start up vs top 10 consulting firm
I graduated from a top 5 undergraduate business school last year and have been offered two jobs. A consulting job as an analyst, at a well known consulting firm and a sales/finance role at a startup. The startup is growing rapidly, and is expected to IPO in 2 years. The offers are both similar in salary, but the startup is giving me stock options and there is lots of me to grow. Do you guys have any advice on which one I should take?
If you genuinely think the start up is a solid firm and will IPO in 2 years, I'd say go with the start up. Might have a lower salary for two years, but if they truly are planning on going public, those options may be worth a lot .
+1
Working at a start up can also present opportunities and valuable experience if you choose to pursue business school later in your career. However, if the offers were from either of these firms (MBB,OW,Monitor,LEK,ATK,Booz), it would be a tough call.
Which firms did you get offers from?
What exactly is a top 10 consulting firm? are we talking deloitte? Or even further down the list?
I agreed to keep both firms private, so I will not say. It is a well known consulting firm, and the startup is growing rapidly. They have already been valued at 660M, and continue to grow. The consulting firm is obviously more safe, but I would have lots of room to grow at this startup. Yes, the options could be worth a lot of money if they go public.
Do you truly believe in the idea, philosophy, business plan , management and vision of the start up? If yes join the start up!!
Also if you join the start up, we would really appreciate if you could come over after some time and talk about your experiences.
660m is not a startup, that's growth equity material lol
definitely already gone through multiple seed / angel rounds
^^^^ lol yes. No one even noticed that. LMAO
true, but they want to be known as a startup stil.
Than I am a billionaire and business tycoon, because that is how I want to be known. lol
But the below advise still holds
Do you truly believe in the idea, philosophy, business plan , management and vision of the high growth company? If yes join the not so start up but high growth company!!
Also if you join the company , we would really appreciate if you could come over after some time and talk about your experiences.
Seriously, a $660M valuation is not a startup. Strongly consider the consulting gig, you can easily get a role at a real startup that's much smaller after consulting, where you can have a real impact, and get a meaningful amount of equity.
Broader point: "Stock options" is not the same as "lottery ticket" - if you have .01% of a company (which is all you're going to get if they're already valued at greater than half a billion - what number employee are you?) and they sell for $700M, you get $70,000. Hardly fuck you money. Be rational folks - you're not exactly getting in on the ground floor here.
Furthermore, you only get $70,000 if your options have a strike price of zero. Most likely, they'll have a strike price around the valuation of the company when you join. So you'll make even less than $70,000 because you have to exercise the options.
FURTHERMORE, those options likely vest over 4 years, which means if they're acquired two years after you join, you've got to work at BigCo for another two years before you can get your payoff.
Moral of the story - don't be an idiot, do the math.
PS - is the "startup" eHarmony? Careful quoting specific facts ($660M valuation) in a world where Google exists: http://finance.fortune.cnn.com/2011/01/31/eharmony-ceo-joins-vc/
The above is the key takeaway from this thread.
OP: just because they still want to be known as a startup doesn't mean you should consider them that way when doing this type of analysis. When you're talking potential upside of a startup, the implication is that you joined when it was like 1st round of VC funding, maybe 10-15 employees, not even worth a true valuation yet, etc. That's where you're taking a real risk, and where you stand to gain a real reward. Maybe they give you a 1% - 1.5% stake that's worthless at the time, but in 3 years when that $660M valuation comes down, you're sitting on almost $7M - $10M bucks. That won't be the case here, so your analysis should be "consulting firm" vs. "random middle market company with a market cap of $660M".
Also, as others pointed out, you outed yourself with a specific data point. How many companies are currently valued at $660M?
Here is my $0.02
First, about the company vs consulting. OP, you have to look what is the ceiling for the company growth, and what is the growth rate. Let's assume, you got hired by Microsoft, and got their stock options when they were $660M in valuation... Changes the picture, doesn't it?
You should not adopt the Get_Rich_Quick mentality, and expect to cash out in 2 years. That is a good mentality from the PE/VC guy point of view (and that's why you got answers like that in this thread), but silly from a company employee perspective, and I will tell you why.
Let's assume we have a startup, and you are thinking about joining. There is also a VC/PE guy thinking about investing in it. Here is the simplified model of reality: there are 10 companies like yours. One of them with 100% certainty will bring 100x returns in 2 years, other 9 will go out of business with their employees losing jobs/landing in jail/performing suicide. There is no way to predict which one will succeed, because it's random (or close to random).
A PE/VC guy can invest in any number of them, but you have to pick ONE. He will invest in all 10, you will work for only one of them.
He just made a 100% safe, risk-free, high return investment. You, on the other hand, volunteered for a suicide mission, a quest for gold in the unknown lands. He hedges his risks, which now are zero. You are playing Russian roulette for money with one empty chamber and 9 loaded.
It's a bit exaggerated to make the point clear. In real life it's not that much black and white, but you got the idea...
So, in your case, if the company has good growth prospects, you are better off there than in a startup just because mid size company is a lot less likely to flop, but still might have similar growth prospects. It does not matter if you got 1% shares, or 0.01%. It matters how much can they grow, and you have to think long term.
Strategy consulting start-up vs PwC strategy team (Originally Posted: 08/03/2013)
I'm currently a consultant at a non-branded boutique firm of ~300 people with options to move into the strategy consulting team at PwC or join a 10 person strategy consulting start-up with a bit of equity.
