Leave job in first year for a startup?
I'm 4-5 months into my job in the credit arm of a MF platform (eg, BX, Apollo, Ares, etc). It's boring stuff since they didn't put me in the group I had expected to be in.
A good friend offered me a job with equity at his startup. The company raised a seed and the goal is series A within a year.
Ofc I'd take a massive pay cut, but I'm more concerned that I'd be shutting the door on finance by leaving early should the startup fail and I want to return. Thoughts? Thanks guys
This is a difficult decision. Below questions may be helpful to answer before making the decision.
1. Do you believe in the startup's product/offering? As in, would you be passionate about the project?
2. How are the fundamentals of the startup? Scalable? Differentiated?
3. Given your background, how difficult would it be to reenter finance?
4. What is your personal risk aversion? At what scale would the startup have to reach for you to regret the decision of staying at your current job?
These are just few of the many questions you should ask yourself.
I'm a big believer in taking entrepreneurial risks. However, I do think it's a good idea to have 2-6yrs of solid work experience before making the jump. This decision really depends on how much you believe in the startup's future success. Good luck!
Based on personal risk tolerance I would a) try to wait it out till the one year mark in my first job and b) would prefer to join a startup after at least series A funding. In your case, if you can ask your friend if you can take the opportunity in half a year from now, you could get both.
Leaving your first job before the first year is up can be seen as a red flag by future employers. Essentially, it isn’t enough time for them to credit you with any experience, plus it indicates that you just might not be able to adjust to corporate life. Obviously that might be far from the truth, but if you’re a big company looking to hire someone, that’s a risk you might not want to take.
And if this startup takes off the risk will have been worth it, but if it flames out (especially before the series A funding), you’ll have to go to your next interview with nothing on your resume but less than a year in corporate America and some experience at your friend’s startup (which companies likely won’t be able to judge the quality of).
Risk is the name of the game when it comes to startups, and if that’s the game you want to play then maybe these concerns shouldn’t hold you back. But I think you gain more in career security by waiting until at least the one year mark in your first job than you lose in potential upside
If you do go down the startup route now, then you could find yourself back in finance in the VC space as an investor. Building and exiting successful companies is very valuable.
It also sounds like you have been at the current role for a short enough time period that you could leave it off your resume. On the flip side, doing 2 years at an institution like you have will put you in a different category vs most other candidates.
The opportunity to join the start up should be compelling as it’s stage of development probably still suggests high chances of failure.
Thanks for all the advice. Really helpful to hear smart people think through a problem you're facing.
I agree that the biggest con is not having finished one or two years on the job to allow me to re-recruit should this startup fail. I do believe in the product and founder -- both are extraordinary. It's tough to assess the probability of success with these things, but it's not hard to assess the relative regret I'd feel should I make the wrong call in either direction.
Though having the experience to return to finance would be great, hopefully I can find a margin of safety in the ability to recruit for growth equity/VC. Compounded by the fact that I do not like my job, I think I'll go for it. Thanks again, and always happy to hear more viewpoints.
I agree with the above - if you leave now, you won't get any credit for having worked in PE, either from potential investors or if you want to go back into the corporate world. 4-5 months is really a long internship - just enough time to learn how to do tasks without oversight. If you leave this job and then the startup blows up, you're going to have a real uphill battle even if you're not looking in finance/PE.
Truthfully, any startup that is pre Series A the risk very likely outweighs the reward at your stage - it's not like you have 5-10 years experience and can easily hop back to your old job. The failure rate around seed funding/series A is literally 80-90%. Even if you have an incredible product it's just extraordinarily difficult to scale a business these days.
Will your friend let you help out informally now and contract you to officially start at 1 year? I truly think that is the shortest time you can jump to this role without raising major red flags if it doesn't work out.
Thanks for the input. Appreciate it.
I can't start in a year because the same equity package won't be there. The company is growing really quickly and already has a large cash pile and unsolicited VC interest. And it's run by some of the most brilliant people I've ever met.
I'm aware that even so, the failure rate is still high. Do you think I could pivot to growth equity/VC if it fails and I can't get back into PE/credit?
Makes sense. Look, if you fully believe in this company and this is a move you'll always regret not taking then do it. You just need to be aware of what lurks on the other side if this doesn't work out. Things to consider - would your group take you back in a year? Do you have a solid network/resume that you feel comfortable you could land something?
As for Growth equity/VC, unless you get to a really legitimate level (Series B or just before) I doubt it tbh - those two are harder to get into than other finance fields since the work is sexier, and typically look for real IB/PE experience. With just a short credit background + some non-founder startup work you would only be able to pivot that way if this startup is successful.
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