Is there any point to joining a startup after IB?
Associate, coming up on 4 years. Recently received an offer from a Series A startup for a Chief of Staff role. My end goal is to start a company of my own. Is there any point in gaining startup experience first?
Here is my thought process:
Pros
- Inside view of how early stage startup works
- Learning opportunity from working closely with CEO
- Exposure to other founders and VCs
- Would give me more free time vs. IB to begin building my own thing
Cons
- Trash compensation ($130k) – meaningful lifestyle downgrade
- Related, low compensation reduces my risk appetite
- Much easier to spend $50K building something now vs. broke at a startup
- I am not factoring in equity due to dilution and vesting schedule
- Is it necessary?
- You learn by doing
- IB has already given me strong foundation
- Plenty of startups have emerged from ex-bankers — without b-school, without startup experience
- Startup will likely still be a grind
- I could be working just as hard, have little free time, and also be broke
It boils down to this: is this useful experience worth doing for a year or two, or is this just a delaying tactic and an unnecessary training wheel? If it's the latter, I want to avoid.
Life moves fast. My banking class is now in business school, PE, and all over the place. Friends are getting engaged. It feels like just yesterday we were all 22.
Thoughts?
Was in a roughly similar spot, though left "the path" earlier than where you are now to start a company
The absolute deciding factor here is the quality of team + company. I'm sure you have thought about this but didn't see you talk much about the company and people in the post
Generally a high potential startup with a smart team will not be much easier than banking. Hours probably will be 80% of what you had, but if you earn any level of actual responsibility the stress will be 2x what you had in banking (I was at a notoriously sweaty place for banking years and didn't mind that part of it, so not saying it lightly). Would not consider going to a good startup if you want to step down intensity. More responsibility does not usually lead to less stress
Looking around, I'm jealous of the guys who are doing/did CoS roles. Comp ceiling is not high but these guys don't stay in the role more than 2 years and have an unfair advantage when they get out due to level of exposure. To how the game is played and to the people. This is all from observation and none of my startup experience involved having bosses to report to so many grains of salt or whatever
Underrated upside to CoS and startups generally is the opportunity to be an "entrepreneur through acquisition". If it is true that the hardest part of "search funds" is finding an asset, then you generate a good beachhead by working in mgmt team of a startup. This is more probably more true for say a services business that works in a fragmented industry, than if your clients are exclusively large multinational corporations
Why is CoS better? They have broad exposure but don’t build a skillset like sales, CS, Finance etc
If software or tech is the goal, not having CS education or SWE work experience is a negative. There are other industries.
Finance is a useful skillset. But OP wants to start a company. Starting a company is about orchestrating groups of skilled people, not exercising your skills to execute useful tasks. I'm sure there are many great roles other than CoS but it's unique in that it forces you to add value without a rigidly defined area of responsibility and formulaic output. Which is much closer to being an executive
Your "strong foundation from banking" isn't worth anything when it comes to building a company from the ground up.
At the end of the day you need to put yourself in a place where you "learn by doing". Experience is the best teacher for start ups and if you want to launch one yourself you either need to do it yesterday or put yourself in a position that allows you to learn how they operate.
Banking is hierarchical, structured, and addresses narrow problem sets. A start up is the exact opposite. There is limited structure, people are focused on putting out the biggest fire, and whatever you're hired to do at the beginning is most definitely not your job description 6 months in.
I think you need to ask yourself: "Am I ready to operate in that type of environment as a co-founder where everyone will be looking to me for direction?"
If the answer is "not yet" then go somewhere to learn the skills to build that confidence. If the answer is "yes" skip joining an early stage company and start your own. You won't know how it'll go until you do it.
FWIW, I think CoS roles are stupid from a career progression within a company. 9 out of 10 times if a CoS is owning a function and it gets to be big enough, I'm bringing on someone with actual expertise in that function to scale it. If you're using that as a training ground it's not bad, but it needs to operate close to a COO and not a Senior Exec Assistant or some bs "strategy role".
I think the answer is "yes." Perhaps I am too cocky, perhaps I am wrong, but I am think I am ready to give it a shot. If this is the case, would you recommend against accepting the CoS role?
It strikes me as an intermediary position, somewhat like B-school that simply buys time. I have no doubt I will learn a lot, but is there a case to be made every startup is different and it's going to be damn hard no matter what? If I'm bootstrapping a startup, I will learn as I go.
I also share the fear that I'm going to be a glorified secretary (IDK if the low comp of $130K confirms this or if it's normal), in which case I will waste 1-2 years and be in no better position to start a company. Steve Jobs was not a CoS — he just started building out of his parent's garage (well, Steve Wozniak did, I believe).
Apologies for the incoherent thoughts, just sharing my train of thought.
There's literally only one way to find out if you're ready to start a company. Start validating your idea today and once someone is willing to pay you some sort of pilot fee, you can start building.
I agree with this. I left banking after 5 years to start my own business, and as much as I wish I could learn by theory or by putting together memos or CIMs, you don’t.
Going the startup isn’t a bad route, but maybe give yourself one year there to learn while building as much as you can on the side.
No idea why you would do this for $130k lol
I don't know either
You’ve ignored one of the most important parts. How much equity are they giving you? Vest? Cliff?
The reality is you won’t be doing a startup on the side in either job. It’s a full time commitment and requires laser focus. If you try to do both, both will end up shitty.
How would you be funding the startup? Raising is not easy and the likely scenario is you struggle to raise without a relevant background.
You mentioned other bankers have left and done it successfully. You’re correct, but I would note the most recent example, Rogo, had industry + technical expertise and the founders all went to the same school. This is the classic funding framework for tech companies.
Starting a company is as intense as your analyst years and as much stress as an MD to produce revenue. If you’re ready for the challenge, you need to start building, but you’re lying to yourself if you think working in a CoS role will help you become a better founder. Successful founders navigate ambiguity and figure out the solution regardless.
Sounds to me like you want low risk, high pay, and better hours, which is the complete opposite of a startup.
I'm okay with high risk, low or no pay, and terrible hours — IF it's my own startup. If I join a Series A startup as CoS, the only reason I would do so is for the learning opportunity getting to work with a seasoned CEO with multiple exits. That and connections for fundraising which, as you mentioned, is not easy.
If I have conviction in myself, you would suggest skipping CoS role? You seem to think the CoS role is useless.
Again, the only reason I am interested in CoS is as a learning opportunity / training wheels (but perhaps there is none for startups). I didn't mention vesting schedule because I don't see myself at the firm long term and, frankly, my conviction in the company is moderate, but not super high. I don't see the equity / compensation as a reason to join as CoS.
If you have the conviction go and build now. You’ll learn more anyway.
Each stage of building a company is different. If you shadow Series A, you’ll see what works for a Series A-type company with traction.
Getting to Series A is hard, but the playbook starts to standardize. What you actually need / want is pre-seed / seed level insight, which you won’t get unless you have an engineering background because no startup is hiring someone with a finance background until they reach a certain stage (Series A at the earliest).
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