How To Get Into Investment BankingThe Ultimate Guide For Entering Investment Banking in a Pre-MBA Role

In one of our popular posts, we wrote about How to Leave Investment Banking. We have since gotten a lot of requests for some guidance on how to get into banking. So if you are in college and looking to start as an investment banking analyst, this is the guide for you. If you are looking to transition into banking as a more experienced professional or after your MBA, then this guide may be useful.

Outlining What People Mean When They Say Investment Banking

People typically mean advisory — M&A and corporate finance. But they could also mean Sales & Trading (think Liar’s Poker) or Global Capital Markets roles when thinking about the investment banking super-set. If you are looking to break into investment banking, these three categories of jobs are the ones you should be focused on. You could also consider jobs in equity research which are also well regarded and could help you transition to investment banking advisory, sales and trading or hedge-fund / long-only fund investing jobs in the future. Finally, you could also consider expanding your net to also include credit risk jobs which are also interesting jobs with promising career trajectories, but are not typically associated with traditional investment banking careers.

What Major Should You Pick?

Pick the major you enjoy and you think you will do well at. We never advise tailoring your entire college curriculum for a single job since what you want might change in the future. Moreover, people with a wide variety of backgrounds and majors go on to pursue successful careers in investment banking. Business, finance, accounting and economics majors tend to statistically over index in most analyst classes at investment banks, but that is in part due to the fact that those are the students that predominantly apply. Investment banks also hire science, engineering, arts and humanities majors.

Investment banking is a highly quantitative career, so strong analytical, financial and accounting skills are incredibly helpful. If you are not a finance, accounting or business major, getting those skills in some form is really useful to your chances of getting in.

Types of Things to Do In School

Having picked your major, it is important to build a portfolio of key skills and accomplishments while at school. Here are a few things that successful investment banking applicants tend to do while at school:

• Maintain a strong GPA. A good GPA depends meaningfully on your major. Interviewers will often give you credit for choosing a more quantitatively intensive major (engineering, physics) over a major considered less intense (political science). Similarly, the reputation of your school factors in this as well. You should aspire to get a 3.5 (out of a 4.0 grade point average) or more.

• Demonstrate an aptitude and interest in finance and accounting subjects. If you are a business major, calling out A or A+ grades in finance and accounting helps

• If you are not a business major, doing a business minor or doing these finance and accounting subjects during school validates your interest in the career.

• Freshman and sophomore internships help significantly. It’s hard to get these internships at bulge bracket banks, but as you prepare for the junior internship that often translates into the full-time job, building a portfolio of prior work experience is one of the most significant stand-out items on the resume. These internships can be at accounting firms, venture capital or private equity companies, consulting firms, or in private wealth management roles. Try and get projects that are finance-oriented, excel-oriented and intense.

• Do a valuation and excel modeling course. Professional training firms like Training the Street often go from university to university during the school year conducting 2-3 day valuation and excel modeling courses. They can give you a leg up during your junior internship since they prepare you for technical aspects of the job.

• Take part in extra-curricular activities that demonstrate your penchant for leadership and teamwork. Competitive athletics are often highly sought after experiences on a resume

• Take part in finance and business related extra-curricular activities like stock picking competitions, and consulting case competitions. These can often be excellent opportunities to learn the vocabulary of business and finance.

Networking

Networking is often a significant hurdle in the recruitment process. Given the number of applicants and the paucity of positions, banks expect candidates to actively network with bankers and former interns to demonstrate their interest. There are several key points of networking:
- Attend the career fair and on-campus career talks by the banks. These are mandatory if you are interested in the career and the company. Wear a suit, talk to bankers, ask a question or two and make a connection. Don’t come across as overeager or overbearing, but use these sessions as a chance to learn about the job and the company.

• Reach out to seniors at your school who have interviewed at major banks. This is one of the most important types of networking since you will often get advice on how to navigate the recruiting process and former interns are often the points of contact for investment banks looking for intel on the future class of analysts.

• Connect with alumni bankers and bankers you met on campus to schedule a informational interviews. Focus on junior bankers (Analysts, Associates and Vice Presidents) who are more involved in recruiting and willing to take time to talk to you.

Acing the Interview

The interviews are structured. Candidates can go overboard trying to prepare for brain teasers and technical questions, and forget to stay organized and composed during the interview. Interviews are typically 50-50 “fit” vs technical.

During the “fit” evaluation, bankers are trying to ascertain whether you have the intensity it takes to do the job, have attention to detail, are genuinely interested in finance, and whether you are client presentable. It’s very important to have crisp answers to the following questions:

• Why Banking?
• Why the specific company you are interviewing with (be specific)?
• In your opinion, what makes you stand out?
• Are you detail oriented?
• Are you a team player?

During the technical phase, you may be given a case study. However, questions tend to be very standard and focused on the following: - Basic accounting and how the three financial statements connect to each other (e.g., how does depreciation run through all three statements) - Valuation methods and CAPM - Basic understanding of how you would model a company (revenue vs gross margins vs EBITDA vs net income)

If you are asked brain-teasers, don’t try get the perfect answer. Just talk through the problem, how you would approach it and don’t hesitate to ask questions. These problems are always designed to evaluate whether you think through problems in an organized fashion and how you deal with such questions under pressure.

What To Avoid

The following 5 things are probably the most common reasons why people fail to get banking internships / jobs: 1. Sloppiness: spelling mistakes, getting the name of the company wrong, poorly worded emails. Attention to detail is one of the most important aspects of the job and the interview process

1. Failure to appropriately network, attend on-campus sessions or reach out to seniors who interned at the firm

2. A non-standard resume or a resume that is not appropriately accomplishment focused

3. Seeming lukewarm about the company you are interviewing with

4. Appearing overbearing, overconfident or hyper-competitive during networking events or the recruitment process

So prep your suits, polish your shoes and don’t forget your confidence. It’s time to make your mark on Wall Street