The recruiting process for top finance jobs is competitive, challenging, and not for the faint of heart. However, as a prestigious and well-known sector, finance (alongside management consulting) has long been a popular target for ambitious MBAs and MBA applicants. Before starting the process, you should take a moment to consider what you want out of the industry. Here are some frequently asked questions that will help you consider the fit, process, and risks associated with this career path.
Would I enjoy the core work of this finance position?
Just because these roles as categorized as “finance,” does not mean they are all that similar in their scope of work. Think carefully about whether you would actually enjoy evaluating the types of businesses or markets covered by each type of job. Do you like reviewing business pitches and helping to fund new businesses even though many (most!) will one day fail? If so, venture capital is right for you. Do you enjoy assessing what macroeconomic drivers or corporate news mean for public company stock movements? If so, a career in hedge funds may up your alley. Do you think helping companies raise capital or pursue M&A activity is interesting? If so, you might want to consider a career in investment banking.
In addition to their abstract role in the financial system, each of these activities involves real human stakes that are not for everyone. Are you comfortable closing the manufacturing plant of a company whose executive team you have worked with for years? Are you comfortable divesting your position in a company that you thought 18 months ago would be the next Amazon or Google? It’s worth considering how you will handle such situations when exogenous factors change and your relationships and spreadsheets suggest opposite courses of action.
What skills do I want to acquire? Will I learn them in this role?
Finance is often considered the “math of business,” so being comfortable in a quantitative environment is a nearly universal requirement. Beyond that, each position in finance will help you develop different skills. As an aspiring post-MBA financier, you should carefully consider your alignment to these specific roles and what types of skills you want to learn on the job.
Investment banking is a great career if you want to master corporate valuation and capital markets and if you enjoy selling your services to companies and buy-side investors. Venture capital is all about originating deal flow, predicting new disruptive models, and valuing businesses with a high degree of uncertainty. Private equity provides an opportunity to develop a deep understanding of how debt is leveraged to purchase businesses and how operational and financial engineering can be used to generate a return on investment.
Knowing what gets your juices flowing and where you can ultimately be successful is the key to recruiting successfully for these jobs. For example, despite both being buy-side professionals, a private equity investor at a large-cap energy fund brings very different strengths to the table compared to an early-stage venture capitalist focused on deep technology.
What kind of environment do I want to work in? How important is work-life balance?
Careers in finance can be quite lucrative but tend to come with intense work environments and long hours. If interested in these opportunities, you need to think hard about whether the grueling lifestyle is a fit for you.
Are you comfortable with unpredictability in your day-to-day or week-to-week? Are you fine with late hours on a moment’s notice if a deal blows up? Are you able to operate in a culture that can be abrasive, unforgiving, or impersonal? Or, do you value a job where the hours are more predictable but the compensation isn’t as attractive? Do you mind traveling for work or would you prefer a job that’s focused on being in the office?
Before pursuing any position in finance, you should ask yourself these questions. There are plenty of less demanding roles in finance, but you need to talk to industry mentors to be sure your expectations align with the reality of the specific positions you’re applying for.
Is this a long-term career or a stepping stone to bigger goals?
If a career in investing or on Wall Street is not something you see yourself doing five, ten, or 15 years out, that’s perfectly fine. Career switching post-MBA is more common than it used to be. There are now ample opportunities to pivot if your priorities change or you plan to go down a different career path after putting in your time. Finance professionals are highly sought after since the barrier to entry is high and the skill development is robust.
Exit opportunities are somewhat dictated by the lane of finance you are swimming in. For example, venture capitalists may leave their funds to go work at one of their portfolio companies or even start their own based on an idea they came up with while evaluating pitches. Investment bankers, given their knowledge of corporate finance, are frequently recruited to work in corporate development at big companies or, in the most senior cases, become CFOs. Some private equity professionals take on C-Suite or other executive roles at companies in their sector coverage.
Of course, despite all the career switching that goes on these days, there are countless examples of finance professionals who remain on the job for life, sometimes even at the same company or bank!
Can I break into this field? How much “risk” am I willing to take to land this job?
Depending on the position, there is a different recruiting process coming out of the MBA program.
Investment banking and other roles at Wall Street banks are typically hired as part of post-MBAs groups or “classes.” The bank’s needs are more or less predictable given employee turnover and work capacity, and recruiting is fairly structured. Most banks recruit on campus for summer internship programs and do full-time recruiting in the fall of the second year. Their processes are standardized. There are on-campus presentations, events, and interviews, where networking is critical. Full-time offers (earned through the successful completion of internships or fall recruiting) are typically sorted by the end of the semester. If you are pursuing this path, it usually means foregoing other job opportunities that come later in the academic year.
Roles at investment shops – such as venture capital, growth/private equity, and hedge funds – are much less predictable and far from guaranteed. Some of the larger funds may recruit more regularly (taking a few MBAs per year) while smaller shops are much more variable. Because hiring happens on a need-only basis, opportunities may not arise until closer to graduation and even possibly months later. Some firms may even begin recruiting processes only to change their needs or cancel the roles entirely depending on fundraising or market conditions. If you are considering pursuing such roles, you need to be comfortable with this level of risk and confident passing up on other more predictable on-campus opportunities. Plus, the competition is fierce. The demand for these roles is far outweighed by the supply of interested candidates.
Do I need an MBA to break into these fields?
Again, it depends on the field.
Investment banks are big on on-campus recruiting. It is extremely challenging to lateral into investment banking if you do not have an MBA or do not start at the Associate level. If you want to pursue a post-MBA career in investment banking, you really need to start right out of school.
Some private equity firms require their pre-MBA associates to obtain an MBA, while others do not require it. The mid-market and mega-funds will frequently sponsor those associates they want to bring back after completing the two-year degree.
Hedge funds and venture capital firms are less consistent. An MBA may help for some funds while others may not consider the degree an asset.
No matter what field you decide to target, your MBA will serve as a valuable cushion if your chosen path doesn’t work out or you decide (even years later) that finance is not for you. This basic level of career flexibility is an underappreciated benefit of the general management degree, one that helps MBAs take greater career risks in super-competitive industries like finance.
Seth is passionate about building and growing companies and is currently focused on investing in, improving and scaling the most promising enterprises. When not tirelessly helping his clients get into the MBA program of their dreams, Seth moonlights as a cultural sophisticate. Seth has dabbled in the art of haute cuisine, has performed classical piano on the stages of Carnegie Hall and Lincoln Center, and has traveled the four corners of the world to satisfy his long-held goal of visiting the Earth’s tallest buildings —he’s been to 12 out of 20 so far.