The Ultimate Guide For Becoming An Investment Banker

Every single person out there is aware that investment banking is a very lucrative field. The money offered at the starting level is definitely at the higher end of what a recent college graduate can expect to make, and spending even just two to three years at an i-bank will set you up well if you want to do an MBA or transition into the hedge fund/private equity space. 

For this reason, the process of becoming an investment banker is not an easy one. There is no specific degree that is required in order to break into this space, although the conventional starting point is typically a major in finance or economics. But irrespective of whether you are studying a business-related major or not, you will need to really study up on the relevant material in order to have a shot at passing the interview process and getting one of those highly-coveted analyst offers. 

In this extended post we will teach you how to go from high school/university into the investment banking space.

How to Start — Deciding If IB Is For You Or Not

For the purposes of this post we are going to assume that you are in the 16 to 22 age group. If you are younger than 16 you are in luck. Simply apply the same pointers but start one or more years earlier so that you are even better prepared. 

The first question you need to ask yourself is why you want to become an investment banker. There are many valid reasons and you should have multiple motivations to explain your desire, but if one of these is not money then forget about going into IB. The lifestyle of a junior banker is a grind and there is absolutely no reason why you should subject yourself to it if the financial part of the equation does not get you excited. 

With that said, it is important that you understand the nature of the business itself early on so that you know what you are getting yourself into. While in high school and college you should read as much as possible not only to expand your relevant knowledge but also to better pinpoint your biggest career goals. Do you want to become an investment banker because everyone else around you wants to be one? Or because you watched a couple of movies that greatly dramatized the work of a banker? Is it really even investment banking that you want to get into, or do you actually want to break into sales & trading?  

If you do not yet know the answers to the above questions then we strongly recommend you pick up the following book: The Fast Track. This is a great book that will explain in comprehensive detail the different sectors of investment banking, securities trading and strategy consulting and in layman’s terms the job responsibilities of analysts, traders and consultants. The book also includes interviews with everyone ranging from first-year analysts and associates to CEOs and the recruitment team. The book will be useful in filling a large part of the gap in your understanding of different entry-level roles and help you better determine what is the best fit for yourself. The only downside is that this book was published in 1997 and could use an update. Certain elements have already been superseded but it’s still definitely worth the read.

Another good (and entertaining) book to read is Monkey Business: Swinging Through the Wall Street Jungle. Again, the book is a little dated but it does an excellent job of describing what junior bankers do. At the fundamental level it will give you a satisfactory answer to the following questions: What do investment bankers actually do? And why do they earn so much?

You will come across other useful books and reading material as well that will shine a light into the industry. After you have read a few books and feel that you have a better grasp of what an investment banker actually does and what kind of skills you need to excel as one, it is time to decide if you will commit to becoming one or not. Do not feel any pressure to commit; there are plenty of other good careers and businesses out there for you to excel in. But if you feel determined to pursue the IB route, then it is time to get extremely serious and start devoting a huge chunk of every single day towards getting that first IB analyst offer.

Overview of the Business

Before we go over the process from start to finish for securing a job in IB, let’s go through the different functions within an investment bank: 

1. Corporate Banking (what we call “Investment Banking): Act as a go-to entity to help corporate clients raise capital through either debt or equity, referred to as Debt Capital Markets (DCM) or Equity Capital Markets (ECM). The other part is providing corporate advisory, referred to as Mergers & Acquisitions (M&A).
2. Sales & Trading: This function consists of salespeople who pitch institutional investors with new ideas and opportunities, and traders who execute orders and provide advisory to clients on entering or exiting their positions. 
3. Research: Come up with research reports related to the industry or set of companies you cover and provide recommendations on actions (buy/sell/hold). 
4. Investment Management: Deals with both institutional and individual clients by providing various products. These can be conventional products like equity and fixed income or alternative investments like managed futures, commodities, and derivative contracts.

