2021 End-of-Year Reader Q&A: Job Offer Decisions, Bank Rankings, Career Transitions, and Disappearing Content

I entered this year with a simple assumption: “No matter what happens, 2021 cannot possibly be worse than 2020.”

But that assumption was shattered within a few weeks, and the year turned out to be even worse than 2020 for me (and many others, I suspect).

The main difference is that when this never-ending “crisis” began in March 2020, there was some sense of unity, as everyone was in it together for a few months.

But as it dragged on, fatigue set in, people began to hate each other even more than usual, and supposedly “democratic” governments became tyrannical.

My solution was alcohol, combined with escapism in the form of books, TV shows, and video games.

But I’ll take a break from the drinking and reality-escaping this week to do my annual edition of reader Q&A:

Job Offer Decisions

The job market has been crazy since the start of 2020, with temporary panic followed by a boom, followed by more panic, followed by a boom… [continue in an infinite loop]. All of that has led to some “interesting” questions about job offers:

Q: I won an offer at a bulge bracket bank in London, but my long-term goal is private equity. I want to delay my offer start date so I can do an off-cycle internship at a large PE firm, which should benefit me in a few years when I recruit for these roles.

Is this a good idea?

A: I would not do this because there’s too much risk. Anytime you “delay” a job’s start date, you’re taking a chance that the market will suddenly shift due to another crisis, deal slowdown, etc., which could result in rescinded job offers.

Also, I don’t think a short PE internship right before this job will help much, considering the cycle starts later in London and moves more slowly.

Q: I have a corporate development offer at a public company and a strategy consulting offer at a Big 4 firm. How should I decide?

A: The corporate development offer is better if you want to stay in finance/deal roles, while strategy consulting is better if you want operational roles, such as sales, business development, market, product strategy, etc., at normal companies.

I don’t think there will be a huge lifestyle difference between the two, and while the salary and bonus will probably be higher in corporate development, that’s not the best way to decide unless you plan to stay there for a long time.

Q: I’m trying to get into investment banking by following your strategy of winning “steppingstone roles” and moving in as a lateral hire.

I have one offer at a Big 4 firm in the management consulting group and another at a non-Big 4 firm in the valuation team.

They’re both in the same location with identical compensation, and I want to get into IB, PE, or VC in the future. Which one’s better?

A: For IB/PE roles, the non-Big 4 firm valuation offer wins because it’s more closely related. Yes, the Big 4 firm has a better brand name, but I don’t think there’s a huge difference from the perspective of the large banks.

If you want more options outside of finance, the Big 4 offer is better because management consulting tends to result in a broader skill set (or at least, that’s the perception).

Q: I’ve been working in business valuations for a few years and just received two offers: one at a technology-focused middle-market investment bank and one for a mid-level corporate development role at a VC-backed startup.

If my long-term goal is venture capital, which one is better?

A: The MM IB offer gives you more options overall, but the CD role might be slightly better specifically for VC.

But this one also depends on the level of each offer.

If it’s something like a Year 1 Analyst in IB vs. an Associate or Manager in corporate development, most sane people would take the CD offer.

Bank Rankings

As always, some banks are moving up, others are moving down, and others are mysteriously stagnant. Which means that I probably need to update that “top investment banks” article.

Q: Should RBC now be considered a bulge bracket bank?

A: I acknowledge that RBC has been moving up the ranks lately, but looking at the data (see below), it still generates less in global fees than even the “lower-tier” BB firms like CS, Barclays, DB, etc.

Also, RBC is strongest in North America and lacks these other firms’ European and Asian presences.

Finally, when re-categorizing banks, a lengthy track record is also important. So, I’m a little reluctant to look at a few years of strong performance from RBC and say it should be in the same category as GS/MS/JPM.

But who knows, maybe RBC will join this group in 5-10 years.

Q: Jefferies is clearly in a different category than the other “middle-market banks,” and it has generated more in global fees than firms like Wells Fargo and UBS.

Will it eventually be a bulge bracket or an elite boutique?

A: Well, let’s look at the data from 2021 and 2020, courtesy of Refinitiv and Mergermarket:

I agree that Jefferies is much different than the other MM banks, but I think it’s too diversified to be an “elite boutique” and a bit too small to be a BB bank if you go by deal volume or fees generated.

So… for now, no, but I could see this answer changing in the future.

Q: Should European firms like UBS, Credit Suisse, and Deutsche Bank still be considered bulge bracket banks?

A: If you look at this globally, yes, I think they should be (see the data above) – but DB and UBS are in a different category than CS, which generates much higher fees.

That said, if you’re in a region like North America where the European banks are weaker, you could make a case that firms like the ones above are better.

This debate reminds me of the argument over the “stronger” vs. “weaker” Ivy League schools, so maybe it’s time to move to the next topic.

Career Transitions

Mysteriously, everyone still wants to get into investment banking and private equity… I’m no expert, but it seems like the salaries and bonuses might play a small role:

Q: I have 5 years of work experience in civil engineering. Do you think I can use a Master’s in Finance degree to move into investment banking and then private equity?

A: I think this would be tough even if you have brand-name schools and firms on your resume/CV.

You’re over-qualified for Analyst roles but under-qualified for Associate roles, so banks would not know what to do with you.

You might be able to use the MSF for other finance roles that care less about your years of work experience, but I think you’d need a top MBA for the IB/PE route.

Q: I’m working at a major valuation firm, and I expect to contribute to purchase price allocations and portfolio valuations.

If I want to break into IB, should I try to work on Fairness Opinions instead? Would that give me an advantage?

A: They’re slightly more relevant than PPA and portfolio valuations, but I wouldn’t recommend focusing on them since the actual work is extremely tedious.

You might benefit from doing a few, but spending all your time on FOs vs. all your time on PPAs will make a much smaller difference than other factors (firm name/reputation, networking, interview prep, etc.).

Q: I’ve been in the Treasury team of a Fortune 500 company for 2 years, where I’ve worked on debt issuances and currency risk hedging. Do you think I can get into investment banking or venture capital from here?

A: VC would be a stretch coming from this role. Sure, venture debt and venture lending exist, but they’re quite different from standard investment-grade debt issuances.

You stand a better chance on the IB side, at least if you target the most relevant group (DCM). If you move quickly, you can probably win a lateral role with enough networking/preparation; if not, you could always aim for corporate banking instead.

Books, TV Shows, Movies, Games, and More

OK, here’s one area where 2021 was less bad than 2020: there were some actual, new, good movies out in theaters, new seasons of existing shows, and some good new(ish) shows.

Q: Succession Season 3 thoughts? No spoilers, please.

A: I am still a huge fan of the show, but I thought Season 3 was a bit weaker than Seasons 1 and 2. The characters are always entertaining, but the story meandered too much, and some of the “payoffs” were not that interesting.

But the final few episodes of the season were great and made me forget some of my earlier complaints.

Q: Any other recent TV show recommendations?

A: So, I spent a good chunk of this year going retro and watching a bunch of series from the 80s, 90s, and 2000s (yes, I’m old).

But in terms of relatively recent series, I’ll recommend You on Netflix.

It’s a ridiculous show with contrived-to-unbelievable writing, but it was so much fun that I just turned off my brain and enjoyed it.

I watch an average of one 45-minute episode per day, which means I can’t finish too many multi-season shows each year. Too much content, too little time.

Q: Books?

A: I was in “retro mode” and “non-fiction mode” for much of the year.

But if I had to give a single recommendation for a 2021 book, I’d say Project Hail Mary by Andy Weir (author of The Martian).

I picked it up based on a recommendation and read the whole 500-page book in ~3 days. There are some logical/story problems, but if you like sci-fi, you will be hooked.

Q: Movies?

A: I saw quite a few in theaters this year; standouts were Dune and The Last Duel.

But I missed some superhero movies, I haven’t seen the new Spiderman yet, and I’ve also not yet seen The Matrix: Resurrections. My expectations are very low, and I’m expecting brain damage if/when I watch it.

Q: Games?

A: I went as far back as 1992 and as recent as 2020 here, playing only RPGs and narrative-driven games.

If I had to give a single recommendation for something within the past 1-2 years, it would be Yakuza: Like a Dragon.

And once you’re done, play everything else in the Yakuza series. These games are overlooked in Western countries, but I think they’re excellent and even better than GTA.

Site Updates, Courses, and Articles

And now to the fun part: you might have noticed that quite a lot of content on this site has disappeared over the past 1-2 years (285 articles, to be precise).

You might have also noticed some disappearing courses and changing pricing/packaging, so let’s delve into the fun explanations:

Q: Why did you delete that article on Topic X? I found it useful! Where is all the content going?

A: The vast majority of the deleted/consolidated articles on this site had extremely low traffic.

If the top articles here attract 20,000 visitors per month, some of these deleted articles had 5 visitors per month.

It’s not a 20% difference; it’s multiple orders of magnitude.

Many articles were outdated, others were redundant, and others were relevant only for a short period, such as the 2012 or 2016 elections.

I may end up restoring or updating some of these, but I don’t think that “more content = better site.”

Q: Why did you remove the Oil & Gas Modeling course? Is it because of ESG? Did ESG activists come to your house and threaten to kill you?

A: Nope, but that would have been entertaining. I think ESG is mostly nonsense for many of the reasons Damodaran has highlighted.

Put simply, there wasn’t much interest or demand for Oil & Gas, and a lot of the content was old and in need of updates.

However, you can’t just make “quick updates” to videos that are based on older SEC filings and Excel files; “update” is a euphemism for “re-do the entire course.”

And I didn’t feel like spending a year of my life re-doing the entire course to maintain a product that generated ~1-2% of total revenue.

Q: What about all the other pricing and packaging changes? What’s happening?

A: The “core” courses are a bit more expensive now, but the Platinum package, with everything on the site, is cheaper because of the removal of the Oil & Gas course.

The main financial modeling course (Financial Modeling Mastery) has a ridiculous amount of content, and it was underpriced for a while.

The overall pricing is still not quite correct, but it’s closer to reasonable now.

I don’t think anything major will change next year, mostly because I’m tired of managing/overseeing/checking all these changes.

UPDATE: This FMM course has now been split into separate, shorter courses.

Q: OK, so what about that Project Finance / Infrastructure course? Venture Capital? Anything?

A: This one comes down to the numbers.

If I spend an entire year, or even ~6 months, working on something new or updating an existing product, it has to contribute a substantial percentage of total revenue (at least 10%).

I’m skeptical that Project Finance could reach that level (and before you leave a comment, remember that I have all the sales data on everything going back to 2007).

However, I might consider it anyway if someone else did the Excel work and research, and we set up a profit share or royalty agreement.

So, who knows – maybe 2022 will turn out to be better than 2021, and you’ll get this new course anyway…