Should I back out of my current offer for a new one
Hey guys,
I'm a young professional with almost 2 years of full-time work experience. Recently I came across a somewhat difficult decision-making situation. As a result, I was hoping to seek some advice and inputs from y'all to better evaluate the circumstances. :-)
Not long ago I signed an offer (offer A) from a small private real estate development firm in my current city (a 3rd tier midwestern city). The position is Development Analyst and I have not started yet. A few days ago, I got another offer (offer B) from a publicly-traded tech/ telecom conglomerate as a Corporate Development Analyst. The job is in a growing and more expensive city in the west. The base pay is around 40% more than what offer A offers so I am kind of tempted by this new offer B; however, I have already signed offer A and the company has been diligently working on my onboarding, so it would be extremely unethical and atrocious of me to back out. As a result, I would like to hear what y'all would do if you were in my shoes, and more honestly, I was hoping someone could bitch slap me awake and talk me out of considering offer B. I have listed some more details on both offers below.
Offer A
- Development Analyst position. Compensation includes base pay and 25 bps of net fee revenue (fee revenue - opex)
- A small real estate development shop with around 5-10 years of history focusing on developing luxury apartment buildings. The company doubled its size last year, currently has around 25 employees, and is still expanding
- It has built around 12 complexes throughout the country and has a few in development. The website claims they have completed around $1 billion of projects, $500-700 million in development and $1.5 billion "in pipeline"
- Met with the team and I like them. People are chill, ambitious, and friendly. I like the chill and relaxing vibe of the office. Plus the office is in my town and I love living here.
- I am personally more interested in real estate
- I have never seen their models so I am not sure how complex their underwriting model would be.
- There are very limited finance/ real estate opportunities in my town so there is a chance that I might eventually move to a larger city elsewhere
Offer B
- Corporate Development Analyst position within a 5-7 ppl team. Publicly traded TMT conglomerate that is highly acquisitive while doing quite a few divestitures at the same time. Deal flows are expected to be strong.
- Brand name carries weight and the industry is hot. Better job stability (maybe)
- Pay is 40% higher and heavy on base salary despite the city being more expensive. However I personally do not like the city very much and do not plan to stay there for long
- Never met the team face to face. I talked to 4 senior colleagues and find them a bit uptight yet nice. The team recently experienced some leadership change (two senior leaders joined the team/ company just a month ago)
- There might be limited progression opportunities within the team.
- I am not very interested in the TMT industry
- One team member mentioned that they do not do LBO models, so I am not sure how transferrable and valuable the skillsets I learn there would be
Growth opportunity is very important to me and I dread being pigeonholed. I am looking to amass hard and soft skills that enable me to be flexible in my career, even if I might not go for a more demanding route in the future. I do not want to make bank but I do want to be able to live a comfortable life. My goal so far is to eventually move to a traditional PE or Real Estate PE firm that has a better work life balance relatively speaking. I also want to stay in a 2nd - 3rd tier city in the future. Which opportunity should I take? Should I even consider backing out of my current offer?
Sorry about writing a book here. I am in the early stage of my career and I barely have any family members/ friends from who I can seek advice, so I decided to post on wso to pick some brains. I truly appreciate y'all paying attention and taking the time!
PS: I am located in the US. I am not sure why it keeps showing central Asia and France.
was the offer with Liberty Global by any chance (going by the mid west tag assuming its Denver office)? be aware that progression can be a bit slow and a lot of the work is done out of the London office. company is doing some interesting things in pivoting into EV etc type space.
Thanks for the response. No it is not Liberty Global.
fair enough. for what its worth all the Corp Dev ppl i saw from LG went onto other Corp Dev positions or rotated within industry. Didnt see any exits into PE. it would be a side step on the way to PE from banking (if that is where you are).
im sure you could do the maths on the economics of he 25bps of net revenue as bonus to help you make decision. if youre interested in RE sector it prob makes more sense. perhaps you should post this qs on Real Estate forum whether a Development Analyst - REIB - REPE path is possible / makes sense.
Thanks so much buddy! That company is way larger than LG but I don't see any Corp Dev alum breaking into PE either. That's a fair assessment and I really appreciate it. I am not currently in banking - I work for a boutique management consulting firm with no brand name recognition. I heard it is hard to move to buy side from Corp Dev if you don’t have previous banking experience? I don’t expect to make any sizable bonus with that 25bps right now so that’s the lower pay is the only concern that I have with offer A.
It sounds like you don't like Offer B's industry, people, exits or location... so is there anything you like except pay? Offer A checks the box on all of those with lower pay.
I'd go with A without a question, IMO. Money isn't everything when your exit ops change drastically and you don't want to be in that industry, and you'll have a tough time getting into RE with a TMT corp dev background. You have a long career ahead of you and salary differences in your mid-20s shouldn't outweigh your long-term goals. Get some solid RE experience, enjoy your town and the team, and if you are still worried about comp down the road you can move upmarket.
Thank you. That's solid advice. It's not that I don't like B's exit opportunities. It's that I don't know what exit opportunities I can expect. I don’t have any banking experience before. I checked their alum and no one exited into PE. Is it naive to hope I would be an exception? Do you think B can lead to good exit opportunities in the future? I think it's great that they're active on doing deals but is the lack of real LBO experience a drawback?
Corp dev to PE is very rare unless you have a PE background or extensive connections (i.e. you're a star at a portco and you go to your sponsor). I don't think your PE chances are good from corp dev, maybe if you came from banking or MBB - but corp dev is really the exit and there's few glittery opportunities beyond it, mostly moves to other corps in the same industry. You could find a seat at a tiny boutique and try to swim upstream, but that's more difficult in PE than say IB or RE.
Corps don't really do extensive LBO models anywhere, given there's no sale/liquidity event to pay down debt. Some might do a quick and dirty one to figure out what a financial would pay, but nothing comparable to PE LBO models. LBOs really aren't that complicated though, and you don't have a huge skill missing in not doing them at B, if you can model you can pick up an LBO pretty quick.
I think A and trying to angle towards REPE down the line is a more viable path for you. You can always pull the MBA trigger and go for MM/LMM PE if you don't end up liking real estate.
Thanks man! It’s nice to get advice from people in the industry. So you still think A might be wirth the shot even if it’s a relatively small shop?
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