Today we are going to cover something very basic and fundamental – namely, what are the things you need to get into investment banking. After going through this blog post today, you will know exactly what you need to do to get a job in investment banking.
Perhaps more importantly, we’re also going to dispel a myth that could guide you down the wrong path. We are going to talk about one thing that a lot of applicants THINK they need for some reason, when they don’t really need it at all.
OK, so let’s cut to the chase.
Here’s Everything You Need
If you’ve read my about page, you may remember that my mentor previously came up with an acronym that makes it easy to remember all the bases you need to cover – we call it the PRINCE system:
- Professional Experiences
- Resume/Cover Letter
- Interviewing Skills
- Networking Skills
- Case Experience
- Extracurricular Activities
Now, knowing the “what” is the easy part. The hard part is going about accumulating these experiences and skills in the shortest amount of time possible. Let’s look at each of them and break down the time it takes to complete as well as the degree of difficulty:
Time Required: 3 months per internship, plus 1-2 months of recruiting for each
Degree of Difficulty: 10
This means having relevant work/internship experience. Before investment banking recruiting starts, you’ll want to have done 1-2 internships in one of the following types of firms:
- Regional boutique investment bank
- Private equity firm
- Venture capital firm
- Hedge fund
- Private wealth management
- Corporate finance
Your best bet is to do this part time (10-20 hours a week) during the school year, or full time during your summer break.
Time Required: 1-2 weeks of frequent iterations in the beginning. Minor ongoing maintenance updates thereafter
Degree of Difficulty: 6
These two pages of paper will determine whether you get selected for an interview or not. There are two parts to this – the “substance” and the “marketing.”
The “substance” should take care of itself as long as you take care of your GPA (maintain at least 3.5, but ideally 3.7+) and the other five items on this list.
The “marketing” includes:
- Using the right words and phrases to present your experiences and accomplishments in the best light possible, and
- Formatting the resume in a way that is aesthetically pleasing and demonstrates attention to detail
Doing a good job on the marketing demonstrates a couple of skills relevant to banking – that you’re a great communicator, that you have attention to detail, and that you know how to format things nicely (you will be doing a lot of this in Powerpoint).
Unfortunately, this marketing aspect is where 90% of the applicants mess up, because they don’t know what they’re doing.
If you don’t know what you’re doing, a good place to start would be to:
- Read my blog posts on how to write the perfect resume and cover letter for investment banking, and
- Download the Master Recruiting Toolkit by clicking the image below; inside you’ll find a resume and cover letter template that is plug and play
Time Required: 2 months of solid studying and possibly more, depending on your level of accounting/finance knowledge
Degree of Difficulty: 8
Once you get the interview, you still need to pass the interview. Generally, the interview breaks down into two parts – a fit interview and a technical interview.
Fit interviews involve answering behavioral questions and questions about your motivations to make sure you’re a cultural fit.
Technical interviews involve testing your accounting, corporate finance, and valuation skills.
People tend to stress out and spend a lot more time studying for technical interviews. While that is understandable, I would caution that the fit portion is just as important to get right.
Time Required: you should be doing this as much as possible for the 6-12 months leading up to your application deadline
Degree of Difficulty: depends on your personality
Sometimes, in order to get the interview in the first place, you’ll have to rely on your professional network.
The more holes you have in your candidacy, the more true this becomes. Maybe you don’t go to a target school. Maybe your GPA is not that great. Or maybe your resume is kind of weak. If any of these things describe you, you’ll have to network even harder.
Doing this correctly can result in job offers you wouldn’t have gotten otherwise. Doing this incorrectly will make you come off as an annoying person at best, and be blacklisted from an entire investment bank altogether at worst.
But how do you go about networking with investment bankers who don’t know you and don’t need anything from you?
Again, we provide some resources in the Master Recruiting Toolkit (so go download it!) You can also read my blog post on networking here, if you haven’t already.
Time Required: 2-4 weeks
Degree of Difficulty: 9
Out of everything on this list, this is probably the one you’re least likely to have heard mentioned. What is it exactly?
Case experience means working on a project that is highly relevant to the type of work you’ll be doing in banking. This could be:
- A live deal you helped out with during one of your internships, or
- More likely, it can be a case competition on campus sponsored by an investment bank that you participated in. This is especially common if your college has a business school program
The case competition will usually be based on a live deal the bank actually worked on previously. You and your teammates will be put in the shoes of the deal team and be asked to give advice to the client.
As you can imagine, there is literally no better way to demonstrate that you’re capable of doing the job of an investment banking analyst. You will build financial models and put together a Powerpoint presentation similar to the ones created daily by bankers.
If your presentation is chosen as a finalist, you will get to present in front of a panel of judges, which usually includes investment bankers who are responsible for on-campus recruiting.
Oftentimes the winning team will be guaranteed interviews on the spot. But even if you don’t place as a finalist, having case experience on your resume will only make you stand out from the competition.
The biggest benefit of all, in my opinion, is that it often allows you to you to “control the agenda” during your interviews. Instead of getting grilled on some obscure technical questions that you didn’t prepare for, it’s pretty easy to steer your interviewers towards talking about your case experience.
Of course, the easiest interviews are the ones where you’ve anticipated all the questions in advance and prepared thoroughly. That is what case experiences allow you to do!
Time Required: 1 semester per club
Degree of Difficulty: 5
Join a relevant club on campus, demonstrate your interest in finance in the process, and ideally hold leadership positions and accumulate examples where you had to work in a team setting (useful for those behavioral interview questions).
Obvious candidates include finance clubs, business fraternities, or student-run investment funds. Depending on your school, there may be other relevant student organizations as well.
