“If your enemy is superior, evade him. If angry, irritate him. If equally matched, fight, and if not split and reevaluate. “

-Sun Tzu

With every investment bank out there well into summer recruiting season, I’ve been getting questions not only on how to judge offers but also on how to prepare for superday interviews and what to expect when going to interview for investment banking summer internship positions.

Since every bank is different, it’s quite difficult to generalize here and say exactly what to expect in every situation. So I assume no liability if anything you read here does not hold true for your particular interviews.

That said, there are a few general guidelines and tips I can give on what to expect. Most of these apply equally to full-time and summer analyst superday interviews, though in general the summer analyst ones tend to be easier (as always, exceptions apply here).

How Many People And How Long The Day Will Be

This varies greatly by the particular bank in question, but at the minimum you will speak with at least 1 banker at every level - Analyst, Associate, VP, and MD.

That is the absolute minimum - often you can go much higher than that and Superday can really last all day, from 8 AM to 6 PM, with 20 or so interviews.

Bulge brackets tend to conduct more interviews on Superday vs. boutiques (not sure how UBS LA stacks up here).

In general, though, the number of interviews tends to be at the lower end of the spectrum and Superdays usually last half a day rather than a full day. It’s just as difficult for banks to conduct 20 interviews per candidate as it is for you to interview with 20 bankers, so it usually doesn’t work that way.

A quick search on WallStreetOasis reveals that others have had similar superday interview experiences.

Fit Questions

I know some will disagree with this, but in my experience the fit questions are more important than the technical questions, for 2 reasons:

1. Unless you’ve had a previous investment banking summer internship, you will not have significant technical knowledge that can be assessed.
2. Generally the more senior bankers who interview you will be focused on fit questions and they are the ones who decide if you get the job or not.

I covered a lot of fit questions in my guide to getting investment banking jobs, but just to recap a bit, your “story” is the most important part and consists of you giving a 3-5 minute pitch on your background, how you got interested in banking, and why you want the job. And if you come from another field like engineering or corporate law, your “story” should show why you want to break into investment banking now.

You should come across as being interested in business/finance, eager to learn, and willing to work hard, but don’t be fake or act like you know exactly what you want to do with the rest of your life.

When you get asked the usual, “Are you a team player?” “Can you work hard non-stop and get results?” “Are you really interested in this job?” questions, make sure you have specific examples to back up everything you’re saying.

The biggest problem I see when I ask fit questions is lack`of enthusiasm. Some people memorize all the answers they read in the Vault guide, but don’t seem to say anything with conviction or have original thoughts.

While it’s fine to give “standard answers” try to inject some of your own personal flavor into your responses. Just don’t go overboard and seem like you just escaped the asylum.

Technical Questions

As mentioned above, I think people tend to focus too much on technical questions in interviews and prepare for every single accounting and valuation question they might get asked, when they should be more focused on fit and enthusiasm.

Broadly speaking, there are 3 types of technical questions you may be asked: 1) Valuation/Modeling Questions 2) Accounting Questions 3) Brain Teasers.

On the first two questions here, you should refer to IBankingFAQ’s excellent section on technical interview questions. Andrew has already done a great job of summarizing the major questions you’re likely to get.

Valuation

In terms of valuation, the three main methodologies are 1) comparable company analysis - looking at publicly traded companies and the multiples they trade at, then applying those to the company in question, 2) precedent transaction analysis - looking at what buyers paid for sellers in similar industries and with similar financial profiles and applying the multiples to your own company, and the 3) DCF - using a company’s projected cash flows, discounting them for the time-value of money and cost of capital and summing those to find the company’s present value.

Know those and the various tradeoffs among them.

Modeling Questions

If you get modeling questions, they are likely to be on merger models - looking at what happens when a company acquires another company - or Leveraged Buyout (LBO) Models - figuring out the return a private equity firm can get by buying a company with a combination of cash (equity) and debt.

The most important aspect of a merger model is the accretion/dilution - will a company have a higher or lower earnings per share (EPS) after acquiring another company? The way I think about the merger model is that it is an analysis of the tradeoffs between using cash, stock, or debt to finance an acquisition. Using any of these or any combination of these will result in a different EPS, and you have to take into account how much debt the acquirer can actually afford, how much stock can really be issued, and how much cash they have.

