Always a lot of discussion on CC about starting salaries, ROI and I banking, mgmt consulting and tech jobs.
Anyone’s kids pursuing entrepreneurship and or start up opportunities right out of college? Thoughts?
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My son and both of his current roommates work for startups. All are with the companies they started with right out of school. My son was very early at his company. He was the first new grad they hired. The companies the other two work for were a little further along. Are you looking for any specific information? 
Congratulations to your kid!!
No just a topic rarely discussed so wanted to get a sense of others experiences. It appears the less traveled road on CC in spite of a significant number of my kids friends pursuing these sorts of opportunities.
A few founders and lots joining fairly new ventures.
While making slightly less initially then some of the traditional big money professions they all seem to want to be a bigger part of something and value the equity upside of getting in early and contributing.
Given CC discussions seems to trend towards competitive schools and career outcomes I have been surprised at how few posters have kids who express this mind set.
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Start ups are a great way to quickly add skills to your resume. You might be a whiz at python, but you will have a chance to understand accounting and marketing which will help you down the road.
The big problem is most don’t make it and when it flames out it’s often without a lot of notice. Great when you’re 22!
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DS worked for startup. Gained a lot of knowledge. When startup eventually failed, since most of them do, he had enough knowledge to start his own company. So far so good.
DD graduated during pandemic. She has very generously paying job for well known tech company. Now 18 months in and with nice cushion in her bank account she is looking to join startup. She thinks that now in her early 20th is the time to explore. I think it was good idea to join structured company first and build some financial cushion so for another year or two she can travel more adventurous roads.
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There are several caveats that I’d offer for anyone joining the conversation that only has a stereotypic notion of what it’s like. I’ll start with the negatives.
As others have mentioned, almost all of them fail. It’s pretty easy to suss out the ones that are just bad ideas, but they can fail when they are great ideas too. They might be undercapitalized, or the founders might be inexperienced at management and thus ineffectual. Just expect it won’t last and be pleasantly surprised if it does.
There’s an allure to having early equity. Often that’s held out as a reason to work for less money, maybe far less than the going rate in the market. Don’t fall for that, as equity in a dead company is dead money. Most fail. Work for an appropriate salary and benefits package and view equity as a long shot bonus.
The good, as others have also mentioned, is that there’s likely going to be opportunity for rapid knowledge and skill growth. That will be on the individual though, as there aren’t usually people able to mentor and babysit, as everyone is working at maximum capacity. It’s why many startups don’t hire new grads.
It’s fun to be part of the buzz of something (hopefully) meaningful in its infancy.
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I took a significant cut in pay and bennies to work for a startup in the early 80’s as the seventh employee. Three years in, we took the company public (still trades on the NASDAQ) and, shortly after, I cashed out and went to Harvard Business School, all before I turned 30. It was the greatest business ride of my career. I got to wear every hat imaginable but probably went through six of my nine lives. I never slept, the company was my entire life. That kind of immersion is exhilarating when you’re young, and the payoffs can be tremendous in experience, contacts, and (sometimes) pay, but it’s really not about the money.
Because I had such a tremendous experience, I generally recommend taking the risk. But. Before stepping off that cliff, it’s critical to know and trust the founder(s) and the product(s)/service(s). You need to understand how the company is financed. Where is the money coming from? What are the company’s plans for profitability? Have they ever not made payroll? What happens if/when they can’t? Will you have an ownership stake and what does that look like? Are you OK with putting your personal and social life on hold indefinitely? Will those closest to you (even a spouse) understand that they will be subordinate to this effort? How strong is your stomach for the ride? What is your financial cushion? Do you have a plan B, an out? A startup is not just a peculiar type of job; it’s an all-consuming lifestyle, the successful ones, anyway.
So, if the research pans out, I say go for it, and give it everything you’ve got. Even if it fails, there is no experience like it.
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What an interesting time that must have been! It was well before prolific VCs and constant talk of disruption. There’s so much noise in the space right now (“let’s do Airbnb for dogs” 
), that finding genuine opportunities can be challenging.
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In our situation my kid is a cofounder. He made the decision to decline a FT I bank offer and go for it. We are supporting him but nervous.
