Why investment banking is an ideal industry for future founders | Suited Blog (2024)
Candidate Resources
By Suited
Interested in becoming an entrepreneur? In many cases, getting your start in investment banking may the best training you could ask for.
The media’s portrayal of what it’s like to be an investment banker has permeated much of the general public’s perceived understanding of the space. Shows like HBO’s Industry and movies like The Wolf of Wall Street paint the profession in a certain light - competitive, harsh, intense, and all-consuming, among others. These perceptions typically turn into a banker’s reality depending on a few things - the firm, the division, and the culture, but the reality of investment banking work is simply not as dramatic (or traumatic) as Hollywood’s interpretation.
Instead, investment banking analysts can always expect a few things with certainty - working long hours, being held to high standards, teamwork, and a lot of learning as you go. These disciplines, along with the more technical skills learned such as financial modeling and analysis, are also the makings of highly successful founders.
Many entrepreneurs are born out of Wall Street, and for good reason. Suited’s CEO Matt Spencer, a former investment banker, believes that there is no better preparation for starting a business than years spent in IB.
"Being an investment banker doesn't just teach you to be good at finance and accounting. You also learn about all the other aspects of business that add up to determine whether a company will be successful. These include competitive market dynamics, operations, marketing, strategy, management and organizational leadership, and negotiation skills. Depending on the types of clients you service, you may be learning about these directly from the founders and management teams that made those companies successful," he says.
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We got in touch with a few other entrepreneurs who feel similarly. Read on to hear why they believe their investment banking experience helped them on their way to becoming founders.
Fansure is a sports betting tool that allows for scenario-relevant sports betting at scale. Former investment banking associate and analyst.
"I am grateful to have started out my career in Investment Banking. IB provides a comprehensive foundation that is transferable to a variety of different career paths, both from a quantitative and qualitative perspective. My experience leveraging analytical data to drive strategic corporate advisory and interfacing with clients taught me lessons that I was able to draw upon when I transitioned to the startup world."
I don't know of any other industry that can give that breadth and depth of "education" into what makes a company successful or not; an invaluable learning experience for future founders.
Many entrepreneurs are born out of Wall Street, and for good reason. Suited's CEO Matt Spencer, a former investment banker, believes that there is no better preparation for starting a business than years spent in IB. "Being an investment banker doesn't just teach you to be good at finance and accounting.
Some generic themes to draw on for your answer to “Why Investment Banking” could include: Fast-paced environment. Exposure to high profile transactions. Surround myself with intelligent and motivated people.
An example answer to the “Why Investment Banking?” question
Here is an example of how to answer the question concisely: I want to work in investment banking because it's the fastest way to learn financial modeling, valuation, Excel, and to understand the nature of large corporate transactions.
Investment banking is an exciting and lucrative career, but it isn't right for everyone. You may have a desire to earn over $100,000 a year as a first-year analyst in New York City, but you need to remember that investment banking is not just a high-paying job, but is also a high-stakes, high-pressure job.
Investment bankers are typically the highest-paid workers in the finance industry—high salaries are most prevalent even among younger employees. The starting salary for the typical investment banker exceeds that of most other finance positions, but working in this field has its challenges.
I'm drawn to finance because it provides a comprehensive understanding of an organization's financial health, risk management, and investment decisions. By pursuing a career in finance, I can strengthen my ability to analyze financial data, provide strategic insights, and guide organizations towards sustainable growth.
Banking employees enjoy higher Job satisfaction. These jobs offer a variety of opportunities and the possibility of rapid career progression. They also get a chance to specialize and meet with new people from other sectors in the bank. This helps them to grow their skills which brings them in utmost happiness.
Here are some tips for answering this question: Choose two or three strengths that are relevant to investment banking. Some examples of strengths that are valued in investment banking include analytical skills, problem-solving skills, attention to detail, communication skills, and teamwork skills.
Investment banking is essentially a financial service provided by a finance company or a banking division to help large multinational corporations in their investment plans. Along with large companies and organisations, this service also helps high net worth individuals and governments to raise or create capital.
Working in M&A allows you to participate in extremely strategic operations for companies. If you work in Large Cap (on the biggest deals) you are likely to find the deals you have worked on in the economic and financial press. As you can see, the job of an M&A analyst offers many challenges.
The top personality traits of investment bankers are extraversion and conscientiousness. Investment bankers score highly on extraversion, meaning that they rely on external stimuli to be happy, such as people or exciting surroundings.
Investment bankers need sharp mathematical and analytical skills as well as solid communication capabilities. Here are some of the top skills investment bankers should bring to the table.
Investment banks help their clients save time and money by identifying risks associated before finalising any project or business move. Corporations and governments turn to investment bankers for advice and guidance when seeking capital, and they are an indispensable part of a smoothly-functioning economy.
“Investment banking gives you better access to finance exit opportunities in private equity, hedge funds, and corporate development, but management consulting gives you broader exit opportunities not just in finance but also in strategy, operations, non-profits, startups, and more!”
Here are some internal reasons you should add to your answer: You enjoy the autonomy that wealth management gives you. You are an extrovert and love dealing with clients and people. You are a proactive person that likes to have a lot of responsibility.
Impactful Work: JPMorgan Chase is known for its impactful and innovative work in the financial industry. I am drawn to the company's commitment to making a positive difference in the lives of its clients, employees, and communities.
The goal of investing is to increase wealth and accumulate money for long-term goals such as retirement. An important investment prerequisite is an “investor's mindset.” This means being psychologically ready to accept the uncertainty that is part and parcel of investing (read: you can stomach losing some money).
Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.
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