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What are the benefits (and risks) of working at a startup instead of an established company?

Laurie Gray's Profile


Title: Chief Financial Officer
Company: Pro Tech International
(Chief Financial Officer, Pro Tech International) |


This question has so many answers that I doubt any single person will be able to give you a complete list. The largest benefits/risks will primarily be driven by the company culture itself and what the owners/executives of that company are attempting to achieve. I have worked in both during my career. Here are a few of my answers, from the perspective of a higher level employee within the organization.

* In small companies all professional level employees will be involved in operational matters on a regular basis. Whereas, in a larger, well established organization, these professionals are more likely to be focused primarily on matters within their specified discipline. The determination of which of these is a benefit or a drawback depends on your individual objectives and desires.

* Start-ups are more likely to have cash flow issues, thus making the competition for resources among projects/departments more acute. Established companies may have the resources, but will probably be more inclined to be following a budget, so your ability to forecast your needs 12 to 18 months out will be critical to getting what you need for your department.

* Flexibility in how you do your job is more likely to be available in a start up. Especially when you may be involved in actually writing the job description yourself. In established companies, job descriptions are likely to already be defined, (maybe in writing, maybe not), so your flexibility in shaping the duties will be limited. Once again, either could be a benefit or a drawback, depending upon your personal desires and objectives.

* Larger companies typically provide more opportunities for growth and training. In start ups, you may be expected to be the expert on your function. Your growth and training will be derived from your personal job performance and the decisions you make each day.

* Start-ups can be an exciting place to work. New, challenging issues arise on a daily basis and decision making takes place quickly. The impact of decisions is generally felt quickly and may be more consequential. Owners typically are more available for truly strategic matters that require their input. In more established companies, procedure may take precedence over quick decisions. Running an issue "up the flagpole" is more important and may take longer periods of time, resulting in frustration.

I don't want to get too long winded on this subject. Hopefully others will provide some additional input to you.

My personal preference is the start-up because I have a higher tolerance for risk and I truly enjoy the opportunity to solve problems that no one else has already solved within the organization. I also enjoy being the "go-to" guy on the issues where I have strength.

Having said that, the time I spent early in my career with the larger, more established companies was critical to my ability to function in my roles within start-ups. Those large companies gave me a foundation for the benefits of a procedural approach to running a business. Those skills provide a backdrop that I can rely on to ensure today's decision fall within the scope of the overall, long term, strategic objectives I am attempting to accomplish for the organization.


Gary Honig
Title: President
Company: Creative Capital Associates Factoring Co..
LinkedIn Profile
(President, Creative Capital Associates Factoring Company) |

Touching on Dan's comments, it takes a "special kind of person" to be an entrepreneur. The whole seat of your pants experience is not for everyone, and usually there are signs in your professional life that point to being able to work in that environment. It is rare that a person can leave the comfort of salary, benefits, paid vacation, health insurance and go work in a small room with some giddy 20 year olds.

Many CFO's sprinkle their efforts around a handful of companies hoping that one actually takes off. Getting close to Angel investors is a good way to find which may be worthwhile.

But it really comes down to that frontier spirit, are you able to hitch your wagon and head into the wilderness.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

In today's marketplace, one could say many of the issues apply to both entities, such as :

Cash flow
Access to capital

Elena Thomas
Title: COO/ CFO
Company: Plan Management Corp.
LinkedIn Profile
(COO/ CFO, Plan Management Corp.) |

These are really good responses above. I worked for many years at a big company, and then left for a smaller start up. A lot of the points about control and influence in the start up space are very true, not to mention the potential for payback and the excitement of creating something new.
Given those areas were well covered above, I would add two considerations: development, and future career path.

By development, I mean that more established organizations have more resources to devote to training and mentoring, and provide access to a larger set of people with skills and experience that you can learn from. This can be important early on, and if you are working in too specific a role at the startup, or always scrambling just to keep basic operations going, you may miss out on that broader professional development. That said, if you are already into your career, and have the skills and expertise you need, this may be less of an issue.

The other point that depends on where you are in your career, is that if you start by working at an established company, you get experience and a good company name and resume under your belt, and you can always go for the right entrepreneurial venture when it comes up. In my experience (and I did recruiting work for my previous employer), it can sometimes be harder to tell the "story" of moving from years at an entrepreneurial venture to a more established company, particularly if the venture was not a success. Even though it could have provided you with great opportunities to build skills, they are sometimes hard to "map" to those experiences an established firm will be looking for in candidates. So there again, if you are thinking that you want to always be in the entrepreneurial space, or you've had more traditional business experience previously, then go for it! But if you're still feeling out your career, and may want to go into the established business world at some point, it may be easier to get some of that experience under your belt before taking the plunge into a start up.

Topic Expert
Edward Abbati
Title: Vice President of Finance
Company: Location Labs
LinkedIn Profile
(Vice President of Finance, Location Labs) |

I have been on both sides of the fence in my career. The biggest benefit is that you really get a sense of what drives a business. As a finance person in a larger stable company, you sometimes get pigeon-hole into a finance role, however, in a startup, you don't have the support staff, you have to make decisions daily that impact the organization. On the flipside, I have been in multiple startups and never hit the big payout.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

"Pigeon holed" is part of the lack of professional/role understanding the the wide range of value a CFO brings to an organization.

We are not just number crunchers and cost containment/expense reducers. We can (and do) bring value to the top line (revenues).

Adam Grotke
Title: CFO
Company: The Wentworth Group
(CFO, The Wentworth Group) |

Here's one you won't read about in business class, but one that left me high and dry: I left a steady position for a start-up that was in the very early stage of forming. After 2 months, the CEO's wife was laid off from a very good sales job, and without any income they decided it would be best for the CEO to find a salaried position. So the start up was terminated immediately.

I still find the energy at start ups to be fun and you really get to use your skills to create your own job to make a huge impact, but there are lots of hidden risks.

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