Harvard Grad: 10 Things I Wish I Knew About Investment Banking Recruiting My Freshman Year
“Martin D.” recently graduated from Harvard this spring and has so far been unsuccessful in landing a coveted investment banking job. Failing to understand the intense competition and “rules of the game” led to Martin being shut out through the recruiting season and post-graduation. Despite a stellar athletic career, a strong major, and Harvard on his resume, he did not receive a single offer.
Referred to us by a close friend, we are working closely with him to re-brand and promote his impressive background and relevant skill-set to appropriate roles on Wall Street. With our assistance and guidance, we fully expect Martin to find success and start his career in investment banking sooner rather than later. He has generously agreed to share the lessons learned about the investment banking recruiting process as a special contribution this month to our blog.
10 Tips Regarding Investment Banking I Wish I Knew My Freshman Year
by “Martin D.” Harvard ’14
Being a stellar athlete and captain of a sports team of a target school, I thought getting a job in investment banking would be a cinch. However, I had the unfortunate surprise of finding out there is fierce competition for the analyst positions at investment banks even among target schools. I was raised in a small town of about 10,000 people in Ohio. In my town, the closest thing people can name to an investment banker is a financial advisor at your local bank branch.
Because I knew no one in the industry, I received very little guidance on resume building and landing a job in finance. I feel that if I had better advice early on in my college career, I would have been able to build a great resume geared toward the banking world. I’ve decided to share some things I wish someone had told me my freshman year to help those of you considering a career in investment banking.
1. Become a Networking Professional
Good Impressions Go a Long Way in the Interview Process
Networking doesn’t mean meeting someone, shaking hands, and getting a business card. This is your chance to make a lasting impression; do not squander these opportunities. You need to come with prepared questions, have an elevator pitch ready, and say something to make you standout because you might walk into a networking event and be the only person who showed up (this happened to me a few times). There are some basic networking questions that fit most situations and you should have in your back pocket, such as “Do you enjoy the work?” and “What is the culture of the firm like?” These questions can provide you some insight to the specifics of the work and whether your personality might mesh will with other employees.
Above everything else, you should be genuinely interested. If you find yourself talking to someone who works in a branch that is not investment banking, find out what they do, how it relates to the firm as a whole, and decide if you might enjoy it. There were countless times where I passed by unoccupied employees of firms to head straight for the crowded i-banking table. It is much better to have an employee referral from someone who works outside of corporate finance than to be 1 of 100 kids barking questions at senior bankers.
2. Go to Networking Events Your Freshman and Sophomore Year
Show your Interest in Finance Early and Often
Although networking events at your school might be directed toward juniors, it is always a great idea to make in impression early in the recruiting process. The firm might not have any opportunities open for freshman and sophomores, but this is a great opportunity to learn, network, and most importantly, show your early interest in finance. Be sure to sign in when you get to the event; banks keep records of who attended the networking sessions when giving preference for interviews. Firms will be impressed with your initiative when you can point to attending the firm’s networking event freshman, sophomore, and junior year (on top of building relationships over the years with bankers at the firm). I made the grave mistake of not attending many of the networking events even in my junior fall. Yikes.
When at the event, be sure to get some face time with analysts, associates, and anyone who else might be present. It may be intimidating to struggle against juniors for the attention of the few employees representing the firm, but banking is not for those who are easily intimidated. Have an older friend help you prepare some great questions to ask that will leave a lasting impression on the people you do talk to. Be sure to mention in your elevator pitch that you are a freshman/sophomore and you want to do banking.
3. Follow up Emails Are Your Friend
They are your first steps to building relationships within the firm
I was guilty of not doing this on many occasions (even once after an interview). After having great conversations with people in person, I would not follow up. This was partially because I did not understand the sheer volume of people they meet on a daily basis.
Building a book of contacts does not happen by meeting someone once and getting their card to ask for something later; you must first build a relationship. This relationship starts with an immediate follow up email saying how nice it was to meet them, mentioning something specific you talked about with them that they would remember, asking a question about the firm, and thanking them for the insight to their questions (remember they probably met 100 people that night so do your best to be unique). Hopefully, they respond with a similar email (it will likely be shorter). Once they do, here is an opportunity to ask any remaining questions that you have about the firm or perhaps mention that you will be traveling to where their headquarters is located and would love to stop in see the floor, meet people, etc. Be sure to do all of this before interviews/applications start. Since this is an effort to build relationships to gain an advantage, it is too late once interviews start. The playing field has been leveled at that point.
4. Summers are Opportunities, Not Breaks
Do Something Interesting or Impressive Each Summer
So you have had a tough first year of college and all you want to do is relax. Well, you are out of luck. Summers are opportunities to gain real life experiences. After competing in international competition my freshman summer, I had nothing lined up for July and August. This was a wasted opportunity that I should have seized to make myself look more interesting or qualified on a resume. There are countless things you can do over the summers that look great on a resume, and it would be a mistake not to take advantage of them. After all, one of the most important aspects of landing an investment banking job (and being successful in general) is having an interesting story. This usually means doing unique things or blending experiences to form an atypical combination – think of how many skydiving opera singers you know. These sort of unique stories are exactly the sort of thing that leaves a lasting impression and gets you lunches and interviews because people are genuinely interested in your story.
Each year, start planning for your summer as early as possible, preferably during winter break when you have free time. Freshman summer is a great opportunity to explore other interests you have outside of finance. Interning for local politicians, studying abroad, working in a lab, writing for a newspaper, and participating in leadership seminars are examples of ways people in investment banking have spent their freshman summers. Sophomore summer should be geared more toward your interest in finance; this could mean working for a treasury, working as an accounting intern, or getting an internship in banking. Having some financial experience under your belt will be a powerful tool in landing a junior summer investment banking position.
