leaving quant vs startup

Need some career advice.

I am considering leaving my quant role for a startup.

I have 2+ yrs of experience as a quant working at a single manager fund. I am considering leaving for a startup that has a product that I find really interesting.

The startup has had a strong funding round and they are <50 people and still growing rapidly. They have a lot of senior people from the relevant industry. Best case scenario is that in the next 2-3 yrs they have an amazing IPO though I don't anticipate my equity would mean that much of a significant bump versus continuing as a quant. But whatever happens the product / industry is very interesting and I can see myself continuing in the industry with the hopes of launching my own startup.

Otoh, I can gain more experience and transition to a MM, either as a quant or PM. This is probably safer from expected wealth perspective. However, I'm concerned because I've heard rumors from friends that have made the transition that some PMs hire quants, squeeze their strategies and once they don't produce new alpha strategies are let go; while transitioning to PM I'm not sure if I'm confident yet. Keen to hear more experienced opinions.

Has anybody made such a transition? Pros, cons, regrets on either side?

Anybody actually seen quants getting hired and fired after giving their strategies?

When did people feel comfortable moving to a PM role? What's the attrition rate here?

At first I felt the startup role would be higher risk, but I don't have a good estimate of the survival rate of quants or PMs at MMs so would be good to hear opinions on this too.

Base for both positions are comparable.

Comments (17)

Dec 21, 2019 - 10:21pm
2020career, what's your opinion? Comment below:

Actually really enjoyed the work, more a case of thinking about where I want to be long-term. I've always been interested in entrepreneurship but I also realize that the quant->MM->PM path is probably less risky and expected payoff higher.

Dec 21, 2019 - 11:11pm
Jim Simons, what's your opinion? Comment below:

If you can still maintain your family and lifestyle financially, I'd say go for the startup. You can always return to finance, and you run the risk of regretting the missed opportunity forever. Good luck either way.

Also, if a quant is paid to find new alpha and they can't find new alpha, they should be fired. In alpha generation roles, you need to show skills like leadership, being good at vetting other quants signals, or something more to justify your job. I've seen quants stay to maintain they're existing signals because no one else understands it or transition to monitoring the overall portfolio.

Dec 22, 2019 - 3:00pm
2020career, what's your opinion? Comment below:

yes, financials are not an issue.

As for your comment on alpha, that's how I used to think however I have a friend who went the MM route and joined as a senior quant bringing along strategies that could put to work 2-300M GMV. The expectation was that once these strategies are in place he did not expect to have to produce more alphas and it would be more about managing these strategies and tweaking them to fight decay. Of course its hard to know if all PMs are like this.

I don't understand what you meant by 'no one else understands it'. At the end of the day its all code and usually there's devs that have vetted the alphas before production.

Dec 21, 2019 - 11:59pm
guy_incognito, what's your opinion? Comment below:

I doubt a MM will fire u after stealing your alpha. They want the best person possible running the strategy.

Another path: start your own fund. You have alpha, right? Best combination of your Quant skills and desire for a startup.

Dec 22, 2019 - 3:03pm
2020career, what's your opinion? Comment below:

Yes, thought of that. But I wouldn't feel comfortable running something on my own unless I have enough alphas for a sufficient capital base to run.

Why do you say that a MM won't fire? The alphas are basically a commodity, once you pay a quant and they've implemented their alphas there's not much point continuing to pay them unless they're also generating more alphas.

Dec 23, 2019 - 1:00pm
guy_incognito, what's your opinion? Comment below:

If u don't trust your alphas and ability to generate more enough to start your own fund, maybe the startup is a better path for you. Staying in Quant will only put u up against those who do.

Dec 22, 2019 - 8:50pm
cp5670, what's your opinion? Comment below:

There are definitely firms and PMs out there that will hire you, have you write your strategy code and push you out after the code is checked in. They are also a lot more likely to be hiring than the better groups that have low turnover.

Dec 22, 2019 - 10:20pm
2020career, what's your opinion? Comment below:

That's my biggest concern if I'm to stay in quant. I've met some great people, but I've always had a nagging suspicion the ones that make it to PM level have a certain level of ruthlessness.

And its always hard to vet a PM and their team. Its ironic that quant is so popular now but actually the alphas are the most easily commodified.

Dec 22, 2019 - 9:29pm
differentialequations12, what's your opinion? Comment below:

Having worked at startups, I wouldn't go unless the company was filling a market need that no one else has filled. Startups are really hard and dont usually go that well.

Dec 22, 2019 - 10:17pm
2020career, what's your opinion? Comment below:

well, there's definitely a market need. But its a really hot area and there's several competitors with large VC funding rounds (the startup I'm thinking about is probably in the top 3 for VC funding in the space). But they're not working on exactly the same product so its not a winner-take-all outcome.

I agree things never seem to go as planned; though its large enough that there's runway probably for at least 2 years. My intention isn't to find a winning lottery ticket. I think the skillset I'll pick up is going to be more widely applicable then what I'm doing in quant.

How big were the headcounts at your startups?

Dec 23, 2019 - 9:19am
qwantum70, what's your opinion? Comment below:

Corporis sint voluptatum tempora officia sit. Doloremque neque minus qui quo veritatis nulla quia. Non rerum tempore soluta ea et. Similique illum molestias enim. Voluptatem quam voluptatem molestiae. Est deleniti voluptatem veritatis in in corrupti sapiente ex.

Start Discussion

Career Advancement Opportunities

July 2022 Investment Banking

  • Jefferies & Company (▲03) 99.6%
  • Lincoln International (= =) 99.2%
  • RBC Capital Markets (▲07) 98.8%
  • Bank of America Merrill Lynch (▲01) 98.4%
  • Houlihan Lokey (▲06) 98.0%

Overall Employee Satisfaction

July 2022 Investment Banking

  • Lincoln International (▲06) 99.6%
  • Jefferies & Company (▲11) 99.2%
  • Greenhill (▲07) 98.8%
  • Rothschild (▲01) 98.4%
  • Evercore (▽01) 98.0%

Professional Growth Opportunities

July 2022 Investment Banking

  • Jefferies & Company (▲04) 99.6%
  • Lincoln International (▲04) 99.2%
  • RBC Capital Markets (▲09) 98.8%
  • Houlihan Lokey (▲07) 98.4%
  • Bank of America Merrill Lynch (▲04) 98.0%

Total Avg Compensation

July 2022 Investment Banking

  • Director/MD (9) $661
  • Vice President (37) $394
  • Associates (191) $246
  • 2nd Year Analyst (117) $162
  • 3rd+ Year Analyst (17) $156
  • 1st Year Analyst (369) $150
  • Intern/Summer Associate (78) $147
  • Intern/Summer Analyst (292) $92