Wondering why the sentiment for IB hopefuls is always BB or bust. I get the branding perspective, which, in a vacuum, leads to better exit ops. But from an actual experience, comp, skillset perspective, I think if ppl looking to break into the industry had a more holistic view and were less motivated purely by prestige/name-brand, more ppl would target going to smaller banks. I can think of the following reasons: (obviously I have limited experience, but nonetheless, my impressions thus far)
- You stand to make significantly more money at a boutique relative to a BB. Obviously the fees are smaller due to smaller deals; however, the bonus pool is structured in such a way that you receive a much bigger piece of the pie and have more "skin in the game" so to speak. A lot of my buddies at BBs have capped bonus. At a boutique, the upside is theoretically limitless based on number/size of deals, etc.
- You're more focused on executing deals, as opposed to always pitching. At boutiques, you're not working with blue-chip companies all the time; however, you are closing multiple deals a year and are able to function as a key member of each deal team. Also, based on ability, you're able to contribute towards all aspects of the deal (i.e. analysts can run the model, not just spread comps and create buyer lists etc).
- At non-BB IBs you have the optionality of working on RX and other Strategic Advisory engagements; given that BBs are usually a lender within many industries and therefore precluded from such advisory work.
- Boutiques offer more opportunities for direct client engagement. Largely due to leaner deal teams, you get far more opportunities to interact and work with the senior management at both your own firm, and with clients.
Interested to hear what the rest of the WSO community thinks.