Investment Banking or Entrepreneurship?
The Big Decision
Have you ever been faced with a decision that you feel will impact the rest of your life? How about when that decision is between two alternatives that both have balancing pros and cons, opportunities for success and personal growth, and are equally appealing in terms of your desire to pursue them. The last time I had to make a decision like this was when I was deciding whether to go to Emory University or Penn State University. (Though they are pretty much totally different schools, to me, they were equally appealing – making my decision an ongoing three-month-long battle). Now a junior studying at Emory University’s Goizueta Business School, a similar pivotal decision is drawing near. What do I want to do with my life? Junior year is an important year for business students who hope to enter corporate America after graduating. Firms that recruit juniors for their summer internship programs offer a promising opportunity for future work in addition to an incredible experience and connections. For me, the decision is whether to pursue investment banking or entrepreneurship.
A dilemma that is faced more and more by college students in today’s age is that between pursuing entrepreneurship or investment banking. On the one hand, the sound of becoming a self made billionaire like Zuckerberg with the freedom and control to build a company from the ground up sounds like quite an appealing adventure. On the other hand, fitting into the elite career of a high paid Wall Street investment banker doesn’t sounds too shabby either. Most would agree that pursuing a startup is much riskier than a career in investment banking, but for me the notion of “risk” is subjective depending on what you’re talking about. Riskier in terms of making money: probably. Riskier in terms of enjoying yourself, learning and growing as a person, establishing yourself, and making connections: who knows. It really all comes down to the individual. Perhaps a closer look at the pros and cons of being both an entrepreneur and an investment banker will provide better grounds for a scale on which to weigh the options.
The life of an entrepreneur is thrilling and unpredictable. There is no other feeling like having an idea keep you up at night, rationing through strategies, thinking of action steps, development, networking, etc. The ability to live and work on your own comes with a lot of freedom and responsibility. It takes more than just a bright, determined, and motivated individual to be a successful entrepreneur. A successful entrepreneur is one who is obsessed with their vision and will go to the end of the earth to bring it to fruition. This type of ability and passion is not common among college students simply due to a lack of life experiences and a lack of confidence, but there are some that possess it. For me, the desire to be an entrepreneur stems from the urge to solve problems, put myself out there, and create something I can call my own. In today’s age, I genuinely believe that anyone can learn anything. With the internet at the core of a fast paced technology race, knowledge is for the taking. If someone else out there can be an entrepreneur and build a company from the ground up like lego bricks, then why can’t I? It is all a matter of just diving off the edge, but it’s not an easy jump.
Two factors that turn many college students away from entrepreneurship are the stress that come from having to wear many different hats and the reality of college debt. As an entrepreneur you need to be a manager, marketer, salesman, financier, networker, developer, and a creative mind all in one. Jumping into all of these sudo careers, as a college student who normally has to choose just one career, is scary. However, the experience you can gain from doing so is incomparable to any other career and may be perceived as the opportunity of a lifetime. Moreover, with the average debt of a college graduate nearing $27,000, the financial uncertainties of running a startup become a serious factor. For students with college debt, a more conservative path to corporate America is the only practical option. But then again, as you get older and have an established job and family, it will be far more risky to quit and pursue a startup. The whole risk reward thing is clearly a recurring theme here.
When compared to going for entrepreneurship right out of college, investment banking sounds like a much more reliable path to financial success and a fulfilling early career. The high salary coupled with a rigorous, fast-paced work life is an appealing opportunity for young and hungry college students. Not to mention, there is something elitist about being an investment banker. Wall Street is home to some of the wealthiest and most prestigious financiers in the world and is a breeding ground for some of the country’s smartest college students. After working on a variety of projects with other bright individuals and superiors, you will be sure to achieve a wealth of knowledge and individual growth. If you love finance like I do, the work at an investment bank will be very mentally stimulating. Projects in line with advising a multi-billion dollar M&A transaction are incredibly interesting and demanding. While the life of an investment banker is tireless, it is definitely very rewarding. Investment banking Analysts earn some of the highest salaries among college graduates. As someone who wants to pursue finance as a career, and make a lot of money, investment banking sounds like an obvious choice. But of course, a position at an investment bank will not be handed over on a silver platter, nor is it for everyone.
Two of the main reasons deterring students from pursuing investment banking after college are the feasibility of entry and success in the industry and the amount of hours that are required on the job. Most bulge bracket and top boutique investment banks only recruit at the most prestigious universities and business schools. They want to see tailored resumes, superb academic records, and experience in finance. The behavioral and technical interviews take lots of practice and are what make or break your entry into a firm. The competition is always well-tailored so it is necessary to prepare accordingly. For those without a lot of finance experience or not studying on a recruiting campus, the journey is even harder. Aside from the process of getting the job, the work-life balance is another deterrent to being a banker. Working 80 to 100 hour weeks is extremely demanding and there is no doubt that it takes a toll on you. Again, the job is not for everyone and that is why the selection process is so difficult. The banks need to make sure they are hiring the right person for the job.
Reviewing the “Risks”
So what can you take from all of this? Whether or not to pursue entrepreneurship or investment banking (both of which are incredible opportunities and choices, might I add) is a decision based on a number of factors. Every person will evaluate the pros and cons of the two careers differently, but some of the main factors that I look at are whether I will be able to make money, establish myself, make connections, learn and grow as a person, and enjoy myself. As I weigh the opportunities of both entrepreneurship and investment banking under these credentials, the decision remains close to deadlock. Either way, it is important to realize the following: success stems from being a great person who does great work. If you are both a great person and do great work, you cannot go wrong in either industry. And let’s face it, there’s time to try a number of careers so don’t stress too hard about one or the other. Just be the best.
by Ryan Erfer