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Startups vs. Big Tech: What New Grads Need To Know When Choosing A Career Path

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Going into your last year of college, all that’s top of mind is likely where you’re going full time after school. While many will start in big tech, consulting, or finance for a couple years, we’ve found that starting your career at an early stage startup can potentially help you learn and reach your career goals sooner. We spoke with seasoned recruiters, exceptional top talent, and Contrary's portfolio founders to create a guide to help you decide whether an early startup or big tech company is best for your career goals.

The Benefits of Working at an Early-Stage Startup

It’s often argued that established, public companies offer more stability, better mentorship, and growth opportunities, while startups are risky, compensated lower, and lack support. However, joining a startup in its earliest stages can provide rapid skill-building, faster paths toward career advancement, and possible better financial upside in the long run.

Ownership and Autonomy

The phrase “a cog in the machine” is thrown around a lot, but it aptly describes working at a Big Tech company. Entry-level employees are often tasked with making incremental changes on an existing product or service that has already been in use for years. There is little flexibility or ownership over the product, and the timeline to bringing new features takes months and even years.

In contrast to the slower-moving structure at bigger companies, new grads who join early stage startups are entering a company working with a small group of people who handle a wide breadth of tasks. With fewer people at the company, there is more opportunity to tackle projects or duties that don’t strictly fall under your role but still need to be done. In doing so, you can take on responsibilities and recognition that entry-level employees in Big Tech are rarely exposed to.

A new employee joining a corporate company will participate in carefully crafted new hire orientation, follow a multi-week onboarding plan, and have a clear scope of responsibilities. For some, this structure is greatly appreciated. In contrast, startup employees are expected to learn by doing. Though it can feel like jumping into the deep end, startup employees who prove themselves quickly typically have autonomy to develop their role, and in some cases, redesign their job, as the company grows and its needs change.

Faster Environment and Faster Advancement

The greater amount of autonomy given to startup employees feeds directly into their faster rate of career advancement, as compared to their peers working in Big Tech. High-growth startups may double or even triple their workforce in just a year. At many places, the first people to be considered for new management or supervisor roles would be the employees who have been with the company the longest— even if “longest” is only a year or two. Founders are starting a business and the company culture that goes along with it, so many prefer to advance employees who they have already identified as good culture fits with future leadership potential over external hires with more experience.

Everything at Big Tech is a process, with many people and many layers of approval involved in seemingly simple and straightforward tasks like filling an empty position on a team or identifying who is ready for a promotion. Startups simply do not have the time or bandwidth to function that way. Employees who are able to own their work and prove themselves are the first to be rewarded with fast advancement at startups.

Greater Potential Compensation and Updated Benefits

Startups usually cannot compete with Big Tech when it comes to base salary — Big Tech are almost always be able to offer more money to entry-level employees than a new company with less than 10 employees. Combined with equity in the form of public stocks, the total compensation package is very compelling and reliable (read our equity compensation guide here).

However, entry-level employees in Big Tech miss out on a major piece of compensation that is readily available to everyone who joins an early-stage startup — equity that has high growth potential. While FAANG and corporate tech employees are offered a small amount of company stock with lower growth potential, startup employees are offered more shares, which could grow 10-20x in value by the time the company goes public.

If a startup is successful and debuts a high-valuation stock price when they go public, then all the people were granted options when the exercise price was lower essentially make thousands overnight. But before going public, that stock is only available to employees, investors and family of the founders. It’s an exclusive opportunity to share in the profit you helped earn for the company. Check out our guide for an in-depth explainer on equity compensation, but suffice to say, the return from these stock options can be worth more than your annual salary— exponentially more, in some cases. Founding employees at companies that became unicorns walk away with enough to retire early, or fund their next startup. Important to note that the high growth potential also comes with higher risk — the equity has the chance to 20x, but also has a higher chance of not making it, compared to an already established Big Tech.

As for other benefits, it used to be typical for startups not to offer employer-subsidized health insurance, a 401(k), or even paid time off. But since employee recruitment is so competitive now, and because many founders are conscious of their employees’ need for some form of a safety net, most startups today offer a typical benefits package comparable to big companies that includes health insurance, unlimited PTO, and 401(k). Many also offer extra benefits like self-care days, stipends for home office expenses, commuter fare, wellness benefits, plus some company-related perks like complimentary use of the company’s product or service.

Though joining a startup as opposed to a company with a recognizable name and reputation can be much higher risk, new grads can count on Startup Search as a source for positions at high-potential early-stage startups. We use our proven methodology and connections to identify startups building towards a successful future and taking their employees with them. It’s daunting, but we hope we take at least some of the risk out of the equation so you can pick the role at the company that’s truly right for you to maximize your growth.