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Corporate Finance vs. Investment Banking
 

M Friedman's picture
(King Kong, 1,007
 
Points)
 on 1/31/12 at 12:23pm
f500monkey.jpg

Did someone say they needed reasons not to go into investment banking? Well, I have two words for you: corporate finance. Sure, there is the prestige of working at a bulge bracket, then there is the money (which is certainly not as great as it once was), and of course, there is this façade of the damn-it-feels-good-to-be-a-banker lifestyle.

Truth be told, many of us are in it for the money. Many of us also realize that all we want is to put in our three years as an analyst and move on. You see, being an investment banking analyst is sort of a check in the box. It says you have work ethic, take orders well, and contain some sort of military-esq discipline. Do these same qualities not exist for corporate financiers?

Perhaps the investment banker’s work ethic is subtly different, and so is the overall experience, but if you’re not on track to be a Managing Director, then why bother with IB at all?

My point is, working in corporate finance has some pretty appealing incentives when compared to working in a bull pen with as many men as the Patriots locker room during half time.

For one, if you work at a company whose main demographic is women, say Limited Brands or Neiman Marcus, guess what? Most of your coworkers will be pretty attractive. Think of it as being the professional version of a sorority house, and you’re one of the only males.

Secondly, the lifestyle is surely better. You may actually be able to avoid the automatron mindset and still attain a level of creativity that may help you later in your professional career. You’ll see deals and strategies come in from the pitch and to its execution- an experience that may be far more valuable than binding pitch books all night.

So maybe investment banking is not for you after all. But maybe its time to take a look at corporate strategy. What do you say monkeys, is investment banking all that it is cracked up to be? Or should more people be considering the corporate development / corporate finance route?

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Comments

oR3DL1N3o's picture

I see what you did there

IB
(Orangutan, 319
 
Points)
 on 1/31/12 at 12:35pm

I see what you did there

WallStreetOasis.com's picture

THREE years as an analyst?

EN
(Human, 12,073
 
Points)
 on 1/31/12 at 12:51pm

THREE years as an analyst? Did you miss Adam the Analyst's latest episode or something?

TWO years and out.

http://www.wallstreetoasis.com/blog/adam-the-analy...

enjoy.

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SECfinance's picture

I want to do corp dev/finance

IB
(King Kong, 1,415
 
Points)
 on 1/31/12 at 12:55pm

I want to do corp dev/finance long-term, from what I have read in the corp dev thread the best way to position myself for one of these positions as fast as possible is to have IBD (specifically BB) analyst experience.

OhYeah's picture

What about the exit

 
Points)
 on 1/31/12 at 1:07pm

What about the exit opportunities? Aren't they better at IB?

"Sincerity is an overrated virtue" - Milton Friedman

GED or Bust's picture

Agree with SECfinance on this

IB
 
Points)
 on 1/31/12 at 1:51pm

Agree with SECfinance on this one in terms of IB > MBA > Corp Dev. I think Google's M&A Head David Lawee has one of the coolest corp dev jobs out there (granted he did the MBA > Consulting (McKinsey) > VC > Corp Dev route).

http://www.linkedin.com/in/dlawee

accountingbyday's picture

How do you define "corporate

CF
 
Points)
 on 1/31/12 at 2:01pm

How do you define "corporate finance"? It is going to be different everywhere and it is usually accounting-focused jobs. For most on this forum, that is simply not what they're looking for.

Also, I would recommend starting in IB, Consulting, VC or even Big 4 before joining "Corporate Finance" if you want to get anywhere near the C suite. While FA -> CFO or Treasurer is technically possible, it VERY rarely happens. Most people would be better served starting somewhere else and then transitioning in as a Manager or higher. You can't even begin to think of executive-level careers until you get into management and I wouldn't bother with the riff raff below Manager.

Note: ALL companies are different and anything is possible, but the above is my advice based on personal experience (F500 Manager).

westsidewolf1989's picture

I'm sorry, but I would much

IB
 
Points)
 on 1/31/12 at 2:06pm

I'm sorry, but I would much rather work in an environment that was predominantly male, despite the obvious visual drawbacks. Many women are great to work with, but there is a certain edge that a lot of guys have that women don't, in terms of being able to communicate forcefully and effectively in order to meet a deadline, along with the ability to have excellent focus. I would feel a lot more comfortable getting in a co-worker's face about his work ethic, why a deadline wasn't meant, etc., if that worker was a guy.

WallStreetOasis.com's picture

thanks accountingbyday, very

EN
(Human, 12,073
 
Points)
 on 1/31/12 at 2:26pm

thanks accountingbyday, very helpful perspective

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accountingbyday's picture

westsidewolf1989 wrote: I'm

CF
 
Points)
 on 1/31/12 at 2:45pm
westsidewolf1989:

I'm sorry, but I would much rather work in an environment that was predominantly male, despite the obvious visual drawbacks. Many women are great to work with, but there is a certain edge that a lot of guys have that women don't, in terms of being able to communicate forcefully and effectively in order to meet a deadline, along with the ability to have excellent focus. I would feel a lot more comfortable getting in a co-worker's face about his work ethic, why a deadline wasn't meant, etc., if that worker was a guy.

