If you’ve ever Googled “what do investment bankers do,” you’ve probably gotten a mix of vague explanations and Hollywood stereotypes. The reality is more nuanced (and more interesting) than most people realize. Investment bankers advise companies on some of the most consequential financial decisions they’ll ever make: mergers and acquisitions, raising capital, restructuring debt, and going public. But what does that actually look like on a daily basis?
In this post, I’ll break down exactly what investment bankers do, from the analyst level to the managing director level, based on my own experience at Lazard and Qatalyst Partners, and from coaching over 2,500 students at Wall Street Mastermind into banking roles at every top firm.
The Core Functions of Investment Banking
At its core, investment banking serves two primary functions for corporate clients:
1. Advisory Services
Banks advise companies on strategic transactions, primarily mergers and acquisitions (M&A). When a company wants to buy another company, sell itself, merge with a competitor, or spin off a division, it hires an investment bank to provide advice on valuation, deal structure, negotiation strategy, and execution. Advisory work also includes restructuring (helping financially distressed companies renegotiate their debt) and other strategic situations.
2. Capital Raising
Banks help companies raise money through equity offerings (IPOs, follow-on offerings) and debt issuances (bonds, leveraged loans). When a company needs capital to fund growth, make an acquisition, or refinance existing debt, investment bankers structure and execute the transaction, connecting the company with investors who will buy the securities.
These two functions (advisory and capital raising) are the backbone of what investment banks do. Everything else flows from them. If you want to understand the basics of IB before diving deeper, our free course covers the foundational concepts.
The Major Divisions Within Investment Banking
Investment banking isn’t monolithic. Within a bank’s IB division, there are several distinct groups, each focused on different types of work:
M&A (Mergers and Acquisitions)
M&A groups advise on the buying and selling of companies. This includes identifying potential acquisition targets or buyers, building valuation models (DCF, comparable companies, precedent transactions), structuring the deal, and managing the negotiation process. M&A is often considered the most prestigious and intellectually demanding area within IB: it’s where the most complex advisory work happens.
A typical M&A engagement might involve advising a large technology company on acquiring a smaller competitor. The bank would run a valuation analysis, help develop a bid strategy, support due diligence, negotiate terms, and work with lawyers to get the deal closed. These processes can take months and involve enormous amounts of detailed financial analysis.
ECM (Equity Capital Markets)
ECM teams help companies raise equity capital. The flagship ECM product is the IPO (initial public offering), where a private company goes public by selling shares to investors for the first time. ECM also handles follow-on offerings (when a public company issues additional shares), convertible bond offerings, and other equity-linked products.
ECM work involves pricing the offering, marketing it to institutional investors through a “roadshow,” and managing the book-building process. The work is more market-driven and fast-paced than M&A: once a deal is launched, the timeline is compressed and the team needs to respond quickly to investor demand and market conditions.
DCM (Debt Capital Markets)
DCM teams help companies raise debt capital through bond issuances and loan syndications. This includes investment-grade bonds, high-yield bonds, leveraged loans, and other debt instruments. DCM bankers work closely with credit rating agencies, institutional investors, and the company’s treasury team to structure and price the debt appropriately.
DCM is often perceived as less intense than M&A in terms of hours, but it’s a massive business by revenue: some of the largest banks generate more revenue from debt underwriting than from M&A advisory. The work is more quantitative and market-oriented, and it’s a great fit for people who enjoy credit analysis and capital structures.
Leveraged Finance
Leveraged finance (LevFin) sits at the intersection of M&A and DCM. LevFin teams structure and arrange the debt financing for leveraged buyouts and other highly leveraged transactions. When a private equity firm acquires a company using significant debt, the LevFin team at the bank designs the capital structure, syndicates the loans, and manages the execution. LevFin is one of the best seats in banking for learning about credit, capital structures, and the mechanics of leveraged transactions, and it’s an excellent path to private equity or credit-focused funds.
