Investment banking after 10+ years of engineering?

pm528's picture
Rank: Senior Chimp | 18

Hi folks, I just joined this forum and need some advice.

I am an engineer in Silicon Valley with an MS in CS and about 12 years of total work experience. I am doing good career-wise but I am not a super achiever by any means, both in terms of rank and salary. I make about $150K annually, and I suspect as an engineer I am probably getting close to the ceiling. I often have to work pretty long hours (on an average about 60 hours a week). Is it possible for me to do an MBA at this stage to change tracks or at least advance my career?

To be honest, my motivation is earning more money and doing less tedious work. I am a smart, driven and hard working individual, who is always ready to accept a new challenge. I'm also single with no kids, which allows me more time and freedom to follow my goals. If it was at all possible, I would switch to finance and work in investment banking or other Wall St type job, but I am open to other options too where I have a chance to make more than what I do now (at least after 2-3 years post graduation).

I realize age (I am on the wrong side of 30s) and the long work experience will probably not make it easy to get into a top school. Also worth noting is that I have a speech impediment problem. I usually do OK speaking to a single person or a small group of people (most times it's barely even noticeable), but not so well while doing a presentation, when my speech gets stuttery and jittery. So I am concerned if this will affect my performance in the program and later in the job (as an engineer, it has not been a problem when talking about work related stuff with my co-workers).

Any advice on whether it will be a good move to get an MBA (in terms of cost vs benefit)? What are my chances of getting in a top 10 school? I am hoping for a 700+ gmat score, but don't have a lot of extra curricular activities to show on my resume. Any recommended area/specialization? Thanks!

Comments (43)

Apr 7, 2015

Hate to be blunt but by and large to get an I-Banking Associate job you need to go to an M7 or at least a top 10 school and you're a little too 'experienced' (read: old) for that. Never mind the fact that there are kids with 1/2 your experience cracking 200k at places like Twitter and Uber. The fact that you're kind of old and have 'topped out' at 150k is also not a plus point.

tl;dr - Yes, there are exceptions (and I *fully* understand your pain) but you're a real long shot :( Maybe consider becoming a dev manager or doing a part time MBA and going into product management.

Edit: really? monkey shit for this? morons.

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Apr 7, 2015

Thanks valleybandar. I'm in hardware, which doesn't pay as much as software these days. 150k isn't topped out, but for hardware it's about 200k or a bit more (unless you go to middle management type roles).

Apr 8, 2015
valleybandar:

Hate to be blunt but by and large to get an I-Banking Associate job you need to go to an M7 or at least a top 10 school and you're a little too 'experienced' (read: old) for that. Never mind the fact that there are kids with 1/2 your experience cracking 200k at places like Twitter and Uber. The fact that you're kind of old and have 'topped out' at 150k is also not a plus point.

tl;dr - Yes, there are exceptions (and I *fully* understand your pain) but you're a real long shot :( Maybe consider becoming a dev manager or doing a part time MBA and going into product management.

Edit: really? monkey shit for this? morons.

Full disclosure, I gave you monkey shit because your paragraph about him needing M7 or at least a top ten MBA to get an IB associate job is factually incorrect.

Apr 7, 2015

I believe that an individual should never have to "settle" for what they currently have in life, however it will always be an uphill battle and yours is especially steep. To be blunt, the main issue at hand is your age. Investment banking as an associate isn't a job that requires extraordinary expertise, they need individuals who can handle long hours and do menial tasks. Sure the money's good, but what value do you offer that recent graduates don't? As much as we like to deny it, age takes a toll on us physically and mentally.

Although you don't have kids now, what if you do want to start a family 5 years down the road? You're currently in a comfortable position with decent comp/hours, and to throw it all away for a small shot at banking is definitely risky. I do wish you the best of luck however, definitely like hear success stories from unorthodox backgrounds.

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Apr 7, 2015

Thanks Misclyfe. Point taken. Is there any area of work (finance or otherwise) after b-school where the pay is > 300k annually (averaged over a few years)?

