MBB vs BB/EB
I currently am an analyst 3 at an EB in London (think Lazard/Rothschild/Evercore) and am currently regretting not going down the consulting route. My thinking is that despite the lower pay, maybe the skillset you learn is way more meaningful to starting a business and being a entrepreneur (especially as I believe this is the only way to making real large amounts of money in the long run).
Would you guys say that MBB consulting provides a superior skill set in general for entrepreneurship and exit opps than M&A and if so why/ why not.
I also understand many people go into IB for 2-3 years to move on to HF/PE but my understanding is that these exit options don’t really train you up to be a good entrepreneur later on either as it’s a very corporate/finance related role and not really in the startup scene.
Views from people who have worked in both MBB/IB would be super helpful!
P.S By large amounts im talking like more than like £30m from either selling the company out to a larger company/fund or IPO. I don’t think this is really possible in an IB career in the UK at the moment to make this much (I hear MDs hardly clear £1m in the UK unless they’re rainmakers or heads of division).
It really depends your role in the start-up. Exiting to some sort of operational role is def easier from consulting. However, in my experience the understanding of value, what drives value, fundraising, M&A, and finance in banking blows consulting out of the water. In leadership roles, understanding the above becomes immensely important.
Most startups live or die by their ability to manage their burn and fundraise. A banker is way better prepared to handle those challenges.
This is really useful thanks!
I am also in IB and considering making the switch. From what I have seen in IB / PE / VC during my internships, commercial and strategic topics are what really drive value. Your financials is just an output of what you do operationally / strategically. In fact, pretty much all finance-related workstreams also build on commercial topics.
Building a DCF model? Well, 90% of that model comes down to your commercial understanding. When you're estimating growth, you're really looking at the market growth, the company's position within that market, the company's internal capabilities to execute on that growth etc.
Spreading comps? Well that also comes down to your commercial understanding. You need to understand if business models/growth prospects are similar, if one company's market niche is more attractive than another, what competitive advantages and moats the peers have that could justify higher/lower multiples etc.
The financial part of a model or a comp spread is really just being able to put the figures together in excel, but in my opinion 90% of the analysis and underlying work very much depends on commercial / strategic topics.
I also think that the overall skillset you learn in consulting is much more useful for a broader set of opportunities. You learn a lot about communicating with people, executive presence, stakeholder management etc. while in IB you won't speak to anyone outside of your team for the first 5-6 years. As such, you will not develop the soft skills that are required to be a successful entrepreneur / leader. Moreover, the entire job in IB is pretty structured. You most often have a pretty well-defined process and you have people giving you super clear directions on what to do. You don't really develop an ability to think for yourself and solve problems from scratch. Instead, you learn to go up the chain and ask your seniors exactly how they want you to do something. Meanwhile, consulting will expose you to unique problems without a pre-defined solution where you will need to analyse and come up with solutions from scratch.
I really regret not going the consulting route. I think it would have been much more exciting and I think it would have provided me with a much broader skillset.
As a former consultant, you glamorise the MBB job significantly. The reality both jobs suck and have their own pros/cons. I do think MBB is better unless you want to do PE, but then again it’s much more selective so for many it’s a false choice (the bankers here won’t like hearing that). Banking is amazing for drilling financial accuracy into you and that’s a valuable skill the first 5-10 years of your career, consultants seriously lack this
Noticed this got traction, so I’ll reply to the top comment now. This is an incredibly ignorant take. It’s why this website can be so dangerous—some very junior person makes an authoritative comment with an incomplete picture. Here’s why I say that:
The comment made is what I would expect from an intern or analyst. It takes the angle that IB is useless and just “shows the operations” that’s not what I am talking about for IB being useful. Being an entrepreneur or being a decision maker in a startup isn’t just building a financial model and a pitch deck—it’s deciding where the company goes and the story it will tell to investors.
A few very concrete things I see not financial people blunder and destroy value for their company:
I get the negative IB hype. Really I do. People treat you like crap and it’s a lonely few years, but the information you gain is just heads and shoulders more valuable than entry level consulting work. It changes the way you view businesses forever. I’m sure consulting does too, but again the question of 1) what drives value is the whole point of leading and creating a startup and the job of IB is determining that and explaining value to potential buyers and investors. A year a banking out of school is so much more valuable than a year of building decks explaining some operational issue.
consulting is a great career and I actually think more valuable and sustainable later in your career, but the entry IB analyst gig is where almost all financial minds begin for a reason.
I hope you realize that startups are a moonshot opportunity. Like less than 0.000001 chance of being a unicorn. If you go down the golden path, go to Harvard and then go to Stanford GSB then you have a 1 percent chance. I wish you luck but you need to be realistic
This is awful advice.
How many Analysts are going to become Head of Global Investment Banking?
"(especially as I believe this is the only way to making real large amounts of money in the long run)." This is what I am responding to. If this dude thinks he's going to be making "real large amounts of money" from a startup I wish him luck but that shit is by no means a guarantee. Not even advice i'm just telling him the truth
You know you can make good money/more than Corporate life without being a unicorn?
He said that he's choosing startups over IB because he wants to make huge amounts of money. I'm just telling him the odds of that actually happening are miniscule. There's no free lunch
London? Congrats on Evercore.
Currently almost done with my first year as an analyst at a boutique bank and I’ve been thinking recently that a lot of the pros people have mentioned in this thread about consulting on this thread align with my long-term career goals and thinking. I’m considering sticking it out here for a few years and then going to b-school to end up at a MBB or a T2 consulting firm. Curious if anyone has any views or relevant experiences to share based on that. Much appreciated.
Would you rather be a VP at a BB/EB or an EM/PL at MBB?
Consulting at the junior to mid-level helps with building certain skills very early on.
The most important one is communication. Depending on the engagement, junior consultants are expected to regularly interact with clients from day one, often working on-site at the client premises. Your client counterparts as a junior consultant will generally not be c-suite executives, but middle managers. Still, those are seasoned people with 10-20 years more professional experience than you have, so coming in as a fresh graduate pretending to give advice on how to run their business is not easy. You need to be able to build trust, be perseverant, and ultimately use the right influencing techniques to get what you want. Even junior consultants are expected to speak up regularly in client meetings and internal team meetings.
The second most important one is project management. You will be expected to run your own work stream quite soon, drafting sections of decks/small decks by yourself. As a project leader/engagement manager, you will manage typically mixed consultant/client teams.
The third one is insight into different business functions/industry sectors. Initially, it is quite normal to be staffed on projects in different industries and different functions before specializing after a few years. This means you may do a corporate finance/strategic planning project with a lot of modeling, followed by an org project where you don't open Excel once etc.
Now to answer the initial question - does consulting prepare for entrepreneurship? Maybe. Realistically, consulting prepares best for a middle management role in a corporation. Many consultants receive offers from clients they have worked for, and sometimes those offers can be attractive if a corporate management role is what you are after.
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