Looking to cash in on the latest tech innovations? You don’t have to be a developer to do so. Cloud computing, the advent of apps and other tech revolutions are creating sweeping changes in the industry, and startup companies are cropping up everywhere.
The buffet of options makes it a great time to be a venture capitalist specializing in helping tech startups get off the ground. Venture capitalists with a strong understanding of the tech industry can use their knowledge to make well-informed choices about which young companies are worthy of seed money. These decisions have enormous implications for both the investor and the company receiving startup financing, and it takes a strong financial adviser to zero in on which investments have the greatest potential.
Many college graduates earning a bachelor’s in finance have hopes of joining one of these firms and using their tech expertise to advise on investments. For various reasons, those aspiring venture capitalists believe their time is better spent actively participating in the work force instead of gaining additional training to bolster their financial expertise and their job prospects. But statistics suggest that there’s more to be gained from a masters in finance than meets the eye, and cutting their education short could be a detriment to their career aspirations.
Opening up job opportunities in your target field
The best way to evaluate the benefits of a Master of Finance is through a case study focusing on Master of Finance recipients from MIT Sloan’s 2011 class. Of the 57 graduates in that class, students enjoyed a median base income of $105,000 annually. This does not include bonuses, which are a standard part of any investment role with a venture capital firm. Those salaries varied between $70,000 and $140,000 annually, which far exceeds the anticipated entry-level income of graduates holding bachelor degrees.
And while MIT Sloan is a globally respected school for studying finance, further scrutiny of this class’s statistics show how a master in finance can be particularly beneficial where venture capital work is concerned. Sixty percent of the class went on to find work in investment banking or investment management, both of which are core to venture capital work. More than half of those jobs—51.4 percent—were facilitated by the school itself, demonstrating how valuable a school can be in providing job opportunities through networking and other connections.
Not only can a master’s degree in finance allow you to enter the venture capital industry at a more prominent position, but it also could give you a better shot at landing a position that focuses exclusively on making investments in tech startups.
Keeping options open in the future
Working in venture capital may be your goal now, but many professionals change course in their careers at least once. If you hold a bachelor’s degree and have a professional background entirely based in venture capital, you might one day find yourself limited in the jobs you are qualified for.
By contrast, a master’s degree in finance can give you far more options in virtually any field of finance. A more well-rounded education will make you more valuable to employers and help you market yourself better, whether you choose to focus your skills in the tech industry or elsewhere.
In the tech industry, it only takes one good idea to launch a career. But the financial side of these aspirations can’t afford to be as idealistic—effective venture capitalists are constantly playing the role of devil’s advocate and assessing the risks and potential of any startup. Such rigid analysis is key to the success of both the startup and the investment firm providing seed money—and the best way to assure such practices is through a solid educational backbone.