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Apr 7, 2015

No. That is all.

Apr 7, 2015

[email protected]#k it, do what you want, yolo man yolo!
Why are you asking us how to live your life?

Apr 7, 2015

From my understanding, you have a higher chance to aim for an IB boutique. From there you can leverage position to a BB if that's your goal.

Apr 7, 2015

@companion: For someone with my credentials, what type of schools (by that I mean ranking) do I need to go to for an IB boutique? Are you referring to the reputed ones or just some obscure IB boutique? How much do they make?
Here is my math. I need to be making at least 300k (perhaps more) annually averaged over the next 10 years post graduation to justify the total cost (school cost + opportunity cost). What is the earning potential for an average (not some rockstar) person in IB?
Thanks.

Apr 7, 2015

Even if you can get into a good MBA program, you have a time value of money problem. You spend $200k and have significantly less career than the typical student to make it back. Once you adjust for the fact that your income is already pretty high and you will be working twice as much in IB, I think you'll find that you're earning quite a lousy return on your tuition.

Apr 7, 2015

If you're talking about actual IB, then the risk /return might not be worth it just because you'll spend so much on the MBA. If you're willing to consider ER here's my opinion as a former ER intern:

You might not get paid as much right out of the gate (how big the pay differential is depends on the firm), but the pay ceiling is much higher than your current job. Additionally, you wouldn't need an MBA (though getting the CFA would probably be a necessity eventually). Plus, your experience in tech will be seen as a major plus for covering any tech-related sectors.

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Apr 7, 2015

To add on to what I was saying, of the four analysts I worked with, only one came from IB, and only two of the people in my office came from top-tier schools (this was an upper MM firm).

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Apr 7, 2015

I don't think asking a bunch of 20 year olds is going to give you much useful advice. I think the ER suggestion above is a decent one.

@"Betsy Massar". What do you think?

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Apr 7, 2015

Becoming an investment banking associate is not optimal because you are not using your experience to your advantage. As others have mentioned, you don't need much experience from other fields to fulfill this position.

Are you interested in investments? If yes, you can definitely look into equity research, private equity or venture capital. While they are long shots as well, I think these are the areas where you can leverage what you've learnt as an industry insider. For example, when people want to invest into companies in your current industry, you will be able to provide better advice with useful industry insights. So start reading all the finance-related books you have access to, buy the classics, go outside and start networking.

Apr 7, 2015

Two things:

1) This point has already been addressed, but you are severely underpaid! I live in SF, and have roommates that are a few years out of school raking in that much with mid-tier companies. Don't pigeon hole yourself into hardware if you find yourself hitting a ceiling there.

You know machine level code, have a masters in CS, and presumably know a few scripting languages. You can easily score a Sr. Software Engineering gig that pays more than that.

2) Forget about the MBA and Ibanking. It's not a good investment at this point in your life, and you don't want to be an associate at the age of 32.

Focus on your current situation. If you want to make more money, try and find a promising early stage startup that will give you equity. Try and learn a language that's hot right now (read: Any of the popular frameworks of JS), and leverage that into a Sr. level gig somewhere. Web is where it's at.

These are risks, and they might end up biting you in the ass. But they're all preferable over coughing up 200K for an MBA and grinding 80 hour weeks at a boutique Ibank at the age of 32.

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Apr 7, 2015

@Goldpeak: I'm not severely underpaid. This is the standard pay in the industry I work in (semiconductors). Your friends are lucky that are at the right place at the right time and riding the software wave. FYI, when I started my career I was in software, but hardware seemed more challenging (plus it paid a tad more than software at the time), so I switched to hardware after a couple of years. Then in the next few years things changed and software companies like google, facebook, twitter, etc made it big. Thanks for your advice, although at this point I don't have any intention of going back to software.

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Apr 7, 2015

I think the most important thing to ask is why do you want to get into investment banking? You've cited compensation from what I understand. From my conversations with others in the industry, as well as many comments I've seen here, considering only compensation is a poor choice, and burnout is a very real possibility.

You need to ask yourself: besides compensation, is there any other reason why you would want to get into banking? Is there anything about banking you are passionate about, or broadly speaking, what are you really passionate about?

The ER suggestion above is interesting, and I would mention considering venture capital as another possibility considering your tech background.

Apr 7, 2015

You need to ask yourself the hard questions as to what's making you unhappy in your current situation.

Apr 8, 2015

Your best bet is to try to get into venture capital. Your engineering experience will actually be a positive instead of a potential negative, which will boost your earnings out of the gate and increase the chances that you'll increase your pay.

You probably would not need to get an MBA to switch to a lower-middle market boutique IB if you have some contacts and can study your ass off for interviews, but the pay would start lower if you skip the MBA.

Apr 7, 2015

Thanks sailSF. So if I want to get into venture capital, but don't take the MBA route, then what actually do I need to do? Like, do I need to get any degree or certification?
Also, is it possible to do this part time without leaving my day job (at least at the beginning)?
You also mention that an MBA might help to get a higher pay. Are you referring to full-time MBA? Will getting a part-time or EMBA (one of the better ones) help in this respect?

Apr 8, 2015
pm528:

Thanks sailSF. So if I want to get into venture capital, but don't take the MBA route, then what actually do I need to do? Like, do I need to get any degree or certification?

Also, is it possible to do this part time without leaving my day job (at least at the beginning)?

You also mention that an MBA might help to get a higher pay. Are you referring to full-time MBA? Will getting a part-time or EMBA (one of the better ones) help in this respect?

Biggest effort needs to be put into networking. Take some online courses / VC interview prep packages (I think there is a WSO VC interview Prep?), understand the industry, and reach out to people. Cold call, go in person, do anything to show that you are desperate to get this job.

Your comment about starting part time makes me believe you aren't committed enough to this idea.

Apr 8, 2015

Sounds like you are burned out and need another challenge. As an engineer with your experience I don't think you will have a problem getting a better salary elsewhere or even starting your own company.
Unfortunately, I-Banking involves tedious work as well. I would speak with people in the field to see if this is what you really want.

Apr 7, 2015

Thanks all for your input. So I guess doing an MBA (and going into IB) is not that viable of a plan. I will do some research on the other options suggested, like ER and VC. It is also worth mentioning that I have almost no background in the areas of finance, economics, etc. (other than casually reading some books on those subjects). I am thinking it might be a good idea to enroll in a course at a local college to gain some knowledge on these. What are some of the main courses that you can recommend? (I guess finance and economics will make the list? Anything else?)

Apr 7, 2015

Thanks also to OG Monkey, jkjeff and sfgfan10 for the recommendation.

Apr 8, 2015

Hi if i had your experience i would do an MBA and get into upper management even maybe CTO or CEO thing, very very less work and very very much more pay :D

Apr 8, 2015

VC will be extremely difficult to break into. It isn't exactly a fall back or safety net as it's very competitive, it's a much smaller world than IB, PE or HF's (VC's simply don't employ that many people because they don't have to) and typically top performers in top groups at top IB's, or industry folks who have a successful exit or were top product people at the Googles of the world can break in. So look into it but I wouldn't waste much time. In my opinion VC is probably the toughest finance related field to break into but that's probably another discussion.

You can try for IB but, as others have stated, don't do it because you read that it's a sexy business where people make tons of money. You'd most likely need a top MBA at this point, which will be difficult to get into at your age (I'm 40 and it sucks when you realize that you're too old to do certain things). A boutique (and I'm not talking about the EB's) will be somewhat tough because they don't have the capacity to really train people and since you don't have finance skills and don't know how a transaction works, I'd say that'll be tough. In addition entry level IB, undergrad and post MBA, really sucks, from the amount of time you put in to the dullness of the work. And if you're 12 years in I'd guess you're 34 or older, meaning that by the time you get your ducks in a row (GMAT's, apps, etc) and assuming you get into a top bschool, you'll be >37 when you graduate. That's pushing it for IB. Not impossible but not very likely. Just like the Marines have a max enlistment age of 27 (I know there are some variations on that) because they know it's tough to mold an older person into a Marine, IB doesn't like older people who would wonder why the fuck they're sitting in their office until 2 am reformatting a powerpoint for the X time (and no direct comparison meant between being a Marine and working in IB).

Why don't you try to move up into management in your current field? See what qualifications your bosses and their bosses have and get those. Talk to them about how to advance at your company. I don't know if a part time MBA would allow you to advance in the Valley because so many traditional top MBA's want to work there, but see if doing a part time Santa Clara MBA, or something similar, would give you a better chance of moving up. Also consider doing one and moving to another area. It's the good and bad about the Bay Area tech scene: it's the epicenter with the most tech opps by far but that just attracts every person with incredible pedigrees so it makes it tougher if you don't have the Stanford/Harvard MBA with Goldman/Google pre-MBA experience.

The ER route is interesting but I have no real knowledge of the field.

Just my 2 cents.

Best Response
Apr 8, 2015

If your goal is to make serious money and advance beyond grunt or mid-level drone, you need to change the way you think about things

Based on your brief description, I'm guessing you are the typical overachiever: you've organized your life around "succeeding" where "success" is defined by awards, medals, degrees, honor rolls, test scores, credentials, etc. You likely assumed that if you achieved success in these forms, then things like money (and power and sex) would follow.

But it didn't. Make no mistake, you are still doing well relative to the general population ($150K is a great salary and working as a hardware engineer at a SV firm is something not many people can do), but you still feel like a low-level grunt who is far from "making it." Naturally, you assume the reason for this is because you don't have the right credential or you went through the wrong crucible, which is why you think an MBA or switch to IB could be the way out of your predicament. It isn't.

Age aside, if you went and got an MBA and landed a gig as an IB associate, you almost assuredly would run into the exact same problems. You would end up lost in the middle of some IB organization, doing grunt work, putting in long hours, and feeling again like you were far from "making it." You might be getting paid a little better, but likely not enough to make a significant difference in the way you live or feel. Being mid or low level in an organizational hierarchy is a miserable grind, no matter the industry.

So what should you do? You need to stop focusing on credentials and whether or not you're in the right industry and instead figure out how to always protect and advance your interests. This may mean you need to change organizations or industries, but it may not. There could be a path to senior management and lucrative payouts within your current firm if you just improve your organizational literacy (i.e. you figure out how to efficiently maneuver through your organizational hierarchy). You'll need to decide that for yourself.

Re: the presentation issues, this is kind of a stab in the dark but I've noticed that people who have trouble presenting in front of groups typically do not view themselves as having high status relative to the group. They either believe that they are intrinsically lower status than the group or they give the group the real-time ability to determine their status, which implies that the group is actually higher status.

It's difficult to be confident and speak eloquently when you perceive yourself as lower status. Try playing with your perceived and projected status and see what impact that has.

Apr 9, 2015

Let me summarize:

Your situation:

a. 30+
b. Senior Hardware Engineer, average performance
c. Speech impediment (assume you can't overcome this and become a good communicator)

Options:

1. banking, no (because of a/c)
2. equity research, no (because of c)
3. VC, no (because of a/b)
4. HF, possible after MBA
5. Product manager, possible after MBA or without MBA
6. Startup, possible after MBA or without MBA

I think you should not go into sell-side finance given your situation. Most sell-side role are more about sales/relationship than technical knowledge. If you can't comfortably network with people and do presentation, you can't succeed in those roles. Public market investing is an exception since it is more about research than communication. I can't judge your potential in HF/AM based on information you give but it might be possible if you have deep knowledge about your sector.

In term of VC, I think you are not senior enough to become a partner and junior enough to become an associate. As @Dingdong08 mentioned earlier, it is the most difficult area to break in right now. I'd suggest you consider something else.

I think your best shot is either product manager of some growing hardware startup or start your own company. Experience actually helps you here and many successful SV people have speech issues (people may make fun of you but won't disrespect). MBA may help you here (probably part-time)

Last, IMHO, people rarely succeed in another field if they can't succeed in current field, unless their personality/skills set fit new job perfectly and not desirable in old job at all. Don't expect switching job/industry can magically solve all the problems. Figure out why you can't succeed in your current job first and see if the new job really fit you well before making conclusion.

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Apr 7, 2015

@youayou" : Excellent post. Thanks for breaking it down. So outside my industry, the only business/finance related role that you think of might fit me is one in HF. You mentioned going the MBA route for this. Can you please elaborate a bit? Is this possible with a part-time or a EMBA degree? What type of role would it be? What's the pay range?

I agree with what you mentioned about being successful in a particular field and changing field. It depends on how you define being successful in a particular field. If you're saying that I'm not successful in my field because I'm not in the top 5 or 10% of engineers, then you are probably right. From what I've seen, I believe I'm in the top 25 or 30% category. It's not that I can't succeed or haven't succeeded in my current job. It's a question of how much earning potential I have in my field. If I change job now (the market is decent), I will probably make 10 or 15% more for the same role. But that's not my goal.

Apr 9, 2015
pm528:

@youayou : Excellent post. Thanks for breaking it down. So outside my industry, the only business/finance related role that you think of might fit me is one in HF. You mentioned going the MBA route for this. Can you please elaborate a bit? Is this possible with a part-time or a EMBA degree? What type of role would it be? What's the pay range?

I agree with what you mentioned about being successful in a particular field and changing field. It depends on how you define being successful in a particular field. If you're saying that I'm not successful in my field because I'm not in the top 5 or 10% of engineers, then you are probably right. From what I've seen, I believe I'm in the top 25 or 30% category. It's not that I can't succeed or haven't succeeded in my current job. It's a question of how much earning potential I have in my field. If I change job now (the market is decent), I will probably make 10 or 15% more for the same role. But that's not my goal.

Don't get me wrong. I'm not suggesting HF is easy. It is more challenging than banking or equity research. It gonna take a lot of efforts to explain to you how the process works so I suggest you use search function. There are a lot of good posts about it. In short:

1. pay is good (better than banking, no upside limit)
2. age is less a concern
3. school name matters (think Wharton/CBS/Booth)
4. full-time is better but not required
5. engineering experience is somewhat useful if company's growth/revenue/profit are technology driven.
6. you need to be really good at investment research. It is a merit based recruiting process. BS doesn't work. Some people can do it and some can't.

Regarding last point, read some classic value investing books and spend 1-2 weeks researching semi-conducting industry, figuring out some sort of investment theme (future of industry revenue, profit margin etc), and giving recommendation on which company to buy. Post your analysis in hedge fund forum here and people can judge whether you have the talent to make the cut.

Apr 10, 2015

You don't need an MBA to crack into finance. It is probably easier now for an engineering/CS type with some experience to break in than it is for a raw undergrad.

I was a topped out engineer 9 years ago. I made a good move to a better engineering position in New York.

I then joined a large bank at age 50 and then moved on to prop trading/hedge funds shops. I get awesome offers for new jobs every week. I'll probably hit 7 figures soon.

You can do it too if you can show how your skills match those needed for a developers job. This is not about knowing finance, it is about knowing about high performance. Those are skills that are in demand -- and there, real industrial experience is a plus.

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Apr 7, 2015

@Grizzled Guru : Thanks so much. Can you please explain a bit? What kind of engineering job did you take in New York? Was it in the finance industry (something like algorithmic trading)? So what did you actually have to do to move from that engineering position to prop trading/hedge fund? Is it like you set your foot in the industry by working in the engineering job, made contacts and learned about trading, and then switched to prop trading?

