Hot Debate Takeaway: Investing vs Tech

1. Which Industry Has Better Pay? 💡

It's hard to compare the compensation at an early stage VC fund vs. large cap buyout fund vs. big tech vs. start-up, all have very different compensation packages.

On average, our panelists agree that entry level finance jobs at investment banks or investment firms tend to have the highest cash compensation. If you work at a financial firm that pays cash bonuses you should consider what factors other than your performance influence the bonus such as the company’s stock price or the economic environment.

But what about non-cash compensation? Associates at small VC funds may be paid in the “opportunity” to become a partner one day and reap the benefits of the partnership model. To read up on how “carry” works check out this article here. Other forms of non-cash compensation include perks and benefits as well as equity compensation. Working at a big tech company might unlock perks such as free food, transportation or great healthcare.

Everyone values those perks differently so it's a good idea to think about the entire compensation package as well as the cost of living in the job’s area.

2. Which Industry Has a Better Culture? 🔑

Our panelists have observed the tech companies often prioritize work/life balance, flat team structures and ownership more than financial firms. However many more established financial firms (and some large cap tech firms) can offer more job stability than fast growing tech companies.

Our panelists all agree that both industries have a long way to go when it comes to the diversity aspect of culture. While the culture of the overall company you choose is important, your team’s culture and your relationship with your manager are even more important. Good managers should give you feedback and help you make progress towards individual and company goals.

3. Which Industry Has Better Opportunities for Promotion? 🪜

Generally, the larger and more mature the company, the more structured the promotion process will be at both financial and technology firms. At mature finance firms it can be easier to get a promotion because there are more defined levels so you may get a title bump every couple of years. At technology firms there may be fewer defined steps so you may get fewer title changes, but you are more likely to gain additional responsibility and ownership more quickly. There are exceptions to this rule - if you are a strong performer at a hedge fund you may have a very quick path to Portfolio Manager (however on the flip side, hedge funds are notorious for the high churn of lower performing employees).