Should I take my MBB offer?
Long story short my graduate BA/A/AC offer for 2023 got delayed for a year. To find something to do, I started a small business. The small business has grown to one with a reasonable size (we employ around 10 employees and around 50 contractors).
I asked for another deferral for a year, which was granted, but I'm not too sure if I should be all in on this business or try to find a buyer. If I go to the MBB, I'll take a 50%+ pay cut.
My business is in a niche sector and it's not very easy to sell (very common for businesses in my sector to sell for less than 1x P/E).
What's your take on this? This is all in an 2nd tier non-US market by the way.
Based on the most helpful WSO content, your decision hinges on a few critical factors:
Long-term Vision: Do you see yourself growing and scaling this business further, or is it more of a short-term venture? If the business has potential for significant growth and you're passionate about it, staying might make sense. However, if you're unsure about its scalability or your interest in running it long-term, the MBB offer provides a structured career path with strong exit opportunities.
Financial Trade-offs: While the MBB role comes with a pay cut, it offers prestige, a global network, and the potential for higher earnings in the future. On the other hand, your business, even if niche, provides autonomy and potentially higher immediate earnings. Consider whether the pay cut is worth the long-term career benefits.
Market Realities: If businesses in your sector typically sell for less than 1x P/E, selling might not yield significant returns. If you decide to exit, you could explore creative ways to maximize value, such as finding a strategic buyer or transitioning to a passive ownership model.
Deferral Opportunity: Since you've already secured a deferral, you have a unique chance to test the waters further. Use this time to evaluate the business's growth trajectory and whether it can operate without your full-time involvement.
Ultimately, the choice depends on your personal goals. If you value stability, prestige, and a clear career trajectory, MBB might be the better option. If you thrive on entrepreneurship and see untapped potential in your business, staying could be more rewarding.
Sources: Impact of recession on MBB's, Q&A: 3rd Year PE Associate ($10bn+ AUM, MBO/LBO, equity, mezz, distressed debt), Unhappy at MBB, Thoughts on Starting Investment Bank/M&A Advisory for my Company, MM Investment Banking Outlook
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