A lot of other factors, such as tax rates, synergies, the companies’ projections, the companies’ balance sheets and tangible/intangible assets, etc. also come into play but the above points are the most important to get across when explaining a merger model.

With an LBO model, you’re trying to figure out the private equity firm’s return on investment (IRR). I think of it like buying a house with a mortgage - you have a down payment (the equity in an LBO) and the mortgage (the debt used to finance an LBO). The LBO model is a measure of how much the company’s value grows and how much debt is paid off. The most important drivers are purchase price, exit price, amount of debt used, and the company’s growth rate and profitability.

Accounting Questions

For accounting questions, just make sure you know how the income statement, balance sheet and cash flow statements link together and be able to walk through how simple changes like adding 10 to depreciation will affect everything else. IBankingFAQ has a good overview of this. I would not expect too much beyond these types of questions, though if you’ve had some accounting/finance classes you may get asked about revenue recognition, EBITDA vs. Cash Flow and other topics.

Brain Teasers

I’m not even going to try to cover this one. Most importantly, maintain your calm during the interview and resist the urge to panic. It’s not the end of the world if you don’t get one right, but generally it’s a bad sign if they ask you brain teasers at all - it means your interviewer is either annoying or doesn’t like you or both. Check out the IBankingFAQ brain teaser section for more.

Superday Dinners

Make no mistake: everything that transpires on Superday is part of the interview, even if they try to position a dinner as a “time to relax” and “get to know others.” Never let down your guard, and DO NOT GET DRUNK. And don’t even think about models and bottles. Focus, thank you very much.

That said, also try not to ask too many nerdy finance questions or too much about investment bankers’ own jobs. No one likes the kid who starts talking about WACC during dinner.

Talk about your own interests and try to come across as an interesting and ambitious person who can also have some fun, but don’t go overboard and use your judgment at all times. If you say something stupid or do something stupid during the dinner, that could easily be the end of your investment banking offer.

Judgment is an extremely important part of your job as an investment banking analyst, and the Superday Dinner is a quick way to evaluate whether or not you have good judgment.

How Many Get Offers

This one is really tough to generalize because it varies so much by the individual investment bank and the particular group you’re interviewing with, how many analysts they need, what location you’re at, etc. I covered some of this in my guide to how we hand out offers after superday interviews, but generally 1-2 out of 10 superday interviewees will receive immediate offers. Most of the rest will be put “on hold” and we’ll start giving them offers if others back out or accept investment banking summer internships elsewhere.

So the odds aren’t great, but if you follow the advice I give in my investment banking jobs guide and my investment banking interview selection guide, you’ll be at a big advantage compared to the competition. Also check out how to close your investment banking offers if you’re having trouble landing anything.

When You’ll Hear Back

It is a VERY good sign if you hear back immediately. Generally if you’re going to get an offer you will hear back the day of the interview or early the next day, because the bank will be eager to get you to accept.

It isn’t necessarily the end of the world if you don’t hear back immediately. Sometimes people will end up getting a “yes” response a few days to a few weeks afterward, but usually it’s because they were put “on hold” and others in front of them did not accept offers. So there’s an element of luck involved.

If you don’t hear back quickly, it definitely pays to follow-up and contact the bank every so often to show your continued interest and enthusiasm in the position. Just don’t be annoying about it and call them every day.

What NOT To Worry About

The two most common things people worry about that don’t matter much are the questions you ask the interviewers at the end and following up with thank you notes after the interview.

Generally I form an impression and make a decision about a candidate within 5-10 minutes of the interview starting. While it’s nice to ask some thoughtful questions at the end, they aren’t going to make or break your offer status.

Similarly, following up generally has almost no effect in terms of getting an offer vs. not getting an offer. By the time I receive your email, everyone has already gathered up and made decisions on all the candidates.

Sure, it’s a nice gesture but if you’ve interviewed with 20 investment bankers in one day, don’t worry about sending personalized thank-you notes to everyone.

Reader Feedback

How do everyone else’s superday experiences compare to what I’ve written here? Let me know if you think anything should be changed - I did this a few years ago already so some of this may have changed by now.

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Tags: investment banking, investment banking interviews, investment banking jobs, investment banking summer internship, superday interviews

Posted on Tuesday, February 19th, 2008 at 4:00 am.