You're an analyst, right? You getting in a lot of people's face these days?

If you're getting in someone's face about a deadline that was missed you've both failed (assuming you're intending to talk about a subordinate, not co-worker as you claim).

I can understand the preference of being in a male-centric office, but you sound like an idiot.

By the way my current boss is a woman and she is far and away the best boss I've ever had.

manbearpig's picture

accountingbyday wrote: How do

CO
(Neanderthal, 3,029
 
Points)
 on 1/31/12 at 2:48pm
accountingbyday:

How do you define "corporate finance"? It is going to be different everywhere and it is usually accounting-focused jobs. For most on this forum, that is simply not what they're looking for.

Also, I would recommend starting in IB, Consulting, VC or even Big 4 before joining "Corporate Finance" if you want to get anywhere near the C suite. While FA -> CFO or Treasurer is technically possible, it VERY rarely happens. Most people would be better served starting somewhere else and then transitioning in as a Manager or higher. You can't even begin to think of executive-level careers until you get into management and I wouldn't bother with the riff raff below Manager.

Note: ALL companies are different and anything is possible, but the above is my advice based on personal experience (F500 Manager).

I was going to say the same thing. There are people from my consulting practice who have left to join banks and they have joined at the Director level even though they are in their late 20s. Some people who left after reaching Senior Manager here were hired at Managing Director level at banks (in MO) and these guys are in their early 30s. There is no way you can be a director/MD in your late 20s/early 30s if you start as an analyst at the bottom of the ladder. I get offers from clients all the time but I'm not making the move unless I come in at the Director level at least. After that it's one promotion and you're at the first executive level (of which there are several).

-MBP

OhYeah's picture

accountingbyday wrote: How do

 
Points)
 on 1/31/12 at 3:19pm
accountingbyday:

How do you define "corporate finance"? It is going to be different everywhere and it is usually accounting-focused jobs. For most on this forum, that is simply not what they're looking for.

Also, I would recommend starting in IB, Consulting, VC or even Big 4 before joining "Corporate Finance" if you want to get anywhere near the C suite. While FA -> CFO or Treasurer is technically possible, it VERY rarely happens. Most people would be better served starting somewhere else and then transitioning in as a Manager or higher. You can't even begin to think of executive-level careers until you get into management and I wouldn't bother with the riff raff below Manager.

Note: ALL companies are different and anything is possible, but the above is my advice based on personal
experience (F500 Manager).

What about corp strategy? Is there a route to corporate strategy through the company from entry level. Maybe starting at product management or some other entry level position?

"Sincerity is an overrated virtue" - Milton Friedman

accountingbyday's picture

OhYeah - there can be, but

CF
 
Points)
 on 1/31/12 at 4:03pm

OhYeah - there can be, but Corp Strategy is one area that varies greatly by company. For instance, at my company, Corporate Strategy is not very well defined and is basically marketing. They also don't take any entry-level people (as far as I'm aware). You'd basically work your way up through marketing, probably post-mba.

We do have a small "strategy" group in finance. It is extremely small and made up of a few ex-consultants and a person or two who has moved in from another role in the company. At my company specifically anyone could hypothetically get in this group, but you definitely can't rise directly in this group. It's more of a rotation in your finance career than an actual destination. Also, I think the lowest level in the group is Manager.

I don't have any direct experience with the finance strategy group and I feel that my company is probably weak compared to our peers in this area, so take my thoughts on this with a grain of salt.

OhYeah's picture

Thanks accountingbyday. Would

 
Points)
 on 1/31/12 at 4:18pm

Thanks accountingbyday. Would you mind sharing which industry you're in? I assume these things vary by industry as well. Also, why is it that you can't rise through an organization from the bottom? What do you learn at IB, VC, consulting etc.. that better prepares you for management roles?
Thanks again!

"Sincerity is an overrated virtue" - Milton Friedman

manopete's picture

I have a buddy that went into

 
Points)
 on 1/31/12 at 7:12pm

I have a buddy that went into GE Energy Corporate Finance Team and he loves it. He basically picked an industry which he wanted to grow in and all he does is stategic M&A. Assuming you can find the right industry and company that is doing tons of acquisitions then I think you're getting great exposure.

Neighbor's picture

There are so many types of

IB
(King Kong, 1,236
 
Points)
 on 1/31/12 at 7:37pm

There are so many types of CorpFin/Dev/Strat compared to IBD (which most of the time are very similar) that it is difficult to compare the two. IB certainly does get the prestige, but each has its own advantages.

I didn't say it was your fault, I said I was blaming you.

carpedogma's picture

New to the site, but my

(Chimp, 1
 
Points)
 on 1/31/12 at 7:42pm
Powa23's picture

I always thought it would've

(Orangutan, 291
 
Points)
 on 2/1/12 at 10:11am
accountingbyday's picture

OhYeah wrote: Thanks

CF
 
Points)
 on 2/1/12 at 11:37am
F458's picture

I work in project finance for

(Chimp, 14
 
Points)
 on 2/1/12 at 12:14pm

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