Nelson Rogers, Princeton Class of 2025


And Why Investment Banks Are Currently Winning

Nelson Rogers, Princeton University, Class of ’25

Two friends and I spent a weekend in a library study room in the fall of 2021. The 400
Investment Banking Interview Questions & Answers You Need to Know was our bible. Our super-days at a few banks and private equity shops were that week, and we weren’t the only ones. Those of us who studied economics kept tabs on one another: who was interviewing where and who had signed with which firms. Of course, offers were being extended not for the coming summer, but the summer after. In the fall of 2021, we prepared with the hope of receiving a job in the summer of 2023. The common feeling when one received a coveted offer was not excitement, but relief.

HOW THE BATTLE STARTS. Timelines moving earlier every year is a symptom of competition: banks and firms wanting to attract and lock in the best and brightest talent before the others. It’s only rational. But in doing so, the undergraduates who compete for the prestige and compensation start on a track with blinders on. It’s not uncommon for a promising undergrad to intern with a firm the summer after their sophomore year, again after their junior year, then sign the return offer for after graduation. They probably at no point considered recruiting: they worked for the only firm they ever considered. But with the staggering number of firms and companies that exist today, one has to think they could have been better off elsewhere.

The percentage of the employed Princeton Class of 2022 that went into finance or consulting is astonishing: nearly 40%. If we extrapolate the Princeton statistic to elite universities, it becomes evident that a given company’s greatest need – highly motivated, educated, connected talent – disproportionately chooses finance and consulting over entrepreneurship. Banks are depleting the very ecosystem they serve.

HOW IT CONTINUES. The thought of what could be if these students chose to lead, contribute to, or start businesses instead of serving them is humbling. But among Ivies and elite universities, access to lucrative internships and analyst roles are too easy. (While access is not objectively easy, the process is made frictionless enough that hardly anyone stops to consider other paths.)

What are even more remarkable are the reasons underpinning the phenomenon. Compensation, at least for internships, is nearly irrelevant. If a top bank offered an internship at no pay (in the hypothetical), it would not be conjectured to say most prospective interns would seize it without blinking. To top talent, who know that of themselves, a role is worth only as much as its present value. Paved paths into the core of finance make the task of estimation and discounting easy. And when the protracted value of a position is clear, the exercise of hunting for success becomes novel.

There are corporates and startups with the cultural and economic capital to compete. When the firms that pay the most are also the firms with the greatest reputations, they trap newcomers on both sides – the vice of wealth and prestige. And given the relative surety of a successful career beginning in banking or an equivalent, there exists no rational reasons to leave.

HOW TO CHANGE THE COURSE. Much to the dismay of corporations and startups seeking bright, connected newcomers, I tend to believe the solution lies in values and goals propagated at the university level. There are few who arrive at an elite school with a lucrative career in investment banking or consulting in mind, and there are many who arrive with the desire to work in an industry or a vertical, whether it’s sustainable technology, aerospace and defense, and fintech. Yet these aspirations fall prey to ease and guarantees.

The cultural definition of success at elite universities in many ways is the surety of banking. But without newcomers to business willing to take a “risk” on a non-traditional career path (by which I mean anything but banking, PE, and consulting), business and financial ecosystems suffer. It’s unfortunate especially for startups, for whom volatility is a fact of being. Perhaps there is a way to assuage this fear if startups demonstrate they associate with such reputable firms (but do not rely on them, perhaps contrary to reality).

HOW TO WIN. If you leave with one thought, let it be this, the beginning of the solution: the fear of unimportance and uniformity singly outweighs compensation and reputation. Elite talent joins banks because they believe banks will launch standout careers––careers that trounce even others in finance. Yes, they have wealth and prestige, but they’re in an intern class of hundreds at one of dozens of banks or shops. Appealing to elite talent’s innate desire to do something unique is, as I see it, the only way to punch above one’s weight.

There is something to be said that banks and buy side firms strengthen the financial ecosystem which, in turn, improves life for other verticals and startups. At the same time, if all the best and brightest go to supporting the markets, few of them are in the markets – where they could be imminently successful and drive radical innovation for which they trained.

When a starry-eyed undergrad looks to the future, they want assurance that the investments they’ve made in themselves will be rewarded. If a company or startup succeeds at this arduously difficult task by proving their value lies in their individuality, then perhaps they will succeed. But until corporates and startups leverage symbolic value as much as compensation, the banks will continue to win.

Lisa Johnson, CPA, Tax Director, FintechForce


How R&D Can Cost or Save Your Fintech Startup in the Ever-Changing Tax Landscape (or Minefield)

Lisa Johnson, Tax Director

Research and Development is a cornerstone of many startup businesses. For over 70 years, businesses have also been allowed to treat their efforts in research and experimentation like any other current trade or business expense for tax purposes. But as of 2022, that changed, bringing with it some good news and some bad.

If you’re a business owner, especially a startup or an aspiring unicorn, this applies to you. As we catch our breath from the end of another tax season, it’s important to highlight recent tax code changes in Research and Development (R&D) and Research or Experimental (R&E) expenses that will likely affect your bottom line.


The Tax Cuts and Jobs Act (“TCJA”) enacted in 2017 introduced significant changes to the Internal Revenue Code regarding R&D expenses for tax years starting after December 31, 2021. These changes require businesses to capitalize and amortize certain R&E expenses over a period of years rather than deducting them in the year incurred, resulting in reduced deductions and thus increased taxable income. Critics contend that these requirements hinder innovation and growth in the United States.

Senate Bill 866, the American Innovation and Jobs Act, was introduced in March 2023 to counteract those effects. It’s designed to promote innovation and job growth in the United States by repealing the TCJA changes in the treatment of R&E expenses.


NOW WHAT? As of June 2023, this Senate bill is still pending. Generally Accepted Accounting Principles (GAAP) remain the same, requiring the cost to be expensed in the year it is incurred. Tax professionals have hoped for more expedient relief from these requirements, and many requested tax filing extensions in anticipation of changes before the final deadline. That hope is dwindling, and it is mandatory for all businesses to comply with the daunting task of identifying direct and indirect expenses related to R&D solely for tax purposes.


R&D Credit expenditures are described in a different tax code section. Classified as Qualified Research Expenditures (QREs), these direct costs are more easily identified than the R&E expenses mentioned earlier.


HOW SO? Businesses may elect to use this income tax credit against payroll tax. This is a great opportunity for cash-strapped startup businesses. Eligible organizations who have less than 5 years of generating gross receipts and less than $5 million in gross receipts in the current year could offset up to $1.25 million in payroll taxes.

The documentation and processes for tracking QREs as well as the compliance with the new R&E expense requirements can be overwhelming. IRS guidance continues to evolve on this topic. As with any new tax regulations, it is important to proactively discuss the impact of these changes with your experienced tax advisor.