Best post-banking plan if long-term goal is to be an entrepreneur?
I'm a current 1st year analyst at an EB, working as an M&A generalist. I did my research and concluded that PE isn't a good fit for me. I'm more interested in a job that would allow me to develop an expertise in a certain market like applicable strategies, operations, etc while also being up-to-date with current market trends in the industry. I also enjoy interacting with people and being able to use my creativity. I don't know 100% yet which industry I want to specialize in, but right now I'm really interested in technology, specifically software. My long-term goal is to start my own company or join a growing startup company.
I'm trying to decide what would be the most optimal next step post IB. I have been looking into Growth Equity and Corporate Development / Strategy. Growth Equity would allow me to work with and learn about different companies, markets, and business models, but the cons is I won't get to dive deep into any particular technology sub-sector.
In Corporate Development, I'll get to see the ins and outs of a company and that particular sector. It will also give me more strategy / operations experience as well, which I heard can look favorable when it comes to raising money for my startup later on. The cons is I will pigeonhole myself into that particular sector and could be harder to switch to a different industry if it's not a good fit.
I'm hoping to get any advice on which role I should look into or if there is another role that I'm overlooking, given my long-term goal is to start my own company or join a growing startup company someday. I'd appreciate any resources to look into as well.
Thank you so much!
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Join a startup but hard to know without knowing what industry you want to start a company in. Anyway, would probably think joining strategy / Corp dev role at a startup is the way to go
I'm interested in software. Does that mean you don't think Growth Equity would be a good fit?
Yeah but there isn’t a ton of GE shops. Honestly, anything on the buyside with is focus on tech will help. Or even take a chiller job and do both at the same time. Doesn’t have to be one or the other
You could try to get into VC then transition into a operator role at a portco
It you want to become an entrepreneur you should go become an entrepreneur or join a start up.
Being an investor won't teach you how to operate a business.
Appreciate the comment. How would you advice me approaching my next steps after IB to reach that goal, if I still need time to develop a business ideas? Like if I'm not ready yet to be an entrepreneur and want to take some time to learn more about the industry that I'm interested in.
Very difficult to say.
Finance / investing is good bc you can learn what investors care about. Also pays so can put a downpayment for any start up.
But if you want to learn operations, etc, best to join a start up and get those skills. And if you want to do tech, learning how to code or at least getting some technical expertise will help.
Find start-ups or small businesses in the industries you are interested in. You want a role that allows you the opportunity to wear alot of different hats and in exchange you'll get compensated with equity. If it goes well, great. If it doesn't, you got an opportunity to get your hands dirty. You'll be able to apply those lessons to your own venture.
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MBA at a Top 5 program. They do everything they can to help facilitate your entrepreneurial success. + You will gain a tremendous network as a byproduct of the MBA.
The other option is product management which is literally about building/developing a product from blueprints to launch. PM experience could be very helpful for one day starting a company as there are many parallels.
They are also almost always well paid. Usually about 10-15% less than SWE at tech companies. Which is alot considering how much senior SWE/PM's can make.
Appreciate your comment. PM is actually an interesting choice that I have kinda thought about. Do you think it's feasible for someone to get a PM / Product Development job coming from an IB background and doesn't have coding skills? I didn't study CS or anything related so coding is literally like a foreign language to me at this point. Of course, if that's what it take to get a PM job then I'm more than happy to dive in and study on my own time.
Honestly, maybe? Network with people from your school who are now doing PM at FAANG's.
Recent similar post here: https://www.wallstreetoasis.com/forums/best-career-that-will-set-me-up-…
Going to paste my same response there here, as well:
"This right here, except that you can get the same out of working for a boutique IB as well. If you find the right boutique, you'll be working with clients that sometimes have quirky business models and built themselves in hidden niches. Most of the time, these businesses will be relatively small ($3mm-$10mm of EBITDA) and less sophisticated (not always), meaning that the path to their current state should be relatively short (and if they're not, you need to question why a 30-year old business is only printing $3mm-$10mm of EBITDA and decide whether the right team could have accelerated growth further) and you should be smart enough to replicate the same business (I hesitate to say this because it's foolish to assume if someone as smart or perhaps dumber than you found success doing something that you could as well but if you can trim out the innate arrogance in the thought process you can hopefully make somewhat of an honest assessment).
You'll only be with them for the 4-8 months it takes to get a deal done but you'll get to hear founder stories, understand their business model (this is dependent on the banker; those that want to truly dig in and learn more always can) and know what margins look like for such a business so you'll have an idea of what to expect yourself at some scale. In hearing these small business owner stories, you'll be able to gauge whether the founders "lucked" their way into a solid business or if they have unique skill sets that most don't have, in which case if the latter you may want to cross those businesses off your own list.
The tricky part, of course, is that you will not learn really any skills you'll need to actually launch and operate a business, namely marketing, product development and customer management, but my argument has always been that it's easier (still not easy overall) to learn those skills from the outside looking in than it is to ever identify niches and markets worth pursuing from the outside looking in (idea generation). Others may disagree with me on that, though.
I've always felt that idea generation that can come out of working in LMM IB is vastly underrated... I could also be missing something that justifies why it isn't talked about enough."
Add-on to that original reply: You probably won't see many businesses you can "relate" to or see yourself launching while working at an EB given the EVs that you're working with (at least I couldn't after lateraling out of a boutique into a large bank). What I said above in my reply in the other thread can also be achieved by working at a true LMM PE firm.
Nothing in finance will prepare you for entrepreneurship. Funnily enough, the most transferrable skill is pain tolerance, because the journey will be full of ups and downs.
Building and selling a product is completely different from putting a model + deck together based on synthesis and analysis. Joining an early (post-product market fit) start-up can be a good experience, but YMMV and your comp will likely be low. My advice if this is the path you truly want to take is to just start building / selling something asap, don't wait. Obviously a banking schedule is tough, but it's possible to flesh out MVPs (minimum viable products) and get them to market. Also, being an entrepreneur doesn't mean you focus on the industry trends - these are lagging indicators of what has worked. If you want to get unique insights (actually valuable information) that can form new products, you have to talk to and understand customers, not read a Gartner report.
From what it sounds like though, you want to retain optionality, not take too much risk, and are interested in developing industry knowledge while having a larger social component attached to your job. Going into growth equity investing might be a better fit. Best of luck!
Appreciate your comment. As I mentioned in the comment above, what are your thoughts on product management vs corporate development to get to entrepreneurship?
Same goal myself. Just quit as a second year to join a tech startup, AMA, feel free to pm.
No offense, and I mean that, but most successful entrepreneurs don’t ask “what do I need to do to become an entrepreneur” - they just go do and then figure it out later. Make sure the idea of being an entrepreneur isn’t clouding what it is to BE an entrepreneur.
Mark Cuban has a quote for this - entrepreneurs vs. WANTrepreneurs.
Consider yourself an "idea person" or an "operations person". Initially I would have said "operations" but seems you are really into creativity and software.
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