Risky job opportunity, or Microsoft at its start?

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Planner
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Risky job opportunity, or Microsoft at its start?

Post by Planner »

I'm a PhD student in mechanical engineering, and am becoming involved with a small company that seems to have the technology to change the world (I reached out to the founder of the company because of ties to my university, and he apparently was actually on business in my state, pursuing what seems to be a promising opportunity). I'm torn as to whether I should continue down this path -- but honestly, I can't unlearn what i now know, and would have trouble working on anything else. I'm very passionate about this, thinking about it when I go to bed and when I wake up. There is money to be made, but major obstacles I don't expect to be sorted out soon.

If you were in a similar situation in your own industry, what would you do? Or any thoughts at all would be appreciated. I'm heading out of town for a couple days, but can provide more detail when I get back. Just looking for a few general thoughts at the moment.

Oh, and for context, I'm 28, and married with 2 kids and counting. Our income isn't extremely high, but it's decent for a student with a part-time working spouse. Our net worth is very positive, we max out Roth IRAs, HSA, and put money into 529s, UTMAS, and ESAs. I've always worried about money and started saving young, but we're now at a point where I (obviously) feel less pressure to take a job I'm not interested in. Of course, I don't want to be a starving artist that can't provide for his family either...
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Re: Risky job opportunity, or Microsoft at its start?

Post by mhalley »

This is the classic risk/reward conundrum. Remember Breaking Bad, when Walter White had the opportunity to continue with the chemical startup but decided to go into teaching for the immediate steady income/benefits? Depending on your family situation, you could be a starving artist for a few years and end up millionaires or be a starving artist for a few years and end up with nothing. It depends on too many things for an online forum to be any help in making the decision. Shoot for the stars or settle? Up to you.
Wife of course is a MAJOR consideration. Can she go to full time work while you pursue this?
Last edited by mhalley on Fri Jul 15, 2016 8:53 am, edited 1 time in total.
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Re: Risky job opportunity, or Microsoft at its start?

Post by nisiprius »

I don't like the fact that you used the phrase "Microsoft at its start." For every Microsoft, there are a hundred Osbornes, Exidys, Ovations, Datatrees... Webvans, Rdios, Quirkys, Zirtuals... even Digital Researches... that fail. And lots of startups would prefer to give their employees stock than pay them a competitive salary.

Let's just say it's a "risky job opportunity" and leave it at that. It's a startup. It will probably fail. That's what usually happens. However, you say "I'm very passionate about this, thinking about it when I go to bed and when I wake up." What I'd ask is: what are you passionate about? Is it something you would just plain love working on? If so, good. Or are you just passionate about the possibility of hitting a big financial jackpot? If so, not so good.

I've worked at two startups. One of them failed. I'm not quite sure of the status of the other, I left in order to retire, but its website hasn't been updated since 2014, but I think the corporate shell still exists.

Both startups were some of the best fun I've ever had, and sheer heaven for an engineer. Why? Because a startup is the only kind of business that can, and is expected to spend more money than it makes. And because in an engineering startup, or at least the ones I worked at, they just hired a bunch of good engineers and the only thing they cared about was "make it work." We got the opportunity to do our job. You may not know how rare that is.

Another detail is that at a startup, you may have a fairly free hand in choosing the technologies to use... and a better chance of learning new things than you'd have at an established company, where you may be somewhat boxed in by existing ways of doing things.

I'm not any kind of career expert, but working at a startup you do get money to live on. Because of the ACA, if the company doesn't provide medical insurance it's not the kind of problem that used to be. I don't think time at a startup looks bad on a resume. Furthermore, if a startup collapses, in your next job search it's pretty easy to answer the question "why did you leave?" And a startup is probably as good or better a place as any to make potential future job-search contacts.

In other words--unless you already have people depending on you--if you are passionate about the work itself it probably wouldn't do your career any harm, might do it some good, might be a great experience and a great learning opportunity. Worst thing is you might miss a few years in which you could be steadily socking money away in a 401(k), but, hey, I spent too many years as a grad student and didn't start retirement saving until I was in my early thirties. Not optimal, but not fatal.

