Accounting

From Big Four to Startup: 6 Things to Know About Making the Leap

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If you’re working at one of the Big Four accounting firms, you might have found yourself wondering what life would be like at a startup. You may be drawn to the “startup culture,” the collaborative nature of small teams, or the potential to have an impact on the business.

But working at a startup isn’t all bean bag chairs, foosball tables, and beer kegs. There’s a lot of hard work that goes into growing a young company, so it’s important to think through all the variables before you make what is arguably the most consequential decision of your career in finance.

As someone who has made the transition from Big Four to startup, Javier Fernandez knows the process well.

Javier was three years into his career as an auditor at the Big Four accounting firm Deloitte when he decided it was time to make a change. He’d hit all of the big milestones so far—he’d gotten the job at Deloitte, passed his CPA exams, and been promoted to Audit Senior—but he also started to feel an itch that work at the Big Four just couldn’t satisfy.

“I looked back at my experience [as an intern] on this small team, and I felt that my work was really making an impact more than it did at my Big Four firm,” he remembers. “So I decided, ‘I’m going to start looking for companies that are smaller in size, where I feel like I’m going to be able to make an impact and have input right away.’”

A few months later, Javier made the leap from Audit Senior at Deloitte to Assistant Controller at The Black Tux, a four-year-old startup. He joined a finance team of just three people, including the company’s CFO. Now, he shares his insight on what financial professionals should consider when making the switch.

1. Choose a company you believe can go the distance

Hiring works differently at startups than it does at big firms. Whereas the Big Four rely heavily on the talent pipeline from top universities, startups cast a wider net—and so should you as you’re looking for startups you might want to work for.

Javier found his startup job the old-fashioned way—by searching LinkedIn—but it’s not a route he recommends for other financial professionals looking to jump into the world of startups. What he does advise: “Spend a lot of time networking.”

Networking has the advantage of giving you a lot of firsthand exposure to people who are already living the startup life. Those contacts can turn into sources when job opportunities come up. But more importantly, they give you a firsthand glimpse into the missions and cultures of different startups, which can help you find the right fit, company-wise and people-wise.

Finding the right fit is hugely important, as startup life can come with heavy workloads, tough challenges, and a lot of uncertainty. Being genuinely excited about what you and your team are building will help keep you steady through the emotional highs and lows that come with that.

Before you apply to any company, do as much due diligence as you need to be confident that it’s a good fit. Read up on the company so you understand what they doing, and confirm that you can get on board with its mission and vision. Reach out to current and past employees (this is where networking comes in handy) to get their read on the direction the company is headed. If you feel really strongly about the company and the value you can provide and/or it’s a small team, you can even reach out to the founder(s) themselves.

Like any company that’s hiring, startups will be evaluating your application and qualifications. But with your career and financial future on the line, don’t be afraid to evaluate them back.

2. Understand the trade-offs in pay and benefits

Startups, by definition, are laser-focused on growth. Whatever money the company has, whether from profit or venture funding, is overwhelmingly aimed toward acquiring new customers and maintaining the company’s upward trajectory. What this means for you is that some of the benefits that come with working at a Big Four firm, such as signing bonuses, paid family leave, and 401(k) match, are harder to come by in the startup ecosystem. That’s particularly true of non-engineering roles, where competition tends to be less fierce.

To make up for the disparity and keep top talent interested, startups frequently offer early employees equity. The idea is that when the company exits, either by being acquired by another company or reaching an initial public offering (IPO), the earnings employees get from their shares will dwarf what they would have earned by diligently stowing up a portion of their salary in a 401(k) each month.

But it’s important to take equity offers with a grain of salt. After all, 90% of new startup ventures fail before they ever get to an exit event. Even grizzled startup veterans are split on whether equity offers make the sacrifices of a startup worth it.

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If you do field an offer from a startup that includes shares as part of your compensation, be sure to do your due diligence when it comes to the terms of the deal. Fortunately, as a financial professional, you’re well-positioned to look after your own interests in this area. Some questions to be sure you ask before accepting an offer:

  • What type of equity is it? (ISO/NSO/RSU)
  • What ownership percentage do the shares represent?
  • When was the company’s last 409A valuation? (If it’s been a while, they may do another, and your exercise price may go up.)
  • What is the vesting schedule, and do you keep your vested shares if you leave the company before an exit event?
  • What are the company’s future funding plans?
  • What is the company’s exit horizon (i.e., how far out do they see themselves being from an acquisition or IPO)?

