WARNING : Do NOT enter IB (coming from a VP at a BB)

For the past 7 years, I have been working in M&A at a BB and can tell you this; it is never going to get better, not even senior banking. When I entered the industry as an analyst in 2013 many of the MDs and Directors were leaving the firm to go work at a young and growing fintech firm. This was undoubtedly the right decision since most of them are now clearing 500k, are working half the hours, and have an actual life(something no one in IB has).

Your life is going to suck

Back then, I thought that once I get to VP, the hours will get better and the pay will be better than any other industry, I couldn't have been any more wrong. Most people will not get past the director, and everyone who is a director and below regularly works 80 hours a week. Even my MD was clocking in 80 hours a week, 30% of the time. When you are working this type of hours, you are not going to have a life outside of the office, and combined with the extremely high-stress nature of the job, your life is going to suck. Half of my coworkers are depressed and the others aren't doing too much better.
Most people enter IB thinking that they are going to be making more money than they can anywhere else. This is what I thought too, but was dead wrong. A lot of my friends who entered tech after college are all making 400k-800k and are working 40 hours a week in a fun, low-stress environment where they are actually making things that matter. This is better than IB in every way.

The HF route is a great alternative

If you have a strong passion for the markets, then going down the HF route is a great alternative as well since you are having fun and making more money than IB. Young companies that are rapidly growing are a great choice too because you enter with a relatively low salary (100k-200k) but this comes with work that is actually interesting and very low hours. If you are able to choose the right firm then picking up that job can even eventually become a 5M check. Just keep in mind that you probably will not make that much money but as the industry is growing, the 200k salaries will grow as well. I am going to be starting a job at a growing fintech firm that specializes in asset management (has grown rapidly over the past few years and has a couple of hundred employees) this year as a machine learning engineer where I will be working half the hours and being paid around 200k with the chance(its a slim chance) of making potentially much more.

If for some crazy reason you do enter IB...

For anyone trying to enter IB or currently in a junior position, I strongly recommend that you do not join IB since you will not have a life and there are much better options where you will be making just as much(if not more) money while working half the hours in a low-stress environment. If you are still in college then there is still hope for you to be able to break into big tech and get a high-paying job with amazing WLB. If for some crazy reason you do enter IB, then just know that you are making the worst decision of your life, because that is what it turned out to be for all my coworkers and me. Don't fall into the false reality that "senior banking is not that bad" or "PE is better" because both of these are nothing more than myths.

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Feb 6, 2021 - 11:31am

Waiting for "Subway Arb" to now start becoming the term de jeur around /r/WSB....

Hear me now, children, for my occupation is of much import. For 82 years I have been an oil man, a ‘baron’ some have called me. Now what does an oil baron do? The answer - crush your enemies! Grind their bones into dirt! Make them regret that they were ever born! Oil is not for the weak - it is the Earth’s milk, and only the strong may suckle at Mother’s teat!

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  • Intern in IB - Gen
Feb 5, 2021 - 7:38pm

Did all your friends become software engineers? Or are some in other roles in tech? I'd love to join a startup/tech direct out of college but I don't know how without being a SWE

  • VP in IB-M&A
Feb 5, 2021 - 7:49pm

Software engineering is definitely the most common path in tech but far from the only one. Many people become data scientists or machine learning engineers which also are high paying. If you are a finance major right now in college than I suggest you pick up as many coding related classes as you can, if you are able to become a great programmer and demonstrate your skills in a project, then it should not be too hard for you to get a seat at a startup.

  • Intern in IB - Gen
Feb 5, 2021 - 7:52pm

I'm currently a CS and finance double major, but my internships lean heavy finance as of now. My plan was to go into IB and exit into VC / corp dev / startup after 2 years. Is this still a dumb idea, or will I be able to have a life doing that?

Basically, I'm willing to kill myself in banking for 2 years, but no more than that.

Feb 8, 2021 - 2:04pm

Business development and tech sales are good roles in tech. If you can join a pre-IPO company even better because your equity will multiply greatly over the years if the startup is successful. Browse crunchbase for a company in an industry/region you're interested in and for the love of God be passionate about the startup and what it's building or you'll hate it from the start. I'm at a seed funded company and the comp is pretty bad rn relative to IB but hopefully the equity will be great. I work an average of 35-45 hours weekly and have unlimited PTO with a 2 week notice. Most weeks I work around 35 unless we're doing something with our west coast peeps where I need to stay online until 6-7pm EST but even then I'll go workout or eat dinner after 5 so it's not "active working" just being on standby with my phone on the ready to DocuSign something or forward it to the right person.

  • Intern in IB - Gen
Feb 8, 2021 - 2:38pm

This sounds awesome. A few follow ups:

1) did you start this job right out of school?

2) do you have a CS background?

3) what is the comp, roughly?