Outside of joining student organizations, you can also do things on your own such as taking relevant online courses outside of school, reading relevant books, and managing your own personal stock portfolio.
And THAT IS IT. I’ve included everything you need to do to get a job in investment banking. I mean EVERYTHING. Well, you’ll also need our Master Recruiting Toolkit below 🙂
Ok, Now What Do You NOT Need?
Now, I said I would also tell you what you DON’T NEED…
If you only take away one thing from this entire article today, this should be it. I want to take all of you who are either currently going down the wrong path, or about to go down the wrong path, and steer you back onto the right path!
So here we go…
For some reason, there’s this big misconception out there that you need to be an expert at financial modeling to get a job in investment banking.
That is ABSOLUTELY WRONG because there’s no Excel modeling test during investment banking interviews!
Buyside interview processes with private equity and hedge funds are a different story, but we don’t care about that right now.
Investment banks will not put a laptop in front of you during the interview and ask you to build a model or quiz you on Excel shortcuts.
Don’t believe me? You know why they’re not worried about your modeling skills? Because modeling is the easiest thing they could teach you.
The investment banks have their own training programs once they hire you, where they teach you how to model the way they want before you start working. If you’re a summer intern, the training is 1-2 weeks. If you’re a full-time hire, the training is an entire summer. There is plenty of time for them to teach you everything they need you to know about building models.
It’s also just a horrible indicator to use to determine who is going to be successful on the job in the future. Just because you don’t have a lot of hands-on experience with building financial models from school yet, doesn’t mean you won’t be able to learn it and get good at it. So why would they hire based on that?
If you’re spending all of your time buying expensive financial modeling courses, you’re spending your time and energy focusing on the wrong things. You might make yourself feel productive. But in reality, it’s completely counterproductive.
Now, instead of spending time on things that don’t matter (at least not yet), you should focus all of your time on the things that do matter (again, PRINCE).
Even without learning how to build complicated financial models, that’s already A LOT of stuff to tackle/learn.
To make matters worse, the amount of time you have to do everything you need to do is becoming less and less, with the investment banking recruiting timeline moving earlier and earlier every year.
Back when I recruited for investment banking in 2007, I didn’t interview for my summer internship until the latter half of my junior year in college.
These days, as the competition for talent amongst banks become more and more fierce, you’re now looking at recruiting for your junior summer internship during the first half of your sophomore year.
With so much to do in so little time, it’s more important now than ever to ruthlessly prioritize how you spend your time when it comes to your preparation.
Keep your grades up.
Get an internship (or two).
Join a student organization and run for officer positions.
Participate in case competitions.
Put all of these activities above on your resume and cover letter in the best way you know how.
And study your ass off on how to answer all the behavioral and technical interview questions with whatever time you’ve got left.
If you still have time after that and want to become an Excel whiz kid, by all means. My guess is that 99% of you won’t have the time though.
And Here’s Where We Come In
And that is why, here at Wall Street Mastermind, we do our best to help our Inner Wolf Pack members with the stuff that truly matters. We’ve designed our program to cover every aspect of the PRINCE system.
You have a lot to do and learn. You can certainly try to figure it out yourself. Thanks to the Internet, all of the information is out there today if you really want to find it.
But time is not on your side, and any help you can get to help you speed one part of the process up will have a compound effect and enable you to get to the rest of your to-dos more quickly as well. Anytime you get stuck on something, instead of spending hours searching for answers online, how much better would it be if you had a mentor who could point you in the right direction immediately?
Additionally, getting into investment banking is not something you get multiple shots at. There are typically three ways you can break in:
- As an analyst right after you graduate from college
- As an associate after you graduate from business school
- As a senior banker once you’ve worked your way up in an industry outside of banking, and have developed a significant network of C-Level executives that would allow you to generate revenue by bringing in deals for your firm
So it’s not as if you screw it up now, you’ll be able to try again immediately. In fact, you may never get another shot again because there’s no guarantee that everything will fall in place for you to end up in group #2 or #3.
That means it’s crucial that you get in your best shot now, on your first try. The margin of error is so small, and the competition is so fierce (again, 1-3% acceptance rate), you’re much better served by having the guidance of a Wall Street pro.
What are some examples of things we will help you with if you join the Inner Wolf Pack? Well, pretty much we will coach you for up to a year and help you with anything and everything you need.
- Need help applying to your first internship? Check.
- Need help applying for a leadership role in the club you just joined? We can do that too.
- Want unlimited edits on your resume and cover letter, especially as you accumulate more and more experiences? Send it over.
- Participating in a case competition on campus? Let us help you with your presentation.
- There are no case competitions on your campus? We’ll give you a case study to work through that’s based on an actual deal, which you can then put on your resume.
- Don’t know what to say to bankers during networking? We’ll teach you.
- Stuck on a new financial concept that you don’t understand? Ask us.
- Not sure if you’re answering the interview questions correctly? We’ll do mock interviews with you.
Oh yea, and we’ll STILL teach you some financial modeling along the way. Just enough to make you dangerous, it just won’t be our primary focus because it shouldn’t be.
And that’s it for today. If you’ve read this all the way through, I want to thank you for taking the time. Hopefully you found this helpful and now have a clear roadmap for how to move forward as you prepare for recruiting.
As one last reminder, to help you with some of the things we talked about in this blog post, remember to scroll up and click the image to get our FREE all-in-one recruiting toolkit if you haven’t already. If I’ve piqued your interest into considering getting more hands-on and personalized help, you can check out our coaching program here. Otherwise, leave your comments or questions down below. And remember: