Sell 7-figure business for EB?

Hi all,

In a bit of a conundrum here and would be interested in your opinions.

I have an EB FT 2022 offer in hand for NYC and have heard good things about the team culture.

The issue is that the business I founded is valued at around $1.5m at the moment that could potentially be sold at any time with 1-2 months of intense work (booming demand for my business type). I feel confident I could do it all again if required and really enjoy the autonomy of 'being my own boss' vs the opposite of that in IB which I spent a summer doing last year. Because of this, IB long-term isn't really an option, I'd be looking to do it for 1-2 years for the development of a different skillset (professional skills, seeing how a larger org operates, working in a larger team etc.) and the likely benefit of having IB on the resume for raising capital for any future businesses (I assume this will have a significant impact on ability to raise capital by showing I have a professional side as well?).

Essentially, I feel I currently have the skillset of building a low 7-figure business but want to expedite the process of learning how to build/attract the right investors to get to 8 figures, and I'm wondering if a year or two in IB will help me to do that.

Part of me feels crazy for even considering the IB offer, but another part says it may be the prudent long-term move as I see many of the most successful startup founders (in terms of capital raised) these days have spent a few years in a professional setting, whether that be IB/PE/consulting and find that trend hard to ignore.

Regardless of how much I automate, doing both IB and business is a no-go really as I'm fairly confident the business will die a slow death, so it's one or the other for a year or two really.

All opinions appreciated, thanks!

Comments (63)

Most Helpful
Dec 1, 2021 - 9:41am

You're sitting on a 7-figure business and you want to do banking?? Banking is for those trying to get into your position, not the other way around. I can't imagine giving up a successful business to go make pitchbooks and update the diligence tracker in a dataroom.

How exactly will the banking experience equip you to make an 8-figure business? You're correct in that most modern founders have prior work experience; however, you already have solid experience (i.e. building a successful business). If you're looking to start a new business, I'm confident a successful exit from your current business will be worth more than banking on your resume for capital raising purposes.

Maybe I'm a bit jaded being salaried my whole career, so far; I personally dream about starting my own business.

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Dec 4, 2021 - 10:09am

Thanks for your response. Makes sense what you say re a successful exit being enough for raising further capital. I just imagine that that coupled with a year in IB would make it that much easier to gain funding, attract talent etc. Maybe what I need to do is actually speak to a few VCs and get their opinions from a potential investor's perspective. Nevertheless, I appreciate you weighing in and obviously a lot of people concur judging by the SBs 

Dec 6, 2021 - 10:00am

I don't think IB holds that much weight for fundraising purposes. If I think about how some of the smaller PE funds founders raised money, they mostly had previous PE experience plus an MBA.

Honestly, if you want a desk job that will help future business endeavors, I would think VC is the best place be. Not too familiar with how VC recruiting works, but I have heard that they like former business owners. If you make a broad network within the VC space, I'm sure that will boost your fundraising chances.

Good luck!

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  • Intern in IB-M&A
Dec 1, 2021 - 10:05am

EBEntrepreneur

Essentially, I feel I currently have the skillset of building a low 7-figure business but want to expedite the process of learning how to build/attract the right investors to get to 8 figures, and I'm wondering if a year or two in IB will help me to do that.

How will building pitchbooks, spreading comps, and aligning logos help you do that? I'm genuinely curious as I've been an analyst for 6 months and have not learned anything regarding how to attract the right investors to move up from a 7 figure to an 8 figure business. If any other analyst has had a different experience, please chime in.

  • Analyst 2 in IB - Gen
Dec 1, 2021 - 11:48am

I will say its more true now than ever before that raising financing for early stage businesses (especially technology) depends heavily on founder pedigree. Raising 1-2 mill (7 figures) is legitimately free in this environment if you're someone that went to a good school and has work experience that venture funders value (big tech SWE, MBB consulting, EB/BB banking or MF PE). I think it's a little different when you're selling a business altogether (so they know the founder is leaving and care only about the asset not the staff), but for future purposes of launching a business, having good work experience can be helpful getting that next round of funding to go from 7 to 8 figures. 

  • Prospect in IB-M&A
Dec 1, 2021 - 1:06pm

Weird that this guy's above comment would get MS. He's expressing his opinion, which is a totally reasonable one. No one knows what the "right" move is here, but both paths have validity.   

  • Intern in IB - Gen
Dec 1, 2021 - 1:19pm

I started a software SaaS business in high school and sold it my freshman year in undergrad for around ~$2m. Figured that it wasn't something I wanted to do the rest of my life and that I'd rather take the money to have the freedom to do whatever I wanted.