  • VP in IB-M&A
Feb 5, 2021 - 7:46pm

Who told you that false information? The good fintech startups all pay you enough to be able to live comfortably and usually once the company starts gaining some traction you are going to be clearing 400k in no time. I know one guy who was in analyst with me quit to go work at a fintech startup  and last year when his firm was sold to a bank he pocketed 7M. His scenario was not rare at all and is actually quite common.

Feb 9, 2021 - 5:31am

Yea sure. "The good fintech startups" Let's go professional like how all bankers do right. What % is that? How was earnings lately? Oh loss? Oh...........so why? How is that going to work? "gaining some traction". Define the traction. At what point of the "traction" ya think u gonna fly? And wow, 400k in no time wow. Your friend, had the right contacts at time of his leaving. He probably was planning for it 3-5 years. Connected with that startup founder who also want to exit. Connected both dots, got into the game just to make it happen. As you can see, his investment in connection paid off. N no its not learnt through coding and unfortunately no, not all startups are unicorns. Mostly go bust and are nothing but attention whores. Let's be real, right. Its important to stay grounded and not mislead the hopefuls who frequent the forum.

  • Analyst 1 in CorpFin
Feb 9, 2021 - 7:27pm

Fintech is just more FINRA regulated companies that sugarcoated what they do. It's all BS when you get back to the roots.

Feb 5, 2021 - 8:48pm

key word: 'potentially' making much more. you are underestimating the potential for the company to not be successful. nobody is getting a big time salary for a low stress job at no risk. a startup might pay below market comp with the promise of comp bumps in the future once the company starts gaining some traction. that all sounds good but what happens if the company doesn't gain any traction, what happens if the company blows up. for every one of your buddy above who gets a $7 MM payday, there are probably many who get no substantial payday. I think that it is overly optimistic to say that your slow salary can easily turn into a $5 MM check. some might say that these kinds of promises of future success are a way to get suckers to agree to below market comp, and that falling for 'senior banking is not that bad' is just like falling for 'you will easily get a big payday at some point in the future by joining a startup'.

  • VP in IB-M&A
Feb 5, 2021 - 9:01pm

You are right on the money when you say that few startups will pay you the big bucks, but after a few years of experience most of the guys who arent absolute dogshit are making between 200k-350k which is pretty damn good for working in 35-40 hours a week. You said that there isnt any low-stress low-hour jobs out there that are high pay, but this is completely wrong. Software engineers in big tech are making 500k-1MM in a low stress, fun environment while working 40 hour work weeks. Also, there are way more SWE jobs out there than investment banking roles making it easier to break into as well.

Feb 12, 2021 - 12:29am

Do you really think SWE just sit around the office and having fun all day while making 500k-1MM. No company (idc if it's Apple, Amazon whatever) will pay anyone $500k-$1MM without getting that level of work out of them. I know friends who think wow IB people get paid $100k for editing PowerPoint I wish!! That's the perception for everything when you're on the outside. Once inside it's not all unicorns and rainbows.

Most Helpful
  • Associate 2 in IB-M&A
Feb 5, 2021 - 9:05pm

This is honestly some pretty irresponsible advice you're giving to (mostly) impressionable college kids and analysts. When I read your post my takeaway is that you're a 29 year old who has held exactly 1 job in your adult like and you're burned out on it. There is nothing wrong with that, but as someone who bounced around a decent amount in my 20s, it sounds like you have a pretty clear case of "the grass is always greener" mentality. 

For every person who gets in early at a start up and cashes out 7mm after a few years, there are hundreds or thousands that bounce around from startup to startup that fail or are constantly scrapping along. There is a lot more firm risk with this career path that you're 100% ignoring. Also, the majority of people at fintech startups not clearing anywhere near 500k? Sorry, maybe the MDs/Directors are making that much if they're running the company, but that is not a great benchmark. I'm in my mid 30s and know a lot of people from undergrad, business school and banking who work at fintech and tech start-ups and practically none of them make more than a first year associate in IB. A buddy of mine was the 20th employee at a mobile payments company that now has ~300 employees and makes less thank 200k per year. The people they hire out of undergrad do not make 100-200k per year, more like 60. Sure, he's sitting on a good chunk of equity that'll be worth a few million if they ever do exit, but he's been in that position for 8 years and is ready to cash in. And that is a success story. He got super lucky to end up at one of the companies that had hockey stick growth. Most of them do not. You don't just show up, get paid half a million dollars a year then realize all your equity a couple years later and retire.

You think hedge funds are a clear winner over banking? It is possibly the most results oriented career path in the world. Sure, maybe they don't work 80 hours a week, but your under persistent stress to make smart investments and beat your benchmarks. Funds fail all the time, whole teams get cut, you can make all the right decisions and still have everything move against you and end up completely fucked. 

