Seeking Advice: $1MM / Year business vs IB/PE recruiting

If this is indeed a real post, without question I would stay with your social media business you have going.

There’s a simple way to analyze your situation. Take your share of annual earnings, estimate the growth rate of those earnings, and discount back the future earnings at some estimate of WACC. I understand the business may be highly risky (that is, your earnings could completely dissipate in 4 years). Perhaps you are highly dependent on a couple customers or are in a highly competitive market or face a threat from AI displacement. So a 20% discount rate seems appropriate.

roughly it seems that the value of staying in your business is $5-7 million. That is substantial and as high, if not higher, than the top 10% of my banking analyst class has today (excluding inherited wealth). I should note I just turned 30. 
 

the top 10% of class generally is guys who advanced to PM at a multimanager hedge fund in 3-4 years and had a 1-3 gangbusters years and thus resulted outsize formulaic bonuses; also guys who are at extremely high paying, high AUM/ investment professional single manager hedge funds, such as Pershing Square, Tiger, Viking, Farallon, D1, Coatue, etc. i suspect that in 5-10 years a handful of PE guys from my class and the top guy still in banking will catch up to the top hedge fund outcomes.

the other thing to think about is that being young is risk mitigation. Let’s say your business does well for a year or two and then tanks. You will have at least $500k-1 million in net worth, and you can apply to business school. You can then have two years of incredible fun traveling while also interviewing for banking. And many bankers would love to hire a successful former entrepreneur. 

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This is insane that you are even considering IB, keep kicking butt at your social media business and spend carefully.

If for whatever reason the business dissapates after a few years, you are a shoe-in for a top MBA and go do IB then (but would also be a great candidate for VC, social media enterprises, etc) 

These kinds of posts kill me every time. I can never tell if the poster is just bragging to the droves of risk averse bankers or they really can’t make decisions by themselves. These overly risk averse bankers also telling him not take entrepreneurial route, lol total losers who dont have the balls to make a real jump off their “safe” path. Like who cares if you cant exit the thing if the business is spitting that kind of high margin cash.

If this post is genuine, please take the entrepreneurial route and thank me later. In what world would you want to work for someone else making that kind of money. Even if this thing lasts only 3 years (trends change as im sure you are aware) and you dont piss away the proceeds away, it gives you the optionality to pursue the next gig outside the confines of working for someone else.

If this is real, do not go into IB. Aside from your comp and learning curve being higher in what you’re doing, you will be incredibly bored and upset after being in the driver seat.

Even if your company goes to zero, you can start something else or join another business with this experience at a much more senior role.

The only exception to this is if you truly hate operating a business, and love finance with a strong desire to work at a MF or something

You can also just hire someone smart (maybe even someone trying to escape IB!) to run it for a shit ton of money and still own it yourself