Friday's career advice

I recently was asked by a freind for some career advice. He as trying to decide what to do next. He currently is a VP at a small public company that is struggling through a transition.
His choices were:

  1. Start a new company
  2. Join a company that just closed a 2 million venture round
  3. Look for a job in another public company.

He had already decided to leave his current firm where he had been for 3 years. He's 40 years old and has 3 children. His current salary is $225K. Here's what I told him about his options.

  1. Start a new company -- this is great if you know what you want to do. There's a lot of risk but there's also a lot of reward. This is the height of creation. It basically means giving up on salary for at least 6 months and quite possibly 12 months. You're likely to end up owning anywhere between 15% and 50% of a company if you're the founder post a round of financing. You're going to have to work harder than you thought possible. The two big pluses of this direction is that you're your own boss and you get to define teh company you're there when the equity gets divided.
  2. Join a funded start up -- if you don't have the stomach or the idea for starting a company this is a great way to learn about start ups.  The good news is you can get paid on day one. Your likely salary as a VP is about 120K to 160K and you'll get anywhere from 1% to 3% of equity that vests over 4 years.
  3. Join a public company -- Also, a viable choice but the bureaucracy is usually in place. You don't play a meaningful role in establishing the culture of the company or the management team. You likely are paid 200-300K and may get equity in the 0.3% up to 0.75% depending upon the maturity of the company. This equity also vests.

There's no right answer. You've got to decide what it is you want to do and assess the risks and rewards. He told me today that he is going to join a funded start up. I think this is a great choice for him.