Sure, its a false reality that "senior banking is not that bad", there is no work life balance in this industry. But its also a false reality that you can work in big tech or at a start up or at a hedge fund and everything is universally better. All those careers have some very obvious risks and downsides that you're completely ignoring 

  • VP in IB-M&A
Feb 5, 2021 - 9:20pm

First off, I said that hedge funds are better only for people who have a strong passion for the markets(the type of people who read 10Qs for fun). Secondly, I can guarantee you that people in big tech are making loads of money and working few hours because I know many people who are doing that. Lastly, I was a little unclear by throwing around the term "startup". I did not mean actual startups, I was referring to young tech companies that are decently sized and have an innovative product (usually something involving machine learning). I agree with you that most young fintech companies don't pay too much but the ones involved in capitals markets or asset management definitely pay their machine learning engineers and data scientists around 200k as I am doing something similar to this right now. I apologize for being too vague with the term "startup" and will edit my original thread so that no young college student or analyst gets confused.

  • Analyst 1 in IB - Cov
Feb 5, 2021 - 11:41pm

The reason you believe "most people" in tech make tons of money is that you are probably surrounded by the top x% of people in tech, given your own professional success. Most people in tech hit a ceiling around $250k-$350k. It's still solid pay for the hours and stress (lack thereof), but no where near the million-dollar payday you're claiming it to be.

Feb 6, 2021 - 3:09pm

Yeah tech is really dependent on stock growth, reason why you see SWE's at FAANG-like companies is because of the stock growth.  In IB at least you're getting cash and not have to really rely on the stock growth of the bank you work at.

Feb 5, 2021 - 11:11pm

This has come up in a few threads lately. Basically it comes down to what you value. If it's NPV banking is a great way to maximize it (if not the best). If it's work/life there are plenty of other jobs that will pay you well (but not MD $) with more free time. Neither path is inherently better. 

  • Associate 1 in IB - Cov
Feb 6, 2021 - 9:46am

You should go into the backup and look at the individual data points. Most people are in the $150k range for 1-3 years of experience.

There are also a handful of people who said they make nearly $800k with two years of experience so I could see how they data would be skewed.
 

Also look at the upside - only 3% of people in SWE get to the level where they're making $800k (this is a footnote on the site you posted). What % of finance people will make $800k+? Definitely more than 3%

  • Analyst 1 in IB - Gen
Feb 6, 2021 - 7:10am

We have to be extremely careful about what kind of tech companies we're talking about here..

Some random mid-market enterprise shop in Nebraska might be paying $60k starting to new grads but any tech company worth its salt in a tech hub will be paying at least $100k to new grads. Even early stage series A companies will be paying that. Also you're completely neglecting the equity conversation with your comp numbers. Sure, you get a base salary (+ sometimes bonus) that caps out low but you also get exposure to equity that may have a meaningful chance at adding to your net worth if everything goes well.

People don't work at startups for higher steady comp, they do it to play the net worth lottery. If you want high steady comp any larget top tech company will gladly pay you $$$s if you get the offer 

Feb 9, 2021 - 5:42am

Why the pure gamble when we have certainty. On an anological note, isn't it ironic, mankind strived for stability, exited the prey/predator environment from the forest, became civilised, n now urbanised & suffocated, turns to nature in the wild and imagines a life there as it were 000' years ago to "distress". I wonder at what point does someone come and point out the obvious and say, we should own up the distress part of ourselves. Because let's face it, its NOT SAFE out there, in the wild. We get HUNTED. BEATEN by bears, BITTEN by Lions, Pounced on by Leopards etc. list goes on. So yea, similar analogy: Why on EARTH, are we signing up for the lottery again, in the name of Tech/"potential networth" over banking/high finance. Like why?? Just cuz we "FEEL" excited? Thats like signing up for something that has 0 certainty.

Feb 6, 2021 - 8:58am

Agree 100% with this answer. I know a bunch of Series B/C startups, where CFO/COO/CSO comp is $200k-$250k max, and those roles usually require 10 years of experience. Sure, you may have 1-3 points in the cap table. If the company exits you'll get $3-5m. I've seen C-suits waiting 10+ years to get that $3m (i.e. cash $3m at age 45, because you need 10 years of experience to become C-level and 10 years to cash out). Financially speaking, IB has better expected value. And btw, $400k for VP at BB is low. VP1 is usually $450-500k and it goes up from there.

Feb 7, 2021 - 3:43pm

Maximizing your comp is a very narrow way of defining a successful career. I'd rather have lower comp but a job where my work is more interesting than rearranging logos...

Maybe finance gives you a higher expected value for comps over a 10yr run, but fuck me that sounds like such a boring career. Money isn't the sole reason people go into tech, unlike finance. Working with an energetic team in a fun office space, trying to disrupt or invent an industry is where a lot of the value is derived from. And ya, not everyone ends up at a tech behemoth, but thats the fun of being in tech. You probably have a 30-40yr career ahead of you coming out of university. Realistically, you can tell if the startup you're at is going to flare out within 1-3yrs. Which means you probably have a shot at winning the lottery quite a few times over your career - each time getting slightly smarter and slightly better at picking opportunities.