For this post, we will focus only on Investment Banking/Corporate Finance. This is divided into product groups and coverage groups. Each group manages their own set of client accounts and oversees a particular coverage area (industry sector):

• Product Groups: M&A, ECM and DCM.
• Industry Group/Coverage Area: Common groupings include Consumer & Retail, Financial Institutions Group (FIG), Industrials, Energy, Healthcare, Technology/Media/Telecommunications (TMT), Real Estate/Gaming/Lodging, etc.

Bankers are allocated into either a product or industry group. Bankers in product groups have extensive product knowledge rather than specializing in a particular industry. On the other hand, bankers in industry groups have a specific coverage area and bring value in the form of stronger relationships with senior management in various companies when compared to product bankers. They also oversee more of the marketing/pitching.

The standard hierarchy at a bank goes from Analyst, Associate, VP, Director, and Managing Director (MD). Deals are typically done in teams of ~5 bankers consisting of an analyst, an associate, a VP, a director, and the MD who is in charge of the deal. Analysts generate the material which is approved at each level of the hierarchy and the MD selects the final material to be presented to the client. 

80-100 hour work weeks are very common across the board for analysts. This is part of the culture of investment banking and at times a necessity. As a transaction goes forward, the details become more and more crucial and can also change very suddenly. For this reason it is much more practical and efficient for the work to be allocated to a select handful of members who are familiar with all the details.

Now that we’ve highlighted the investment bank structure, let’s dive into the first part of the preparation process.

Setting Academic Standards

If you are still in high school, your goal is to get into a target school. These are the main universities that investment banks actively target for junior talent. Within the US, these schools mostly rank within the top 50 in the country. Think Ivy League, Stanford, Duke, Williams, NYU Stern, etc. If you are from outside the US then this list is much smaller. The major non-American ones are concentrated in the UK (Oxford, Cambridge, London Business School), continental Europe (INSEAD, HEC Paris), Canada (UBC Sauder, McGill) and China (Tsinghua, Fudan, HKUST). Go online and find a full list. 

If you live in the US, get into one of these target schools, or at the very least get into a top 50 school. College tuition is not cheap but you can justify the cost-benefit analysis of going to a top 50 university if it will get your foot in the door of an investment bank. Do everything you can to study and attain a high GPA. Take advantage of the following hacks:

• Take community college classes during the summers. The costs are very affordable and you can improve your chances by making your high school transcript stand out when it comes time to apply for college. 
• If you possess any physical gift then you are in luck. If you are 16 years old and suddenly experience a huge growth spurt that brings you from 6’1” to 6’9”, go try out for the high school basketball team. Even if you have never played before in your life it is also certain that the varsity coach will bring you onto the squad as a backup. It doesn’t take that long to develop a center and within the span of 1-2 years you will be good enough (HINT: tall enough) to earn a spot on a college team. 
• Read more into affirmative action policies in college admissions and check all the ones that apply to yourself. 
• If your parents are divorced then you have every right to associate with the more disadvantaged parent when declaring household income. 
• Develop a close relationship with a particular charity or community service organization. We recommend working at a dog or animal shelter. Most people including college admission officers have a soft spot for animals and if we are being completely honest they deserve more of our help than most humans do. 
• Start a business that is profitable and pays taxes. Only mention this business in your college application/essay if it is selling a product or service that does not generate controversy. Yes, we completely agree that many of the most lucrative business ideas are highly controversial, but your college application is not the time and place to shine light on them. 

If you are from another country, you have two options: Pursue your undergraduate degree in the US or overseas. If you are willing and able to cover the costs of studying in the US, the good news is that the process is basically the same and you can stick to the same blueprint above. If you cannot afford to do so or decide to study in another country, then your options are a bit more limited. For starters, your grades/GPA will likely form a much greater part of the equation, if not the whole equation, so be prepared to study as much as necessary. You will also need to be very strategic from much earlier on. If you come from a country with only one or two target schools, you will need to ensure several years in advance that you can meet the entry requirements for them. If there are no target schools in your country then find the nearest or most cost-effective targets in other countries. 