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3. Showcase your skills, both inside and outside finance

Once you’ve landed an interview, the next step is to show the hiring team members that you have the chops to do the work the company needs.

“In the early stages, you need finance professionals that are willing to roll up their sleeves and get their hands really dirty, tackling unsexy tasks like mapping out and building out the core financial plumbing of the business or managing audits,” writes Jeff Jordan, a general partner at the venture capital firm Andreessen Horowitz, who advises startups through the complexities of hiring and operations.

Startups care less about seniority and credentials than they care about your ability to get things done from day one. So during the interview process, don’t be afraid to showcase your expertise and your ability to identify and solve the company’s problems, even if those problems feel a bit “above your pay grade.”

Javier experienced this firsthand during the interview process at The Black Tux. “The CFO, who is my boss now, told me right off the bat, ‘You know, you’re a bit junior for this position,’” he remembers. “In the interview, I really went out of my way to show, ‘Hey I can do all the accounting work that’s required. I know these new accounting standards are coming out. I bet you haven’t implemented everything yet.’”

This is another place where startup life diverges drastically from life in the Big Four. At the Big Four, you’re one finance professional among many, surrounded by hundreds of experts who all speak the same language. At a startup, you are the finance expert or one of a very few. Whatever the financial challenge—from implementing new accounting standards like ASC 606 to tracking and documenting employee expenditures—you need to be ready with an answer or able to find one if you don’t know it off the top of your head.

Showcasing your finance skills is key, but it’s just one piece of the puzzle. Equally as important is showing that you understand the business’s broader vision and how finance fits in and are ready to pitch in wherever the company needs your help.

Javier says his openness to learn and try new things, even if they were outside his accounting wheelhouse, is what clinched the deal with The Black Tux. “Later, once I got hired, my boss told me that’s one of the reasons why he didn’t give up on going with me,” says Javier. “I showed I wasn’t stuck in the accounting world.”

4. Be prepared to take ownership over your tasks

Big Four financial institutions come with layers of management whose job is to set priorities and dole out assignments, as well as support staff that ensures that what needs to get done gets done. In Startup-land, on the other hand, the structure is much more fluid. Teams are small, and often everyone is doing two to three jobs at once. To be successful, you need to be self-directed, setting your own priorities and identifying your own opportunities to get things done.

“I remember the first week, or the first month, I was always questioning, ‘So what do I do?’” Javier says of his first few weeks at The Black Tux. “I quickly started to realize that in a startup environment, people are free to work on whatever projects they want to work on.”

If you’re one of the team’s first financial hires—maybe even the first—chance are there will be plenty of work to get you started simply setting the company’s books in order. That’s what Javier found at The Black Tux. “There was so much room for improvement on the accounting side when I got here, so I started first working on things to improve things there first: our month-end close cycle, things like that,” Javier remembers.

You won’t just be doing tasks, either; you’ll be defining how those tasks should be done. Big Four organizations come with processes and protocols that have been developed over years and even decades. Your job as an associate is just to execute them (correctly, of course). At a startup, you’ll be the one creating those processes and protocols, laying a foundation that can scale as the company grows.

A popular metaphor in startup circles is of building an airplane as you’re trying to fly it. If the idea of doing both at once sounds overwhelming, a startup may not be the right fit.

Establishing ownership over the finance domain is key, but divisions between departments and workloads are seldom as clear in startups as they are in the Big Four. It’s important that you’re ready to jump in and help, even when the task at hand is outside your core area of expertise.

“I’m in the finance department, but really the finance department in a startup handles everything that has to do with numbers,” Javier explains of his role at The Black Tux. “It’s not just accounting. It’s budgeting. It’s operations. If our technology team needs a new tool, the finance team is in charge of doing a cost-benefit analysis. Any analysis that has to do with numbers, finance is always involved.”

