO Y1 and he went right to being a manager for strategy & finance at a well-funded startup making >$120k + a small options allocation. The PE route won't close any doors off, but going right to the tech startup will + it's likely going to be less stable.
That's how I'd evaluate the opportunities at least knowing nothing about you, LT goals, or the background of either role.
thats the exact comp i would be getting at the startup offer
Makes sense. You've had 2-3 years of PE experience as an analyst vs my ex-colleague had 2 years Big 4 + 1 year PE. I imagine that if you had a full associate stint under your belt it could be notably higher (probably not 2x though).
If you want to stay in a strategic finance role, then PE could theoretically help fast-track by a level or two. However, if you want to switch to another role within the startup (e.g., PM, Product Marketing, etc.), then it's better to switch earlier than later - the PE years won't help you advance at all (if anything it'll slow you down as you'll be viewed less of a generalist)
Smaller firm is not a guaranteed improvement on WLB, and I think any PE job you might get a friday afternoon staffing or get surprised with some huge project out of nowhere.
That said, agree with above - if you can stick it out another 2 years in PE and "wait out" the tech/startup layoffs a bit, you will have your choice of fintech startups and you qill be quite attractive to them. Hopefully they'll be in a better situation than right now with the cream rising to the crop. Also, startups can be crazy stressful, you don't get to just be "junior excel monkey, none of this falls on me" - startups will put a lot of pressure on you to wear multiple hats and innovate, esp right now. Different type of stress but worth considering.
very true. i did probe into their work life balance and actually made it known that im switching because i needed something more sustainable (i was getting staffed on my vacations and literally took 1 week a yr). they seemed to respond well to that and although the hours are long the smaller firm would be more predictable because oyu have more visibility into incoming projects
i get it. the company is well funded and honestly who's to say a new PE firm cant go under either. i dont anticipate it to be easy breezy but they told me they dont work on weekends (like once or twice ever that ppl in my role have had to)
Finance at Tech is not necessarily a stepping stone to VC, unless you are in Strategic Finance or Corp Dev.
nothing's guaranteed thats true. but in PE i had a hard time getting an offer in VC bc of my lack of experience in early stage (very diff beast)
You’re going to have to be very careful here. I know a few people who have left IB/PE for startups in search of better WLB and were shocked to find that they preferred IB/PE. Startups can be a very high pressure environment with the culture determined by the founder or the senior members of the team. It isn’t unusual to see ex-bankers or consultants leading startup teams and essentially ‘porting over’ the culture and work expectations from their prior firms. I’m talking Corp Dev teams doing evening conference calls, weekend conference calls, crazy deliverables for deals going nowhere, and everything else that you probably hate about PE. I encourage you to diligence hard the precise expectations.
Another thing that many people fail to realize is that there is maybe a minor correlation in the professional world between hours worked and expectations. Just because you aren’t in IB/PE doesn’t mean your boss isn’t going to be a hardo perfectionist. I’ve had portfolio companies where the mechanical engineers were expected to work 50-60 hour weeks and got paid $50k - $100k in their 30s and 40s. If you do decide to go into the corporate or startup world coming from IB/PE, you’ll need to reset your expectations. I’m not saying it isn’t possible or that there aren’t fantastic jobs out there, just that there are plenty of difficult jobs that also don’t pay as well.
If I were you I would try the smaller shop before you abandon PE altogether. There are lots of LMM PE firms with reasonable hours and good people running them where you’ll still have a great trajectory financially. Don’t let your one bad experience ruin the whole industry for you … at least give it a second try before bailing out completely.
yea thats very true which is why i was very careful to probe into the work life balance, check the prior experiences of founders and current team members. i straight up asked if there is weekend work. understand its not a straight 9-5 and honestly any job can be stressful nowadays. they also have MUCH better PTO policy and i can work from anywhere
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