Don’t go into finance unless you really like markets / deals / investing
I see way too many people who went into finance thinking it was the “prestigious” path with (1) no idea of what it’s actually like to work in the industry when they recruited and (2) no inherent deep interest in markets, deals, investing.
At the 2+2+2 mark, these people are invariably lost, encounter some career crisis, and look for “impactful” and high paying exit ops outside of finance that don’t actually exist.
They don’t have the skills or grit to do sales, customer support, product management, engineering (ie actual job functions) but instead want to do “strategy”.
For people who actually care about markets / deals, finance is still a very cool industry. Finance is capital allocation, it is infrastructure for the global economy. This is cool. And the people who think it is cool will do well and have longevity in this career.
This perspective aligns with some of the most helpful WSO content. Finance is not just about prestige or high salaries; it demands a genuine passion for markets, deals, and investing. Without this intrinsic interest, individuals often find themselves disillusioned after a few years, struggling to pivot into roles that require entirely different skill sets.
For those who truly enjoy the intricacies of capital allocation and the infrastructure of the global economy, finance can be an incredibly rewarding and long-lasting career. However, entering the field without a clear understanding of its demands or a deep-seated interest can lead to burnout and a lack of direction when seeking exit opportunities.
The takeaway? If you’re considering finance, ensure it aligns with your passions and interests, not just your perception of its prestige.
Sources: Finance can ruin your career (hot take), Finance Career Path & List, Advice On a Career, Private Equity vs. Venture Capital in 2018, List of Transferable Skills in Corporate Finance
Disagree. You don’t need to love finance, you need to love what finance can teach you.
Banking taught me how businesses work, how capital gets raised, how investors think and how deals actually get done. I left and am now raising capital for my own business. I never wanted to be a career banker, but I wouldn’t trade the education for anything
Not sure what type of businesses you’re starting but Elon, Jensen, Dario et al built businesses just fine without going into finance for an “education”
Pointing to the winners is a pretty compelling argument for buying lottery tickets too
Morgan Stanley Bankers are the reason Elon was able to fund his endeavors.
if it wasn’t for Krishna Rao, Anthropic would’ve not scaled so fast.
The whole AI ecosystem is structured with savvy financial engineering and dealmaking.
I don't think the fundamental nature of the job is what most people dislike about PE. It's the bureaucracy and increasingly micromanaged nature of the process.
We can debate what separates a great PE investor from a mediocre one another time, but I think a lot of people (myself included) feel the burnout when you're 70+ IC memos deep and on Model v250, making some five-layer-deep assumption that you already know will be wrong a month after closing so an MD/Partner can justify paying another 0.5x EBITDA, only for IC to reject the deal anyway.
The bigger issue with PE, given the illiquid and long-duration nature of the asset class, is that mediocre folks who happened to make VP/Principal 10 years ago during one of the biggest PE bull markets were able to accumulate enough tenure and carry to effectively coast. Some of these people are now in senior seats despite not necessarily being "Partner material" or capable of generating meaningful alpha in today's environment.
That said, I do think we've seen the beginning of a reset over the past 3-4 years. As fundraising has gotten harder and firms have consolidated, we've started to see Directors/MDs get pushed out. But IMO, we're probably going to need another few years of pruning.
Just a small rant on the above. With that being said, who knows, I make it sound like I'm a good investor when I'm probably medicore myself lol. Additionally, in the last decade or so the industry attracts type A folks who are risk-averse so its no surprise that these PE shops require 100+ pages of IC memos and pointless DD just to somehow justify to LPs
100% agreed.
As someone at large-cap PE, I view our partners, outside of the senior partners, not as investors but as fundraisers and politicians. The job isn't investing, it's managing bureaucratic workflows and internal politicking. The number of committee meetings and approval processes is frankly ridiculous, and it has to be part of why large-cap PE has struggled to generate alpha this decade. You're not thinking about companies until the senior partner level, you're managing processes.
I'm seriously considering moving to a newer fund or smaller fund without all this bureaucracy. Better upside, and you actually get to learn how to invest instead of just managing workflows. I think the bureaucracy and risk-adverse nature of MF PE really attracts a certain type of person, and over time I am realizing I am not that person.I got into investing to learn how to evaluate risk-reward, not to play office politics or optimize for "safety." Not rocking the boat and going down the middle of the fairway aren't investing decisions, they're career preservation tactics, and are pervasive across large-cap funds.
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