Home / Financial News / Farewell Goldman Sachs, hello Uber: How the tech world is raiding Wall Street talent
uber1.jpg

Farewell Goldman Sachs, hello Uber: How the tech world is raiding Wall Street talent

Ride service company Uber often hires bankers for corporate development. They focus on plotting the company's strategy and handling financial transactions including capital raising.

NEW YORK/SAN FRANCISCO — Three mid-level bankers in Goldman Sachs Group Inc’s technology investment banking group in San Francisco have left to take positions at ride service company Uber Technologies Inc in recent months, people familiar with the matter told Reuters.

‘Masters of the universe’ no more: London traders’ champagne lifestyle comes to an end as banks slash costs


Those days are over for London’s financial market traders. Thousands are now being forced into the ‘real world’ as banks slash costs and shrink trading operations

Read more

The bankers are the latest to leave Wall Street banks for Silicon Valley startups, where the lure of more flexible hours – and in some cases stock options and share grants – can be hard to resist. For tech companies, having bankers on staff can help smooth the path to an initial public offering and other capital raisings.

Uber, currently valued at around US$51 billion, said in August that it expected an IPO within 18 to 24 months. It has already raised US$7.4 billion from multiple financing rounds, and is the biggest so-called “unicorn” – the term for privately held tech startups worth US$1 billion or more – that has yet to go public.

Goldman does not disclose attrition figures, but it has lost enough employees to startups, private equity firms, and other companies in recent years that it announced earlier this month a series of changes designed to help it retain more junior employees at the analyst and associate level, including promoting them faster. It has also set up a task force to help it retain mid-level employees who hold the vice president title.

Spokespeople for Goldman and Uber both declined to comment.

The increasing attraction of other fields for Wall Street bankers underscores how increased regulation after the financial crisis has weighed on employees’ potential earnings from careers in the sector.

There is a lack of publicly available data documenting how many people have left the big banks, but there have been a series of high profile exits, including Ruth Porat, former chief financial officer at Morgan Stanley, who earlier this year took a similar role at Google parent Alphabet Inc., and Michael Evans, former vice chairman and head of Asia at Goldman, who became president of China e-commerce company Alibaba Group Holding in August.

A vice president in Wall Street investment banking can get paid US$500,000, including bonus, while a mid-level corporate development employee at a technology company like Uber might earn closer to US$200,000, recruiters said. The banker’s salary will often fluctuate depending on how the deals and capital raising areas are doing in a particular year.

Bankers may take pay cuts to move to Silicon Valley, but there is often the appeal of a better work-life balance and the opportunity to work at fast-growing private companies that can offer shares or stock options, and therefore the possibility of big IPO paydays for senior staff. Those gains can sometimes more than make up for the reduced salaries.

Related

Check Also

1123narruitt.jpg

Marriott’s $12.2-billion takeover of Starwood Hotels will help it dominate Canada

TORONTO — Marriott International Inc.’s US$12.2-billion takeover of Starwood Hotels and Resorts Worldwide will not …

Leave a Reply

Your email address will not be published. Required fields are marked *