My eventual goal is to move into MBB or b-school and possibly end up in PE via consulting so the next move is perhaps a 2 year play to get some experience elsewhere at a senior consultant level. I've been going through the usual comparisons on projects, responsibilities, training, network/people, etc. but am still having a tough time comparing the options. The brand and structure that comes with it is tempting to load up the resume but at the same time I've heard about getting pegged against utilization targets and being a cog in 'the machine' that is a Big 4. Not sure how relevant it is but my resume has an ivy on it for education but currently no brand name firms to de-risk myself as a potential hire.
Which option would folks on this forum recommend? Also, what is your current perception on PwC's strategy consulting team (been hearing mixed things)?
I think for b-school app, it would look better if you started at a start-up. With the experience you will gain at a start-up probably make stand out more and more interesting.
Disagree. For b-school, PwC Strategy (if it's the team/division that used to be Diamond) would be a much safer choice. Will you be happy there with all the con's you mentioned? I'm not sure.
Also, you really shouldn't join MBB with the hopes of ending up in PE. While it is possible if your'e at McK or Bain, it still pales compares to IB. I just don't understand it when new BA's or AC's join with their sights set on PE.
Better 2nd job for B-school? Boutique Consulting or Series A Startup (Originally Posted: 03/10/2015)
Have two offers on the table - Spent a year at a well known F100 technology firm doing tech strategy work
1) 60k a year - biz ops/salesy role with opportunity to specialize in pretty much any startup function (product, marketing, sales, etc - leaning towards product management) after 3-6 months (which will include a ~10kish raise) Series A funded from good VC funds (think Greylock, Sequoia, etc.); I am interested in their space (7.5 on the 1-10 scale); ~20 employees
2) 72k a year + guaranteed $18k EOY bonus at a boutique digital consulting shop - they do a combination of tech strategy/IT consulting - company is smallish ~300 but I will be in their HQ office in a SF/NYC/LA city working directly with the senior management team helping close deals (60%) + doing the projects (40%)
My question is related to b-school - what will look better? I went to a Top 25 USNWR university with just under a 3.8GPA and do pretty significant non-profit work. Can I get into a H/S/W either way or will one be significantly better than the other (contingent on good gmat scores)?
If possible, it would be great to also hear opinions about what is a better general choice for me!
Thanks!
Well...why do you want an mba/which job is more closely related to your target job after an mba?
I want to work at a VC post MBA...thanks for the insight @nutella...is it better that I'd be closing deals or working on strategy work? How big of a difference will it make?
Well...why do you want an mba/which job is more closely related to your target job after an mba?
I went to one of the B schools you mentioned after working for a venture-funded company and found it gave me a lot of interesting experiences and successes/failures to write my essays about. Worked at a well-known consulting firm before that and also found that useful but less so. You will have more freedom and responsibility at the start-up so chances are you will learn more as well. I'd probably do that if I were in your shoes.
For B School, I'd give the start-up the slight edge. IT consulting is not seen as in as good a light as strategy work, and H/S/W fill most of their classes from M/B/B as far as the consulting bucket goes. If you really kick ass at the start-up (i.e. getting more responsibility etc, promotions, "wins"), you could be in the mix at H/S/W with a good GMAT and good essays. Neither opportunity is an auto-admit or auto-deny, most of it will be what you make of the opportunity.
Oh I was contrasting strategy consulting with IT/tech consulting. Schools generally prefer the former to the latter. Deals are great to talk about but you would probably get exposure at either job.
If you want to ultimately do VC, then working at a startup will be way more valuable than IT consulting. Plus the startup role sounds more interesting (not to mention the potential upside).
I'd take the startup offer.
Agree with most thoughts here. Top schools tends to go for MBB in terms of consulting, otherwise you're going to have to have some amazing stories.
If you want to go VC afterwards, nowadays VCs are tending to look for more operational startup experience vs. the traditional feeders (tech m&a, consulting), so being there at Series A would be a step in the right direction. However, when it comes time to start pursuing VC in earnest DO NOT get caught up in in taking a operations/ EIR role. Completely different tracks that never cross.
Big 4 IT Consulting v. Startup (Originally Posted: 06/21/2009)
I currently have two offers. One is for IT consulting at a big 4 and the other is for basically managing and further developing an entire system for an already profitable startup company.
I have always had an interest in entering PE and although I am aware that these are not the best routes, that is what I got after college. Any thoughts?
neither of these are going to get you into PE. just go with whichever you think is the better opportunity.
Agree with xqtrack on the first comment (especially if by PE, you really meant LBO firms), but if you are willing to play the best card that i available to you, then I will try to get to know this profitable start-up company a little better.
By luck, it might be backed by a couple of venture capital and growth equity firms (since you said it is profitable). Look at the board member if it is listed on their website to get some ideas.
If it is a start-up company where you have a good access to the top leadership (founder or CEO / CFO, someone who has a board access), try making a favorable impression on them with your hard work, and be able to put them for your future reference. Tech start-up operating experience with a reference from a highly regarded entrepreneur can be the best weapon you can develop from the choices that you have there.
I do have access to the founder of the company, and he has seen my work and been involved in extending to me the offer to work full-time (I interned this summer first). He went to a top b-school. We have about 2 mil of revenue and gaining fast.
That said, I also have a stellar GMAT, 3.6+ GPA at a top 20 school and double majored in 2 quant majors (think CS). Can't I just go to a top Bschool and follow that path to PE? Also, what are your thoughts on my chances at VC. (I know this might not be the forum to ask that question).
but i have to agree with the others. the IT consulting job is DEFINITELY not gonna get you PE. the start-up sounds interesting, but it is also not a traditional route. as for your question on bschool, it is extremely difficult to get into pe post bschool if you do not already have pe experience.
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