Ultimately, it all comes down to being ready to take initiative and decide what needs to get done to move the team and the company forward. “That’s been a huge difference coming from a big organization, where you’re assigned the work and you’re just supposed to do it,” says Javier. “Here, doing the work is the easy part. It’s finding the problem and gathering the people to work on the solution that’s the most challenging part.”

5. Take advantage of flexible work options

The popular image of startup culture often entails people working 24/7, sleeping at the office, and doing everything to grow the company as fast as they can. It’s true that workloads can be heavy. It’s not uncommon in the startup world to hear people talk about doing the work of two to three people.

But startups are also often as interested in innovation in how they work as what they work on. Flex-time policies, work from home days, and fully remote teams are all common in the startup ecosystem. That means you can expect a more flexible work environment than you find at the Big Four.

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“At Deloitte, you’re expected to be at your desk by a certain time, 8 or 9 a.m. And then you’re supposed to leave at a specific time as well,” Javier remembers. “The first thing I asked when I started [at The Black Tux] was, ‘What time does the team usually get in and what time do we leave?’ and the response was ‘Whenever you want.’ Our culture is basically, ‘As long as you get your work done, it doesn’t matter what time you show up for work. It doesn’t matter what time you leave. It doesn’t matter if you take every Friday off, as long as your work gets done.’”

Javier says he’s also noticed a difference from the more regimented world of the Big Four when it comes to deadlines and task management. “At a firm like Deloitte, it’s like: ‘This is the deadline; you have to meet it. Work to do, you know it’s due at midnight, just get it done.’”

At The Black Tux, he says that deadlines are much more forgiving, even if they stack up a bit faster than they did at Deloitte. “Working at a startup, everyone has a really long to-do list. And yeah, there may be some deadlines that are hard deadlines, and other deadlines that are more loose. Just knowing when to speak up and say, ‘Hey I’m not going to be able to meet this deadline,’ is huge. Of course, you have to add a good reason, but people are definitely more understanding because they know that everyone has a lot on their plate.”

6. Be ready to be the voice of reason

Startups come with big dreams and big plans to get ahead. Sometimes, those dreams can get so big, a company can fall prey to its own ambitions, setting growth milestones that are impossible to meet.

In some cases, that laser-focus on growth can lead to some tension with the finance department. “By our nature, CPAs are risk-averse. We’re designed that way. Entrepreneurs, however, are not,” writes CPA Cinnamon Williams for inDinero. “As an accounting professional working alongside other members of a startup, you’ll no doubt find yourself straining against a constant, company-wide desire to accelerate and move quickly.”

Far from shying away from that tension, startup finance employees need to be ready to meet it head-on. After all, helping your company strike a balance between ambition and caution is literally the job. “The finance team should help the company find the right balance of setting high, yet achievable sales goals, and budgeting costs to provide needed resources without burning cash too quickly,” explains Brigitte Hackler, a finance professional at an Indianapolis-based startup studio.

It’s not difficult to find examples of what can go wrong when startups start playing a little fast and loose with their finances. Just look at Fyre Media, Zirtual, and the now-infamous Theranos.

Playing financial gatekeeper isn’t right for all personality types. But if you have an appetite for the unknown, and you don’t mind saying “No” when it counts, you can quickly establish yourself as an essential player that any startup would be lucky to have.

Your startup future is waiting for you

For the right person, working for a startup can be the best career decision you’ll ever make. You’ll have the opportunity to expand your skill set dramatically and make a bigger impact on the business than you would at a larger organization. But it’s important to be realistic about the realities and demands of the startup life and whether it’s the right fit for you and your personality.

“Really think about what you want to do in your career,” advises Javier. “If you’re looking for a career where you want to stay in accounting, and you just specifically want to do accounting, then I would say a startup might not be the right fit. If you’re looking to transition out of accounting—and it’s difficult to do once you have a couple years just in the accounting work—I would say the startup environment is perfect. Not only are you doing the numbers and finance side, but you have so much opportunity to help with operations.”

For his part, Javier doesn’t see himself returning to a large corporation anytime soon. “After experiencing working at both big companies and at a startup, I can say that I can never go back to work for the big Fortune 500 companies,” he says. “I love what I do. I love the different problems that arise and the fact that my input has a lot of impact on the company. I don’t think that I would ever work for a huge corporation after this.”