Chapter 10 – Taking a Job with an Entrepreneurial Firm
I wanted to take the time, for this blog, to answer the questions to Steven Rogers’ questions at the beginning of Chapter 10 in his book Entrepreneurial Finance: Finance and Business Strategies for the Serious Entrepreneur.
The two questions are:
- Should I leave my job to take a job with a start-up?
- How should I do a financial analysis of the decision?
Should I Leave My Job to Take a Job with a Start-Up?
There is not a ‘yes’ or ‘no’ answer to this question. If you want to grow as an entrepreneur, without having to take the financial risks yourself…this could be a great option for you. While you will, most likely, be hired for a certain set of skills you possess, you can still learn the ‘ins’ and ‘outs’ of what it takes to run a start-up by observing the decisions made by others and contributing to decisions in your own way. You will be able to learn how your decision can affect someone else’s and work with them to come to common ground. Just take a second to look around and absorb all the information you can, while trying to consistently contribute in a way that forces you to continuously grow. The financial risk is off of your shoulders, so the intensity may not be the same (and this is something you can’t learn unless you take the dive for yourself), but this would be a great way to practice. If you never end up starting your own business, you’ve developed skills that you can transfer to another job and advance your position there.
How Should I Do a Financial Analysis of the Decision?
I don’t have the best answer for this question either, but I do have my own answer. If I were the one trying to make this decision, I would look at what financial responsibilities I have and if I can meet those obligations moving to another company. The best financial analysis, in this situation, would be the one of your personal finances. If you can manage time off from work (in case the start-up company fails) and a cut in salary, then go for it! The experience you’ll gain is much more valuable than the cut in pay. Think about opportunity costs as well. What is the cost of not switching jobs? Would you help build a successful company, become a C-level executive, and be personally satisfied? What is the price of that compared to staying at your current job and making a larger, stable salary? Opportunity costs are great to think about when taking big risks.