Who EARNS More- Investment Banking vs. VC vs. Corporate Finance ? 🤯(Ex-BCG) #Finance

have you ever wondered what are the four major skills that are needed to actually build a career in Investment Banking or venture Capital or corporate none;">Finance then hi welcome to my channel my name is shatakshi whenever i’m on a chai break i’m making out really cool CashNews.cos for all of you on careers in your early years management consulting and mba as i spent last 10 years working management consulting and

strategy so feel free to hit on the subscribe and the notification button so that you are notified whenever i’m putting out content and off late i have been doing that almost on a daily basis five four three two one zero so this CashNews.co is pretty interesting because i had made a separate

CashNews.co doing a comparison between jobs and careers in Investment Banking versus management consultant and i will put a screenshot somewhere there if you missed out on that but a lot of you actually wanted me to deep dive into the world of corporate

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance not corporate Finance

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance and Investment Banking so here is me now responding to all of your comments request and i really hope that i will be able to do justice to it and largely if you

want me to make a separate CashNews.co i am covering of course extensively management consulting i have made a separate CashNews.co around product management fee fee to check that out i am covering text-decoration: none;">Finance if there is any other sector that you want me to cover i’m more than happy to either invite a friend or if i would have any experience i’m more than happy to make a CashNews.co on it and feel free to stay tuned till the end if you want to

know who earns more within the four roles covered in Finance so from Investment Banking to venture Capital to corporate

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance to private Equity so i really hope that this CashNews.co will be very helpful for you now largely this CashNews.co i am going to be dividing into two sections

the first section is the kind of four popular roles that exist in Finance what are these roles how do they differ and who does what and then the second section is largely

around the skills and we will do a 2 a b c d and then last but not the least in the third section we will do a salary comparison so let’s start about the four rules that we’re talking about in text-decoration: none;">Finance i would say one a is corporate Finance one b is Investment Banking then one c is venture

Capital one d is private Equity now in a layman’s term when you talk of corporate Finance roles and have a lot of friends who are

working in hul png in corporate Finance roles it largely comprises a lot of Budgeting a lot of analyses a lot of looking at p l a lot of operations

that’s the heart of a lot of corporate Finance roles in fact a lot of chartered accountants make up very good corporate

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance managers and if i were to move very quickly to the Investment Banking side then in the entire banking or investment division there is a buy side and then there is a sell side your largely

Investment Banking is on the sell side and what do i mean by the sell side so investment bankers act as an intermediary between the buyer and the seller and they eventually help the seller reach eventually towards the buyer so imagine in a layman’s term it’s kind of a

middle party and then Investment Banking bankers largely do two kinds of role one the most famous one is Mergers and acquisitions and the second one is ipo deal right so imagine paytm is going ipo then what is the price sure the first offering price that will be

offered to the retail investors what will be the Valuation of the organization so on and so forth so that is what investment bankers do from the sell side which brings us towards the buy side of the equation which is the third role which is for venture Capitalist

right so sequoyah excel and many other leading venture Capital firms what they do is they give certain amount of money in c it could be seed money it could be series a and then they expect the entrepreneur or the startup to take that money and then have an expedited growth on that

venture but you as a venture Capitalist right what do you do you largely make sure that the share of the pie that you had taken eventually the pie eventually becomes big and you take an exit that means that a lot of financial modeling a lot of due diligence a lot of uh performance

eValuation of your deal and finding new deal could be the kind of work that you would be doing which brings us towards the fourth kind of role which is largely in private Equity now private Equity organizations deal with larger numbers is a much

more stable they’re not dealing with startups they lead they’re dealing with bigger organizations and they typically do lbos which is Leveraged Buyout and this is where a lot of my experience in terms of interviews with private Equity come in so

i’m not sure if anyone of you has heard about carlyle group it’s a very famous and celebrated private Equity group in america for their india office i had cleared their all interview rounds and that is why and how i uncovered how private Equity

interviews really take place and when you do leverage buyout what does leverage buyout basically means for example there is an asset and you pump in a lot of money you take over that complete asset so instead of venture Capital where they will take 10 percentage

Equity in the organization or 30 percentage or whatever it depends upon the Valuation model but in this case you take over the complete asset it could be part Debt it could be part Equity most of the times it’s leveraged and

then you do a complete overall of that asset you make sure its p l is now looking sustainable and then you look for an exit either through mna or through an ipo and that is what private Equity firms do so those are largely the four roles that you can play from corporate

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance to private Equity so that’s section number one now bringing or coming back to section number two of course the weightage of your work and the style will

differ but i would still say that there are four main skills or four i would say uh characteristics that you need to exhibit uh when you are sitting in that interview and point number one really basic and you could be sitting for their interview after undergrad as well but number one is time value

of money right do you understand the exact mathematical value of rupees hundred ten years down the line right we all understand there is Inflation do you understand if rupees 100 today is it better than 100 rupees 10 years down the line or even one year down the line of one month

down the line right we all understand intuitively the entire concept of Inflation but can you do that math so that’s point number one point number two is discounted Cash Flow method can you do Valuation of an organization through dcf method

which is Cash Flow in minus Cash Flow out and mind you we are not talking about Revenue right Cash Flow is very different can you build those eValuation models which brings me towards point number three which is

the npv and Valuation of the organization which is that if i give you certain details or certain numbers or certain excels of excel of an organization would you be able to value that organization right what do we mean by Valuation so for example you would have

heard that this is a startup is in a unicorn club that means that its Valuation is worth a billion dollar at least right how does that Valuation really come into place in a vc model a lot of time dcf is not applied but still in terms of first principle thinking dcf

still continues to be the best model in terms of eValuation in terms of finding the Valuation of an organization which brings us towards the fourth skill which is finding the price of the deal right so if sequoyah comes or even if as if as sekoya come and tomorrow

i say that hey shatakshi i want to be take 30 percentage in your organization and i will pay you x price right that x there will be an analyst working in sequoia who will do his or her due diligence and will come up with that x number and similarly there could be a leading organization for example

there is a there is a larger organization there is a dying newspaper media company right and then a private Equity or a carlyle analyst will go and say that we want to take a complete overall and we want to have complete ownership and this is what we are ready to pay you that price

is basically determined through a lot of calculation and similarly Investment Banking you could be investment banker and you figure out what is the first initial offering what is the share price that will be offered on day one when paytm or zomato or what not really goes uh when

their ipo happens which brings us towards the end of section number two and which brings us to section number three before i give the order of these salaries that these people take please understand these are averages it depends from geography to geography it heavily depends from form to form it

also depends upon which role are you talking about and especially in the world of Investment Banking private Equity in venture Capital you get a huge part of your salary is annual bonus or carry on as they say so of course it depends upon year to

year or the performance of the firm at large as well but if i were to rank order then invest corporate Finance will come at the bottom then will come investment bank then

will come vcs and then will come private Equity so that’s the order of the salaries that they earn and of course like i said it could change from firm to firm it could also change based on your experience and your own performance so all right if you need more help to get into

Finance then we run an alternative to an international mba program then feel free to check out my education venture global governance initiative.org and with that please

smile a lot please do a lot of cheers which i with me please let me know in the comment section if you are also a child lover and i will see you very much soon take care bye you