Friday Reader Mailbag – Bailing On Big 4 Before They Bail On Me?
A reader writes from an EU country:
I have been following your blog since the start of my career. I am a recent graduate and an associate at [Big 4] in [EU country]. I am currently working to specialize in financial due diligence for M&As.
My long term (10-15 years) plan is to become a venture capitalist / or establish a private equity firm with 3 of my other fellows working in the [other strategy consulting firm], [new global bank holding company], and [Dow replacement for AIG].
My question is that: Am I in the right path? I have been offered a dozen jobs paying 2/3 times more than [Big 4], and I am a successful graduate of a top-tier prestigious universities in [EU country]. I am telling you to emphasize the trade off I face. In [Big 4], I think I can gain considerable experience since it’s the largest M&A adviser in [EU country] in terms of due diligence. I had interviews with a couple of headhunters working for small M&A houses offering a lot of money in [local] terms. Do you think it is worth earning less for a couple of years?What else could you recommend me?
Thanks for your time and help,
My suggestion is to work for [Big 4] for a few years at least, even if the pay is lower. That assumes:
1)You can afford to earn less for a little while
2)You like the people you have met in [Big 4] and feel you could work with them, learn from them, respect the kinds of deals they are doing
3)If you stay with [Big 4] you promise me to take full advantage of all of the training, travel, and mentoring that will be available, work your ass off, do well, and think for the longer term.
I hope that answers your question. This is my opinion, based on only what I know, since I do not know the business environment in [your local country] that well. Write back if you want to talk more. Good luck and let me know what you decide and how it turns out. Keep in touch.
I will keep working in [Big 4] since I plan to go global a few years later as you said!
Thanks for your valuable mentoring.
I don't think Topkapi should work in a Big 4 Transaction Services if her long term objective is to be in VC/private equity. Among some Big 4 current and former employees, Transaction Services (or M&A, as they call it) is cynically referred to as 'glorified audit' with good reason. You focus primarily on accounting issues and carry out high level audit type work. You do not directly build the corporate finance/valuation expertise that is relevant for VC/PE careers. VC/PE companies know this, hence it is the exception rather than the norm to transition from Big 4 to private equity or venture capital. I should know, i work in a Big 4 transaction services department. The situation is better in Europe, where they do vendor due diligence that tends to look more at the operational side of the business. In addition, i think Europe is less siloed careerwise than the US, hence it is easier to make a move from accounting to corporate finance. Hence i would advice Topkapi to take the job offer from the M&A house. Its a win-win situation as he/she will earn more money and get more direct relevant experience. Joining a Big 4 firm may well end her dreams of being in VC/PE forever. Anyways, good luck to him/her. Careers take many twists and turns and in a few years he/she may find that they don't want to do VC/PE anyways.
PE, for the most part, is dead until the next credit boom. Unfortunately, it will take years for this credit debacle to clear out of the system. There is no trust and the action taken by the gov’t are not restoring trust but actually making the trust issue worse. Without the credit facilities available PE, that has not been hoarding cash (which is most), has lost its business model.
I know, I know, Debbie Downer but that doesn’t mean its not true.