Corporate Finance vs. Investment Banking

M Friedman's picture
Rank: King Kong | 1,070

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 facade of the damn-it-feels-good-to-be-a-banker lifestyle.

Corporate Finance Investment Banking - Difference Between Careers

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.

Why Corporate Finance Compared to Investment Banking?

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?

Learn more about corporate finance with the video below.

Read More About Corporate Finance on WSO

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Comments (24)

Jan 31, 2012

I see what you did there

Jan 31, 2012

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.

Jan 31, 2012

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.

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Jan 31, 2012

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

"Sincerity is an overrated virtue" - Milton Friedman

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Jan 31, 2012

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

Jan 31, 2012

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).

twitter: @CorpFin_Guy

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Jan 31, 2012
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).

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Jan 31, 2012
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

Best Response
Jan 31, 2012

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.

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Jan 31, 2012
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.

twitter: @CorpFin_Guy

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May 17, 2018

Interesting to hear a different perspective. I have had 4 women bosses and 4 male bosses. Every single one of the womens have been horrid bints from the 5th circle of hell while the 4 males have been too cool for school.

To my knowledge there have been no scientific studies done on chillness as a boss based on gender so I'll just have to rely on anecdotal evidence.

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Jan 31, 2012

thanks accountingbyday, very helpful perspective

Jan 31, 2012

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.

twitter: @CorpFin_Guy

Jan 31, 2012

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

Feb 1, 2012
OhYeah:

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!

I am in healthcare.

I'm not saying that you can't rise from the bottom to the top, it definitely can be done. However, my advice would be to take a different route if you want to do it quickly.

I'll give you an anecdotal example. I sit by a senior analyst who is really good. He went through our rotational program and is in his first SFA role. He's probably been with the company ~5 years. Due to politics and some other factors out of his control he is going to be an SFA again. Once he's done with that role he will no doubt be promoted to Manager, but this will be ~7 years from when he started here. I am sure that if he started in Big 4, IB, Consulting, etc... after 5 years he'd come in as a manager.

There are exceptions to everything, but as a whole I'd start in a client serving role if possible. This will usually let you jump some of the lower levels that good people sometimes get caught up in. Once you're a Manager or especially Director then its up to you to get where you need to go. If you're an analyst you really need someone to help you through if you want to go faster than the traditional path.

All that being said, every company is different. Some are better at rewarding talent, others are more political. It all depends, but my bottom line is that I wouldn't risk it if I didn't have to.

twitter: @CorpFin_Guy

Jan 31, 2012

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.

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Jan 31, 2012

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.

Jan 31, 2012

New to the site, but my question parallels the idea behind starting off in Corp strategy getting into a company where its just a few people on a team working closely together. Could there be benefits to doing something other then just crunching numbers meticulously, such as being more involved in deals developing an understanding of why you do what you do then just being told what to do?

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Feb 1, 2012

I always thought it would've been insane working for a Supermajor on their CorpFin/Dev team. I'm sure the pay wouldn't be too bad either.

Feb 1, 2012

I work in project finance for a renewables company. Less 'accounting' based than CF and much more analysis driven. Not to mention it's a fast growing sector. Anyone else feel the same way?

May 17, 2018

What kind of creepy MF says "I will choose my career path based on the amount/attractiveness of women I can ogle"
???

May 17, 2018

Woman eater

May 17, 2018
Comment
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