Once you get into university, knock off as many credits as you can in the first two years. Knock out a good chunk of the required courses for your major and save the electives (hint: easy classes) for your junior and senior years. If your major is not economics or finance, be sure to still take the following four classes or any variation of them: 

• Financial Accounting
• Managerial Accounting
• Foundations of Finance
• Corporate Finance

These four classes are the most applicable for an IB career and are immediately transferable on the job. Anything more complicated is entirely useless. If you are a non-business major and your university does not allow you to take classes unrelated to your program then go online and study these yourself. This will give you the foundational knowledge for any further studying and preparation you do later on during the interviewing phase. 

Do the bare minimum to get a 3.8 GPA. If necessary, take some additional classes in history, social sciences, or anything else where you can guarantee yourself an A. Make sure your cumulative GPA never falls below 3.5. If you are pursuing a social science degree then you MUST maintain a near perfect cumulative GPA. 

So now that we have fully addressed the academic aspect, let’s move on to the next part.

Building Your Network

If you do the above right and maintain good academic results, you will have a college experience that is productive and also moderately fun. Remember, college should not be the best time of your life. It should be the period that helps set you up for the best time of your life.

The next step is to network with the right people. In your freshman year, go to your university’s club fair at the beginning of fall semester and join as many relevant clubs as you can. If you go to a target school then this should be easy. There will be a handful of good clubs affiliated with the business school and if you show up to their events as a freshman you will run into a lot of upperclassmen (juniors & seniors) who are currently in the process of interviewing for internships and full-time analyst offers. Build up good connections with as many of these people as you can and the timing will work in your favor. By the time you are a junior or senior they will be first or second year analysts and will be able to internally refer you and help you secure interviews. 

Your networking objectives should have two components to it: The first is to secure the summer analyst internship between your junior and senior years and the second is to secure the final job offer for an analyst opening post-graduation. This means you effectively have three years of time to build your network for objective 1 and four years for objective 2. 

Divide your networking into four steps. First, as already mentioned, meet as many other students as you can at those business clubs in your school or area. Talk to them and connect with them over WhatsApp. Maintain a spreadsheet with their contact information, mutual relationships and job status and follow up with them at least once every two months. Whenever any of them find internships be sure to ask them for advice on how they applied, what kind of questions they answered during the interview, as well as any leads they may have. Leads are extremely important. If they just secured a part-time internship position during the school semester, chances are they will have been interviewing simultaneously for at least one other part-time intern position which they will have had to cancel. Find out the contact information of the hiring managers for the other part-time intern roles, then cold call them and say that you understand they are still looking for an intern and that you were referred by a friend who was interviewing and have a similar set of transferable skills. If you build up 20 or more contacts from the relevant clubs and consistently maintain contact with them, your chances of getting one or more part-time internships between your freshman and junior years will be very good. 

Second, go to your school’s career site and spam it with job applications. Apply to every single opening available on the system, and apply for it as early as you can. For interns and graduate-level openings, many firms have an unwritten rule of shortlisting the first few applicants for an initial interview. The majority of positions also require only a CV so it should not suck up much of your time either. Keep track of all the roles you applied to and after three to four days of applying call up the company and ask them about the status of your application. Most of them will tell you that they have not reviewed your CV yet, but this is the time to give them your 30-second elevator pitch. If you are at a non-target this step will be crucial as you will not get as many results with the first step.

The third step is a continuation of step one. If you began networking starting in freshman year, you should have two to three years worth of relationships (50+ contacts) under your belt and a handful of these should be IB analysts by the time you are a junior. Now comes the critical part: Getting a summer analyst offer. These are extremely competitive and you can send over 200 CVs online and not get any responses. The best way to approach this is to leverage your existing network and ask them to give you an internal referral. If you have multiple friends/contacts working at the same bank and they all internally refer your CV, your chances of securing the interview are excellent. If you have a senior contact like a VP or MD refer you then this will carry even more weight. 

