Leaving Big Organization for Small Shop
Has anyone left a large big name shop that is more siloed and process driven for a smaller more entrepreneurial company? After years climbing the ladder in a large organization, I feel that I am on the wrong path and having to spend the majority of my time on reporting and menial tasks instead of working on deals and value-add work. I am not sure if my issue is the large organization or team/organization structure I am in.
I have an opportunity to join a smaller team that is well capitalized but more in the "start up" stage where I will be working on investments/development/fund raising. From the outside looking in, it looks like an opportunity to have an entrepreneurial experience while still having access to capital and a goal of developing institutional partnerships to grow the business.
I would love to hear your experience (biggest benefits/challenges, day-to-day experience, long term prospects, exit opportunities, etc.) if you have made a similar move from a larger institutional player to a smaller entrepreneurial company.
Diligence the culture. And than diligence it again and again and again. Though these small shops can be an amazing opportunity. The major issue some people run into is that you end up doing 3 jobs in one. A big organization has the ability and funds to hire someone to do acquisitions, another to do asset management, another to do development. Etc. it sounds like this small organization you are looking at you’ll do everything. That can be amazing in a culture that still respects a normal work week. But if they expect you to do three jobs in one, you could find yourself working 100 plus hours per week. Make sure they have realistic expectations for the time it takes one person to do a job.
As a reference point, I left my big corporate institutional role to join a firm where I was doing acquisitions, asset management, and portfolio management. Great learning opportunity! But I missed on culture and they had an unrealistic expectation for hours. I was expected to work 100 plus hour weeks, on repeat, with no repetition. That wasn’t for me so I promptly left. And it was on me for missing it. The small firms won’t always have the funds (some do, and choose to keep the profits) to hire people for each role. Just be cautious and careful (assuming you care about having a life outside of work). Unfortunately many people don’t care if they grind their employees to a pulp and sell them that they need to work like this to learn and get opportunity. In reality, you don’t.
It's not all rainbows and sunshine. I made a similar move, I am learning a lot more but often find myself frustrated with the lack of resources and feeling that I am wasting my time on things that used to be covered by someone else.
Great point about resources. I too, was frustrated about lack of resources. For example, no demographic data software, costar/Yardi, etc. It made it challenging to put information together when asked because I had to go scrap it together off the internet when it used to take me 5 minutes on CoStar.
My end result was I promptly left for a large, institutional developer where I now have resources and only one job.
Small shops are great highly dependent on the culture/people.
Trust me, it fucking sucks if you are one of the only Analysts/Associates and you are grinding out IB hours late at night being the only one in the office.
i worked for a shop where i was the only analyst and the AUM was proably only $200mn, and i was pretty happy but i loved the guys i was working under. to me, the bigger more competitive shops will expect an analyst to produce Starwood-quality work partly because, as mentioned in this thread, everything else is handed to you on a silver platter so your focus can turn to writing longer investment committee memos and tighten up your SLEEK FORMATTING!
Depends on your personality, if you are a thrive in/make order of chaos type of person, go to the smaller shop. You will have much more latitude to add value by brining your big shop expertise to a startup. Having someone who knows how it “should” be done is an invaluable asset. Just make sure you get all the big ticket process/procedure out of the way early so it doesn’t come back to bite you down the line.
Also, make sure there is a roadmap for organizational growth so that way when you do start to feel work life balance is getting out of whack you have a plan and the monetary resources to build out your org chart.
If they aren’t talking about carry/equity/profit sharing/co invest don’t do it. It’s cool to be at a smaller shop when start out to have exposure to everything but once you get a few years under you it’s just brain damage. Unless they can demonstrate/show they have put processes in place I would be wary.
Definitely interested in hearing more on what others have to say in their experience on this.
I wasn't at a large shop previously but went from a mid-sized shop to a small one, and I notice a difference. The small shop has a lot more upside for me and is less bureaucratic. I'm getting more of what I want without too many barriers or road blocks. I do feel I have to do a lot of different things, so there's some downside on that.
Everyone is in here talking about work life and missing on the whole point, which is the opportunity to get earlier and larger economic participation in deals. That’s like the whole point lol
I've done this move
Pros: get to take on more leadership, wear more hats, be more involved in making impactful decisions, much more exposure to company leadership. At a small company it wouldn't be unusual to get a 1 on 1 lunch with the CEO/founder and have them ask your opinions about firm strategy or culture, or take questions/concerns/ideas directly to the head of a department who sits near you rather than having to run it up the hierarchy to some corporate office in another city/country.
Cons: sometimes I REALLY missed being a small cog in a massive machine in the sense that I could take PTO or summer Fridays or attend golf outings or just get my work done at a more leisurely pace without anybody really noticing or caring. At a small firm anytime you aren't at your desk or accomplishing tasks as quickly as others its way more noticeable, and since you might be the only person who does certain tasks you have to always coordinate coverage for when you're away or unavailable, and sometimes you feel like you can't take time off at all or you'll be screwing over a coworker by giving them a lot of extra work.
This is spot on. Almost feel like it's taboo to take vacation or be out of office because people notice. With less hands to carry the workload, there's more responsibility and ownership.
Previously if I was off at my old job, because our team was large enough and multiple people were working on a single project it wouldn't impact workflow. Now because it really is ownership of what I do, if I'm not there the work doesn't get advanced.
Definitely enjoy the learning experience and culture at my company is great. Really get along well with the team here and hours aren't bad. Although the advancement will be minimal unfortunately. Overall, can't complain.
I think the benefits and challenges are going to be pretty standard across responses.
Small firms have fewer resources. You'll have to wear more hats and do things that you used to have juniors do for you. For that matter, you'll probably be the one training new hires. Things will be chaotic. You'll probably end up doing work you consider "beneath" your skillset. Your cash compensation will likely be less.
Flip side, you'll learn more because you'll do more. Most importantly, you'll probably have a far better chance of participation earlier on. More exposure to the principals. If you're in development especially, you'll have a better understanding of what it takes to execute on a deal.
I'd argue that if your goal is to do your own thing and open your own small (at first) shop one day, go to the smaller guy. It'll give you a better window into what your life will be like - after all, for as small as this place is, when the principal started it, it was smaller and even more hectic. If that's not your thing, stay within the structure of a larger firm.
Yes, this happens all of the time. In up or out orgs thos who go out go other places. Some go to other big shops, most go to smaller shops or start their own.
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