What is the "true" value of a Banker?
Guys - wanted to pose this question to my fellow monkeys:
At the end of the day, what is the true value of a banker?
I've been contemplating this question ever since watching the Social Network. Bankers - we get paid a nice sum of money for what is essentially glorified secretarial work. Some may regard "modelling" as a "technical-skill". But is it? Are businesses and deals really driven by numbers? Or are they driven by personalities, egos, relationships, and "gut-feelings"? A laid-off associate/VP really has no marketable skills to speak of - sure they might know modeling, but the worth of that "skill" is highly questionable. After all, it's not a hard skill like "computer science". A model doesn't drive anything - at best, it's a sanity check. The same associate/VP will also lack the necessary relationships that bring true value to the bank. Isn't it fair to say then, that our very livelihoods are truly at the whim of the markets? If we had some better perspective, shouldn't we realize that the line between us and a Starbucks Barista is one bear-market away? (not to knock starbucks baristas!)
On the other hand - you have your software engineers. Knock all these guys all you want (I used to be one), but I've since realized they have a hard skill. These guys can actually create tangible value with what they know. A talented software engineer can build something that truly is value-add. Sure they might not make as much as a banker initially --- but don't they have much more up-side? Google/MSFT engineers routinely work together and build start-ups that subsequently get acquired by GOOG/MSFT. Many software engineers are multi-millionaires. In addition, I imagine that unlike IBD, most people working at GOOG/MSFT more or less enjoy their jobs (if you have any doubts about this... read the myriad articles pertaining to Google's working atmosphere).
I guess if I went back, I would have learned a hard-skill in college and combined it with my other abilities to go on an entrepreneur track (or worked for a tech company that would have allowed me to accumulate such skills).
THe thing that cemented this for me was watching Social Network. That scene when Zuckerberg walks into the VC and tells them f'ck you. It was simultaneously exhilarating and a bit depressing. Seeing a 22 year old (at the time) completely having power over a bunch of Managing directors twenty years his senior -- the very people, we monkeys presumably strive our entire lives to become.
Sad ain't it?
Here's the difference (and I've been both, so I know):
Banker = No Risk, virtually guaranteed upper-middle class income Entrepreneur = Maximum Risk, potential for great wealth or poverty
For me personally, I choose entrepreneur every time. I've had a few things work out badly over the years, but none of my entrepreneurial failures have even approached the level of misery I experienced as a "successful" trader. And trading is more entrepreneurial than banking. The mere thought of spending 14 hours a day in front of an Excel spreadsheet and taking shit from associates makes me want to swallow rat poison. But that paycheck sure is nice, I guess.
Don't underestimate the skills you pick up as a banker, though. It's true, bankers don't create any value, but they're good at recognizing value and helping others to do the same. That can be a valuable skill outside of banking. Helping others to see value where no one else does is the essence of sales, and there are a lot of rich salesmen out there.
Minimum wage X Working Hours, which is exactly how much analyst/associates are paid
Before I start just so you know: I will not be criticizing your post, but more of the general mentality in mainstreet/wall street America. Excuse me, but since when are VC's all of a sudden these gods we all have to bow down and kiss ass to? I haven't seen the movie yet nor do I know the story behind that scene, but I DO know that a VC's next paycheck, his ability to keep his Russian wife, ability to support his 4 kids' Ivy League tuition, and have $300 haircuts all depend on his ROI from an investment. And not only ROI, but his equity in the start up. OF COURSE he will try his best to get the better end of the deal. Zuckerberg is not his "buddy" nor is he Zuck's. Just like how drug deals go bad, it's not uncommon for a VC to fuck a startup's founder over or a start up to fuck a VC over by wasting all their money or diluting their shares.
22 year old, 44 year old, 202 year old - who gives a shit? If tomorrow a 6 year old's dinosaur clay project goes big and everyone wants to buy one, and the 6 year old walks into Sequioa Capital and says "fuck you" to a 60% equity offer, would you be surprised that a 6 year old DARE stands up to a (GASP) 50 year old harvard mba VC?
If fucking King Tut woke up tomorrow and decided to walk into the Intel Venture Capital offices and demanded he get a fair end of the equity deal on pyramid start up and that Intel doesn't try to take over his board with their dumbass non-technical execs, it's no different than if my 1 year old newborn cousin spat in a VC's face for trying to fuck him over after he found a way to cure cancer with breast milk. Age means shit. It's the value in your product and idea.
come on, they're just people, like you and me. not some kind of gods or whatnot. VC's depend on the entreprenuer - in some cases, MORE than the entreprenuer depends on them.
I hate seeing hard working smart entreprenuers walk into his VC pitch in front of a panel like it was a small penis examination on national television. I see it as the other way around - the VC's have to impress ME with an attractive equity deal or else they are not touching my idea. You, the VC, may have responsibilities to your family and your firm to keep making money. I do too - I have a responsibility to myself, my fellow co-founders, and all the hardworking unpaid interns whom we gave equity to - and most likely, they're young and vulnerable. I'm just as important as you.
I feel like this topic merits a separate post. Sorry for the tangent lmao.
stop bitching, don't you have typos to fix or something? most programmers aren't geniuses developing innovative products or whatever the fuck you have in your head, they are monkeys who sit around mindlessly stabbing away at endless code.
i agree, which explains why most programmers don't start start ups.
hello guys.. thanks for sharing information..
Bankers are salespeople. The model and most everything junior people do is just part of the sales pitch...none of that grunt work to me qualifies as a skill because with minimal training it can all be easily reproduced like a commodity. However, being a great salesman is indeed a hard skill that is extremely valuable, and at the higher levels succesful bankers that can produce business do indeed have a real skill just like a programmer who has the skill and creativity to create new ideas. Give that banker a phone, a computer, and a few analysts to put together the pitch and he will make you money. That is real and portable.
The best line from zuck was during his early years when he turned down a lucrative offer saying, "I might not ever have an idea this good again". The reality is he was in a unique situation. But to the original question, a banker can add huge value, but most don't.
I see your point. Both my parents are entrepreneurs, and me and my brother are in finance. They sometimes joke that they earn the money, and we just "count" it haha
wasn't smart enough to become a SE or quant, so I chose banking even with my technical background
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