Feb 7, 2021 - 2:10pm

Yea, this guy has no idea how much people actually make at Series C level companies. A bunch of people making over 500k with ten years of experience? The founding teams aren't making near that if we are talking cash. As a non-exec level person, you are making high hundred / low two hundred in cash even as a director/VP level person. Obviously your equity can end up make you a millionaire, but you have to go years with relatively low cash comp and win the gamble, which many don't. 

Feb 9, 2021 - 5:53am

IMHO, start-up players meant for the guys/girls who can really afford such a gamble right. I mean, maybe the sons/daughters of bankers/lawyers who have way more than 500k in the account p.a. hard cold cash as pocket money who is overzealous in "SHAPING THE WORLD OF TOMORROW". 
Or, I'm GONNA CREATE SO MUCH IMPACT, I'D BEAT AN ASTEROID CRATER.
 

Proceeds to do something with not much value anyway.

  • VP in IB - Cov
Feb 6, 2021 - 8:33am

In my BB VP years I was making about 400k

That's just low. Our 2nd year associates more than that. When I was in a BB I made more than that as associate. You are not just underpaid (could be performance, could be bank), but also M&A teams at BBs act super cool but their hardo mentality for no good reason, lack of actual client connections, higher mix of douche bags and limited long term prospect make those groups a bad place to be after analyst years  

Feb 6, 2021 - 12:35pm

I suspect this is a big factor in your view towards banking, this is significantly below market. VPs at any reputable firm should be making high 400s as 1st year and up to high 600s as 3rd year. Even 2nd year associates at EBs or 3rd year associates at BBs get over 400.

Whether it's your own performance or potentially you were in a bad performing group that underpaid and overworked bankers. That number is a huge red flag of something else going on. I would also contemplate quitting if I was only getting 400k throughout my VP years.

Feb 5, 2021 - 10:06pm

Let me get this straight, you were an m&a VP for your entire career and now you're working as a machine learning engineer? As someone who studied cs in college, I have an extremely hard time believing that. 

To live is to suffer, to survive is to find some meaning in the suffering.

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  • Analyst 2 in IB-M&A
Feb 5, 2021 - 9:36pm

What a pointless thread. Most college students don't go into IB with the intention of staying. Most see it as a stepping stone to go into PE/HF/AM/Corp-Dev/etc. where you do give up two years of your life to become a 'professional' and get that "IB" stamp of approval (particularly if you're at any BB/EB or even tier 3 bank). Yes the work is mundane (moving logos for the 50th time for a MP no one cares about) but ultimately when you're sending in your resume having "Investment Banking Analyst' stands out from all the other finance jobs when going for "high-finance".

There are also a lot of reasons why IB is appealing to a lot of college kids that don't have a particular skill-set but want to make $. You don't need a technical background (i.e. coding) or need an advance degree (MD/JD) to get into the field and make 6 figures right out of college. IB out of college is one of the most risk averse jobs for undergraduate students that is why its so appealing.You mention fintech as a good exit opp, well do you know what fintech people are primarily looking for? Software engineers (which most people don't have the skills) or finance/marketing/strategy/etc. individuals which IB puts you better than 90% of the other applicants. 

I'm not saying IB is great, it honestly sucks (getting out in the next 5 months) but your reasoning for why one shouldn't go to IB is pretty weak.

  • VP in IB-M&A
Feb 5, 2021 - 9:38pm

I have been occasionally using this website ever since I was in college and want to help young guys not make the same mistake I did

  • VP in IB-M&A
Feb 5, 2021 - 9:43pm

PE is not any better than IB, AM is a practically dead industry, and unless if you really enjoy trading then you will fail in the HF industry. You said that most people don't have the technical
skills needed for tech, but whats stopping them from developing those skills? This thread is more directed towards college kids who haven't even started their career and can definitely develop those needed technical skills.

  • Intern in IB-M&A
Feb 6, 2021 - 2:29am

Welcome to applying for IB roles as an international student. It's tough out there (know first hand) but keep your head up and keep grinding. 

  • VP in IB-M&A
Feb 5, 2021 - 10:51pm

I was a cs major in college with a finance minor and entered IB for the money. Also, my wife's brother is high up there in my current company.

  • Analyst 1 in IB - Cov
Feb 5, 2021 - 11:01pm

Lol I would eat my dick if this isn't just some college kid

  • VP in IB-M&A
Feb 6, 2021 - 11:01am

Especially if you are in college, one can learn how to code and start their career in the tech industry which is the smart way to do things unlike selling your soul in an IB job.

  • VP in IB-M&A
Feb 6, 2021 - 10:56am

S&T has been in decline for quite a while now and there are half as many seats today as there were 15 years ago. The pay has also come down a lot for whatever seats are left. I suggest you watch Anton Kreil's presentation on investment banking(he was talking about s&t the title is misleading), he talks about how much worse the industry has gotten in detail.