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Our son started a company with his BF at West Point. Keeping their product afloat and relevant consumes a lot of their time, but they have day jobs that help support the effort. They’re pretty sure that, eventually, the side gig will pay more than the Army, but they aren’t looking to expand, hire, or go full time, so not exactly a startup model. Depending on the product, though, technology can provide a very low cost of entry these days. For our son and his BF, it’s a software app that simply requires their time/skillsets, no requirement for serious capital.
Good luck and best wishes to your son. Keep us posted. This is an interesting thread.
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Agree- very interesting thread! My kids have not gone this route but certainly have friends that both joined early start ups and founded them.
I have a family member who invented a product, has several patents and is currently in production. She has plenty of investors and is towards the end of her career- idea was born out of her PhD work and her lifelong career in healthcare. It’s been so interesting to watch and learn about because it’s not something I could ever envision myself doing but am so impressed by those who do.
My son co-founded a company when he was a senior in college. He was its CEO for a year after college. The company changed from a software company to a software consulting company as they learned what their customers needed. The challenge became enterprise sales, which he knew he knew nothing about. So, he sought a new CEO with more experience. The company has grown modestly since then and is still running a number of years later but will never produce a big return.
He left to get an MS in Computational and Mathematical Engineering and an MBA. He learned a lot from his experience with his first company but it also helped him get into one of the best business schools at age 23. In his last year of school, he founded another firm after recruiting the best leader he had met in business school. They went into an incubator while in school, raised a pre-seed round and then a Series A. They have grown pretty rapidly and have been recognized in media and elsewhere.
I have co-founded three firms, but only one is a venture-backed startup. I co-founded it a few years ago with one of my son’s classmates. It raised a pre-seed round and struggled for a couple of years through the Pandemic (and a bit before) but recently brought in an employee from my other firm and has really turned things around.
I would like to echo some of what @eyemgh and @ChoatieMom have posted. Startups are a lot of work and are inherently a lot higher risk than big company job. At times, there is intense pressure from VCs. A growth rate of 10% per month may not enough. But, when things are working, it is very heady.
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My kid started an online business in college and continues it today, over 15 years later. He has also gotten a full time job in his field (unrelated to his online business). He took a 2 year leave of absence during Covid but was fine with paying all his bills due to his income from his online business. He makes more from his own business than his fulltime job but gets nice benefits from his job, including excellent health insurance.
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I gave a talk at a college about working at a start up after graduation because I was one of the founders at a start up at that time. My message was if you had a big student loan you couldn’t really afford to work at a start up.
Start up is all about new ideas and innovations, but once you have something people want then it would require organization and discipline to make it scalable.
I usually encourage young people to work at a large firm to learn how to run a large organization and then go to a start up.
It is one thing to develop an interesting piece of software quickly, but it is another thing to put it into production for hundreds and thousands of users.
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Here is a basic question - what is the definition of a, “start up”? When does a business cease being labeled as such?
@oldfort, I used to tell people who wanted to work in clean energy to spend a year working at one of the really well-managed energy firms (including a few of the ones that they thought were evil) so they could learn how large projects are best managed). This was for folks who were on the generation/distribution side more than the software/new tech side. I don’t think anyone ever took me up on it.
But, generally, I think you advice is correct not just for the reasons you suggested but also because will be better placed to identify a problem that companies have and that if they have an idea/technology that solves a problem companies are having in a cost-effective manner, they have a reasonably shot at success. Having a great idea for consumers does not mean you can get consumers to notice you or to be willing to pay.
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Technically, pre-series A funding. But I have seen the term used more loosely.
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My first question would be what is their cash burn and access to funding? This is a great letter from one of the top VCs cataloguing the “excess of excesses” and what may cause the current “frenzy” to end: https://twitter.com/wolfejosh/status/1459713710348460033
Basically things could get very bleak very quickly, like they did in spring/summer 2000, which I remember very clearly, and only those companies that could get to cash flow positive within their existing runway were able to survive. Now is not the time to start a company that will take years of investment to pay off and can’t survive at a reduced scale if the market turns in the next year or so. If the founders don’t take a salary is this business capable of generating cash?
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Yes. People seem to use the phrase to cover much more significant firms. I think people think about venture-backed startups, which may well have raised Series A or B rounds. Not sure have far it goes.
I think many consider them startups until they are self sufficient, go public, or are acquired. Lots of wiggle room in that definition.
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