PE associate job vs Tech Startup backed by tier 1A VC firm with substantial path to growth.

As it says above, could recruit for a pe associate role or join a tech startup backed by a tier 1A firm (a16z, Sequoia,etc) that bootstrapped to a substantial MSDmm ARR before even taking the money. would be like employee number 10 so part of the founding team.

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That said you can join startup and then go VC after if you’re passionate about something and want to attack a theme. Hard truth about startups is that if you don’t have the founders ear you have to understand you’re going to be on the other end of some really hard decisions / pivots /changing strategy

 

My first comment didn’t load idk why. My hot take is that unless youre a first 5 employee hire at the startup, the worst investing seat will be 1000x intellectually stimulating than even the best, most fast growing startup.

 

This shouldn’t be a hot take— you’re absolutely right. Startups are a bit overrated. They can be extremely political / have pretty dumb bosses, and you have to assume that the startup equity is worth $0 (it’s also often issued as exercisable options btw , which you have to pay in to to get and that money is likely to be lost). 

The real prize of working at a startup or corporate in general is if you can find ppl that you mesh with, a comp / WLB that suits your needs, AND perhaps most critically, be in the mental space where you’re ok just coasting at a particular pay level without much (or any) development 

 
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This is a personal decision that depends on your willingness to take risk and your interest in tech vs. private equity.

A few things:

  1. Being an early employee at a startup comes with the ability to work your way upwards into leadership positions that would otherwise take decades to attain from the outside. This can significantly accelerate your career.
  2. If your company "makes it," you can potentially get an outsized payday.
  3. You're young, and now is the time to take outsized risks.
  4. a16z, Sequoia, etc. and early traction are pretty much the best signals you're going to see at this stage.

Downsides:

  1. Obvious failure risk, AI companies (I'm just going to guess it's an AI startup) are scaling ARR faster and earlier so a few million within the first year is no longer "n of 1"-type performance. Also need to pay attention to gross margins - lots of startups often just resemble passthrough vehicles for foundational model providers like Anthropic and OpenAI.
  2. Being employee #10 will probably not pay out as much as you think, unless you happen to win the lottery and join a company that becomes Facebook, OpenAI, etc.
  3. The path to PE will likely be closed if you take the startup path.
  4. On a risk-adjusted basis, comp in the long-term PE career path has historically been substantially better (not sure what it is now given how competitive everything is). That being said, it's not easy to climb the PE ladder either, lots of people burn out.

I passed on a few startup jobs back in the day, and on jobs at tech companies that have since achieved incredible scale, in favor of my "path" on the buyside. I sometimes feel pangs of regret that I didn't take more risk earlier in my career. Now that I'm earning pretty decent money and will need to take a 50%+ pay cut to join any startup, I doubt I'll ever be able to take that leap.

 

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