“I went to Wall Street and my friends went into tech. Guess who made the mistake?"
Article below:
I could be working in Silicon Valley. I studied computer science at one of the top universities in the U.S. and most of my peers went into start-ups. Six years later, I’m a 27-year-old a quant on Wall Street and I seriously think I’ve made the wrong call.My mistake was crystallized when I went back to San Francisco for three days last week. Literally everyone I know there is working for a start-up and the contrast with Wall Street is immense. Everyone in SF knows someone who’s cashed out, who’s bought a “second home in the Bahamas”, some kind of car, or has just stopped working altogether. That kind of stuff is commonplace.
OK, it helps that my class graduated in 2010: my peers have been able to ride the post-Facebook IPO valuations wave. The companies they work for are mostly private, so the equity wealth has gone to the venture capital and private equity funds that backed their employers – and to them as employees. Banks and traders have been mostly locked out of this, it’s the 20-something workers who are cashing in (and out).
In the meantime, the sell-side is floundering. I’ve been paid less than $155k for the last two years and have been waiting for the kinda-good-times to come back to Wall Street. Sure, there are some upsides: I’m at a bulge bracket bank which is highly respected and has a wealth of institutional knowledge to tap. I get to work with cash sales and trading, derivatives sales and trading, exotics and prime brokerage. There’s a wealth of data and knowledge at my fingertips.
However, while I respect the institution I work for abstractly, being a junior quant/tech guy who’s had flat pay for three years in a stressful job in a stressful city isn’t my idea of fun. I’m starting to get a little tired of this, especially when I look at SF and see that everyone else’s net worth is multiplying.
The thing is that I knew finance would be a challenge, but I didn’t imagine that it would be like this. The low pay, resignations, and general pessimism are beyond what I imagined. Back in San Francisco, the gyms are filled with 20-somethings who’ve parked their Maseratis and Ferraris outside. Someone made a wrong choice, and right now it looks like that person was me.
I have a dual degree in Computer Science and Business Admin. I think about this choice everyday, and I do reckon on both sides of the spectrum that there is the perception of grass being greener. The only difference is, finance people think more about the tech business than the other way around. A lot of software engineers have no clue about banking, consulting, or buyside. If they did, I would imagine there'd be a lot of disillusioned tech people complaining about how they made the wrong decision in pursuing a career with limited upside -- seeing how the frat bros they graduated with are now making 700k at 30 years old as VPs at X bank while they've been making "only" 250k with 3% raises for the last 5 years. Or how the VC partners they work with are making tens of millions off carry when a founder would be lucky to get that in one liquidity event. On the other hand, finance people are particularly cognizant of the world around them and the industries they deal with as part of their job. The tough work environment pushes the standard banker's perspective outwards: whether that may be looking longingly at the buyside, consulting, real estate, or tech. This is also boosted by the media's glorification of high tech and startups. The past few years have been very good to the tech industry, comparable to the mid to late 90s for finance. A career spans 30 to 40 years, which is long enough for the market to equalize many times over and readjust how it rewards value. During this time, there will be several financial collapses, and several tech busts. I made peace with myself by just pursuing what I was good at. I got my CS degree for the challenge and prestige. I was good at getting grades in my CS classes but I don't like coding so the choice was obvious. The 'game' drew me in, and I wanted to be a participant. For other people, maybe the challenge to innovate and build within tech is what inspires them. Just do what you're good at, because it's the top 1% of either field that ever becomes anyone anyway.
Good post. I'm not saying banking is better than tech or vice versa-there are pluses and minuses of each and one is probably better for one person and the other better for another person-but there's definitely a grass is greener thing here. I'm also curious as to the article writer's job because he should be making more than that. If he's more of a tech guy than a producer who takes risk I'd completely agree that he should have, or still should, go to tech. Or do something similar in tech to what he's doing in a less expensive and less stressful place.
"Everyone in SF knows someone who's cashed out, who's bought a "second home in the Bahamas", some kind of car, or has just stopped working altogether. That kind of stuff is commonplace."
I like that everyone knows someone who's cashed out. Sure, with some degrees of separation they do but it's really not commonplace to make enough to buy a place in the Bahamas (people on the West Coast typically buy second homes in Hawaii or Tahoe btw). The startup world is really tough to make money. I forget the actual stats but a very large percentage of startups fail and even if they don't fold for every tech company that gets bought for tens or hundreds of millions or becomes the next unicorn, dozens or hundreds stagnate and get folded into another company or get sold and the VC's pref sucks out most of the money from founders and employees. And unless you're a founder or one of the first few employees your options are somewhat small. Check out the stats on what a non founder CFO or COO gets in options (2-4% pre-dilution) and think about what they're going to pay a 24 year old engineer. Yes you can make money, and especially if you happened to luck out and join Uber as an early employee (although time will tell what and when a liquidity event occurs) but most likely it's not retirement at 30. Does it happen? Yes. Is it anywhere near common? No.
You can get a good paying job at an established tech giant and get paid well and maybe your options will make you some money depending on their strike price and what happens to the market and that particular stock by the time you can exercise them, but unless you're an exec that's not going to be FU money.
Like I said, I'm not saying finance is better than tech or consulting or whatever else but the grass isn't necessarily greener.
Can I just point out the obvious? This guy is obviously not in IBD, as evidenced by 155k annual income 7 years into the job. And flat pay several years running. What are we talking about here?
My mouse isn't working properly, get that guy in here to fix it.
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What's even more amazing is that this guy thinks everyone in SF is making bank and retiring at 27. Of course, none of his friends did....just 'other people'. Suddenly, 5 guys out of 10,000 is 'everyone'.
This startup stuff is really getting out of hand. Like, I get that finance isn't a cakewalk, but almost all startups fail. Around 90% of startups fail. That means that if you go start some tech thing there is a 1 out of 10 chance that it will survive. You don't just land in the magic land of San Francisco, shit out some app with a few lines of code while you're on the toilet one day, and start bathing in piles of money. That's not reality.
A majority of my friends are in startups in both the NYC and SF areas. One friend worked 5 years struggling (3 people living in one room and maxed out cards) just to get seed funding of $1MM. Another had the entire management team shaken up by potential investors and is now fearful of losing his own job. On the other hand, I have a client who got $100MM in funding for a medical startup. BUT, he was already well connected, so it's not easy as a 24 year old coming up with an app that lets you measure your dick without a ruler, cashing out for $700 trillion dollars and buying a LaFerrari and walking on water.
Seriously, tech isn't the most stable job scene out there and seeing as how risk averse most IBD- PE/HF track minded guys are, being a director at a startup where you're constantly looking over your shoulder at investors would make you throw up your lunch from last week.