IB > Entrepreneurship > IB?

Hey guys, I am an IB analyst at a BB. I am thinking quitting my job to start my own company. I really like IB but I'd like to work on my startup. I like solving problems and I think it'd be really fun to work on a project that helps society. 

As you can tell by the stats that most startups fail, do you think I could move back to IB in 2-3 years in case my startup doesn't work out? I don't mind banking at all and I like my job. 

Also, do you think I can I work on my startup for the first two years while working in banking? Ik banks want you to disclose outside biz activities. What if there were no conflicts or I didn't earn any revenue for the first two years? Do I still need to disclose? Any issues with compliance/MDs if I disclose? 

As always, thanks WSO for your help! 

 

How do you define immaterial? I've really been thinking about this. My startup idea has absolutely no conflicts with my work...I don't see why my firm would have an objection. I think if we start making money that's when I need to disclose and may run into problems. 

 

I started my startup while working in commercial banking. It's been around 2 years now working on it and I'm now starting a job in corporate banking in a fairly sweaty group (sweaty for CB). I got the OBA approved at my last bank and at the bank that just hired me. Who says you can't do both? I still have time for a girlfriend, family, friends, and travel as well. 

STONKS
 
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All due respect, you’re asking who says OP can’t do both because you were able to juggle a commercial banking job and what sounds like a super slow crawl to a starting product. It’s a different ballgame when you’re trying to juggle unpredictable 80+ hour weeks with a startup on top of everything else in life.

OP, for what it’s worth, I quit my IB gig 1.5 years back to work on my own startup. Success has been mild and while I haven’t actually sent in my resume anywhere yet to test employers’ interest directly, I’ve talked with recruiters who tell me it wouldn’t be difficult to get back in. This could be a function of the hot lateral market and could change in the next year, though. Either way, you’ll likely find good work somewhere if not back in IB (strategic finance or corp dev roles). I’ve had good inbounds for those types of positions. I spent a little under 2 years in IB before leaving.

 

All due respect, you're asking who says OP can't do both because you were able to juggle a commercial banking job and what sounds like a super slow crawl to a starting product. It's a different ballgame when you're trying to juggle unpredictable 80+ hour weeks with a startup on top of everything else in life.

OP, for what it's worth, I quit my IB gig 1.5 years back to work on my own startup. Success has been mild and while I haven't actually sent in my resume anywhere yet to test employers' interest directly, I've talked with recruiters who tell me it wouldn't be difficult to get back in. This could be a function of the hot lateral market and could change in the next year, though. Either way, you'll likely find good work somewhere if not back in IB (strategic finance or corp dev roles). I've had good inbounds for those types of positions. I spent a little under 2 years in IB before leaving.

It was a super slow crawl because the industry is highly regulated and things take time when you don’t have connections/capital to move them quickly. Unless you’re a programmer I don’t see why you would need to work more than 5 to 10 hours per week on your start up.

STONKS
 

Thanks! Appreciate the response. I totally agree with you. But I feel like I'd not really be able to form partnerships with clients or raise revenue without forming a legal entity. If I incorporate, do I need to disclose? What if it's immaterial or we didn't make any revenue? I think the worst thing that could happen to me is that I get fired (unless compliance is up my ass lol). Honestly if I get enough traction, it doesn't really matter to me. My goal is to test the MVP for about a year and form partnership before launching officially in about a year. 

I don't work during company hours and usually focus on it during the weekend. Technically weekends are also "company" hours in IB lol 

 

As soon as any compensation is received, expenses have occurred, or an entity is formed you need to disclose it to your firm for approval and update your U4 because it is no longer a passion project or hobby - it is now material and your firm needs to make sure it does not conflict with any regulatory requirements. With that being said, it is extremely unlikely they would not allow the OBA as long as it is not investment or securities-related. There are two regulations regarding this by FINRA: 3270 and 3280. 

Highly unlikely you will be raising capital or forming partnerships without at least an MVP in place. Depending on what your idea is, and even at a quick pace, it will still take 6-12 months just to get that up and running (assuming you've already done the background research needed to start development and have a team in place to build - UI/UX and coder). 

If FINRA or your firm finds out about the OBA without disclosing it, you'll have more problems than just being fired -- fines, barred from the finance industry, and possibly your firm taking ownership of/in the start-up (this happens more frequently at tech firms -- specifically Amazon; they are ruthless and will go after you). With that being said, speak to a securities attorney if you are actively pursuing this because it is a rather grey area (on purpose). 

 
[Comment removed by mod team]
 

I did 1 year in IB, left to start a company and raise some money. Failed. Now I’m back in IB… coming back was a bit more challenging than expected due to covid and the uncertainty at the beginning of 2020.

i had to quit since the industry was really material and my bank was leader in the sector. I officially asked for an exemption and was told no “unless you are a rainmaker”. So I quit.

 

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