Big Shop -> Small Shop
Currently at a large, institutional shop and looking to move to a much, much smaller shop. Reason being is the path of progression here is very structured and I don’t see myself getting excited about eventually becoming my VP. My VP doesn’t make nearly enough money (as I hope to) and I don’t see how my current shop or many of the larger shops can help me accelerate my career and earning potential. I also don’t have the patience to follow the steps outlined and let others directly control my future (as is the case with a large shop). Have 2 years of experience and up for associate promo. I’m looking to join a smaller shop and wanted to ask others here if there are smaller shops that allow you to grow into a true business leader and is there an opportunity to be compensated accordingly. I guess the point is I don’t see how the rat race will get me rich. So I am trying to step down and try out a smaller shop.
Just be advised that at a small shop you run into the same issues unless they are growing. If the firm isn’t growing quickly, there generally is nowhere for you to move up to. Which means you get stuck at your current level.
Also. If you want to get rich. Focus on doing your own deals. Build equity not salary…figure out how to get a piece of the promote. Get it. And than use that for your own deals.
Can I PM you about this?
Yes
I've done both, but at this point 90%+ of my time has been at small shops. That said, it isn't all sunshine and rainbows, and I imagine the amount of random nonsense I have to deal with is higher than someone at my level at say Hines or TCC. I think it is important to not fall into the grass is greener trap, especially only 2 years into your role and especially with the market as it is right now. For what it's worth, while I'm quite happy with being a small shop guy as I think it meshes with my personality more, if I were to do it all again I'd probably spend just a little more time than I did at larger firms before breaking away. I even flirted with going back to that life in 2020/2021, so it's never as cut and dry as some make it.
I believe TheKrewe, redever, Count_Chocula, pudding and others have spent time at or currently work for large, institutional firms and can speak more to the benefits of staying beyond two years. Personally, if I were you I'd at least try to tough it out for two more, especially if you don't have a perfect situation lined up to depart to and this is all theoretical.
Remember, there's no guarantee that your life at a small firm will be pure wish fulfillment. It certainly can be, but it could also be an unstructured nightmare. It's really the wild west.
Edit: Just saw pudding already responded. My bad for the ping.
There are some great comments already in this thread. I will add another anecdote about my experience. I started my career at a large institutional firm, and I felt the same frustrations you articulated in your post. I decided to take the leap and move to a smaller shop of ~12 people. The upside was that the funds they raised would keep growing, I would get a piece of the promote and fees, and the firm would continue to grow effectively elevating me into a more lucrative and senior position. The reality was the partners got into a dispute and the whole company wound down within 24 months. In hindsight, the move was a mistake, and I would have been better served to wait for a better opportunity. I learned a lot watching a company blown up. It was difficult to get back into the institutional space after moving to a smaller firm. The move from big firm to smaller firm is a bit of a trap door, so you should be really sure it's a path you want to take. There is no "right" move, it's all about what is the best fit for you and your career goals.
There are pros and cons to both routes, and in terms of advancement there's just as much chance you get stuck at middle/upper-middle management levels due to the age of the executive team not working out in your favor.
At a smaller shop, you'll likely get more exposure to the full cycle of a deal and get your hands dirty with every aspect from cradle to grave. Big companies have much more specialization so once you close a deal you usually wash your hands of it and move on. That's rare at a small company. This is much better if you want to go out on your own someday than only knowing how to find, structure, and close a deal then having no idea how to execute. The flipside is you will almost 100% be working with less sophisticated technology and databases so you will likely always feel behind the curve from your peers at the big boys in terms of inefficient processes and having to waste time doing manual tasks that should be automated in today's day and age. Depending on shop you may also be working with less sophisticated people and while that doesn't mean you can't make a lot of money it means you'd have trouble moving BACK to a larger company.
IMO, if you are already at a large firm, it's best to stick it out there until you hit VP/director level and THEN look to go smaller. At that point you have real benefit from having that name on your resume into the future. Leaving at analyst/associate people could view it more as burning out.
I think I agree, you're going to maximize your value at a smaller firm if you have 4-5 years at big shop with 1-2 promotions in that time.
What exactly do you mean by “maximize your value” like from seeing more deals & experience? Or more from a skill set/modeling perspective? Knowing brokers/relationships?
What exactly is maximized the most & the most valuable?
I work at a small development shop, about 12 of us. We’re very scrappy and entrepreneurial. Been here for 3 years, first job in development. I cannot wait to move to a more institutional shop. Small firms are great, you learn a ton by doing everything which was the main reason I joined a small firm. But the lack of structure and process can get old real quick.
Just out of curiosity, what do you think will be "better" at a more institutional shop? I say this as someone who worked at a larger firm and now a smaller one; there are always problems with structure and process, it is inevitable. I'm biased towards smaller, "do it all" type of firms, but I genuinely caution you not to fall into the grass-is-always-greener trap. Every place you go will have problems, and the problems that small firms have that big ones solve, well, big shops have issues that small ones don't. I would think long and hard about moving if you enjoy what you do and are adequately compensated for it.
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