IB Global MM vs. Corp Banking Rotational Program - Advice Needed
Hi all, I'm about two years out of school and looking to break into venture one day. I am fortunate to be debating between two offers, one to join an IB analyst class at a global bank (not sure about group placement at this time), and another to join SVB in a CB rotational program. I am ultimately looking to open some more doors and as I mentioned break into venture. If I took the CB route, will I still have access to many of the same exits aside from PE/HF? I really liked the folks at the CB, but am worried it may be difficult to make the jump from debt to equity down the road. I'm honestly not too sure the IB route is the greatest fit, but do not want to pass it up if I can't get to where I want to go from the CB gig.
Any advice would be really appreciated, thank you!
bump
As someone who used to work at SVB in the rotational program. Stay far away if you want any decent Finance exits. There are no exit opps outside of more commercial banking and venture debt funds but definitely not VC/PE. The corporate banking and Sponsor Finance teams are by far the best teams in the commercial bank but still not worth it at all over true IB. The hours aren't that great for the pay either. 9-9+ was the norm on those teams. You'll see some underwriting reps in the Associate role but it will mostly be portfolio management and grunt work sending requests to middle office, CRM, Accenture etc and tracking those requests. The systems they use are atrocious and have only gotten worse and slow everything down. Curious what your comp is? For the 2021 / 2022 ADP class it was a standard $80k + 15% regardless of SF/Boston. The best Associate exits I saw were people that left for IB, venture debt funds, or tech startups. Venture debt is a dead end and the underwriting they do has no meaning. The other banks entering the space are eating SVB's lunch and SVB is just matching term sheets
Thank you for the insight here. Would you be willing to talk more via PM?
I'd rather stay anon but I'm happy to answer more for you. I'm anticipating a company comparison question and how easy it would be to transition to SVB Leerink from the Corporate Banking team. Basically ANY middle market bank with at least a somewhat known name are all much better gigs than SVB. Second, it is impossible to move from the commercial bank (where corporate banking is housed) over to Leerink. The 2 divisions are not integrated at all and management has said that the recruiting pipelines will be kept separated. You can't even find Leerink employees on your MS Teams to send a chat to. I only heard of 1 person who even got an interview from the commercial bank. Also Corp Banking is an interesting team to be on because a lot of your clients will be sub $1b market cap public companies but the main products they have at SVB are Revolving LOCs. The commercial banking teams however interact with VCs a lot but as an Associate you'll just be taking notes. Their entire underwriting process for term loans is based on how much the investor believes in them and is willing to re-invest in them. You can easily move over to the private bank or startup banking where your whole job is setting up checking accounts and business credit cards however. It's a no brainer in my eyes. Even if you only last 6 months in IB you can still exit to a Corp Dev job that pays more than SVB
Completely understand and had a feeling the two were fairly separated. Did you make the jump to IB after the rotational program? I was thinking the SVB name and working on some of the larger technology deals on a corporate banking team would make an earlier stage VC exit a bit easier than doing an IB stint, especially if it wasn't in a technology group. Even at the earlier stage, you think this jump would be near impossible? Appreciate the advice and insight into the business.
I see what you're saying and that was basically my hope when I joined. Corporate Banking's clients are actually the later stage companies so the work is much different and uses cash flow based analysis. This is transferable to other senior lenders and corp banking teams. The tech/software and consumer focused commercial banking teams interact with the early stage clients. Either way yes I would say it's still near impossible. VC hiring is more flexible than PE so you can possibly find a way into a LMM regional VC. I'm also pretty sure the common sentiment towards SVB in the VC world is that SVB is "the least innovative company yet says they are THE bank of the innovation economy". They use a simple Churn/Burn/ARR Growth analysis to calculate size of their term sheets, but it all gets thrown out the door when the client presents a higher competing term sheet. Then everything is based off of the strength of their investors and how willing their VC investors say they are to reinvest in the next round. It's all BS word of mouth shit that the VCs have no downside to lie about. Like of course they'll say they believe in their portfolio company if it means they can get added runway. There is a VC Relationship Management (VCRM) team that interacts with SVB Capital and with VCs that could have decent VC exits but there are no entry level positions there. The rotational program also does not do rotations in SVB Capital or VCRM. They always say they are considering it but it's not going to happen. The commercial bank was severely understaffed on the Junior level when I was there so they definitely won't have extras to send over to do Capital and VCRM rotations. SVB's business is based completely on interest rates and debt payback than actual VC analysis wanting 100x equity returns. Having an understanding of industries and products is not a part of the SVB experience at all. Even as you underwrite, the product/market analysis is just a check the box aspect. VCs know this and is why you won't see any ex-SVBers at any VC funds anywhere
Thank you for this. I guess my last question may have been answered but in terms of creating a credit memo & underwriting a deal for a late-stage technology company on a corporate banking team, wouldn't there be a pretty in-depth growth & financial analysis and maybe some landscaping work done for a deal similar to what would be done in a pitch or CIM? Aside from the large VC shops, I was really thinking that this type of work at SVB would be transferrable to a smaller, earlier-stage VC shop more so than a random MM bank they probably have not heard of. While it may take a few extra years on a late-stage team, I was really thinking it'd be a more sustainable gig than the IB (especially since I'm not sure about placement) and allow me to get similar skills minus valuation stuff that I could just get on my own and also network in the industry. If this really isn't the case, I think I'll go the other route but I guess I'm just not sure how easy it'll be to exit from a lesser-known IB to VC. I also thought it may be more unique than the traditional IB candidate?
Nah bro it's even less applicable. The corporate bank does later-stage work than the commercial bank. It doesn't matter that they do more technical/difficult analysis...it's still the opposite of early-stage VC. Harder work doesn't mean better exit options. If people from the commercial bank (the people that actually lend alongside the VCs at the time of each new round to extend runway) can't exit to VC, then I don't see why someone from a less applicable and less transferable department would be able to. The modeling is very templated and formulaic in late-stage. It's basic vanilla senior lending and it's the same thing you'd do as a corporate banker at any balance sheet bank. Understanding and analyzing product/market fit (which is what early-stage VCs care about) is even less important in the corporate bank because these late-stage clients have the financial performance to back it up so there isn't any market analysis even necessary...it's just a check the box part of the memo. The credit memos are nothing like a CIM or pitch deck. There's no biases in a credit memo, it's straight facts. You talk about YoY Rev growth, OpEx spend trends, trailing 3/6 month burn, runway, AR turnover etc and you're done. If it meets the parameters you're good, if it doesn't then well fuck them. VCs are in search of companies that have prospects of a future market fit sooo good along with an efficient management that can maintain unit economics as they grow and dominate an industry or better yet create the their own impenetrable niche in their own market. Corp bank just wants to get paid back their 4.25%. I know more about the commercial bank than the corporate bank but I was close enough to know that it's definitely not applicable to early stage VC (which is harder to find a good role in than late-stage anyways imho). Plenty of small late-stage VCs out there that will throw in a $1-$5m allocation of a $300m Series F and try to catch the wave. Good early stage VCs are only the crème de la creme of the VC world (Benchmark) and the small funds have to have some sort of regional niche. But as always, VC recruiting is a crapshoot and if you're a witty and smooth-talking person you can eventually land a role at some small regional VC if you try long enough. Definitely don't do the IB if you don't want to, but small MM strategic M&A is a much more common exit for the majority of VC portfolio companies than IPO'ing is so I'm sure you'll encounter plenty of VC-backed companies there too depending on industry. Another thing to consider is that this will be the first year for the corp banking specific rotational program so be ready to be a guinea pig if you go SVB. My $.02
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