A RISK-AVERSE WAY TO INNOVATE AND BE AN ENTREPRENEUR
Despite coming from different schools and professional backgrounds, CommonBond’s interns came for similar reasons. For Vasu Sharma, a current UNC Kenan-Flagler MBA and former software engineer from India, an internship in the fintech space was a natural evolution from his computer science background — and a gateway into corporate America. The flat corporate structure and access to executives has been a welcome surprise, Sharma says. “The guidance we get from them (executive team) is very insightful that goes beyond the work and into life philosophies,” the 26-year-old says.
Divya Narayanan, who spent three years at Bain and about a year and a half at Google before starting her MBA at Wharton, says the experience has made her “absolutely” want to work for an early-stage startup upon graduation. “I found out I love the ownership and ability to execute that you get at an early-stage startup,” Narayanan, 28, says. “For me, it absolutely helped me validate that in a risk-averse setting.”
It was also a gateway entrepreneurial experience for Nick Pucci. Breaking into fintech is a “natural fit” and an “evolution into something more entrepreneurial” than investment banking, Pucci, a Chicago Booth MBA, says. Still, the hiring process of startups can be nerve-wracking, he says. Especially when offers poured in for classmates taking traditional internships. “You’re going to get caught up in everyone else doing consulting and banking in the fall, but the internship offers don’t come until spring,” the 29-year-old says of his first-year experience.
MASSIVE AMOUNTS OF VENTURE CAPITAL POURING INTO MBA-FOUNDED FINTECH STARTUPS
While companies like CommonBond and Earnest are able to hire a who’s-who cast of elite MBAs, that’s not the case everywhere, Merchant says. At least not yet. Most early-stage fintech companies start out focused on developing their product, which requires developers and engineers. And that’s usually too early for business roles. “A lot of these companies are too early to realize how to utilize a business person yet,” Merchant explains. “They are still trying to get the product sorted out. It’s just too early for someone to come in and do strategy, business development, or sales. So you have to wait until you figure out exactly your course. Then you start to back-fill with business talent, which usually comes after a significant funding round.”
Similarly, many career services offices within B-schools have yet to track how many of their graduates are actually going into the space. Merchant says Columbia isn’t tracking MBAs going into fintech roles, but to her knowledge, eight current MBAs spent either the summer or spring semesters interning at fintech companies. Sue Kline, the senior director of the Career Development Office at MIT Sloan, also says their data is still insufficient to know exactly how many grads are going into the space. At UC-Berkeley’s Haas School, finance and accounting professor Christine Parlour — who taught Haas’ inaugural fintech class to 33 MBAs — says even though there is “tremendous interest,” she is unsure of how many from her class are actually going into the fintech space full-time. Still, according to Bill Rindfuss, executive director of strategic programs at Berkeley-Haas, about 10 MBAs from the class of 2016 have gone into full-time positions or internships in the fintech space for companies like Earnest, PayPal, and Visa. In the class of 2015, Rindfuss notes, Berkeley-Haas MBAs founded fintech ventures WeFinance and Xendit.
If funding and maturity are antidotes to MBA fintech hiring woes, it explains why companies like CommonBond, SoFi, and Earnest are able to hire MBAs in droves. It’s also paints a positive outlook moving forward. Take SoFi, for example, which has raised more than $1.3 billion in equity since being founded in 2011 and which is one of nearly 30 fintech unicorns worldwide. Earnest has garnered nearly $100 million in four rounds since being founded by Harvard MBAs in 2013. Meanwhile, CommonBond has raised more than $78 million since being founded in 2011, also in four rounds. If you include funding raised for debt refinancing, both Earnest and CommonBond are closing in on $1 billion in some sort of investment.
‘IT’S NOT JUST A TINY PIECE TO A LARGE PRODUCT’
Worldwide, 2016 seems to be the year of funding for private fintech ventures — thanks largely to China’s absurdly massive venture capital interest in the space. Lu.com and JD Finance — both Asian fintech ventures — each has closed VC deals worth more than $1 billion in 2016. Despite a drop in North American VC deals in fintech companies, MBA-founded fintech ventures have held their own. Big bank and personal investment disrupter Betterment, which was co-founded by Jon Stein, a 2009 Columbia Business School grad, has raised $100 million in venture backing this year. Oscar, an HBS-founded health insurance venture, has raised $400 million this year and nearly $800 million since being founded in 2013.
Julia Joggerst, who holds an MBA from NYU Stern, personally knows what a funding round can do. During her time at Stern, she consulted for CommonBond as an InSITE Fellow. At the time, CommonBond had just raised their Series A round and were operating as an eight-person team in a small Brooklyn office. Joggerst took a management consulting position at PwC but kept her eye on CommonBond. When they raised a Series B round, she pounced. “I spoke with David (Klein) about joining full-time,” Joggerst says, noting that CommonBond was hiring across the entire team after the Series B. For almost a year now, Joggerst has been CommonBond’s director of special projects.
Out of the four summers CommonBond has run its internship program, DeGisi says this crop has set the highest bar. Time will tell if this summer’s MBA interns return to CommonBond or even the fintech space. Regardless, Kaplan says, the high-touch, innovative experience did exactly what it was designed to do: While many of her fellow HBS classmates were at massive companies, she was able to own the product launch alongside her small team of interns. “It’s not just a tiny piece to a large product,” she says.