Big Bank vs. Small Bank

Graduate School Business School - MBA
1

<p>One of the main themes prevalent on the MBA discussion forum is that big banks equal quality work experience and a better shot at a top MBA acceptance. But why is this the case? You would think that if you worked for a smaller bank, you would have more leadership opportunities and would have more of a chance to succeed than the uber cut-throat big banks that despose of analysts like yesterday's newspaper. </p>

<p>Any ideas on the benefits/drawbacks of a Big Bank/Small Bank setting?</p>

<p>(this thread is referring to Investment Banks when it says "banks".....just for clarification)</p>

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<p>.........nobody???</p>

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<p>Nobody most of these people are college students.</p>

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<p>Any Investment Bank will provide good experience. The thing is, you see, that big banks have established training programs for accounting, finance and other stuff. They also work on bigger, more important projects. Small banks do not. Consequently, you will have to learn on the go, which can be annoying; the type of project you work on will also be much less glamorous. But both banks will give you a solid foundation with which to market yourself to B-schools.</p>

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<p>Dawgie you seem to have a chip on your shoulder. All the posts you've made in 'Ibanking' threads have been negative.</p>

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<p>If you're talking about investment banks, the reason they provide a better shot at acceptance to a top bschool is that not all ibanks are equal. Look at the league tables, the bulge bracket pretty much dominate the industry (and they pay much better esp. at higher levels). Someone from Morgan Stanley will have worked on much more higher profile deals and have made much better contacts than someone from a small bank.</p>

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<p>The big banks are the ones with institutionalized "analyst programs", with typically finite 2-year stints after which it's expected that most people will leave. If you work at one of these, you will be in with a large cohort of people doing the same thing. You will work on larger transactions, probably more hours and under slightly more stressful conditions. You will probably be living in a large city with lots of recent college grads around.</p>

<p>Smaller firms tend not to have these insiutionalized analyst programs. When they hire somebody its for a "real" job. There will be fewer people just like you there. The transactions will generally be smaller. They may be in locations that are not equally desireable to all applicants.</p>

<p>As for which situation will provide better experience for a particular individual, or better credentials for admission to an MBA program, I can't say. I would imagine it varies based on the particulars.</p>

<p>I think it might be a mistake though to expect that after only two years you're likely to be a "bigshot" at a smaller firm far beyond where you'd be at the larger one. They're not all bumpkins there either. And there are clearly some levels of practice that you won't be exposed to there. Perhaps balanced against other opportunities; perhaps not.</p>

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<p>I can't speak for MBA admissions, but my experience is, down the road, what you've done can be more important than the prestige of the company you've done it for.</p>

<p>I know a number of individuals who are now at prestigious investment banks, who were hired there due to their accomplishments at weaker less-prestigious shops. Frequently they rose to visibility of the big shops via competing against them, or working beside them on deals.</p>

<p>I recall a securities salesperson who was hired at a prestige firm, based on his accomplishment selling for a regional "weak sister". His argument was
" if I can sell successfully in that crappy place, I can certainly sell for you".</p>

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<p>sometimes it sucks to work at a smaller bank because of a lack of resources, this can result in you doing things outside of 'finance'. a good example of this would be with pitch books.</p>

<p>at a BB they have desktop publishing staff who will physically bind and put together your pitch book while you and your team work on the actual contents of the book (putting together the info, the valuations, etc)</p>

<p>at a smaller bank you may not have this staff, so while you have to work and complete all the content of the pitch book, you ALSO have to physically bind and put the book together yourself.</p>

<p>Some people view this as a waste of their time and skills.</p>

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<p>Let's say you worked a job at Citadel or Lazard or Blackstone or the like. How do business schools view this? I'd imagine you'd have a smaller base of contacts, but certainly the experience at these places would be amazing. To even get in, I understand, is incredibly tough. So, assuming two candidates with roughly similar aptitudes, would it be better to work with Citadel or Goldman Sachs?</p>

<p>Out of curiosity, I'd like to hear about other advantages and disadvantages about going to, say, Blackstone over Goldman Sachs from those with experience on the matter. Is the reason that not many opt for this simply because it's so incredibly difficult, or is there a career advantage for picking GS?</p>

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<p>
[quote]
So, assuming two candidates with roughly similar aptitudes, would it be better to work with Citadel or Goldman Sachs?

[/quote]
</p>

<p>All things being equal? The candidate from Citadel, Lazard or Blackstone - with a couple of caveats.</p>

<p>One can assume one of two things from a candidate from the above firms: 1) is extremely well connected, and / or 2) extremely capable.</p>

<p>The experience (from a pure hardcore finance perspective) will be more in-depth and rigorous (on balance) at a pure advisory house like Lazard / P/E firm like Blackstone vs. an i-bank (even a blue chip one) like Goldman (not to mention at a larger i-bank you could be coming from a number of depts - anything from public finance to mortgage securities to sales / trading to corporate finance)</p>

<p>BUT does that make it necessarily BETTER?</p>

<p>Not in all instances.</p>

<p>For purposes of sheer resume recognition and wow factor - I'd say Blackstone trumps Goldman - and certainly so in the finance world ... but not EVERYONE is going to give Blackstone the "props" it deserves. It's much like any high-end boutique. For example, when you think of men's suits and I gave you a choice between Armani / Ralph Lauren (e.g. Goldman / Morgan) or one from Brioni, you'd probably pick Armani - and you'd have a great suit no doubt - one that will get instant public "recognition" - "Armani, nice!"... but for those with truly discriminating taste and knack for luxury - you'd chose the Italian silk, Saville Row, tailor-made Brioni suit in a heartbeat (so would Donald Trump, James Bond (in the films), Kings and Sultans)... but, again, it's not necessarily the highest "street" recognition - but certainly the best for those who know... Rolex is a great watch and has a huge "wow" factor - but Patek Philippe is widely regarded as a much finer timepiece (with much less public recognition), etc. etc.</p>

