For students with backgrounds in computer science, Internet startup companies--with their exotic stock options, sky-high signing bonuses and bright prospects--have long presented attractive career opportunities after graduation.

But some are discovering that the picture can sometimes be less rosy than it seems. Just ask the Harvard graduates who were hired at the end of the last academic year by MicroStrategy, a software company in Vienna, Va.--at least a dozen, one graduate estimates.

Like many other tech companies, MicroStrategy found its stock plunging this spring. Still, the recent graduates who had received job offers were told not to worry because their jobs would not be affected, according to The Washington Post.

But just weeks before they were to begin work, 236 college graduates who had accepted job offers were abruptly terminated--after having turned down other companies.

"People were upset when they had to completely change their plans," said one member of the Class of 2000. "They had housing and everything and were all set to start work."

Former MicroStrategy employees signed non-disclosure agreements with the company and declined to comment.

The MicroStrategy story is not unfamiliar to students venturing into the high-tech world. After years of seemingly limitless growth, many Internet companies have been forced to face the realities of business.

A report published by Webmergers.com in August revealed that of 238 startup companies profiled, 41 shut down this year, 83 withdrew plans for initial public offerings (IPOs) and nearly 30 had been sold in "fire sales" after running short of cash.

But despite the sea of uncertainty associated with startups, many students are sticking by them. Computer science concentrators and others say the excitement of working at a potentially lucrative dot-com is worth the risk.

"I think some people are really attracted to the experience you get working 50 feet away from the company founder," David J. Mitby '01 says. "The hope is [the risk] produces some gains, both in terms of experience and financially."

Gambling on Greatness

Last summer, Mitby, a computer science concentrator, worked at a technology startup called Tellme Networks.

Mitby says he met Tellme's vice-president of production at last year's dedication of the Maxwell-Dworkin building. Tellme's CEO visited Harvard that November, and after meeting him, Mitby decided Tellme would be a stimulating place to work.

"Tellme builds infrastructure for the telephone network, not just the computer network," he says. "It is a unique way to look at an old medium."

Mitby says he views Tellme as less of a risk than other startups because it has big-name backers and founders who have already been successful in the computer industry.

But while not all startups can claim that, many soon-to-be-graduates say they still aren't too wary of companies that might not be around this time next year.

"Even if the startup you are at fails, it's easy to roll to the next startup company," Mitby says. "The risks are there, but are not all that terrible."

Mitby says he plans to return to Tellme after graduating this spring.

Computer science concentrator Scott A. Penner '01, who is also a Crimson executive, says he is fully aware of the uncertainties associated with startups. But that has not dissuaded him from considering working at a startup.

"It's my number one choice," Penner says.

What is the attraction associated with these companies? The answer, says Penner, is simple.

"It's a lot of fun for someone that comes out of Harvard to work at a company that really depends on them," he says.

But he acknowledges that this fun can have a real downside if the company bottoms out.

"If you pour a lot of time and energy into a startup, you can get burned seriously," Penner says. "If there is an upside, it is about a thousand times better than the downside."

Some students have already witnessed that downside.

"I've seen them fail," Alex J. Eilhauer '01 says. Regardless, he says he would still look at a startup company as a potential employer after he receives his computer science degree this spring.

"The big advantage with a startup is that it's smaller and you feel like a bigger part of the project you're working on," he says.

Over the past summer, he worked at a fledgling firm called Epesi--and says the biggest draw was working on projects every bit as important as those of senior developers.

Driving a Company's Success

Even the possibility of a company's failure can be appealing.

"With Microsoft, if I do a bad job, it will still be there," says Eilhauer. "Maybe there is some security in that knowledge, but it's really exciting to know that I'm important to the fate of a company."

At a small company, he says he finds it exhilarating to think, "Wow, that's just us!"

According to one Harvard student, employees at larger companies often daydream about working in startups.

"They're losing tons of people to new IPOs," computer science concentrator Octavian S. Timaru '03 says of Alcatel, an established communications firm where he worked last summer. "People inside the company go and start new companies and hire people away form Alcatel."

Employees at large companies often are frustrated that their work isn't making any big waves, he says. But at a pre-IPO startup, things are different.

"You're setting the standard," Timaru says.

A Middle Course

The good news for many students is that they may not have to choose between the two extremes. Not all startups are huge risks--as articles in Alcatel's company newspaper darkly prophesize--and not all major corporations are stifling or boring.

Timaru points out that many big companies are starting to offer attractive stock options to lower-level employees, not just managers.

Mitby says Tellme Networks is an ideal startup: While it offers the excitement of a new venture, he says that the company is much more likely to succeed because of the big names behind it, including Netscape's former vice-president of technology.

"There's a lot of people who are risk-averse to startups," he says, "but when you look at who they are backed by, this company seemed to have it all."

The particular company can make all the difference.

"You can work 10, 15 hours a day and get paid in options," Timaru says. "The company goes down, and you end up with nothing."

But the rewards of choosing a successful startup can be great--including the potential to influence the future of technology.

That possibility, many students seem to think, makes finding themselves at another MicroStrategy an acceptable risk.

--Staff writer Eric S. Barr can be reached at barr@fas.harvard.edu.