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“I read your articles on the myth of the buy-side job and why finance doesn’t guarantee you $10 million and your own beach in Thailand . But I still want to do finance – I just don’t want to do investment banking. I’m an Economics major, I have a 3.7 GPA and I have no industry contacts. Do you think I should start in private equity instead? How can I do it?” This is a very common “strategy” I get questions about.
“How can we fight this fight with the brightest and best educated rushing off and working night and day to do private equity deals and derivatives trading?” -Ben Stein, Looking for the Will Beyond the Battlefield Derivatives trading… maybe not so much anymore. But PE continues to be a big draw, pulling in bankers like bees to honey – despite the fact that most firms are barely doing any deals lately. Yes, we’re at that stage of the year when newly minted Analysts (and some Associates…) are thinking about what they’ll do next, only months after starting out in investment banking.
This question came up in the recent series on venture capital : just how are PE and VC different? Technically, venture capital is just a subset of private equity. They both invest in companies, they both recruit former bankers, and they both make money from investments rather than advisory fees.