  • Associate 1 in IB - Cov
Feb 6, 2021 - 12:28am

If your ultimate recommendation is "IB isn't great long-term" most people on WSO already know that (but I don't think it is, given your title). I would say at least 70% of people who enter IB don't plan on staying on IB to begin with. Most people are smart enough to recognize that it's simply the most efficient, versatile platform to a) develop wealth relatively quickly in your youth, b) learn different aspects about a business that can translate to other roles down the road and c) competitive to get in, but simply not that difficult to stay in (vs other roles like sales that are constantly stressful and commission-based). 

To me, this reads as a) you're a disillusioned VP who drank the kool-aid, ignored other aspects of your life in your career climb and hit a point in your career (maybe forced out of your bank?) and you deeply regret not thinking more carefully about what you wanted out of life at 25, 30, 35, 40, etc or b) you're a college reject that wasn't able to break in. Frankly if you are truly a VP, then forgive me for what I'm about to say, but the reason I think it's the latter is because not only does this read poorly (no effort formatting, redundancy in language), I struggle to believe that someone 7 years deep in their IB career is naive enough to believe that "going down the HF route is FUN" as a proposed alternative to IB (as if hedge fund roles aren't 10x more stressful with 20x more turnover than IB)

Overall this is structured as a stream of consciousness rant, but your takeaway is supposed to be this fable that IB just awful whilst drawing equivalences to other, more "fashionable" roles. No compromise, no pros/cons, no ambivalence... sorry to say if you wrote this from a place with a good heart, but this is not the type of post I would encourage malleable university students to read and draw conclusions from 

Feb 6, 2021 - 3:41am

Shitty advice, if you are great at what you do, you will most likely be abler to make great money, but many people also in tech makes much less than AN1. Working for smaller companies for a potential big payday is a huge risk of wasting many years, and only works out for few.

Feb 6, 2021 - 4:41am

I did two BB internships, and went into big-tech FT on the business side. I'd say that's the realistic alternative for strong candidates that don't have a CS/engineering background. Pay will be lower (70% or so of IB) for the first years, but WLB is infinitely better. Worked very few 50+ hour weeks in my entire time in big tech. The gap gets bigger over time though; 5 years out you'll make materially more (double) on the buyside than in bigtech on the business side, at least in London.

Regarding the SWE comments: The technical roles in big-tech are fucking hard to get, because Google SWEs are really fucking good. The people that are like "just spam l33tcode lul" are either lying, or were really smart before. You will not be able to study econ/finance and accidentally stumble in a DS position at Google/FB from undergrad.

  • 3
Feb 6, 2021 - 7:50am

With all due respect OP, I think you are very much oversimplifying things here. The biggest rebuttal point I would make is you haven't accounted for risk-adjusted earnings - i.e. what is the chance of actually getting to that level of earnings? While banking/PE is tough, it is one of the lowest risk ways to make relatively big bucks - if you're a smart, hard-working analyst/associate then you have a very good chance of making it to VP. Whereas you mentioned some guy making $5m at a startup - sure that happens, but let's be realistic that guy represents a very small minority. Most will be earning much less - as to get to $5m you can't just be good, you also need to be lucky enough to be in the right place/right time (i.e. even if you're a superstar at a mediocre startup, you probably wont ever earn as much as you would have in IB).

Also the startup/fintech space is incredibly crowded now. Your colleagues who joined in 2013 probably got in at the right time - but then equally for them it was a huge risk for them back then, as "fintech" wasn't even really a term in 2013 (at least not widely used/known by the public). So they're maybe making much more than an IB VP now - but it was because they took big risks. If it had gone the other way, they might equally be now stuck in a random corporate development job earning $120k a year.

I'm in PE now, and have a number of ex-colleagues who left IB/PE to join a tech startup/fintech etc - and while some are doing well, a lot of them are at startups that really are not going anywhere. Especially now, it seems like almost anyone can get funded to create a new startup even where the field is already extremely crowded and/or they appear to have no discernible competitive advantage.

Finally, coding really is a very different skillset to IB - I think that's something a lot of people on this site miss when they talk about IB vs tech. Sure, a smart kid can learn to code (I'm not saying that) but it's also a matter of what your interests are - in tech you can spend days or even weeks getting into the weeds in the code, whereas IB is much more about working on deals (at least past the analyst stage) as the models are really a tool to get the deal done, rather than the end product as the software/code is in tech. Personally while I enjoy coding, I would never want to be a programmer at a big tech company - as instead of working on a deal in IB/PE, I might be spending days/weeks debugging and testing code. Personally that just doesn't appeal to me (in the same way I'm sure many guys in big tech would find IB deal-making very dull). Finance and tech are really not as interchangeable as a lot of people on WSO make it out to be.

  • Prospect in IB-M&A
Feb 6, 2021 - 4:02pm

When you say IB is not just about modeling, but about making deals, what do you mean by that? What does it entail and what kind of person would do well?

  • Prospect in IB - Gen
Feb 7, 2021 - 4:16am

Interning at an EB rn so have some little experience, but what he probably means is that IB is really about advising and building relationships in the end. Thats how you get deals and mandates coming in. Honestly I'm sure our associate spend at least 50% of the time in calls or responding to client emails about advising etc. So once you get out of the analyst bucket, it is time to get into human interaction. Some ppl might not like that part and some ppl like the constant human interaction and advisory part.

Feb 7, 2021 - 8:47am

Don't get me wrong, the model is important - but at the end of the day, it is really just a sense-check. No F500 exec is making the decision to buy or sell something solely on the model - rather the model is there to validate the thesis/idea that your MD and/or the client have come up with.

On a given deal there will be tons of issues/roadblocks that come up - legal/structuring issues (ie having to consult with lawyers and/or accountants and take their advice and see how it applies in the context of your deal), managing the client/external parties such as bidders, arranging and providing financing for the deal (if you're a balance sheet lender) and negotiating what you're going to charge on said financing.

Of course as an analyst you're not necessarily going to be exposed to all of that right away (your job often is just building/managing the models, building slide decks, managing the data room etc) - but these other issues are what an associate and VP spend most of their time dealing with.

So the IB/PE model is basically just one small part of any given deal. Whereas in software development, the product/code you are designing is the final product and is ultimately all that matters from your point of view (obviously the product has to be marketed/sold, but that's dealt with by completely separate marketing/sales teams in big tech)  

Edit: type of person who would do well - someone who is technical enough to build/understand models obviously, but just as important is seeing "the big picture." Imagine IB deal making as like a chess game - your job as a good associate/VP is always to see 3 moves ahead and anticipate what external parties/the client etc are going to need and ask for in advance (based on your prior deal experience at that point).

By contrast, I imagine most software engineers need to be the opposite of big picture - ie have microscopic attention to how the code works etc, but the big picture of how the final product is sold or marketed is effectively irrelevant to their job 

  • Associate Director in IB - Gen
Feb 13, 2021 - 11:13pm

This.

Yes, finance and engineering are among the best paying jobs out of college, but they're two completely different lines of work. The types of people who excel in each aren't always interchangeable, as some on WSO suggest.

  • Investment Analyst in PE - Other
Feb 6, 2021 - 10:40am

Just based off how you write and respond to comments, I am willing to bet any amount of money that you are not actually a VP at a BB. You sound like someone who couldn't break in, had to settle for a shitty role at a fintech start-up, and is now writing all this as a coping mechanism to get over the fact that you never made it. Take a hike. 

Feb 6, 2021 - 5:59pm

Absolutely true! I was going to write the exact same thing. I am not going into the details here but the biggest flaw I disagree with this IB and SWE is NOT THE SAME THING. two different worlds, two different skill sets, two different everything. Maybe 0.01% of the entire community can lateral into a great role in Tech but even being a PM at Amazon is a joke. I'm sorry, if your not happy with your life, go out there and quit your job!

Array
  • 2
Feb 6, 2021 - 10:51am

Posts like the OP were pretty popular the past few years. I was somewhat convinced given how much IBD sucked, until I started hiring SWEs and AI/ML data scientists. Received 500+ applicants in a few days for our latest "entry level" posting and most were overqualified with pretty intense skillsets (PhDs, MIT, 10+years of experience, etc.) Space seems to be a lot hotter today and likely to get even more competitive. 

I would be surprised if you could just transition from banking -> clipping $400k cash just showing up and farting around the WeWork waiting for your $7mm equity check. 

  • VP in IB-M&A
Feb 6, 2021 - 10:59am

My buddy who got the 7M check is quite rare and he took a huge risk by going and working for a real estate tech startup with only a handful of workers, but it paid off. Most people will not be getting there.

Feb 6, 2021 - 11:04am

When you choose the group known for the worst hours at the sweatiest banks, you shouldn't be surprised that you are working long hours even up the food chain.

Array

Feb 6, 2021 - 1:28pm

One of the things I really enjoy about WSO, is the constant "Banking: don't do it!" vs. " Banking forever!" dichotomy that runs on a near weekly basis.  What is good  for those  who are thinking of banking, already in banking, or those "Freshman in HS looking to exit into VC" types is that these stories, when taken in aggregate and slightly diluted provide 360 degree coverage of what banking is.  From my favorite story of the Apollo Lev Fin banker to the daily ramblings of  overworked 22 year olds, WSO is showing ALL sides, which I truly admire.

Quick aside:  Those $200k jobs in fintech or just tech do exist, but you may have to move somewhere you do not want to (Hello, Indianapolis!),  but a majority of these are  still not at that level outside the overly expensive major hubs.

Namaste.

D.O.U.G.

