From students and friends, I found there is a recurring question or envy: “should I go to Investment Banking or should I start my own company?” or “I think I will stop banking to start my own company”.
I worked in Investment Banking before and I have started my own company and think I can now sort of compare the two.
First of all, what’s amusing about this question is it implies some sort of similarity. “If I studied finance, or if I worked in Banking, I have the skillset to start my own company”. The answer to this statement is simply NO.
A career in banking and starting your own company are two COMPLETELY different things. It’s true that banking brings you some good skills but as any other jobs would to launch your own startup.
The first misconception finance people tend to have, and I deeply thought so too, is that because we understand money, we can easily make money on our own starting a business. This is completely wrong. If we go back to the basic definition, Finance jobs are designed when you have money to manage. In a startup, you have no money. The first thing you need to do, beside the fact of creating an amazing product, is to sell. You don’t really learn that in Banking (except if you are a sale).
The good thing you learn in Banking though, is to analyse a business and be more pragmatic about what you do. You also learn how to speak to finance people, which is extremely important when you want to raise money. Last but not least, you build a good network of people with relationships and potentially money (very important when you don’t have money).
Finance and Entrepreneurship are 2 different things as they require 2 completely different spirits. Working in finance is often describe as “stressful”. It’s true, but nothing to compare with the startup world.
In one case, you are paid every month, working for a big institution. In the other one, nobody knows you, nobody wants you, you struggle to get £1 and it’s a situation of survival.
The worst case scenario is also different. When you work for a firm, worst case scenario, you are fired and you can look for another job. In the other scenario, your company dies, as a founder you are the last man on board, after having to fire your employees (if you have employees)…
There is not one career which is best than the other one. Finance jobs are deeply exciting, as much as Entrepreneurship, but in a very different way.
At the moment, here are some of the companies recruiting interns and analysts: