So you want to start your career in a start-up instead of M&A?
When you’re young and academically bright today you have plenty options. If you’re at the top of the class, you might be considering a job with an investment bank, or a job with a start-up. I’ve done both. Start-up life is great, but you should probably start with a bank first.
When your career is just beginning, starting out in M&A is like attending a military training school. It will equip you with a strong, reliable and recognized skill set, mostly in corporate finance and corporate development, but also in corporate strategy. The hours can be harsh and the discipline and bureaucracy can be extreme, but you will almost always get a lot out of it.
By comparison, beginning your career in a start-up is like playing the lottery. There is excitement, but there is also risk. If you start with the right firm, the upside can be huge – and far greater than in banking. But if you join the wrong firm, your career will be off to a bad start, from which it may not be easy to recover.
There’s a reason that people choose to begin their careers in investment banks and then to move on. Starting in M&A is like a guarantee of your caliber. If you join a prestigious bank doors will open to exit opportunities across private equity, hedge funds and venture capital, plus to corporate positions whether in large companies or start-ups.
By comparison, if you join a failing start-up you may find yourself with a questionable skillset and very limited exit opportunities. On the other hand, in most start-ups you will get a more operational, technical and commercial experience than in a bank.
Ultimately, then, it depends upon your own risk tolerance. If you think you’re lucky, start-ups are for you. If you want a safety net before trusting in your luck, start in banking. Personally, I spent over two years in banking, but I also spent six months in Hong Kong trying to build a business selling champagne to car dealers. Today I work in start-up in New York City. Start-up life is good, but without the financial modelling skills I learned in banking, I would be a far less useful employee.
Charles Bocquentin worked as a banker in Paris, London and New York before joining a start-up in New York City.
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