  • 2
Feb 6, 2021 - 1:29pm

As others have said - this is a pretty irresponsible / misleading post.  If OP is actually a VP at a BB, which I doubt, they should have a more informed view of career tracks.  Honestly, I thought this was a troll thread, but given the engagement, maybe not.

  • IB experience - your situation sounds particularly bad.  Not saying it doesnt happen, but 'everyone works 80+ hour weeks regularly' is not typically true.  Also - if you were making $400k as a VP at a BB, that explains a lot as that was a signal that you're not cutting it and should find a new job
  • "a lot of my friends who entered tech after college are all making $400-800k and are working 40 hours a week...in a fun, low-stress environment".  No, no they're not.  This is a super uninformed view and it reads like a high schooler wrote this after watching Silicon Valley.  If it sounds too good to be true for the college kids, thats because it is.  
  • "go into HF".  Shrinking industry with even higher stress than IB
  • Startups - "enter with relatively low salary ($100k-200k)...very low hours".  Nope.  Show me the entry level start-up job that has very low hours and $200k salary.  If this is so common, why are you, as a BB VP with 7 years of experience, joining a startup that pays you $200k?

IB can suck - no doubt.  Same with PE.  The industries aren't for everyone but lets cut the bullshit about all these mythical jobs that pay $200k to entry level candidates with no experience and provide 'very low hours' and low stress environment.  You're not helping anyone with the fake news. 

  • Prospect in IB - Gen
Feb 7, 2021 - 4:21am

Currently interning at an EB, and I noticed that Associates work almost more than anaylst in my bank because of the sheer amount of live deals, and senior bankers require someone with expertise that analyst can't bring to the table. I'm still thinking of staying for a long term due to sheer amount of money you can earn at an EB, but god damn Associates/VPs get grilled hard when there are so many live deals at the same time.

  • Analyst 1 in IB-M&A
Feb 6, 2021 - 11:23pm

To be fair, I do have friends in SWE positions in unicorn / FAANG tech companies working 35-40 hours a week making $200k out of college. Amazon is definitely the worst of the bunch, but working at somewhere like LinkedIn/Google and you are set for a good work life balance and compensation. The stress is decently high but nothing compared to finance.

Feb 10, 2021 - 9:02pm

Completely true. Why are other people here talking about working hours for something that they willingly sign-up for. If you're internally motivated to do the deals, to work it all out, this is your life right? I mean, its what you want. If you don't want it, then get out, there's so many people lining up for it. Stop hogging space.

  • Associate 1 in IB - Cov
Feb 11, 2021 - 3:41pm

This is the classic "banker spin", the same shit you do with your clients. Stop giving intelligent people the "run-around".

Elite students from elite schools that can land SWE gigs at big tech firms -- FAANG, and even Tier II firms like Lyft, LinkedIn etc. -- can make higher total entry compensation and enjoy a much better quality of life than their finance peers. Period. Full stop.

Mid-career SWEs at big tech enjoy mid to high six figure total compensation, working a fraction of the hours of their finance peers. Period. Full stop. 

Long-term prospects in tech are better than in "high finance." It is literally the biggest and fastest-growing segment of the economy, outside of healthcare. Period. Full stop. 

Finally, if you are a mid-career, big tech employee clipping mid to high six-figure checks, you can always strike out on your own and start your own company or alternatively if you are risk-averse, get a huge piece of the equity pie at another promising late-stage start-up, and leave the finance MD cohort in the net-worth dust. And yes, if you have 10+ years of big tech experience, you should be able to get a senior position at a legit pre-IPO tech company with substantial equity upside.

Controversial
Feb 6, 2021 - 1:49pm

Don't understand why this guy is getting so much shit...if you're a bright kid at an Ivy in 2021, entering IB over big tech is clearly suboptimal from a career perspective. High finance, particularly banking, is on a secular decline as fees continue to get squeezed, competition increases every year, and the actual product offered continues to become commoditized. 

Tech is on a secular ascension and keeps penetrating / permeating more aspects of everyone's daily life. The opportunities will only grow and it's still very early innings.

If you're an average kid from a non-elite school, sure, there's still some good short term upside if you can manage to get into front office finance.

If you're an elite student at an elite school, it's a no-brainer for tech. Anyone who says otherwise is just clowning themselves with confirmation bias at 2AM after their MD emails "pls fix".

Feb 6, 2021 - 6:06pm

Actually what you do in Tech vs Banking are two different careers.
Gross example, buyside post MBA or Tech post MBA. One thing I learned was that all the least qualified and honestly poor talent went into tech post MBA. Picture Amazon PM role vs. investment team at a good shop.

Array
  • Analyst 1 in IB - Gen
Feb 6, 2021 - 11:20pm

Lol Amazon's non-tech PM role is not even a fucking PM role, it's some operations / business bastardisation that got slapped with a PM title. Terrible example to use.

Plus Amazon hires basically anyone who breathes post-MBA outside of their PM-T position.

Feb 12, 2021 - 11:34am

I agree. If you go to an elite school and can get interviews for big tech associate PM roles, its way better than IB analyst roles.

