(noun): a person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk.
On many, many occasions during a degree, you contemplate what will come next. Some people are completely set on moving on to get a PhD in Theoretical Physics, while others have decided that a corporate firm is by far and away the best place they could start their career in business.
However, most people aren't fortunate enough to have this level of certainty. For an intelligent, talented student like you, furnished with a diverse range of skills and experiences, about to receive a good degree, how on earth do you choose from the thousands of business-related career options available?
You basically have four options:
Join a Large Corporate (Investment Bank, Consultancy, Law Firm, Professional Services etc).
Go into Investment Management (Private Equity, Venture Capital, Hedge Funds, Pension Funds etc.)
Start your own Company (or continue with your existing company if you recently started one).
Join a Start-up Company.
The first thing to say is that there is no right answer. Each person has slightly different needs, priorities and values. To help understand what might be the best option for you, let's weigh up the pros and cons:
1. Join a Large Corporate
This is the easiest option to take.
Pros: You get a good name on your CV, good training, your friends and family will be immediately proud of your new job, you get a good work-life balance (except in IBD!), you have relatively good job security and you receive a high starting salary.
Cons: It's unlikely you'll get public credit for your work, your personal development is likely to be quite niche and narrow (management consultancy is broadest), long-term financial upside is often low (relative to starting and selling your own successful company), your role often has little or no impact on the wider world, you'll have to deal with internal politics, established organisational structure, and your department is always likely to get bent out of shape a little.
2. Go into Investment Management
This one is tough to do straight out of university. Elite Investment Managers may only recruit 2-3 new analysts each year and they often prefer applicants with 2+ years relevant experience.
Pros: High kudos - there's no doubt these places are hot, you get a very good work-life balance (normally < 60hrs/week work), direct exposure to top people (both within the company and meeting clients), a relatively high starting salary, reasonable job security and high long-term financial upside (if you reach fund manager).
Cons: Training is on-the-job (albeit with some useful professional qualifications), your impact on investee companies can be significant although your pre-occupation with leverage and a target IRR (internal rate of return or "yield") can conflict uncomfortably with their non-financial objectives, and personal development is again relatively niche and narrow.
3. Start your own Company
The scariest option - not for the faint-hearted.
Pros: Incredibly steep personal development - you have to learn and adopt new roles very fast, you can personally have direct impact on the world, it's definitely best for getting public credit, it's your idea so you'll be super-passionate about coming into work every day, you have no boss, there's no politics as everyone is equal to start with, you only have to work with people you like and there is huge financial upside if you nail it - you could become rich and famous.
Cons: no brand name for the CV, no training or guidance - you have to work out everything yourself from first principles, terrible work-life balance - the start-up will be your life, you risk public humiliation if it fails and you have no initial salary.
4. Join a Start-up Company
In contrast to jumping into starting a company yourself, this can act as an intermediary bridge.
Pros: Good for personal development - you're likely to get stuck into lots of different areas, little politics (if it's still a small team), salary is stable (especially if the company is funded by venture capitalists), long-term financial upside is potentially high if you joined early enough to receive a significant (1%+) equity share.
Cons: Unlikely to be a brand name for your CV, no formal training, work-life balance isn't great - there's a lot of work still to do, less public credit than if you were a founder and long-term financial upside is still much lower than the founders.
Many of these pros sound great. How do I choose?
Internships are one way. Internships not only provide you with an education and insight into a prospective industry, but during one, you also get paid well and have a lot of fun (particularly in London).
Internships also help you work out what you don't like. This helps you home in on what you actually do want to do.
Kulveer Taggar, ex-President of Oxford Entrepreneurs society and Co-founder of Boso.com and Auctomatic.com took a slightly different path having spent 6 months at an Investment Bank after graduating:
"I actually did both, the graduate job before leaving to do entrepreneurship. In my case, I quickly realised I'd have more immediate control over my future by doing my own thing rather than working in an Investment Bank. I valued working with dynamic people and in situations where I was out of my comfort zone. Also, I very practically believed that entrepreneurship would get me to financial independence quicker than a graduate job."
The reason why some people end up in the wrong job is they didn't think things through enough; they didn't play the tape forward. Here are some of the popular misconceptions people have:
"...starting a company is too risky."
Is it? How much risk are you actually taking? When you graduate from fresh out of university, you're young and broke. So you try starting a company for a couple of years and it doesn't work out. You're still young and broke. What are you actually risking? It's only the opportunity cost of not getting a job.
And anyway, having interviewed with many employers and worked as a professional Careers Coach myself, I know that experience of starting and running a business is valued highly by employers. The amount a candidate will have learned is now well understood - irrespective of success or failure.
Not only this, but if your start-up fails, you'll have learned many lessons from the mistakes you made first time round and you're more likely to succeed if you try to start another company.
"...I need to get some experience before starting a company."
FreshMinds - Google, Microsoft, Facebook, Yahoo! and countless other successful companies were set up by first time entrepreneurs with no serious work experience.
"...a big company will pay me more money."
Yes - it will in the short term. You get a nice, large salary. However, you don't get equity beyond a few token employee stock options. You don't get access to a potentially massive financial upside in the future.
How much money do you need straight out of university? Many people care much more about the money they'll have to support their family and live when they have the time to enjoy the money. If this is the case, then surely long-term financial upside should be what you are looking for?
What is more, money is just one currency. What about learning skills and developing a network? Do they have value? Did you think about them? What would you learn in that job you are considering? Who will you build relationships with? Even if you do ultimately want money, is it therefore better to choose the option which will give you more money now, or the option which furnishes you with the tools required to make a lot more money? For example, starting up a company will require you to learn financial, legal, sales, marketing, strategic, management and many other skills. Surely learning all these have serious value?
In his "Guide to Career Planning", Andreesen went on to say:
"After graduating is when you should optimize for the rate at which you can develop skills and acquire experiences that will serve you well later. You should specifically take income risk in order to do that. Always take the job that will best develop your skills and give you valuable experiences, regardless of its salary."
I'll leave this debate with a closing quote from Charlie:
"Overall, there is no right route, whatever decision you make, the key isto learn from it and reassess your options. Don't get stuck in a job and find you never take the risk of starting up. Equally, if you start something that's going nowhere, make sure you fail fast and move on."
This ends our four-part series on entrepreneurship. If you would like to continue learning about starting businesses and what's required, you can subscribe to David's blog at www.davidlanger.co.uk