<p>And believe me business schools KNOW - it's their "business" to know.</p>

<p>With that said, let's be absolutely clear: landing a highly coveted spot at a highly specialized firm such as Lazard or Blackstone is incredibly competitive - and they are known to work their guys into the ground (Lazard has a notorious rep as a particularly brutal meat grinder - they'll definitely get their pound of flesh from you). So why do it you ask? What's worth brutal 100 hour work weeks and no weekends and no social life? Again it comes down to that recognition in circles that know and matter (i.e. recruiters and adcoms) - i.e. if you can survive there - you'll survive basically anywhere.</p>

<p>Next, even if you did manage to get in. You really have to ask youself: Would I last? Would I really do a stellar job? Think of it this way - if you are a professional athlete, say a baseball pitcher - going to pitch for the Yankees is the pinnacle of your sport - but it comes at a price - the media glare, the harsh critics, ruthless fanbase, the hall-of-fame caliber around you and who have proceeded you - ARE YOU THAT GOOD? Can you thrive in that kind of environment? Can you handle the stress? Because it's basically sink or swim pal. And remember you are gonna need to get recommendations from these people you work for when you apply to b-school. Are they gonna say, "yeah this kid was a bonafide ROCK STAR of rock stars and we've seen the best" or are they more apt to say "dude, this guy barely kept his head above water, we wish him the best - but he was kinda out of his league here".</p>

<p>So, the real question isn't is Blackstone better than Goldman, it's really am I really good enough to work for Blackstone (and even Goldman for that matter)? And if that question is a definite "YES", it then begs another immediate question:</p>

<p>"What do I need b-school for?" - i.e. if you can make it at these firms, you can't beat the reputation and money - it's like Sinatra said:</p>

<p>"If you can make it there, you'll make it any where..."</p>

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<p>"at a smaller bank you may not have this staff, so while you have to work and complete all the content of the pitch book, you ALSO have to physically bind and put the book together yourself."</p>

<p>I guess it depends how small you're talking. I worked at two regional banks that provided support staff for this, at least in their main office.</p>

<p>But a couple things to keep in mind:
- there likely will be fewer pitch books to assemble
- If someday you branch out and start a small operation yourself, you, bigshot analyst, will have to do everything yourself for a while. So it's not so terrible to learn how to do it. </p>

<p>As a matter of fact I know a guy who started his own firm in the 80s after being a honcho in a BB. In interviews, he said one of the main differences was: in the other shop he didn't even know where the mail room was. Now he WAS the mail room.</p>

<p>So as the central focus of your job, I agree this would not be thrilling. But as one incidental task, just another step in the process, when there are far fewer of them to do than at a BB, and not so frequently: there are worse things IMO.</p>

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<p>
[quote]
I guess it depends how small you're talking. I worked at two regional banks that provided support staff for this, at least in their main office.

[/quote]
</p>

<p>I think it's Greenhill where I heard this happened. Maybe they have a support staff but not as complete as a BB so -sometimes- you have to do the binding yourself. But I agree with what you said, there can be things that are worse and the experience doing these sorts of things isn't too bad.</p>

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<p>What are some regional banks in the Midwest? Is AG Edwards a regional bank or is a regional bank much smaller?</p>

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<p>Some midwest investment banks, off the top of my head:</p>

<p>AG Edwards
Dain Rauscher
Piper Jaffray
Stifel Nicolaus
George K Baum
George W. Baird
Prescott Ball & Turben
Seasongood & Mayer
A number of affiliates of regional commercial banks</p>

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<p>Is it relatively easy to get a job at these regional banks with good credentials (example being a 3.0+ GPA in Business/Finance at a state school)?</p>

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<p>
[quote]
at a smaller bank you may not have this staff, so while you have to work and complete all the content of the pitch book, you ALSO have to physically bind and put the book together yourself.

[/quote]
</p>

<p>I have one word to say to this: KINKO'S.</p>

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<p>I believe that, generally, it is quite difficult to get an entry level job at a regional investment bank. Simply because: the ones I'm familiar with typically do not have huge "analyst programs" like the big firms. Their openings are for new, "permanent" employees. Availability depends on opportunities if the business grows, or if someone leaves. they are not turning over tons of staff every two years. In a typical year there may be few entry-level openings, or none at all.</p>

<p>Every successful entry level candidate I saw had direct ties to the specific region in question. By growing up in the immediate region, or going to school there, usually both. They want people they think are likely to stay there, not bolt off. Also these firms do not grossly overpay entry level peope who don't know anything, or for that matter anyone else who can't personally directly deliver business into the firm. (Though people who can do very well). Very different from the mindset of the New York firms.</p>

<p>Typical background for a successful candidate would be: business or economics grad from regionally proximate flagship state school, good grades, fraternity type with the right social skills and "look" that they think will be conducive to promoting successful client relations.</p>

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<p>fraternity type - so does joining a fraternity help?</p>

<p>If so, what type of fraternity? social fraternity? or business/professional fraternity?</p>

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<p>lol...a fraternity! Period. (that should be enough!)</p>

<p>Ps. No, not FBLA</p>

<p>PPs. If by now you are till lost, I can't help. ;)</p>