Fast forward to the present, I am now a junior who decided that IB would be the best path for me post undergrad for many of the same reasons you have stated (financial skillset, pedigree for future capital raising, network), and will be heading to a top TMT group. 

I look at it like this, the value of IB experience far outweighs sacrificing two years of my life as it will make my future entrepreneurship endeavors significantly easier to raise capital, attract top talent, get into incubators/accelerators due to network, Bschool, etc. Essentially, sacrifice two years to have a better chance at starting something on a bigger scale and I firmly believe that IB will help me in that pursuit. 

  • Prospect in IB-M&A
Dec 2, 2021 - 3:22pm

Lmao I actually go to Stanford, though I can see why you're so desperate to vicariously live the life of a "hypertarget (WYD/Oxbridge/LSE)" graduate, whether you went to D/LSE or some total shithole like UCSB.

Dec 1, 2021 - 1:29pm

Maybe if this was an investing job that looks at and diligences a high volume of opps but banking won't help other than sticker branding but presumably you're from a good school etcHonestly have you thought about going for like 3-6 months, long enough to finish your SIE exams and stuff (or not) and then quit or get fired if all you want is 'the name'. You can spin it however you want.But to be honest I think it'll br crucial to work on your business. No one knows when the music will stop and the cycle will come to an end which is more of a reason to strap in and try and make the most of your business asap. How much is recurring revenue / would you be able to pay yourself even if the economy tanks a bit?

Dec 4, 2021 - 10:40am

Yes, am thinking this is the play to be honest. Do a year max in IB for the branding while keeping the company ticking over then get back to business afterwards. Largely recurring revenue, can't imagine revenue would dry up much in a recession but demand for the business would ofc fall quite a bit

  • Associate 3 in IB-M&A
Dec 1, 2021 - 2:02pm

I'd do a year in banking, especially if you say this isn't a once-in-a-lifetime opportunity and you could do it again. If this was your unicorn that you KNEW you wouldn't be able to replicate, different story. Take the cash and flesh out your next idea, then get it started right after your first bonus.

You can go into IB and mostly coast without worrying about bonus or PE. I don't think the skillset is that spectacular if you want to be a founder, but unless you have Harvard/Stanford undergrad, it legitimizes you to have it on your resume.

  • Associate 1 in PE - Growth
Dec 1, 2021 - 4:31pm

I currently have a >2 m business but I am still in growth equity. I think the question really comes down to, 1) can the company run by itself for 2 years when you start FT and 2) are you doing IB to get into VC/growth equity.

If the answer to any of the above is no, then I would not consider doing IB. PM me if you want to know why I am still in growth equity despite having a successful start-up. 

  • Analyst 1 in IB-M&A
Dec 1, 2021 - 8:04pm

Why not do VC? Same credibility as IB, probably way more in entrepreneurship circles. Would actually help you think about scaling a business, fundraising, etc. VCs love hiring founders, so you'd be able to get your foot in at most any shop.

Like everyone here has said, junior IB is a joke in terms of teaching skills other than PowerPoint and maybe some basic financial modeling.

Dec 1, 2021 - 9:17pm

Was going to mention this. If you want to build your network to get access to greater capital for your next startup you might as well go straight to VC rather than beat around the bush with IB. 

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Dec 2, 2021 - 12:47am

95%+ of people at your EB would leave in a heartbeat for the opportunity that you would give up to do it. You are vastly overrating the team culture and underrating the vaue and freedom of having equity in a business. If the bank name starts with "M" that figure goes up to 99%

Be excellent to each other, and party on, dudes.
Dec 2, 2021 - 4:35am

I understand your thought process as you may be more risk averse at it relates to your future. However, if you're really able to realize a 1.5M liquidity event, continue building your business or maybe start another business as clearly you've done something right and you may be able to do it again but on a bigger scale. You need to evaluate whether post-sale you'd be okay with being a bottom of totem pole peon or whether you'd be willing to take a new risk with a solid financial cushion to make sure you get through your day to day life.

  • 3
Dec 2, 2021 - 3:30pm

Agreed, any of the things you would have learned by starting in a professional environment can be outsourced by hiring people with that experience once you start to scale. IB analyst work is not that relevant to entrepreneurship, and the biggest benefit would be the resume building. If you already have a target school on your resume, I would probably skip IB altogether. You answered the question yourself when you said you enjoyed being your own boss more than you would enjoy IB. In the end, there is no bad decision, and I suspect you will end up more successful than the majority of us on here.

  • PM in HF - Other
Dec 2, 2021 - 4:27pm

Know a few people that were in your situation and did banking then PE/ownbiz etc…

Know some folks are tired angry analysts. But reality is finding a business and growing a business are much different skills and if banking attracted you in the first place you may not the pure founder type. Those guys who did banking really matured and developed to a level to really grow their next venture.

Dec 4, 2021 - 11:16am

Thanks for your response. I think banking appeals to me in its ability to help me realize my business plans faster rather than in the banking work itself. Out of interest, how long did those guys you mentioned went to the next level after banking work in banking for?

  • Analyst 1 in IB - Cov
Dec 2, 2021 - 7:13pm

Are you the sole owner? A $1.5M cash out (or much less if you're diluted) may not be worth bailing on a highly lucrative elite IB role. Especially since the $1.5 sounds more like a possibility (contingent upon a few months of grinding) than a guarantee. 
 

the risk-adjusted answer is to probably go IB. If there were a higher ceiling on the business would be a no brainer but it's complicated. 
 

perhaps you can ask your firm for a one year deferral given the circumstance and do both 

Dec 4, 2021 - 11:18am

Hi, yes I'm the sole owner, revenue is roughly doubling YoY so 1.5 certainly isn't the ceiling. I'm thinking the best bet is to allow the business to coast for a year (perhaps hiring someone to take over temporarily) while working in IB, then resuming the business afterwards.

Dec 2, 2021 - 10:21pm

How about incubator programs? These programs were created specifically to help start-ups succeed.

Depending on the quality of the one you find, you'll have access to:

1) Many mentors who have / had previously run successful start-ups

2) Various panels / workshops which are specific to scaling your start-up (Banking does not teach you how to improve operations from the ground up)

3) A network of various other start-ups (They usually accept cohorts) who you can learn and grow with (The people you meet in banking won't be as entrepreneurial)

Although banking will be helpful objectively, I believe it will be diminishing returns compared to other avenues you could pursue.

As well, it doesn't touch on other core skills required such as B2B sales, marketing, UX research, etc. etc. which you need to grow a start-up. 

This is just my 2 cents!

  • Principal in RE - Comm
Dec 2, 2021 - 11:44pm

I'll bite. 
Here's my story: 
Built a M&A Low mid-market practice while in undergrad, was averaging around $500m in sales volume per year over a 5yr span. Sold it to a MM PE firm. Walked away with 85% equity Which basically nets out $50m+ 

By doing this I built a really nice network of a lot of people in the finance & tech space. 
I didn't work at any established firm and don't plan to because the insane freedom far outweighs the prestige of joining a larger firm. 

What you should understand: 
No matter who you are, if you bring a good deal and have a decent understanding of the fundamentals, a potential buyer will respect you enough. No one asked me how old I was or what school I went to or what BB I worked at. They care about the deal. 
A network can be built with or without a job. I think you need to speak to other million dollar founders and seasoned execs at banks or PE firm and etc. That's how you will know what you wanna do. 

Just my 2 cents. 
 

  • VP in IB - Cov
Dec 3, 2021 - 1:46am

Built a M&A Low mid-market practice while in undergrad,

?

was averaging around $500m in sales volume per year over a 5yr span.

????

Sold it to a MM PE firm. Walked away with 85% equity Which basically nets out $50m+ 

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  • Principal in RE - Comm
Dec 3, 2021 - 3:28am

Yes. It was mainly due to the partners I worked with. They been transacting for decades and were well connected. My specialty was the ability to run the team like a newly built ford. 

I brought the business practices, they brought the industry knowledge and network. 

Now, I just use my own capital to buy Low Mid-market firms with a few other new younger partners I have in a few industries that are interlinked. Basically working towards creating a decent small conglomerate. 

  • Analyst 1 in IB - Cov
Dec 3, 2021 - 11:02am

Built a M&A Low mid-market practice while in undergrad, was averaging around $500m in sales volume per year over a 5yr span

wat

Dec 4, 2021 - 11:20am

I quite enjoy getting 'in the weeds' of a business rather than just analyzing the idea/business like a VC so GE would probably be the ideal fit. Issue is that GE spots aren't really accessible out of UG so would likely have to do a couple years in IB before pursuing that

  • Analyst 1 in IB-M&A
Dec 4, 2021 - 11:24am

If you complete a successful sell side of your own business that is quite literally all the "IB Experience" you would ever need. Go to VC or continue in industry or something you like - you can skip the grind

Dec 4, 2021 - 2:14pm

I would suggest you to do MBB strategy consulting instead to be honest if just running a business and brainstorming ideas is what you want to polish. Will get good presentation skills too.

IB will make you in someone who can churn out solid deliverables but I don't know if an analyst stint will get you a big picture  

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Dec 8, 2021 - 5:21pm

You're crazy. Keep growing it.

You can always get back into banking via MBA.

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