If you can pass the interviews and secure a summer analyst offer then you are in position to complete both networking objectives. All you need to do now is to perform well and make as many solid connections as you can within the bank during the eight weeks of the program. At the end of the summer, the bank you are interning at will shortlist a substantial proportion of the summer analyst class and give them full-time analyst positions after they graduate the following year. If you can perform well and also get internal backers during the course of the summer then your chances of securing a junior analyst role are good. Once you secure the full-time offer your job networking journey is effectively finished. You can take a bunch of easy classes your senior year and have more fun. If you want to see if you can secure an offer with a more prestigious bank, you can continue interviewing for full-time analyst roles during your senior year, but even so the pressure is now off!

The fourth and final step only applies to those who have not secured an offer by the start of senior year. If you fall into this category then you will need to network like crazy the entire year. Go to all the events and mixers you can possible find within a 200 mile radius and cold call every single day. If you did the summer analyst program but did not receive an offer you will also need to come up with a good reason why. Continue to apply for part-time internships during the fall and spring semesters and spend as much time interning as you can outside of your class schedule. In short, combine steps 1 and 2 on hardcore mode and spend every waking moment trying to get closer to securing a full-time position. Put all fun and entertainment on hold during this time.

Developing Mental Fortitude

This is the most crucial aspect within the entire journey of becoming an investment banker. Such careers are highly coveted and there are literally hundreds (if not more) of candidates competing for every single position. Be prepared to face hundreds upon hundreds of rejections and disappointments before you experience any kind of success. At every stage, think rationally and write down what you observe others doing that works and what they are doing that does not seem to work. Then analyze and come up with a list of things they are not doing that have the potential to help you move forward.

As an example, most people are showing up to a few networking events, but not necessarily all the available ones. You should already know what to do here. Then there are other opportunities that they are overlooking. Perhaps they are only going to the networking events and mixers that are officially open to them. In this case, you should be going to all the ones that you physically can, including ones that are within 5-6 hours traveling distance by car. Yes, if you are studying at Cornell and you know there are a series of networking events at Columbia and NYU, hop in a car and drive down to New York City. If you find out there are events at McGill then hop on a plane and go to Canada. We guarantee you there will be no other students from outside of Montreal at the McGill event and the recruiters will surely remember you. 

We know what you are thinking right now: What if they don’t let me in because I’m not on the pre-approved list? Yes, practically every university-affiliated networking event requires that you sign up beforehand using a university email. They will ask for your name at the entrance and then check your name off of a list. If you are networking a lot then most of the time you will not be eligible to attend the event. Fake your way in. Act very surprised and say that your friend sent an email invitation to you and you signed up using that. The one excuse that always works is saying that you signed up less than a day before the start of the event. The gatekeeper will simply nod and acknowledge that your name probably did not get updated by the system. Remember, if you want to get far then you MUST be willing to put yourself into uncomfortable situations like these and be extremely persistent.

You have a choice at these mixers: Make four or five good connections each time (these people will remember you and associate you with a fun conversation) or make one super connection. As the name suggests, the super connection is always superior. Most of the time you can build up decent rapport with 80% of the people in attendance, but every now and then you will speak to someone who you really gel with. Perhaps the two of you went to the same high school, have a mutual friend, or enjoy similar interests and end up having a 40 minute conversation about some sports team. Focus extra attention on maintaining the connection with these super contacts. Meet up with them again even if it involves flying to another city. When it comes time to apply for summer analyst or analyst positions they will go to bat for you. 

Through all this, you will invariably experience many upsets or feel dejected due to a perceived lack of progress. But remember, as we already mentioned in a previous blog post, improvement is not linear and your luck increases through continually working hard and exposing yourself to as many opportunities as you can. It’s okay to sit down one day and cry for five minutes as it can make you feel better afterwards, but don’t spend much time worrying about poor results. Also, never cry or display dejected emotions in public. It will ruin your image. 