But I'm worried your use of the word "Microsoft" aspect. Go for it because you think the job would be exciting and stimulating, not because you are hoping to hit a financial jackpot.

One warning: if the "Microsoft" thing didn't pop into your own mind--if it was someone at the company that raised the possibility of "changing the world" and "being the next Microsoft"--then be on guard.

By the way, the first startup also had a "change the world" proposition. It didn't change the world, though.
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Re: Risky job opportunity, or Microsoft at its start?

Post by bonfire »

sounds like you're excited about the opportunity. Being excited about the work you do is rarer than many think. Many of plow through a job because its secure, steady and financially necessary to care for the family. With a PhD in mechanical engineering (I thought most engineers stopped at Master's degrees), I can't imagine it would be difficult to find work if this doesn't pan out. If I could go back to 28, I probably be willing to take a couple of chances especially on something that made me feel as you descirbed. Wish you the best on a big life choice

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Re: Risky job opportunity, or Microsoft at its start?

Post by gloomydog »

I mean, ultimately it is up to you. But a startup becoming huge, or more precisely - your stake in it becoming huge, is like a 5% chance. My relative got wealthy, we didn't, and the startup my spouse cofounded was incredibly well funded with great research from a famous institution.

Are you trying to join one of the hyperloops? :P
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Re: Risky job opportunity, or Microsoft at its start?

Post by KlangFool »

OP,

I do not understand what do you mean by RISK? You are a salaried worker. Make sure that they offer you a competitive salary plus generous stock grants for the upside. And, if the startup failed, you will gain valuable experience.

In summary, take the RISK portion away from your side. Make sure that you WIN even if the startup does not work out. Look at this as an objective business proposition.

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Re: Risky job opportunity, or Microsoft at its start?

Post by 62nc »

I agree w bonfire. It sounds like you're excited about your work. That is probably rare.

Additionally - you're doing well. 28 with + net worth, contributing to all your accounts. If you can live off the income, meet your target savings goals, and be excited about going to work every day....seems like an easy answer.
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Re: Risky job opportunity, or Microsoft at its start?

Post by quantAndHold »

Even if, in the end, this company turns out to not change the world, would you do it anyway?

Even if, in the end, you don't get rich, and actually make less money than you'd make working for a more stable employer, would you do it anyway?

Odds are that what the company accomplishes, both technically and financially, will be more modest than your dreams. But that doesn't mean it's the wrong thing to do. If you're that passionate about the technology, you might want to do it anyway. Just go in with your eyes open.
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Re: Risky job opportunity, or Microsoft at its start?

Post by jharkin »

Planner wrote:Iseems to have the technology to change the world
We only ever know this in hindsight. Remember that Dean Kamen was convinced he was going to revolutionize the world more profoundly than the invention of the internet or indoor plumbing....

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Re: Risky job opportunity, or Microsoft at its start?

Post by itstoomuch »

Tao of Clams
If you already have enough clams on hand and have enough clams in the freezer for the freezer.
Motivation to go after the really big clam diminishes.
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Re: Risky job opportunity, or Microsoft at its start?

Post by slbnoob »

I'll add to the observations made above.

Be wary of the greed of hitting a jackpot. Go into it assuming that this will be another startup which will fail. Anything above that is a bonus. Hence, be prepared to 'leave' in a few years. I think the experience of working in a startup will do you well in your next job search should that eventuality arise. I would take comfort in that.

Another thing which will make the decision easier for me is if the spouse made decent money to shore up finances in case things went belly up soon and the next job wasn't coming soon. However, where do you draw the line in terms of 'decent' is the question. Consider this hedging your finances.

It is not common to find something you're really passionate about to work on. So this calls for taking on the opportunity. However, do realize that it is very possible for the sheen to wear off once you've been working for a while and muddling through challenges without really getting anywhere. This typically happens even in the middle of a PhD stint.

I would go into it considering that the likelihood of the 'world changing' and 'the next Microsoft' claims panning out to be very small. Now that the risk has been adequately considered, aim for the reward.
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Re: Risky job opportunity, or Microsoft at its start?