Even if you're an average kid from a non-elite school, your chance of being able to get a solid SWE job that pays 80-100k to start is much higher than your shot at an IB analyst job, and again, provides way lower hours with a very solid chance of getting to 200-400k in your 20s.

Feb 7, 2021 - 12:07pm

Biggest difference will be in 10-15 years. 5-10 years out sure you can agree this make more than you but have a look 20 years out.

Array
Feb 7, 2021 - 12:54pm

Bro, my friend who didn't even graduate college. Did a bootcamp and worked 3 years at Citi as a software engineer, just got a job at Tik Tok. His comp is $150k base, 25k signing and $300k Tik Tok stock vested over 4 years at ~$100Bn valuation. Based on his knowledge Tik Tok valuation almost double since he joined 6 months ago. Huge part of it is driven by the fact that Tik Tok U.S. won't be scrutinize by the new administration. Now that's just Tik Tok, think about thousands of B/S tech startup being bought out and IPO over the years. A lot of these tech guys literally made $1-2 millions easy after being at a place for 4 years. $1-2MM early on in your career makes a huge difference. Needless to say, most people on this forum wont be MD and probably worked a FP&A or corp dev job at a MM company somewhere in 5-6 years.

  • Associate 1 in IB-M&A
Feb 6, 2021 - 2:55pm

I think there is a lot of good advice in this thread - and the reality is that it all depends on the person. If I might - and don't bite my head off for this - for those of you who are analysts thinking about "what's next" and are curious about the world outside of finance - this may be a time those MBA associates can actually offer you some value by describing what other roles are actually like and pay.  Even if they haven't already worked in the industry you are looking at, they may know someone through school who can give you the real deal. Contrary to popular belief, I knew quite a few people who went tech -> finance at business school, as well as almost every other industry, so there's a lot of people who will give you the unsugarcoated version of things. 

  • Prospect in Consulting
Feb 6, 2021 - 4:48pm

Bezos, Zuckerberg, Gates, etc are definitely kids with no social skills who are some of the most influential people in the world.

Collison brothers are self described weird kids who are introverted and are on their way to controlling much of financial services...

  • Associate 2 in PE - LBOs
Feb 6, 2021 - 5:11pm

Those 5 people you listed are some of the most charismatic people in the world when it comes to motivating employees and selling their services

Feb 6, 2021 - 5:15pm

Imagine thinking Mark Zuckerberg, Jeff Bezos or Bill Gates are A) actually charismatic (i get the lols just typing that) B) actually motivate any employees themselves (newsflash: they don't, there is a chain of command and the higher up the chain, the more those people want to keep their jobs / bonuses)

You fucked up dude

Feb 6, 2021 - 5:42pm

A more realistic ceiling for tech these days is about 6-700k. If someone wanted to progress their salary quickly in tech this is how. The trick is to hop between jobs instead of fighting for a promo up to L5, then transition to SDM. Most SWEs don't enter the industry with a plan like 2+2+2, so they fuck around instead of being laser focused on TC growth. Another thing is not to glorify FAANG and definitely don't stay in FAANG for too long. The next tier down (Pinterest, Stripe, Snap, Lyft) pays way better and inflates your title to entice you.

y0-1.5: L3 SWE ~180k

y1.5- 4: L4 SWE 260k+

Y3.5 - 5: L5 SWE 350k+

Y5-7: L5 SWE/SDM 450+

y7+: L6 SDM 550 - 700k

In short, if you play your cards right and account for RSU growth you should be clearing 1MM in 10 years. If you're in a hot space, like ML / distributed systems, expect even more. L7 is where it actually gets hard to break through (no gamification of the process like above) so no advice there.

  • Prospect in Consulting
Feb 6, 2021 - 6:28pm

Something that I think that is underrated, is how the need for SWE is only growing and not enough SWEs are graduating college/are immigrating into the US. 

When I entered college, IB vs SWE pay was probably generally comparable with SWE having higher base but IB quickly progressed faster. But in just the four years I was in college, SWE became much higher straight out and increases in pay also followed. There is no clear solution to solving the gap in SWE, tech companies are making more and more money, and private capital is loading into the space to just raise the salaries across the board to be competitive. 

Some people argue that the jobs will just go to India or immigrants or whatever, but it just isn't happening. Understanding how these labor markets will be looking into the future is deeply important

  • Analyst 1 in IB - Cov
May 27, 2021 - 10:11pm

This is an entirely made up data set and should not be considered as an example for what FAANG or non-FAANG SWEs should expect. OP is clearly not in finance (look at his posts), and probably wishes he was considering he's on WSO. You can subtract $50k-$200k off of each of his examples, and then take the non-faang cock out of your mouth. Sad!

Feb 6, 2021 - 6:44pm

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  • Investment Analyst in HF - EquityHedge
Feb 7, 2021 - 10:15am

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