The entire process will not be easy so it is important that you understand this. We have spoken to a lot of people and many of them spent four to five hours networking every day for two whole semesters. This is on top of their coursework and part-time jobs. However, the upside is that this experience will prepare you extremely well for the grind of being a 1st or 2nd year analyst. 

Studying & Preparation

This is another critical piece of the puzzle. As important as it is to network, it is impossible to network your way into an investment banking role. This applies no matter how strong your connections are. Even if your dad is an MD at a bulge bracket firm, the only thing he can guarantee you is a spot on the summer analyst program or an interview opportunity for a 1st-year analyst opening. 

Presentation and performance is everything. Even before you begin networking you should already have a plan in place for building the right knowledge base. As already discussed, make sure you take the four aforementioned courses as early as possible (Financial Accounting, Managerial Accounting, Foundations of Finance, Corporate Finance). Pay attention in these classes and make sure you fully understand the entire syllabus. After you are done with these classes keep the notes so that you can refer to them later on. 

You will need to have an excellent grasp of the financial and accounting concepts not only for the interviews but also for the job itself. The work is extremely competitive—you will be doing the exact same thing as other analysts and if you lack the necessary grasp of finance and accounting principles then you will have a very difficult time staying afloat. 

As mentioned above, investment banks provide two main services. First, they function as the middleman between entities who are raising capital and those that are supplying it, conducted in the form of DCM and ECM. Second, they provide corporate advisory on M&A and restructurings. To do either or both, investment bankers need to determine the valuation of a company. For this reason, questions relating to valuation techniques will form a key part of the interviews. 

Let’s go over the key valuation methodologies: 

• Comparable Company Analysis (Public Comps): Utilizing ratios of similar publicly-traded companies to derive the value of the targeted company.
• Precedent Transaction Analysis (M&A Comps): Referring to prior M&A transactions involving similar companies to value the targeted company.
• Discounted Cash Flow Analysis (DCF): Determining the value of a business based off of its future cash flows.
• Leveraged Buyouts Analysis (LBO): Determining the value of a company by assuming an acquisition of the specified company through a leveraged buyout, which is completed almost entirely using borrowed funds.

The above methodologies are by far the most commonly used across the board, and different segments within the investment bank will utilize these methodologies to address varying needs across varying circumstances. There are also other valuation methodologies that are more specific to certain industries such as TMT or oil & gas. Oftentimes, multiple techniques will be utilized to “triangulate” a business’s value by providing valuation estimates from multiple angles. For this reason, a junior banker will be expected to have some degree of proficiency across all of the four techniques in order to be considered satisfactory for the job. 

Here are the main points you will need to know: 

• The foundational blocks of valuation including Enterprise Value, Market Capitalization and Book Value. Examples:
  • How do you compute Market Capitalization and Enterprise Value?
  • What is the difference between Market Capitalization and Book Value?
  • When should you use Enterprise Value?
• When to use each valuation methodology.
• The advantages and disadvantages of each methodology.

We will not go into detail here as this post will end up reading like a 500-page book. Instead, our recommendation is for you to go online and study the valuation methodologies using available content—There are plenty of free resources although they may be somewhat messy and over the place. If you want an organized and easy-to-use guide that covers all of the above in sufficient detail, we highly recommend Investment Banking: Valuation, LBOs, M&A, and IPOs by Joshua Rosenbaum and Joshua Pearl. We personally own and have read the 2nd edition of this book and can vouch for the fact that this is the single guide that rules all investment banking books. If you are willing to cash out some more money, you can also get the 3rd edition hardback version (unnecessary in our opinion). It is a great read that will help you get up to speed on the technicals of investment banking transactions. Be prepared to read and analyze this book over and over again if you really want to break into the industry. If you want to test yourself and see how well you understand the book, there is also a Workbook containing over 500 problems that is sold separately. There are also the Focus Notes, which can be used as both a companion to the book or on a standalone basis.

