Weighing exit ops between Series B startups, Series C startups, and PE-backed portcos
WSO,
Evaluating a few different exit paths from +4/5 years out of MBA MBB consulting and curious how other have thought about it / if I'm missing anything. I haven't given up on partner track but am a couple years away and am weighing my options. I don't really think there is a "right" answer but it would be cool to hear from others in the community around what they've seen (both horror and success stories)
Option 1: Series B startup
Pros:
- More upside if it works, usually these opportunities come with 0.3-0.4% equity
- If the company works, you likely get more responsibility since "you were there from the beginning"
- Cool to experience "hypergrowth"
Cons:
- Most startups fail and the odds of a Coinbase / DoorDash exit valuation are low (i.e., if you're worth >50B doesn't matter how little equity you have)
- Huge pay cut vs. MBB today
- Companies still in engineering phase don't have much use for consulting skillset
- If it fails, you don't have a great story to tell when chasing the next role
Open questions:
- How to choose the company (presumably combo of founder experience, industry TAM, degree to which you like the business, etc.)?
Option 2: Series C startup
Pros:
- Probably can keep you close to whole on salary with a little drop in Bonus
- More certainty w/ product market fit and likely legit investors behind the company
- Still experiencing "hypergrowth" / company has found product/market fit
Cons:
- Less upside if it works (typically you get 0.1% or so which is peanuts unless you get well north of $1B)
- Unclear if there is a path to more senior roles, depends on evolution of the company
Option 3: Chief of staff / VP ops/strategy in PE-backed portco
Pros:
- Board-level exposure, you are usually the "go to" analyst in the company but also get to follow the c-suite around
- Keep your salary + bonus whole
- Likely requires moving to a low-tax state (could be pro or con)
- Upside can be high, but likely capped due to existing management cap table structure
Cons:
- PE / GE likely wont invest in cool growth initiatives, more likely that you're optimizing the current core business or cutting headcount
- Business likely not sexy
- Unclear exit ops outside of becoming PE portfolio-co ops guy
Obviously there are winners and losers on all of these, but it would be cool to hear how others have approached this decision.
Principal in Consulting, sorry there are no responses yet. Maybe one of these topics can point you in the right direction:
More suggestions...
Fingers crossed that one of those helps you.
bump
Only thing to push back on is that you mentioned it's hard to tell a story from a failed startup. I actually think it's the opposite - in my experience working at FAANG (albeit as a SWE prior to MBA), they LOVED the fact that my first job was at a failed startup. If anything, it helped me get a job in big tech.
i think you're a bit off on fundraising timing - most series B companies have already found product-market fit. series C companies could be considered "late-stage", since they're usually only a couple of rounds away from an IPO
you're also missing chief of staff roles at those startups (personally something i'm very interested in) though they might be a bit too junior for someone with your level of experience
another thing to keep in mind: you'll always have MBB on your resume, you'll always be able to fall back on a stable FAANG opportunity. assuming you don't have any outstanding personal obligations, you should take a gamble on an early stage company and gain some real operating experience. even if the company fails, you'll learn a ton about how to translate a consulting skillset into building and running a startup
0.3% for series B? So if I join a unicorn valued at 1bn in latest series B round could get 3mm in equity? Why tf not
Well at series B it's usually not worth $1B... it might be worth $50-500M although in today's environment things are crazy. The bigger it is the less you probably get.
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MIP? What makes you say that? I'm just not sure what a typical comp structure looks like in PE-backed co at this point.
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