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 expandingIt 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 don't know why the region shows France and Central Aisa. I tried deleting them but they kept showing up. I am located in the US.

 

First, you owe zero loyalty to offer A. They do deals for a living and they will understand if they don't get this one. Think of it as an LOI falling out. It does sound like a solid choice, have you checked their references with others? You could try relevant brokers, former employees, etc.

I wouldn't accept offer B without meeting some of the team face-face, especially your potential boss. Tell them you want to visit the city and meet them before making a firm decision. How they respond will give you a good indication of what future will look like.

 

Thanks! However I have already accepted offer A and they have been going out of their way to work on my visa transfer (I’m on H1B and it’s their first time hiring internationals) so they do incur around 8K sunk costs for hiring me, let alone the time they spent along the way. They could have rescinded the offer after learning my visa status but they chose to stick with me, compared with company B which is a SP and Fortune 500 but offers no relocation assistance at all. I somehow feel like company B doesn’t value me as much😔

 

The only reasons are higher pay (maybe higher jumping board for future salary negotiation? Idk) and brand name. The pay still higher even if COL is around 20% higher and it seems like a conventional and safer choice. Offer A is exciting and has more growth potential but actual compensation growth might take some time to come to fruition, and what if the company doesn’t grow as expected 😔. It’s a small and young company so there’s a chance things go sideway. Am I overthinking here?

 

The money will always come (especially if you’re doing something you’d seriously enjoy and excel at). If the salary is the main thing holding you back, I would try to look past it for the short term with Option A. I took a way lower salary from a REPE shop vs a corp fin role and I would do it again and again. Salary ramps up very fast.

 

Do you want to stay in the area you're at long term? Considering you aren't fond of the more expensive city for Offer B. Honestly sounds like you want to stay with Offer A, but are enticed by the money. Also sounds like a lot of upside with Offer A. If you like the people, business, and city, I would probably lean that way. Sounds like a pretty strong offer to me

Grass isn't always greener, especially if the only pro is the $. Your expenses are likely going to rise 25-50% depending on where you live now and where you are moving to. As someone who has made that move before (From LCOL to HCOL), you'll want to really map out your pro forma just like we do in this business, and I mean everything. Insurance, Taxes, Rent, all of it, because you may not actually be making more money at the end of the year

 

Thanks! That’s spot on since $ makes up 90% of the enticement. It’s more like moving from a medium COL area to medium-high COL area. The metro area I live in is interesting since it’s so black-n-white fragmented. A lot of rough areas in the inner city are dragging down the average living cost statistics but the actual living costs is way higher than it seems on paper. Anyway I’m rambling off. I did a bit of math and it seems like the only significant bump in living costs comes from rent ($400-500/ month higher for a 1B1B). Gas and groceries costs are said to be higher but I feel like the change might be minimal. ( I guess. Or do grocery and gas really add up? I have never moved to a HCOL city before). Taxes and utilities are slightly lower and I don’t consider owning a house there. I think the reason I’m torn is because it’s scary to turn down an offer from big company in a hot industry (what if I never get as good an opportunity again), and it’s scarier to bet on the future of a young small shop. I only hope I’m making the right choice for myself.

 
Most Helpful

I hear you.. You'll have to run the numbers, I won't be able to help you there. You very well could bridge most of the gap with with the variable portion of the income from Offer A, if not immediately it sounds like the potential is definitely there in the long run

I would definitely recommend taking some time to get to know the team for Offer B, especially since you're comparing it to an offer where you've met the team and appear to be a good fit. These are people you are going to be spending a significant portion of your life with. I'd say culture/fit is just as important if not more important than comp, at least early on in your career

Lastly, I'd recommend you think long and hard about what you want to with your career. Corporate Development Analyst for a TMT firm, my assumption is this would be looking at new sites/locations for the company? Great work, but likely slightly different than going out and developing commercial real estate assets to be sold or operated by your firm. Although they both deal with real estate assets, these appear to be somewhat different careers directionally to me. Maybe someone else can comment about the corporate dev gig, I do not have any experience there. 

Again I would recap by saying it sounds like this is primarily driven by income, which I would be careful about, especially since this would be a bit of a career change for you. You may find it difficult to get back into development later on, if you realize after the fact that you prefer that career path. It's a bit cliche but I generally believe that people should make career decisions based on the career/day to day vs the comp. If you like what you're doing, the money will come

Doing my best to not steer you, but just help lay out how I would think about this move. Sounds like you have some great options either way. Best of luck! 

 

Two questions for you: (a) is the compensation in both roles enough for you to comfortably cover your expenses and save a little and (b) which role do you think you’ll get more experience from. If the answer to (a) is both, than you realize need to just focus on (b). I know it’s hard, but early in your career you really have to prioritize experience. Money will come with experience, but choosing money over quality of experience when you are an analyst making (no offense) very little in the grand scheme of your career will be a losing proposition over time. I don’t want to read into it too much, but sounds like you think (a) is the better job but the salary offered in (b) is enticing. If that’s true and (a) is paying you enough, there’s your decision. 

 

Remove any consideration of ethical/unethical by reneging on company A from the calculus, and make your decision.  You don't owe them anything and you have to live w/ the consequences of the decision more than they do.  They would probably fire you and the majority of the junior staff if the market turned sour, anyhow.  

I come from down in the valley, where mister when you're young, they bring you up to do like your daddy done
 

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