We will cover how to prepare for the behavioral questions in a separate post.

Interview Process

There are major differences between the interview & hiring processes at bulge bracket banks versus boutiques. The larger ones tend to follow a highly regulated interview process while the boutique firms hire on an as-needed basis (kind of like hedge funds). 

Recruitment at the larger and more established banks is also segregated between Core and Non-Core. Core refers to the process for target schools. Banks have a certain list of target schools (Wharton, Stanford) that they go to and conduct on-campus interviews every year and from which they will hire a specific proportion of their incoming analyst and associate classes. This hovers at around 70%. 

Everything else falls into non-core recruiting. Candidates in this category are in most cases invited into the process through internal referrals, which is why networking is key. If you do not attend a target school then it will be extremely difficult (arguably impossible) to receive an interview solely by applying online. Investment banks receive many tens of thousands of applications every year, and most of these online applications will not even receive so much as an initial glance. 

We want to emphasize once again just how competitive the process is. A bulge bracket investment bank hires between 50-100 analysts every year, with only 15-30 of these coming from non-core recruiting. Less than a thousand analysts are hired across the US every single year, and the numbers are noticeably smaller across other regions. The odds are heavily skewed against YOU, which is why you will need to take advantage of every opportunity that comes your way. 

Now let’s go over the process for both Core and Non-Core Recruiting.

The Process for Core Recruiting

Step 1 — Application & Info Session: The analyst openings will be available on your school’s online careers center as well as the careers section of the banks’ websites. Constantly keep track of the timelines posted there and make sure you submit your application as early as possible. Online applications will usually close many weeks prior to the start of interviews. 

Banks’ will also host info sessions on campuses of target schools 1-2 months prior to the start of interviews. Always go to the info sessions as these are an excellent time to stand out. Come prepared with relevant knowledge as well as very good questions to ask. Keep in mind that a good question is one that you cannot find the answer to online. Be sure to also network at these info sessions and send follow-up emails afterwards. 

Step 2 — On-Campus Interview: Candidates are shortlisted for on-campus interviews based upon the quality of their experience (as presented on their CV) and also based on feedback from the info sessions and/or internal referrals. The bank will arrange an interview time slot for each candidate with the university’s careers center. You will meet at an arranged location on campus and speak to up to 2 investment bankers. They will ask a range of questions including both behavioral and technical ones, so be extremely prepared beforehand. 

Step 3 — Superday: This is also known as the final step in the investment banking interview process. On the main day of Superday, candidates will be doing multiple interviews (~10) with multiple different bankers (analyst all the way through to MD) within the bank, typically in a 1-on-1 or 2-on-1 format. This is an extremely backbreaking process and will last a full business day (8 am to 6 pm). There is no fixed interview format: It can be purely behavioral questions or technical questions or any combination in between. In addition to being able to satisfy any technical questions that come your way, you will need to ensure that you can build great rapport with the interviewers. The VPs, directors and MDs will be screening for fit and specifically shortlisting the candidates that they like the most on a personal level. This is understandable given that they will be working 60-100 hour weeks together on a regular basis. 

Step 4 — Learning the Outcome: This part does not involve any direct action from yourself. If you are receiving an offer then you will hear back from the bank with very short notice, either during the Superday itself or within the following one to two business days. It is fine if the offer takes longer to be delivered, but do keep in mind that with each passing day your chances decrease by around half. If you go one week without receiving any news then you can reliably count yourself out. 

The Process for Non-Core Recruiting

Non-Core recruiting is arguably even more competitive than Core recruiting with students from over 3000 colleges and universities coming for 30% of the available spots. Not to mention that those from Core can simultaneously participate in Non-Core as well. Landing the Non-Core interview is a huge achievement in and of itself as it is the biggest hurdle in the entire process. 

