M&A to +$60M Startup

Hey Fellow Monkeys,
I am currently in route to become a VP at a global M&A firm in the U.S. but the way teams are structured may limit my upswing in this firm. I am considering leaving for a role at a mid-size tech start up that has raised $60M+ in the last four years. This is a role under a CFO with higher compensation and equity package that would almost triple my total compensation. Obviously, the role is operational vs transactional, although some future acquisitions are definitely in the plans. I have been with the firm about eight months and someone just told me to stick with the firm for longer than a year to get more consistency since this is my third job after undergrad in 2013 (I have a good story).
I would like to hear thoughts about this.
Thanks!

Comments (8)

Feb 11, 2019

I don't understand how your comp would increase 3x from being a VP at an M&A shop. Putting that aside, I would take the risk on the start-up.

Leave on good terms with your current firm, and you could always potentially come back if the start-up opportunity doesn't develop as expected.

    • 1
Feb 11, 2019

I have the same question on comp. It usually goes in the other direction when you move from IB to corporate.

Regardless I'd make the move. Making a career as a hunter-killer M&A advisor is incredibly difficult, and will consume every waking hour of your life from now until you retire. If you are even thinking about leaving it you should leave it.

Feb 11, 2019

Yeah... I'm a bit confused on how OP can make more comp at this startup than a VP role... $60M total funding is a good amount of money raised, but not enough (at least imo) to be throwing around that kind of money for someone who's under the CFO (not even the CFO himself / herself). Actually, unless the team is incredibly lean, as an investor I would be wary that a presumably series B-ish/early C? (I'm guessing?) is splashing so much cash on comp...

That aside, it sounds like a cool role OP. An opportunity to try something entrepreneurial while you're still young. And it be an interesting skill (operational, industry) to add if you choose to lateral back into banking given some shops have been beefing up their advisory/relationship focus on earlier stage companies (potential future clients that may become big players).

    • 1
Feb 11, 2019

Thank for the feedback guys. My actual comp would be 2.75x higher because of the equity component (76%-80% cash comp, 20%-24% equity). I am in a secondary/tertiary market when it comes to M&A markets. Startup activity is extremely high and competitive in my market so recruiting for these positions is pretty hot, hence the high compensation.
My team is weirdly set up where I can't go any higher than VP (sounds stupid) but it's how it is and I don't want to be stuck in that role. What do you guys think about the fact that I am not even a year with this new firm?

Feb 12, 2019

So you are saying you would immediately triple your pay + get a higher position + gain equity in a successful startup and your current firm has no space for you to move up? Unless I am missing something, the decision is fairly obvious.

If anyone asks why you left before Y1, 3x the pay and lack of upward mobility at the old firm are convincing answers.

    • 1
Learn More

7,548 questions across 469 investment banks. The WSO Investment Banking Interview Prep Course has everything you'll ever need to start your career on Wall Street. Technical, Behavioral and Networking Courses + 2 Bonus Modules. Learn more.

Feb 12, 2019

The start up role is a no brainer IMO if what you say about comp is true. Movement on a resume, even in short intervals, isn't an issue if theres progression and if it makes sense. No one will question this move, if you decide to make it. Your boss will be pissed though.

Feb 12, 2019

Opportunity sounds too good to be true, and yet you're hesitating. Doesn't compute.

Feb 12, 2019
Comment