5. Junior Year Internships Result in Full Time Offers
The Majority of Incoming Analyst Classes were Summer Analysts
Summer analyst programs at banks can be thought of as a trial period before a bank wants to fully commit to hiring you. Why would a bank (or anyone for that matter) pay you a $70,000 base salary when you have had no direct or equally challenging work experiences? Interviews are due diligence before a bank invests in a person by hiring them; internships extend the interview process 10 more weeks and give the bank more exit opportunity.
Because many hires are made from summer analyst programs, be sure to fight for a spot in one. If you can, set up lunch dates or ask networking contacts to stop by the office before the application process starts (sometime in the Fall Semester). Showing interest and initiative early on will give you a leg up on students that rely solely on their resumes and have done a poor job networking.
6. GPA Matters
Banks have Preferences for People with GPA’s Above 3.5
Being a college student, you are used to stressing over grades, and you know how to fill your transcript with A’s. College will certainly be harder and you will likely have less structure in your day, so you need to stay on top of your academics. Most banks have minimum cut-offs for GPA in the interview process. Most of the time no amount of networking or preparation will overcome being below the minimum GPA. Special circumstances may arise for some people, but don’t ever expect to be an exception. Do whatever you can to keep your GPA above or around a 3.5. This might mean taking an additional class each semester while getting a higher GPA to boost your GPA or deciding to take classes based on your performance in similar classes (i.e. playing to your strengths). Looking back, I wish I had taken easier electives and chosen to major in economics instead of biology.
Along these same lines, if you have great standardized test scores, be sure to highlight them on your resume. Standardized tests can be a great way to bridge the gap between your major and your professional interests. For example, if you are an English major, putting your perfect SAT Math score can assuage doubts of your quantitative abilities. Banks want the best of the best; find a way to exemplify how you are the best.
7. Load up Your Schedule
Produce Results In a Challenging Environment
Investment bankers work 80-100 hour weeks. This sort of commitment in a fast-paced environment leaves bankers sleep deprived, but they must maintain the same attention to detail in their work at all times. These materials are going to be presented to executives at companies, so careless mistakes are unforgivable. Banks do not want to hire people who have never proven themselves to excel under these stressful circumstances.
In order to overcome this concern, you should provide concrete examples of your ability to produce great results (grades, championships, sales, etc.) in similarly challenging environments. A great way to exemplify your ability to produce in a challenging environment is to overload your class schedule, work part-time, be on a sports team, be involved in an organization, and still earn your highest GPA to date. It may sound like a daunting task, but this is exactly the kind of example that will give you a massive boost in interviews. Loading your schedule to the max also shows you like to be busy and readily sacrifice free time for opportunities to learn.
8. Get Involved with a Team
Show That You are a Good Teammate
Investment banking is team-oriented. Deal teams consist of a Managing Director, a Vice President, an Associate (or two), and an Analyst (or two). The work is not evenly distributed, the analysts work longer hours and must be willing to do what is asked of them. Having a great GPA and experience will only get you so far if you do not have the right attitude. Being able to point to a team experience where you showed this “anything that is asked of me” attitude will give you a big boost in interviews. Pointing to a time you worked on a group project will not have the same affect since most of the work in group projects is divided very evenly compared to banking and you work together for a limited time.
Probably the easiest way to get involved with a team is through sports or team oriented student organizations that take a significant amount of time. Being on a team shows that you are amiable, resilient, and flexible enough to adapt to group needs. For every deal that closes in banking, there are somewhere around ten deal pitches that do not. The directions from your superiors change rapidly and many of your projects are scrapped before they even get in front of clients. If working three sleepless nights on materials that end up being thrown away will disgruntle you, you might be looking at the wrong industry.
9. Know the Three Front Office Branches
Understand What Each Branch Does and Which Appeals Most to You
Investment banking is really the corporate finance branch of investment banks, but it gets the most attention and generates huge sums of income for the firm. Thus, it tends to take the name “Investment Banking.” However, there are two other branches of the front office: Sales & Trading and Research. Understanding what each branch of the front office does is critical in order to make an informed decision that aligns your interests with your profession. Each branch attracts different types of people, and they perform very different functions. I recommend exploring these branches on your own. Each branch makes great money, so try not to be influenced by small differences in compensation and make your decision based on your interests. I was so blinded by the big bonuses investment bankers receive that I didn’t even give S&T or Research a chance. Looking back, these were viable options that could have been a great fit for my interests.
10. Preparation is Crucial
Investment Banking Interviews are a Means of Thinning the Herd
Investment banking is one of the most competitive fields to break into with typical acceptance rates lower than all Ivy League schools. Each bank will receive thousands of applicants for their incoming analyst class (usually 60-80 analysts). Because there are so many applicants, banks can be incredibly selective. They need to find ways to sort resumes before interviews begin. Typically they will look at GPA, recommendations from current employees, and experience to make initial cuts.
Once interviews start, they are looking for any indication that you might not be the best candidate. This means anytime you answer a question and the interviewer does not like your response, you may be finished right then. This means there is an incredible amount of preparation that needs to be put into interviews (e.g. understanding of accounting principles, corporate finance, current market trends, etc.). There are plenty of resources out there to help you prepare for interviews, including The Write Resume. Be sure to take advantage of others’ expertise in investment banking interviews, so you do not let an opportunity slip through your fingers.
Obviously, there are more than 10 things you need to do to be successful in investment banking, but having read this, you can avoid repeating some of the blunders I made through my college career. If you take this advice to heart, get advice from people in the industry, and are serious about a career in finance, you will be in a much better position than I was upon graduation.