Post by ctreada »

28 is a good time to take a career risk, but keep in mind that the % of startups that actually change the world is very small.

And the number of startups that make employees wealthy is even smaller.

It's hard work and startups are volatile. I'm on my 4th right now ;)

A lot of fun but a lot of risk. You have to think fulfillment and family on this one. Good luck.
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Re: Risky job opportunity, or Microsoft at its start?

Post by nisiprius »

The Segway is interesting, because it was neither the success it was hoped/hyped to be, nor a total failure. I don't know what it would have been like working on the engineering team that developed in the early days. The company's still in business, it has a niche market, I couldn't find out in thirty seconds of Googling what the story is on its stock--it looks like it once was a public company with ticker symbol SEGW and is now private... Self-balancing technology is finding various uses and spreading, even if hoverboards have their problems, too.

I imagine that the people who worked on the original Segway engineering team probably had a good time for a while and probably advanced their career.

It's sort of a shame that Steve Jobs kind of set the bar as "change the world," as when he famously said to John Sculley, "Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?" But of course that's another issue in going to work for a startup. Steve Jobs wasn't the only person to have a "reality distortion field."
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Re: Risky job opportunity, or Microsoft at its start?

Post by KlangFool »

nisiprius wrote:
"Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?"
nisiprius,

We are part of the world. So, if we change ourselves, we are changing the world. It is impossible for us not to change the world. It is just a question of degree.

We cannot stop changing ourselves in any case, Our environment and physical well being is changing constantly. We change ourselves and affect the world in the process. We are all connected.

Only changes is eternal.

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Re: Risky job opportunity, or Microsoft at its start?

Post by nisiprius »

KlangFool wrote:
nisiprius wrote: "Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?"
...We are part of the world. So, if we change ourselves, we are changing the world. It is impossible for us not to change the world. It is just a question of degree...
Fair enough.

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Re: Risky job opportunity, or Microsoft at its start?

Post by BolderBoy »

Planner wrote:I'm a PhD student in mechanical engineering, and am becoming involved with a small company that seems to have the technology to change the world (I reached out to the founder of the company because of ties to my university, and he apparently was actually on business in my state, pursuing what seems to be a promising opportunity). I'm torn as to whether I should continue down this path -- but honestly, I can't unlearn what i now know, and would have trouble working on anything else. I'm very passionate about this, thinking about it when I go to bed and when I wake up. There is money to be made, but major obstacles I don't expect to be sorted out soon.
I'm a little unclear. Are you torn between finishing your PhD or ditching it to go with this startup? How many years more to finish the PhuD?

Nisi is right, be careful... My cousin did his PhD in EE and has joined one startup after another through his life, each one failing along the way.
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Re: Risky job opportunity, or Microsoft at its start?

Post by Dottie57 »

The most fun I had in a job was at a new dept of an existing small (30 emps) company. I look back now and reallize how special it was. Fun , exciting, committed. Interesting work. Pay not good. Benefits poor. But learned a lot.. When I left I didn't realize I would never have that type of experience again.

But make a lot of money. No.
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Re: Risky job opportunity, or Microsoft at its start?

Post by technovelist »

As has been pointed out already, we all have rear-view mirrors so we can see how successful Microsoft has been, but there were many others that didn't become nearly as successful, or successful at all in some cases.

If you are thinking about abandoning your goal of a Ph. D. to work in this company, could you take it up again later if the company doesn't set the world on fire?

By the way, I know that it's great to work on something that you love. I've done it at my own expense three times. The first time was a total bust because we had no marketing plan. The second one was a very mild success; I probably made more than minimum wage for my work on it, but not by much. The third one is still in progress, but so far I have about $10,000 out and $0 in, so I can't consider it a big success so far. :mrgreen:

But all of them were a blast to work on, and I didn't lose more than I could afford on any of them.
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Re: Risky job opportunity, or Microsoft at its start?

Post by Watty »

KlangFool wrote:OP,

I do not understand what do you mean by RISK? You are a salaried worker. Make sure that they offer you a competitive salary plus generous stock grants for the upside. And, if the startup failed, you will gain valuable experience.

