Professor startup vs FT at trading firm

Jun 10 11 Comments

tl;dr: I've been offered a position to join a technical startup by my advisor for 3% equity (with no salary until funding), but I've already accepted a FT position as a research engineer w/ above average new-grad pay at a big trading firm (e.g. Jane Street, DE Shaw, 2 Sigma).

I recently finished my undergrad and accepted a FT offer as a research engineer at a big trading firm. During my last few months of my undergrad I've been committing a lot of time researching part-time with my advisor and plan to submit a paper soon. In the meanwhile my advisor and a couple other professors have been building a company out of the research they have produced. Before accepting my FT offer I was asked to join the company since I've more than proven myself (I've basically committed full-time to working on my research with them). At the time the company was still very early on and I ultimately decided to accept my FT offer.

I was recently pitched to again by my advisor that progress has been looking great and they have been getting decent attention through their POCs. They told me they would like me to join the company and I would be getting 3% equity (vested over 4 years, not fully diluted) as a founding engineer, the same as the other engineers (all students of the professors) who have joined the company. They said they were looking for either a quick acquisition within 2 years or at least a decent early series funding round in the next year and that my upside could potentially be equivalent to or more than my FT offer. My advisor also did strongly emphasize the chance of success is still very low but the upside could be huge. I do believe he has my best interests in mind but I can also see where he could be biased in his intentions. I believe the problem space they are working in is very niche in a good way and could have huge potential for a decent exit.

One of the professors have had experience with starting a company and getting acquired early by a large tech company early so I believe the team has the experience and connections to pull it off. My advisor told me that this is a great opportunity considering that since I just finished school I have no significant commitments like a family to worry about and that this would be a much better experience being part of the core team building a startup than taking a FT job and being another cog in a big machine. He said I will even be able to hedge the risk by pursuing a PhD at the same time since the research areas overlap.

My main concerns are:

1. I will be receiving no salary but only a promise of some equity until funding is received (or when the company exits and I receive my share + an offer @ acquiring company). I should be fine financially since I will be able to receive some grant money for being a PhD student at my school, but not having a salary is obviously less optimal.

2. I will have to burn a bridge reneging on the offer.

3. Nothing is in writing yet until after I commit fully and renege on my FT offer. That being said I do trust my advisor is not intentionally trying to cheat me since he'd like me to do a PhD with him afterwards regardless of the outcome.

Pros I can see:

1. I plan to pursue a PhD after a few years in the industry, so being able to hedge a PhD with this startup is very optimal. This will also allow me to finish a PhD earlier than planned and thus my starting salary if I do end up going into the industry will begin higher as well.

2. I've always planned to start or be part of the founding team of a technical startup. Being offered this opportunity as a student with few commitments seems like an opportunity too good to pass up, although with huge risk given the concerns (see above) I have.

I am leaning to not renege on the offer and continue with my original plan of pursuing a PhD after a few years of working FT. My advisor did say if I do decide to come back after a year I will definitely not be getting anything close to the equity package being offered currently.

It seems that this is a huge risk to be giving up a good FT offer for a moonshot, but I'd hate to look back and see that I passed up on a huge opportunity to catapult my career. Apologies for the rambling.

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TOP 11 Comments
  • Google anons2
    Trading firm job, duh. How much is the TC? If startup wants you bad enough, maybe you can moonlight there. That equity is fantasy though and there's a decent chance you will have to find a new job a few months to two years down the line.

    Best thing for a new grad is to put a great company brand on their resume for a year or two.
    Jun 10 4
    • OP
      TC is about 330K first year and 150K + 70K targeted bonus.

      Is it easy to moonlight while working at a trading firm given the higher emphasis on proprietary information and confidentiality?
      Jun 10
    • OP
      I was also pitched that if the startup gets a good acquisition in first two years I'd be looking at a decent chunk of cash (600K+) and I'd be able to secure a higher starting salary if I decide to finish up a PhD and apply for jobs then.
      Jun 10
    • Jane Street Capital idbkkskd
      A typical startup exit is more like 8-10 years. And startups are way more likely to die than pay anything out to employees.

      It sounds like your professor is either naive or lying to you.
      Jun 10
    • Think about the expected value.

      The startup has a VERY small chance of a liquid exit, especially at a valuation that would make sense to you.

      And yes, a good name early on in your resume will work wonders long term. So, Jane Street, no brainer.
      Jun 10
  • Spectrum Brands gDsz07
    You are smart. Do the math. Success rate of a startup surviving 2-3 years is 3%. Do a risk adjusted return analysis. Take your 3 years of salary which is 100% and multiply by 1, and compare against the potential money in startup in ideal case and multiply by 3%. That’s the simple risk adjusted return. Compare the two and see what shakes out.
    Jun 13 0
  • New / R&D 🍻ilkebeer
    If you're confident you're gonna go back for the PhD just start doing it now and work with the professor at the startup. If it works out sweet, if it doesn't at least you tried. Most of the clowns here only think of FIRE and TC, you should try something fun while you're young.
    Jun 10 2
    • OP
      I guess another concern I have is doing my PhD at the same school as my undergrad. Part of me wants to try a different school and in a different research area.
      Jun 10
    • Synopsys pullela
      . To

      .
      Jun 10
  • Synopsys pullela
    If your Ph.d is in an area of good jobs and can be done in a time bound manner 3-4 yrs I think the start up/PhD is a great option.
    In 3.5 yrs 1. You d finished an advanced degree 2. Pay hike of 30 % over an ms degree. The startup is almost gravy. Besides if it succeeds you would've a solid footing financially too. I'd say go for phd
    Jun 10 1
    • Google anons2
      This is bad advice. You would have already warned over $1mm at the trading firm in this interval. Then go take a break and go back for PhD or fuck around with a startup that won't pay you well
      Jun 11