Step 1 — Apply Online: Create an online application for each opening and upload your CV. Investment bankers typically put a lot of emphasis on the CV, so make sure that it is perfectly formatted with zero spelling mistakes. This is extremely important as the people who review your CVs have all put in the hours formatting pitch book after pitch book as a junior analyst and will take note of even the smallest typing error.

Step 2 — Reach Out To Your Network For Internal Referrals: You don’t want to become one of those guys who puts months and years of intense preparation into the investment banking interview process, only to end up without even a single opportunity to showcase your skills. Yes, this is very common, which is why you need to be not only extremely prepared, but also extremely connected. As covered in the Building Your Network section, you need to build as big and reliable a network as you possibly can, preferably starting two or more years before you actually begin applying. After you have made a series of applications, you can reach out to your contacts at all the different banks you applied to and ask them to refer your CV to HR. If you receive an employee referral at a particular bank, you are more likely than not to land a first-round interview. If you have over ten referrals then you can expect a good handful of first-round interviews to prepare for. 

Step 3 — First-Round Phone Interview: Give yourself some serious credit if you have gotten this far. As mentioned, this is without a doubt the most difficult step within the Non-Core process. Hopefully your confidence level is sky high now knowing that your CV was selected from many tens of thousands of applications. 

Phone interviews are standard for both internship and full-time positions within Non-Core recruiting. The only way to do well in them is through preparation of both behavioral and technical questions. If you are extremely prepared then you will pass. The interviews are usually conducted by Associates and VPs. During the interview they will focus on identifying candidates who are a good fit for the job, namely ones who are prepared, possess good soft skills and demonstrate passion towards investment banking. Usually, the interviewers will speak to a series of 8-10 candidates and then shortlist the CVs of the 1-2 best-performing ones from the phone interview to move on to the final round (Superday). 

This should be pretty obvious, but always prepare a cheat sheet to use during the phone interview. This should consist of the three financial statements (Income Statement, Balance Sheet, and Statement of Cash Flows), valuation methodologies, and select responses to potential behavioral questions. 

Step 4 — Superday (see above). 

Step 5 — Learning the Outcome (see above).

Dates & Deadlines to Keep In Mind

Although the IB recruiting process varies bank by bank, the interviews usually take place at the same points of each year. This is why it is important to take action at the earliest possible moment, as missing deadlines by even a few minutes may remove you from being a part of interviews at a certain bank for the given year. Let’s walk through the timelines for each type of recruiting. 

Full-Time Analyst: 1st-Year Analysts start work during the summer post-graduation, either in June or July. They will first undergo eight-weeks of training covering financial statement analysis, financial modeling, and using Microsoft PowerPoint & Excel. Full-Time Analyst interviews for the following year begin in August and run until October. However, there is some school-to-school variation as well as discrepancies between Core and Non-Core. 

Summer Analyst: Summer Analysts start their program in June for up to twelve weeks. Banks will extend Full-Time Analyst offers in the final week of the program to the candidates who they determine to have performed sufficiently. In most cases this is the majority of all Summer Analysts. Summer Analyst interviews begin in January and run until early March. Interviews will begin either on-campus or via phone. 

Year-Round Recruiting: Smaller boutique firms lack the same kind of deal flow and financial resources needed to implement the same kind of recruiting program as bulge bracket banks. For this reason, they will typically hire year round on an as-needed basis. It is extremely important to keep track of the career sites for boutique firms and apply as early as possible.

Which Group Should I Join?

Depending on individual circumstances, some of you will have the privilege of deciding which group to join. In such cases, it is crucial to think carefully about this. Carefully consider the direction you want to go in after two years of the analyst program, and make sure that the group you select will help you get there and not limit your opportunities.