In summary, take the RISK portion away from your side. Make sure that you WIN even if the startup does not work out. Look at this as an objective business proposition.

KlangFool
+1

There is likely a reasonable pay range for someone with your skills so if they can pay even at the low end of that range then there is little downside to going to work for them as long as you still get your Phd. since you will be getting good experience and be working on something that you are excited about.

One thing to watch out for though is that people talk like a startup will either succeed or fail but it is also possible that they can muddle along for years. If you are not careful you could find yourself still there with the company still muddling along when you are 45 with poor prospects of better wages or the company succeeding.
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Re: Risky job opportunity, or Microsoft at its start?

Post by Epsilon Delta »

Watty wrote:
There is likely a reasonable pay range for someone with your skills so if they can pay even at the low end of that range then there is little downside to going to work for them as long as you still get your Phd. since you will be getting good experience and be working on something that you are excited about.

One thing to watch out for though is that people talk like a startup will either succeed or fail but it is also possible that they can muddle along for years. If you are not careful you could find yourself still there with the company still muddling along when you are 45 with poor prospects of better wages or the company succeeding.
One issue with the muddling along is sometimes it comes with pay cuts, or as the owner puts it, an opportunities to acquire equity and get rich. Some people have trouble cutting their losses (a.k.a. jumping ship).
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Re: Risky job opportunity, or Microsoft at its start?

Post by ClevrChico »

mhalley wrote:This is the classic risk/reward conundrum. Remember Breaking Bad, when Walter White had the opportunity to continue with the chemical startup but decided to go into teaching for the immediate steady income/benefits? Depending on your family situation, you could be a starving artist for a few years and end up millionaires or be a starving artist for a few years and end up with nothing. It depends on too many things for an online forum to be any help in making the decision. Shoot for the stars or settle? Up to you.
Wife of course is a MAJOR consideration. Can she go to full time work while you pursue this?
+1

I probably worked with 500 people in startups over several years. Nobody got rich. A few of the founders got signing awards from vc's of around $100k and blew most of it. Obviously a few make it and do well.

The surest path to financial reward is employment at a large company,
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Re: Risky job opportunity, or Microsoft at its start?

Post by westcoastinvestor »

Go for it. You are 28 and have the opportunity to work someplace interesting. Working on something you believe in is a rare opportunity.

What is the worst that could happen?
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Re: Risky job opportunity, or Microsoft at its start?

Post by t3chiman »

Planner wrote:... I'm torn as to whether I should continue down this path...
Can't tell you how to live your life. But I would be reluctant to abandon a PhD effort in order to join a startup. PhD's represent an accomplishment that few achieve. And it's yours forever: "Nobody can take it away from you", as they say. Startups are commonplace, as are their claims of future technological triumph and world domination.

Unless the founder really needs your talents, and cuts you in to the business with cash and equity (both very rare in practice), my advice is to keep plugged in to the business opportunities in your field as you finish up your doctorate. When you get the piece of paper, look around for interesting and rewarding work.

And be sure to plan a nice getaway trip with your wife. The school grind is tough on her, too.
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Re: Risky job opportunity, or Microsoft at its start?

Post by Downtown »

I've worked at a couple of start-ups. They can be frustrating and fun at the same time. Money was so, so. My advice now that I'm contemplating retirement in the next few years...finish your PhD!
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Re: Risky job opportunity, or Microsoft at its start?

Post by Planner »

Thank you all for your responses. This has been helpful. Let me try to elaborate a bit more, and I hope I don't get too many "you're just dreaming, kid" responses.

[edit -- removed specifics about the company]
I'm getting involved with a startup with promising nuclear energy technology called a thorium molten salt reactor. Large capital costs are needed for success, but the technology itself has been proven (demonstrated at national labs).
[end-edit]

Okay, I know I sound like a fool who has been sucked into something too good to be true. And I understand that "the next Microsoft" is not likely to be this company. I know that there is always something that I and others could be overlooking regarding the benefits of this tech. I am well-versed in the political issues that stand in the way (I've met with many legislators about this and other issues). But dang it -- I can't unlearn this. It's a better form of energy generation that brings out the Star Trek geek in me that wants to do big things for society. It makes me think a true "nuclear age" is just around the corner, and humanity can finally move on from the industrial revolution.

