Small Shop vs Big Shop

team, mentorship, culture, fit.... tons of factors that matter before size/reputation of firm. 

If you are saying all of that is equal, then the 'well known' firm has better career advantages, but again, lots more to factor before that should drive a decision

Both have their advantages and disadvantages. Bigger, well known shops can look great on resumes and the brand can be good for b schools and other opportunities that come down the line. Yet, it could also be hard to stand out and become top dog. Smaller shops can offer more opportunity to move up as they grow and you might get more of that sweet, sweet promote earlier. On the other hand, a smaller shop may not have the resources to weather a bad recession the way a more established firm would. For me, I’m probably not going to end up at BX or Starwood, that dream died quickly, lol. My big dream is to run my own shop down the line (like everyone else in RE) a smaller, more entrepreneurial firm might be a good fit as I would be exposed to the whole deal form start to end vs one aspect of it at a bigger place. This is assuming culture and team were a good fit.

Working at a small shop has been great for me because I’m involved in every aspect of developing buildings as the development manager. Everything from finding brokers to even start looking at properties, to finding the site, getting it under control, designing and entitling the project, gaining community support, overseeing pre-development, securing all sources of financing, and working with the larger team to oversee construction, lease up and stabilization. So for me, I’m getting the exact experience I need to go out on my own in, realistically, 5-10 years.

But small shops have their challenges. For one, we do not always utilize best practices. It would be great to work for an institutional shop like a Hines or a CIM to see how their methods differ. I’m sure I’d learn a ton and improve as a developer, so making that move at some point is certainly something I will consider. But I know if I did make the move to a larger firm, I would have far fewer responsibilities, at least until I have a longer track record and sharpen my skills further.

Bigger shops keep more doors open for you, the firm name and the deals you work on will be recognizable by many in the industry. Small shops will give you more skills as you crossover into different aspects of the deal. The bigger shop is probably going to be the safer bet, especially if you are just coming out of college. You probably know you want to be in CRE, but maybe don't yet know what you want to do long-term, so you want to keep options open. If you ended up not liking the environment of a big shop i think its easier to go big to small than it is the other way around.

IMO better to start out at Bigger shops just for the optionality, but comp potential is much greater at smaller shops as you get more experience. 

The saying “big brands open doors” was told to me by a Harvard, Disney, Big REPE, Berkeley MBA guy when I was 5 years out of college.

I was in my Great Recession job working at a small company as a 1099 worker (constantly low on cash company), and this guy was trying to help us start a fund, which would have been great (Fantastic) timing except capital dried up.

We were sitting eating lunch and he talked to me and mentioned that.

I think the pattern recognition is important. The big brands background is helpful.  People know the company or the process or the expectations. 
 

In development, small company has its advantages with skillset growth.  

I think the biggest takeaway from working with the big dogs is you get to know what they want, so you can sell to them (feed them) and in term make a few bucks.  Helpful for selling your services to acquisitive type of folks.

Since a lot of the above comments handle a majority of the trade offs I’ll give you a different angle - you should think long and hard about who you are and what you want out of your career.

Big shops come with brand recognition, are safer and more structured. The trade off is you typically have a far more specific/narrow field of job responsibilities, a more limited ceiling without typically playing politics and more bureaucracy with a slower decision making process. So if you’re someone who prefers structure and is risk averse, looking for more of a 9-5 with stable/safe prospects both now/in the future who doesn’t mind bureaucracy and likes becoming an expert in a narrower field then this is a good match for you.

Small shops you get pretty much the opposite of this - limited/no brand recognition, higher variability both in your position roles/responsibilities but also compensation depending on the company. There is typically a lack of structure which can be frustrating for some but with that comes opportunity. As a young ambitious person you can typically stretch far outside your traditional role which is great for those who want to start their own shops or better understand real estate as a whole. The upside is typically higher at these shops because there are less people so if you truly dedicate yourself you can shine harder and move up the chain faster if you impress the senior leadership in place. So if you’re someone who prefers to know “a lot about a little”, doesn’t mind an unstructured environment and likes to move fast then a smaller shop is likely a good fit for you.

I was pursuing MF development and had to choose between a small shop or 2 giant shops. Ultimately, it came down to 2 things for me:

1. Mentor/Boss - If you are green in Development, you can barely crawl at first and will spend hours each day with your boss asking a billion questions. Make sure this person is someone who wants to see you grow but doesn't drive you crazy. My boss asks me what notes I took after every call. I hated it at first but now I see it makes me better. Also, is the mentor established/respected in the development community? 

2. Culture - Just walking through the office you will get a quick sense of the work/life. I worked in a cubical farm before and couldn't go back, but my downside is no one at my company is below 40. So not only am I the default IT guy but the office convos are more geared toward little Timmy's Tball game than my drunk tinder date.

Going to a big shop is safer.  For the more entrepreneurial among us, it will feel like wasting several years of your career; as someone else said, all the money in this business is in the carry, and I can guarantee you, at a big shop you don't even sniff carry until your well into your 30s, and that is only if you are excellent at your job.  At a smaller firm that can happen a lot earlier.

Someone else on this thread posted about how they went to smaller shop and ended up making close to half of what they thought they would.  That's the downside of going to a smaller shop!  Like the rest of the world, you get compensated for risk.  Yes, it sucks that person (or any generic person) ended up making less than they thought, or would have at a Hines.  The flip side is that the anonymous poster also thought they'd be making half a million in the 4th year.  That's a huge salary, and much bigger than anything a person will make 4 years into a stint at CIM or Related or whatever.  One cannot ask for all the upside that comes with a small shop while simultaneously demanding the same security that comes with grinding away for years to move up the hierarchy at a firm with 500 people.

All of which is to say the answer lies in the long term goals and risk profiles of the person in question.  If I want to start my own firm at 40, being at a small shop may not be great, since why put all that risk into growing someone else's place and getting all that carry, just to throw it away and start over?  If I don't want the risk profile that comes with guaranteeing my own deals, but still want a chance at 5-10% of the promote, then yeah, I'll put in my time on the 5 man team and hope that if it grows into a 50 man team, I'm sitting at the top of the heap.

Personally I'd prefer to run my own shit so I'm happy to work for a more established player before moving on, but that's my own take on it

I wasn't expecting to be making $400K in salary.  I was making low 100s in base but made money on fees and carry.  I get 10-20% of acquisition fee (10% for in state and 20% for out of state), 7.5% carry and a base.  Doing $40 million in acquisition would be great but they said no to everything... underwrote close to 90 deals last and they seemed to have a BS excuse about why something didn't work.

The owners want to use very conservative assumptions for all deals and when deals do pencil, they will write a BS LOI and "tell the broader team they wrote a strong offer".