There are three points to consider:

1. Prestige & Track Record: How is this group regarded within the bank? What is the deal flow like?
2. Culture & Environment: Have you met many members of the group? What are the bankers like? How well do you think you can work with them? 
3. Exit Opportunities: Will you be able to develop the relevant expertise and know-how from this group that will translate into your desired exit opportunity? Is this an area that you are passionate about? 

Bulge bracket banks sort their groups according to industry and product groups. Product groups specialize in a particular deal type, such as M&A, restructuring, ECM, DCM, and leveraged finance. If you are part of the M&A group, you will focus entirely on acquisitions of businesses for all industries across the board. Alternatively, industry groups have a coverage area restricted to one industry but will be involved in multiple types of deals (ECM, DCM, M&A, etc.). As already previously mentioned, key industry groups include TMT, FIG, industrials, healthcare and natural resources. 

Each bank structures their groups differently. At some firms, group selections are determined immediately following the initial eight-week training period. Other firms will give you the opportunity to provide a hierarchical ranking of your group choices and throw that into a matching process together with the rankings of all the other analysts and associates. Another common procedure is to make the selection based off your networking results. If you were brought into the interview process through internal referral, that particular referral can carry substantial clout. As an example, if you received three internal referrals to the same bank, with one each coming from an analyst, an associate, and a VP, with the VP coming from the FIG group, then it will be much easier for you to receive consideration for FIG. If you were offered at the conclusion of the Summer Analyst program, then there is a high probability that you have already been enrolled into that particular group. There is, however, room for working out alternative arrangements. Some bulge bracket banks permit Summer Analysts with full-time offers to interview with other groups if there are available spots. 

Certain groups are much more competitive to break into than others. This is because these groups have the greatest track record with generating strong deal flow and getting candidates successfully over to the buy-side. Some of the most highly regarded groups within investment banking include M&A at Morgan Stanley, Healthcare at JP Morgan, Industrials at Citi, and TMT at Goldman Sachs. As a general rule of thumb, Morgan Stanley and Goldman Sachs are always at least top three for most groups, while Citi, BAML, and JP Morgan are usually top five. If you are passionate about technology and want to move into a hedge fund, you will be highly sought after by technology-focused hedge funds as part of the TMT group at GS. The same can be said for FIG, Healthcare, or any other industry group.

At the end of the day, however, you should always weigh exit opportunities more heavily over prestige. Just because a particular group is the most highly sought after at your bank does not make it the right group to join. If you are interested in a certain industry and want to eventually move into a private equity firm specializing in that industry, then you should seriously consider joining the relevant industry group at your bank even if it is not as highly regarded by other analysts. This is because particular industry groups use financial modeling methodologies that are unique to the industry, and firms on the buy side will be looking specifically for these when hiring.

It is also important to note that the above is not necessarily applicable to many boutique investment banks, which will not always have the same variation of groups. It is common for small boutiques to have only one group, with their bankers functioning across a broad spectrum of industries. 

Exit Opportunities

The Investment Banking Analyst role is a two-year program. After the two years is up, a minority will receive an offer for a third-year (usually reserved for high performers). For those who are interested in becoming career investment bankers, the standard path is to go off and pursue an MBA program and then become an Associate. 

However, the majority of analysts will go on to pursue opportunities outside of IB once they have done their two years. The two most popular routes are going into Hedge Funds and Private Equity. We will cover both in a separate post later on. Other options include Venture Capital, Equity Research, Strategy Consulting, Fintech, Entrepreneurship, etc.

Conclusion—Get Too Work!

In this post we have laid out much of the process for securing an investment banking analyst position right out of college. As we have already emphasized, this is an extremely challenging pursuit, so if you are truly serious about it then get to work immediately. Network whenever you get an opportunity, as it is not just about your own Rolodex but also the Rolodexes of your contacts. Study and learn the relevant Finance and Accounting principles and make sure you understand them extremely well. Be sure to also go through our other posts—while not directly related, the insight and advice will be conducive in helping you improve your life which will also translate into bringing you closer to becoming an investment banker.