It may not be this company that does it [edit], but I can't really see how we won't eventually make this transition. I'll try to stay involved, but will always make sure I take care of my family first -- that'll include getting a PhD, taking my wife to dinner, and earning a decent salary.

Again, thank you all for your comments, and I welcome any other thoughts on my situation.
Last edited by Planner on Mon Jul 18, 2016 10:03 am, edited 1 time in total.
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Re: Risky job opportunity, or Microsoft at its start?

Post by siamond »

By all means, go for it! Just put aside the "Microsoft dream" (as other posters indicated, this is highly unlikely), but see it that way:
1. you're clearly very passionate about it
2. whatever happens, you'll learn a lot
3. you're not the one taking the risks, the founder is, you'll keep your salary

As long as you keep proper balance between work & personal time, this is a fantastic opportunity, go for it...
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Re: Risky job opportunity, or Microsoft at its start?

Post by technovelist »

Planner wrote:Thank you all for your responses. This has been helpful. Let me try to elaborate a bit more, and I hope I don't get too many "you're just dreaming, kid" responses.

Okay, I know I sound like a fool who has been sucked into something too good to be true. And I understand that "the next Microsoft" is not likely to be this company. I know that there is always something that I and others could be overlooking regarding the benefits of this tech. I am well-versed in the political issues that stand in the way (I've met with many legislators about this and other issues). But dang it -- I can't unlearn this. It's a better form of energy generation that brings out the Star Trek geek in me that wants to do big things for society. It makes me think a true "nuclear age" is just around the corner, and humanity can finally move on from the industrial revolution.

It may not be this company that does it (despite the founder's initial efforts to resurrect the technology), but I can't really see how we won't eventually make this transition. I'll try to stay involved, but will always make sure I take care of my family first -- that'll include getting a PhD, taking my wife to dinner, and earning a decent salary.

Again, thank you all for your comments, and I welcome any other thoughts on my situation.
That sounds like a wonderful idea, and in fact I have heard of that technology before.

If I were in your shoes, I would go for it, because it really would be a game-changer for society if it is allowed to flourish.

However, as you have noted, political issues are a primary reason to be concerned about the success of any company having anything to do with nuclear power, no matter how good the idea or technology is.
Last edited by technovelist on Mon Jul 18, 2016 11:10 am, edited 1 time in total.
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Re: Risky job opportunity, or Microsoft at its start?

Post by vitaflo »

There's nothing more rewarding than working at a place you really believe in. But it only works if you actually believe in the product and not the money. Dreams of riches ruin most good intentions. I'd continue working at a place you believe in until you don't anymore, as long as you can properly support your family. I wouldn't worry about what the company may or may not become, you have little control over this at all. Being happy in your career and being able to support your family with it is worth a LOT. Just be prepared for all your hard work to not actually go anywhere. That of course doesn't mean it's not worth doing.
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Re: Risky job opportunity, or Microsoft at its start?

Post by UnitaryExecutive »

Starting or joining a startup as an early employee is probably the 2nd most optimistic thing you can do and you definitely have the optimism and the passion.

I've done it twice - the first time I worked for free for the first 6 months because the experience was way more valuable than joining a big company. The startup imploded but I accelerated my salary faster than I would have at a large company and I met a brilliant CTO who I've followed around for my whole career. The startup imploded and I didn't exercise the options but the learning, work and people were great.

The 2nd time was with said CTO from previous startup - I took a 50% paycut to join his startup and we sold within 18 months and I ended up with ~450k. We also doubled down and invested some of our own money in.

A few other thoughts:

1. Do you trust the founders? How many shares outstanding?
2. Create a range of outcomes with the base rate being 90% failure and calculate EV
3. It's a much different decision with kids - I might not have made the same decision the 2nd time if we had our son then.
4. The startup seems super capital intensive - it's a hard environment for startups with large capital requirements
5. Most people don't take enough risk early in their careers. A lot of times the value is in getting to work on tech you'd never get to work on at a big company or getting similar experience.
6. Are you a specialist? You tend to need to wear multiple hats at a startup
7. There is luck + hard work involved. Even extremely successful startups almost fail
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Re: Risky job opportunity, or Microsoft at its start?

