My two year anniversary in IB is approaching and while I greatly appreciated my time in banking and learned so much, I am considering three great career paths and am curious to hear your thoughts. The three options are as follows (ranked by risk):
1. Entrepreneurship
I love playing this new sport and see the great opportunity of its expansion in the United States. Without providing too much detail, I have targeted the perfect geography to establish the first location in its region (also near my hometown). For the past three months, I have been creating a detailed model/business plan and estimate that first year cash flows would conservatively run around $200k (for me) with nice upside from tournaments and other revenue opportunities. While the financial side seemingly checks out, I would learn a great amount entrepreneurship and provide an opportunity to franchise and build wealth. Of course, I understand this path comes with huge financial and opportunity cost risk but I am not opposed to pivoting to getting an MBA and rejoin the PE grind if all else fails.
2. Corporate Development / Strategy
Having worked in investment banking for almost two years + two full years in college, I have gained a nice understanding of the M&A process and generally the types of things investors are looking for (obviously no expert though). Working with mostly LMM companies, I have noticed that most founders don’t start to truly think about positioning their company for an exit until after they get an IB under retainer. By then, there really isn’t much they can do. I propose I can convince a LMM business owner to add me to the payroll to provide basic guidance pre-process. I can also help them start on an acquisition journey (have worked on a few small buy-side deals) and help with internal strategic initiatives (worked with all kinds of admin people through sell-side VDRs and DD processes).
3. Private Equity
Self explanatory. End goal is entrepreneurship but private equity will help me learn key business ownership skills. And pay me well in the process
Curious to hear your thoughts. Even if it is “chill tf out” or “sit tf down”, please let me know.
Based on the most helpful WSO content, here's a breakdown of your options and some advice to help you decide:
1. Entrepreneurship
2. Corporate Development / Strategy
3. Private Equity
Max the Monkey’s Take
Final Advice
Good luck with your decision! Let me know if you want to dive deeper into any of these paths. 🐒
Sources: Breakdown of Post-IB Exit Opportunities, Private Equity vs Venture Capital - Differences and Similarities, What is the point of doing private equity if you will be pushed out after two years to get an MBA?, CorpDev to PE prospects - creating a long-term map / success stories, To all Consultants considering PE
What pe would you be looking at if ur goal was entrepreneurship? Tech pe ?
Does lbo pe help?
1 or 3. 1 isn't a bad option, MBA is always a safety net. If all else fails u can go back to banking
#2 is extremely hard to do. As an AN, there is alot you still have to learn (you admit not being an expert) and LMM business owners are likely to be biased against your youth.
+1 to this, only way this would work is to look for PE backed LMM companies.
I would highly caution against #1. I'm aware of someone who did something similar and it ended up being a business they had to sell (for a lower price than ideal, the ROI on those years spent buidling the business didn't seem financially worth it). Your estimates may be off.
If you have offers, #3 is your best option IMO.
Do we know the same people?
20-30 are your prime saving years from a compounding interest perspective. I am awe struck by how many friends and university alumni I've met who have wasted them on dead end "start ups."
Only need one exit to make up for what your little 401k has been working towards for 20 years. Entrepreneurship is a full life thing; owners skip around just like you wagies do.
I am very much on the entrepreneurship train after you spend some time in the workforce.
A meaningful number of people in my tech circles are, without any particular personal conviction, at startups with no real business plan or differentiated product. Too many people are chasing startups and entrepreneurship for the sake of it.
Many I know are staring down early 30's with a) start-up equity that has marginally increased in value at best b) lack of strong foundational skills a bigger corp provides c) no big name or projects they can point to if they want to pivot.
Would they be better off having spent 3-7 years at a "Big Logo" corp before moving to entrepreneurship? I tend to think yes. Especially in finance or tech where they could easily seed a nice nest egg of $300-600k during that time.
I agree with most of this outside of your part b. I've worked at late stage startups / unicorn + smaller corporations that had startup environments and I learned a ton. I've barely learned anything in my current role at a large multinational corporation.
That being said, before moving to entrepreneurship - I completely agree with that take. As someone who has been playing with the idea of entrepreneurship, I face the constant predicament of either starting a business or instead using a chunk of that nice 'nest egg' for a house downpayment and just slog away within the corporate world.
Okay, valid rebuttal. And I see your points.
Can I say something that may shock people here? Not every entrepreneur is running a startup... Like I've worked at startups as well as invested in them, but now I own a bootstrapped normal business that's cash flowing less than a year in. I think this forum (and many others like it) tend to think that every single business out there is a high-risk B2B AI SaaS startup that demands proprietary technology in order to prove their existence. The reality is that only 1% of businesses ever raise VC money, and the risk of entrepreneurship goes down significantly if you just do something that has already been proven to work.
I think going and spending 5 years at a huge company will do nothing to prepare you for being a business owner. The point of working at a startup is to teach you to understand risk and wear a lot of hats while being super scrappy. The value of the education you get is way more than whatever equity you might be granted. If you keep looking at things at the economic face value, you'll never learn the skills needed to go off on your own. In fact, I'd argue that the guy with that "nice nest egg" has a bit too much to fall back on in case it doesn't work.
You'll only ever really know if you've done it before or you're in the circles. If you want that cushy W2, go for it. If you want to build your home on the slopes of Vesuvius and live life dangerously, join the club.
Open that pickleball business brother
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