Apr 9, 2015
pm528:

@Grizzled Guru : Thanks so much. Can you please explain a bit? What kind of engineering job did you take in New York? Was it in the finance industry (something like algorithmic trading)? So what did you actually have to do to move from that engineering position to prop trading/hedge fund? Is it like you set your foot in the industry by working in the engineering job, made contacts and learned about trading, and then switched to prop trading?

He means you don't even needs to know finance/trading if you have appropriate technical skills. In the old good days of high freq trading, an outstanding FPGA engineer could easily clear half million doing only engineering work.

I think you need to be more clear about what you want to achieve. Do you like engineering work? Will you feel satisfied if you do similar kind of work but earn much more in another industry? Or you really hate engineering/programming and just want to do something entirely different?

I was under impression that you hate engineering work since you mentioned MBA and not interested in other side of silicon valley. If you are confident about your technical skills and willing to do technical work in financial industry (with better pay/excitement), there are a lot of more feasible options than ones I listed earlier

Some references about how FPGA applies to HFT (http://quant.stackexchange.com/questions/10519/how...)

Apr 10, 2015

I think you should learn how to invest. I think with a frugal lifestyle and no family obligations you can build a significant amount of capital on 150k a year in addition to whatever it is you have saved up already. I suggest you buy the book Hedge Fund Market Wizards and read the Tom Claugus Chapter. I admire the way you responded to these toxic (though not untrue) comments. There is no reason you could not be a Mike Burry or a Tom Claugus. Keep at it.

None

Apr 7, 2015
sticks4brains:

I think you should learn how to invest. I think with a frugal lifestyle and no family obligations you can build a significant amount of capital on 150k a year in addition to whatever it is you have saved up already. I suggest you buy the book Hedge Fund Market Wizards and read the Tom Claugus Chapter. I admire the way you responded to these toxic (though not untrue) comments. There is no reason you could not be a Mike Burry or a Tom Claugus. Keep at it.

Thanks for the encouragement :) Will do as you have suggested.

Apr 10, 2015

I think a full time MBA at this point might be counterproductive. I also think the term "investment banking" is used very widely in some circles whereas most people in the financial services business use it more narrowly - pertaining to M&A, advisory, bringing equity or credit deals to the market, etc. Most people who work in sales and trading, equity or fixed income research, asset allocation, Asset Management/portfolio management, etc would almost never say they work in "investment banking". It sounds like your skill set may match up better for a technology/applied math/quant buyside role. I have seen multiple offerings for people with heavy quantitative backgrounds. I think recruiters for certain technology/modeling oriented roles look really favorably on anyone with a hard-sciences background. Saying you have no chance in "investment banking" might be true when looked at through a narrow lens. However, I agree with some posts in this thread that imply you probably have some good options with a MS in CS but less options in traditional investment banking.

Apr 7, 2015

@drive4show : Thanks. Yes, being an outsider to the finance industry, I was using the term "investment banking" broadly.
If MBA is not a favorable route in my case, what should be the path taken to break into those roles that you mentioned? I am not sure just having an MS in CS is sufficient. I have seen on message boards that in most cases people do have specialized degrees (like MS in quant) to enter these fields. I am not saying I am going to go get those degrees now, just trying to understand the options.

Apr 13, 2015

I know quant firms take people with just bachelors in CS or math (they tend to be super genius grads from places like MIT though). In fact places like Jane Street are a CS grad's wet dream, as you probably know. I think you actually might stand a good chance as far as interviews go if you're decent at stats and can do the problems on Project Euler, which require not-too-advanced knowledge of number theory, probability, and combinatorics.

This has been my knowledge as a mere undergrad. I don't imagine it's too different for more experienced hires unless they're requiring PhD level knowledge.

Apr 7, 2015
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Jun 13, 2018
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