Post by jjh »

I don't know if it's the next Microsoft or even risky. The fact that you're so passionate and excited about it should be enough to tell you the decision to make. Most people your age (and older) would love to have something in their life they were so excited about to work on. When people look back at their lives they don't usually regret the risks they did take, they regret the ones they didn't. It sounds like you're in an awesome financial position to take this "risk" and even if it doesn't work out, who else do you know that can say they worked on a project like this? I think your value to your next employer will be higher and at 28 you have plenty of time for career recovery if it's not what you expected. I say follow your intuition.
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Re: Risky job opportunity, or Microsoft at its start?

Post by joebh »

Skip the risky job opportunity and sign on with the next Microsoft instead.

Oh, wait - you can't know that yet.

I've worked for a half dozen startups over my career. None of them became the next Microsoft. All of them were fun. One of them was the best job I ever had. None of them made me rich. All of them contributed to a rewarding, fulfilling, relatively lucrative career.

The "best job I ever had" was at a startup software company that had a chance to be the dominant player in a lucrative, emerging market. Smart hardworking people doing things they hadn't done before. I worked a ton of hours and had a ball. Over time, I got promoted to VP of Engineering. Unfortunately, it wasn't as well funded as it needed to be. In spite of the fact that we had the best technology, a few other players with more money entered the domain, invested a lot, and became the dominants. Eventually my company got sold to a much larger hardware company that was dabbling in software. Being part of the leadership team that selected a company to buy us was depressing. It fizzled out after a few years. Working for the larger company felt like defeat and I didn't stay there long. We all got a small "success fee" but in the scheme of things it wasn't really much.

This is an intensely personal decision - one only you can make. You need to weigh the pros and cons. And most of all you need to fully understand the risk tolerance for both you and your family.

Consider how long you and your family can get by without the kind of money are less risky job could bring you. Perhaps you could cut back on expenses. Perhaps your wife could work full time. Consider the kinds of work hours, travel, etc that the startup will demand. In my case, I often worked >60 hours per week on a regular basis and a lot more during crunch times. That can be hard to do with children, unless you have a very understanding wife.

The rewards of a startup can be great, even if the immediate financial rewards don't occur. Long-term, you can learn a lot of valuable skills at a startup that can serve you well later in your career. But short-term you may be giving up some pay, benefits, and work-life balance. It's not for everyone. But for some, it's the best work environment.

For me at least, I was always excited to go to work every day. I haven't worked in a startup for around 10 years and I miss the feeling.
cjking
Posts: 1949
Joined: Mon Jun 30, 2008 4:30 am

Re: Risky job opportunity, or Microsoft at its start?

Post by cjking »

I have heard of thorium reactor technology, I think The Economist has written positively about it.

As long as the job pays enough (even if that's less than you can earn elsewhere) then I think you should take it. I agree with everyone it's unlikely it will make big money for you, you need to treat that prospect as an unlikely bonus. The real bonus in this job is how you feel about it, even if you win the lottery you won't be able to buy that elsewhere.

(In fact, looking back at the thread, I think vitaflo's answer is perfect.)
slbnoob
Posts: 477
Joined: Thu Jul 25, 2013 1:31 pm

Re: Risky job opportunity, or Microsoft at its start?

Post by slbnoob »

Now that you've mentioned that the startup is about thorium MSRs, I'd just caution that this technology has been investigated for a while, more vigorously recently, particularly by governments (as many energy initiatives are). Obviously you'll know a lot more than what I've gleaned over the years from news reports, but my first reaction is that your startup definitely does not have the first mover advantage. Also, just the nature of the problem is that it tends to require massive infrastructural capabilities (hence capital) which governments (or their affiliated national labs) can afford. Raising money in the capital markets for a startup for what is a capital intensive problem is no cakewalk unless you have a bankrolling CEO (like Musk). But for all the cautious posts here, this startup may well be the first one to come out with a commercial technology to convert our beach sand to electricity :)
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