Big companies usually offer more job security, higher salaries and a clear career path, while startups offer fast growth, a casual culture and equity, often with lower pay. The right choice depends on your personality, desired career path and preferred working environment. This post lists the pros and cons of each.
Startup vs. big company: which of these alternatives is the best one for your situation? Maybe you’ve thought about quitting your corporate job to join a startup, working on problems that you’re passionate about. On the other hand, maybe you’re concerned about startup risk, and thinking about leaving for a position with more job security.
Of course, there is no singular, “one size fits all” response to this dilemma. For every person who prefers working for a big company, there’s another who prefers the startup life.
However, there are still various pros and cons of working at a startup vs. large company. In this article, we’ll go over all of the issues to consider when you’re making this choice for yourself.
Is it better to work for a big company or startup?
Should you work for a startup or established company? The answer depends on your personality, your desired career path, your preferred working environment, and many other factors.
The pros of working for large companies include:
- Job security: While companies of any size can unexpectedly close their doors, the risk is much greater with small businesses. Many startups fail, often simply by running out of funding, which means you’ll be out of a job. Large companies offer more job security and also usually higher salaries than a startup.
- Clear career path: At a large company, the path of your career growth is usually clear. Good performers move from junior roles to senior ones, and later into management and upper management.
The cons of working for large companies include:
- Lack of innovation: Large enterprises have developed their own company culture and way of doing things. This means that creativity, innovation, and new ideas aren’t always welcome.
- Less room to explore: At a big company, the job description is usually set in stone, and the type of work you’ll be doing is clearly and narrowly defined. This can lead to stagnation and feelings of boredom after enough time in the same position.
Why is working at a startup better?
Big companies have their own advantages in the battle of “startup or corporate,” so what do startups have to offer? The pros of working at a startup include:
- Room for growth: Working at a startup can be one of the best experiences of your career. Being surrounded by smart, highly motivated people will help you learn a lot (and quickly). Helping build a company from the ground up, all the way to winning your first enterprise clients, is rewarding.
- Casual work culture: Startup culture is usually more casual than large companies. Dress codes are often relaxed, and some startups offer remote work or flexible hours. Perks vary widely from one company to the next.
The cons of working at a startup include:
- Lower pay: Startup salaries are often lower than at a big company. The trade-off is equity in the business, which pays off only if the company has a successful exit, such as an IPO or acquisition. Some employees have been well compensated this way, but many equity grants end up worth little.
- Less direction: A startup may not be the right fit for people who are newer to the workforce, or who need more guidance in their job. Startups often give employees a great deal of independence, with less clear leadership and direction. For example, a startup sales hire may be the only person in the entire “department,” and will need to build the entire sales pipeline from scratch.
Is working at a startup good for your career?
Can a job at a startup help with your career goals? It all depends on what you make of your startup experience.
Working at a successful startup can give your career a real boost. Being able to say that you worked at a startup with a successful exit can open doors for you at other companies (large or small).
Even if your startup has a quieter exit, the knowledge and experience you gain stay with you. The connections you make in the startup community can follow you throughout your career, helping you find work or raise funds at your next position.
In addition, startup employees often have impressive job titles and make huge contributions to the company, giving you no shortage of accomplishments to put on your resume. Some people find that working at a startup teaches them as much as an MBA would, at far lower cost.
Founders Network is a peer mentorship community for tech startup founders. If that fits where you are, request an invitation.
Frequently asked questions
Is it better to work for a big company or a startup?
There is no one-size-fits-all answer. The post says it depends on your personality, desired career path and preferred working environment.
Why is startup pay lower, and what makes up for it?
On average, startup salaries are often lower than at big companies. The post says the trade-off is equity in the business, which pays off only if the company has a successful exit.
Is working at a startup good for your career?
The post says a successful startup can help your career. The experience, the connections you make and the contributions you can list on a resume carry over to your next job.
What are the downsides of working at a big company?
The post lists less innovation, since new ideas aren't always welcome, and less room to explore because job descriptions are narrowly defined, which can lead to boredom.