Industry Coverage Groups
In addition to product groups (M&A, ECM, DCM, LevFin), most banks organize their bankers into industry coverage groups: TMT (technology, media, telecom), healthcare, financial institutions (FIG), industrials, consumer/retail, energy, and real estate. Coverage bankers develop deep expertise in a specific industry and maintain relationships with the companies and management teams in that sector. They originate deal flow by pitching advisory and capital-raising services to their clients.
As an analyst, you’ll typically be staffed in either a product group or a coverage group (or sometimes a combination). The type of work varies somewhat (M&A analysts spend more time on modeling and deal execution, while coverage analysts spend more time on pitching and relationship management), but the core skills overlap significantly.
A Typical Day as an Investment Banking Analyst
There’s no truly “typical” day in investment banking because the work varies based on what deals are active. But here’s a realistic picture of how an analyst’s day might unfold:
- 9:00-9:30 AM: Arrive at the office. Check email for overnight requests from senior bankers in different time zones. Review the day’s priorities.
- 9:30-12:00 PM: Work on a financial model for a potential M&A transaction. Update assumptions based on new information from the client, run sensitivity analyses, and prepare a summary for the associate.
- 12:00-12:30 PM: Quick lunch at your desk while reviewing comments on a pitchbook draft from last night.
- 12:30-3:00 PM: Revise the pitchbook based on VP feedback. Update industry data, reformat charts, fix footnotes. Send the revised version for another round of review.
- 3:00-4:00 PM: Join an internal team call to discuss deal strategy for an upcoming M&A transaction. Take notes and identify follow-up items.
- 4:00-6:00 PM: Research comparable companies for a new pitch the team is building. Pull financial data from Capital IQ, calculate trading multiples, and build the comps table.
- 6:00 to 7:00 PM: Dinner break (ordered to the office).
- 7:00-10:00 PM: Continue working on the model and pitchbook revisions. Respond to ad hoc requests from the deal team. Finalize materials that need to be ready for a morning meeting.
- 10:00-11:00 PM: Final review of all deliverables. Send completed work to the associate. Head home.
This schedule is representative: some days are shorter, some are longer (especially when a deal is approaching a critical deadline). The pace is intense, but the amount you learn in a compressed period is extraordinary. For students considering whether this lifestyle is right for them, our free resources include candid discussions about the reality of IB hours and culture.
The Key Deliverables: What Analysts Actually Build
Pitchbooks
Pitchbooks are presentation decks that banks use to pitch their services to prospective clients. A typical pitchbook might include the bank’s credentials (relevant deals they’ve worked on), an overview of the client’s strategic options, preliminary valuation analysis, and a recommendation on next steps. Analysts spend a significant amount of time building and formatting pitchbooks: it’s one of the most visible deliverables in banking.
Financial Models
Financial models are the analytical backbone of investment banking. Analysts build models to value companies (DCF models), analyze potential acquisitions (merger models), evaluate leveraged buyouts (LBO models), and project financial performance (operating models). These models are complex, often running across dozens of tabs in Excel, and need to be accurate, well-organized, and auditable. If you want to build your modeling skills, download our technical cheatsheet as a starting point.
Confidential Information Memorandums (CIMs)
When a company is being sold, the bank creates a CIM, a detailed document describing the company’s business, financial performance, market position, management team, and growth opportunities. The CIM is sent to prospective buyers as part of the sale process. Analysts often draft sections of the CIM and work with the company’s management team to gather the necessary information.
Management Presentations and Board Materials
For live deals, the bank prepares materials for the client’s board of directors and management team, including fairness opinions, strategic alternatives analyses, and deal updates. These are high-stakes documents that directly influence major corporate decisions.
The Investment Banking Hierarchy
Investment banking has a clearly defined hierarchy, and your role changes dramatically as you move up:
- Analyst (Years 1-3): The workhorse of the team. Analysts build models, create presentations, conduct research, and handle the bulk of the analytical work. Most analysts are recent college graduates.
