With the rapid development of technology and internet in recent years, tech investment banking has become increasingly popular among finance professionals, especially for those with non-finance background. Compared with traditional investment banking, tech investment banking has its unique advantages such as better work-life balance, closer to innovation, higher efficiency and more promising career development. This article will analyze the reasons why tech investment banking emerges and its potentials.
Unique location advantages enable better work-life balance
Most tech investment banking teams are located in Silicon Valley, San Francisco area, which is the center of internet and technology industry. The nice weather, laid-back lifestyle and abundance of outdoor activities of West Coast enable a much better work-life balance compared to the stressful lifestyle in Wall Street, New York. For young professionals who desire both a promising banking career and a more relaxing lifestyle, tech investment banking provides the perfect combination.
Non-finance background welcomed
As tech investment banking serves mostly internet and tech companies, professionals with computer science or engineering backgrounds are highly sought after even without prior finance experience. Many banks have tech-specific divisions focusing on deals in tech industry. Hence tech investment banking opens the door for those non-finance majors who are interested in banking career.
Closer to innovation and real economy
By working closely with startups and tech firms, tech investment bankers get exposure to most innovative ideas and technologies that shape the world. Compared to traditional banking focusing more on financial markets and transactions, tech investment banking enables young bankers to obtain first-hand experience on how technology can disrupt traditional business models and influence real economy.
More deal opportunities, faster career path
The tech industry remains the most dynamic sector with countless new startups and fast-growing tech firms. This provides abundant deal opportunities for tech investment bankers, who can build experience and develop expertise at a much faster pace. Within a few years, it’s possible to get promoted to VP or Director level for star performers.
Better exit options
After years of tech investment banking experience, it’s easy to transit to corp dev, VC/PE investing or strategy roles at tech firms, which usually offers better work-life balance, more upside and ability to shape tech industry. The skills learned such as modeling, valuation and deal execution are highly transferable.
Lower barriers compared to buy-side
Tech investment banks take relatively more analysts from undergrad and MBA programs as the analyst class is large. Buy-side tech investing roles like VCs are much harder to break in without years of relevant experience. Thus tech investment banking serves as a great stepping-stone before making the switch.
In summary, tech investment banking provides unique location advantages, welcomes non-finance background, enables close involvement with innovation, offers more deals and faster promotion, opens doors to promising exit options, and has lower barriers than buy-side. All these make tech investment banking an appealing career choice for aspiring finance professionals.