So You Want to Be an Investment Banker, Doctor?

An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provides ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities.

Investment bankers are different from venture capitalists. Venture capital is a form of financing where capital is invested into a company, usually a startup or small business, in exchange for equity in the company. It is also a major subset of a much larger, complex part of the financial landscape known as the private markets. Here is how venture capital works.

Venture capital firms are a type of investment firm that fund and mentor startups or other young, often tech-focused companies. Like private equity (PE) firms, VC firms use capital raised from limited partners to invest in promising private companies. Unlike PE firms, VC firms often take a minority stake—50% ownership or less—when they invest in companies. A firm's array of companies is called its portfolio, and the businesses themselves, portfolio companies.