- Associate (Years 3-6): Associates manage analysts, review their work, and serve as the bridge between the analytical team and senior bankers. Many associates come in after completing an MBA.
- Vice President (Years 6-10): VPs manage deal execution and client relationships. They oversee the analytical work product, coordinate with other parties (lawyers, accountants), and begin developing their own client relationships.
- Director / Senior VP (Years 10-14): Directors focus primarily on originating new business and managing senior client relationships. They’re the first level where revenue generation becomes a primary responsibility.
- Managing Director (Years 14+): MDs are the rainmakers. They bring in deals, maintain relationships with CEOs and boards, and are ultimately responsible for the team’s revenue. Compensation at this level is largely driven by the deals you originate.
Understanding this hierarchy is important because it shapes your day-to-day experience at every level. As an analyst, your job is to execute. As you climb, the job shifts toward client management and business development. For more on how IB careers progress, explore our blog for detailed breakdowns of each level.
Common Misconceptions About Investment Banking
Let me clear up a few things that I hear people get wrong about investment banking:
- “Investment bankers trade stocks.” No. Investment banking and sales & trading are completely different divisions. Bankers advise on transactions; traders buy and sell securities. These are separate career paths with different skill sets.
- “It’s all about math.” The math in investment banking is not particularly complex: it’s mostly arithmetic, algebra, and basic finance concepts. What’s hard is the judgment: analyzing whether a deal makes strategic sense, understanding what a client needs, and communicating complex ideas clearly. Strong analytical skills matter, but so do communication, judgment, and attention to detail.
- “You need to be from an Ivy League school.” While target school students have a structural advantage in recruiting, students from non-target schools break into top banks every year. Networking, preparation, and performance matter more than pedigree once you’re in the interview room. We’ve helped hundreds of non-target students land offers: check out our testimonials for real examples.
- “Everyone leaves after two years.” Many analysts do leave for private equity, hedge funds, or business school after their analyst program. But a significant number stay in banking and build long-term careers. The exit opportunities from IB are unmatched, but banking itself can be a rewarding career for those who enjoy the work.
- “The work is boring.” Some of the tasks (formatting pitchbooks at midnight, proofreading footnotes) can be tedious. But the overall experience of working on multi-billion-dollar transactions, advising CEOs, and learning how the financial system works is genuinely fascinating. The ratio of interesting to mundane work improves significantly as you become more senior.
Why Understanding the Job Matters for Recruiting
Here’s why all of this matters if you’re trying to break into investment banking: interviewers can tell immediately whether you actually understand what the job entails. When you can speak specifically about M&A advisory, financial modeling, pitchbook creation, and the deal process, you demonstrate genuine knowledge and commitment. When you give vague answers about “wanting to work on big deals” or “being interested in finance,” you signal that you haven’t done your homework.
The best candidates in IB interviews are the ones who can articulate not just why they want to do banking, but what they understand the day-to-day reality to be, and why that reality excites them. If you’re preparing for interviews, our technical cheatsheet and free course will help you build the knowledge base you need. And if you want personalized coaching from people who’ve actually done the job, apply to Wall Street Mastermind here.
Want Personalized Interview Coaching?
Wall Street Mastermind has helped over 2,500 students land offers at Goldman Sachs, Morgan Stanley, JPMorgan, and every top bank on Wall Street. Our coaches have personally worked at the firms you’re targeting, and they know exactly what the job looks like from the inside. Apply here to learn more about how we can help you break in.
Related Articles
- Investment Banking Internship: Everything You Need to Know
- Investment Banking Technical Interview Cheatsheet
- Free Investment Banking Recruiting Course
- How to Network Into Investment Banking
- Investment Banking Resume Template
- Wall Street Mastermind Track Record
Follow Wall Street Mastermind
Stay up to date with the latest investment banking recruiting tips, student success stories, and career advice:
