Banking -> Startup PM on who SHOULD join IB

If you haven't read the recent thread on why you shouldn't join banking yet, read it here https://www.wallstreetoasis.com/forums/warning-do-not-enter-ib-coming-from-a-vp-at-a-bb

It's biased, but it's good to see the other side

Ex-BB associate, current PM @ startup here. Long time lurker since my college days -- this forum was a great resource when I was making career decisions, so thought I'd share my $0.02.

East coast, target (econ/CS) --> BB (A2A) --> PM @ bank --> PM @ startup

Caveat: my experience has only been in banks and startups, so comments on big tech are purely from my own interviewing and anecdotes from friends

Why IB vs SWE is the wrong question

Many here are talking about advisory (IB) vs SWE (Tech), and the people that get into each are completely different.

Granted, many analysts go into advisory without understanding the nature of the job, but the longer you stay in finance, the more it becomes a sales job. Yes, at the analyst/associate level, much of the job are execution (good PPT, good models), but mostly to keep your boss and clients happy. As you progress in banking, the scope of work only shifts more to sales.

I've never worked on the buy-side so can't comment there, but my peers seem to have wildly different experiences (banking 2.0 --> building interesting investment thesis). Working with some mega funds when I was banking, I know sure as hell that grass isn't always greener on the PE side.

SWE on the other hand, is a no-BS, does-it-work-or-doesn't-it type of role. As a banker, you can finesse your way out of things. You can make things look pretty without the most sound analysis, and you can often bend reality, but as a SWE you can't. It either works or it doesn't. It either runs in 1s or 1min. It takes a very different type of person to enjoy this type of work. 

If in doubt, just try building a simple website or a small CS project. You'll very quickly figure out if you like interacting with people or with code.

If you do find yourself to be a 'people' person and still want a stable, high-paying job out of college, then the choice set should be: IB, consulting, APM (and maybe bizdev/sales)

IB and consulting are the only industries (that I can think of) that allow a 22-year-old to interact with F500 C-suite and top investors on a regular. There's incredible value in being a fly on the wall in some of these meetings.

I've learned how to organize my thoughts and present to a crowd from banking, which has been incredibly useful as a PM.

Compensation

There should be no question on this: NPV(Finance) > NPV(Big Tech) > E(Startup)

Finance (IB alone, or exit to PE/HF/Corpdev) is a lower-risk, predictable cash flow path. An average performers who joined a reputable IB out of college or MBA, you can reliably hit high 6-figures by mid-career, and low 7 figure by mid-to-late. The comp progression plateaus later and higher. Trade off are longer hours and more stress.

Big Tech is equally lower-risk and predictable, at least in the current environment. Bonuses are traded for equity. Looking at PMs at your FAANGs, you can reliably hit mid-6 figures by mid-career, high-6/low-7 by mid-to-late. Out of college comp starts slightly higher ($160-200k all-in for Google), but these roles are hard to land. Google hires 40-50 APMs per year, while large BBs can easily hire 150+ analysts per year. In addition, most of these APM programs (Google, Uber, LinkedIn) are known to prefer candidates with CS backgrounds. Comp progression plateaus earlier. But hours are shorter (compared to finance at least), perks are better, and your deadlines aren't as fixed.

Tech startups aren't NPVs, they're Expected Values. At any stage before pre-IPO, you'll be taking some % of discount to FAANG comp. Equity can be worth something, can also be worth nothing. If my current place exits at $5bn (Plaid's val at Visa acquisition), my options over four years will be worth ~$1.2m, or $300k per year in at least 5-7 years. More than likely though, it'll never hit anything close to that exit. Even if it did, I could have made something close to that if I stayed in finance.

p(multibillion exit) is so low that E(x) is just a little higher than your base salary. If you're joining a startup, it needs to be for 1) you see a 100x potential, 2) you love what the company is doing, 3) you want to learn how to build a company

Finance is a great path for people high, predictable compensation. Your value grows with time and the quality of your network (IB / PE especially)

Big tech if you want a balance of pay and lifestyle. 

Startup if you want diverse work (you'll wear many hats) at the price of lower pay and less structure. Don't count on equity upside to let you retire at 30.

No, you can't "do anything you want" after banking

Something that was repeated again and again when I was recruiting was that:

You can do anything you want after banking

As a young lad, I took that to mean that I'm deferring my career choice by 2 years. The myth was, "if I didn't like banking, I can still do something else." Anyone on WSO who says "your skills in banking are transferrable to strategy/marketing/operations" have not tried recruiting for these roles.

While not impossible, doing a stint in banking doesn't magically make you a better candidate for these jobs. Your best bets are buy-side, corpdev @ F500, and strategic finance/FP&A at startups. For anything else, you'll need to prove yourself with experience outside of banking, network hard, or be very very good at spinning your banking story

Coming from a finance heavy target school, I've seen most of my peers stay in finance after finishing their 2 years in banking and 2 years on the buy-side. Those committed to pivoting either had a real hard time finding a job they deemed worthy (some combination of interesting company, good role, decent pay), or went to business school.

If you choose a career in finance, be at least somewhat sure that this is the type of work you like. It's still a traditional professional services industry, with rigid structures and hierarchies.

now what?

Talk to people!

Listen to WSO, but also ignore WSO. People who are on this forum have already chosen. If you're still in college, join different clubs, talk to different alums. Don't rule anything out too early, and don't sneer at other jobs because they're not 'high finance.' 

The allure of 6-figure out of college is great, I admit, as is the promise to hit 400-500k by your late 20's. But I can say for sure that my quality of life didn't change much when I was making $100k to when I was making $300k. You'll eventually need to put these numbers in the context of your own happiness, let it be your fulfillment, free time, relationships, or just mental health.