The last time we did a Q&A, Bitcoin was worth… actually, about what it’s worth right now.
Since we’re back to that level, it seems like a great time for another round of questions and answers!
Among other topics, we zip through:
- How to position yourself for full-time recruiting, coming from a lackluster internship.
- The merits of quitting a new job within the first week (hint: there are none).
- Story makeovers at all levels – undergrad, MBA, and post-MBA.
- How to position yourself for IB/PE roles if you’ve had 10+ years of experience in corporate finance.
- PE recruiting and case studies, because everyone always wants to break in even if there’s a zombie apocalypse.
- And my usual responses to snarky comments, criticism, and requests for things I don’t want to do.
Climbing the Ladder: Accelerated Recruiting and Accelerated Quitting
Sometimes you take my constant Game of Thrones references too seriously.
Just look at the number of questions that involve “climbing the ladder”…
Q: I won 3 bulge bracket superdays last year, but no internship offers. So I’m completing an internship at a boutique bank this summer.
Unfortunately, I do a lot of research and only a bit of Excel / valuation work. How can I make sure I get interviews at the large banks for full-time recruiting?
A: Start EARLY and aim to participate in every single bank’s accelerated recruiting process. This usually happens as return offers are being decided and internships are wrapping up.
Reach out to your contacts and former interviewers by the end of July and ask directly about it; also make sure you don’t focus 100% on the biggest banks because you never know what will happen.
Be careful about spinning your internship experience – many interns “go too far” and write unrealistic descriptions.
Mention the valuation work, but don’t try to spin it into sounding like it was all deal-related.
Q: I accepted a full-time offer from one bank, and then I quit within my first week to join a bank with a slightly better reputation. Everyone was angry.
Now I have the opportunity to move to a group with better exit opps – do you think it’s fine to leave within the first week once again?
A: Why wait a week? At this rate, you might as well just quit on the first or second day. I’m sure there will be no long-term harm to your reputation.
In all seriousness, you should never do anything like this because finance is a small world and your reputation follows you everywhere.
Yes, you might get slightly better opportunities elsewhere, but is it really worth being known as “that guy” (or girl)?
What if you run into your former co-workers at your next interview after they’ve switched jobs?
Story Makeovers: A New Reality TV Show?
Because you always need to tell your story, but you rarely do it well on your first try.
Q: Can you critique my story? Here’s my outline:
- The Beginning: I started out at College X in a different major.
- Spark: I met a mentor who made me interested in finance, and then I transferred to the business school there.
- Growing Interest: I did a middle office internship at a bank, learned more about financial analysis and modeling, interned at a Big 4 firm working in valuations, and became more and more interested in deals after working on X’s acquisition of Y, which made me interested in Industry Z.
- Your Future / Why You’re Here Today: I enjoyed my time there, but my end product was used mostly for reporting purposes – I want to play a more active role in deals and influence outcomes, and your group and bank are the best way to get there.
A: This was decent for a first attempt. I would say:
- More Specific Spark: Who was this mentor? Where did he/she work? What did he/she say, exactly?
- Better Transitions: Why did you move from the middle office to the Big 4 firm? What did you do to learn more about finance after the Big 4 experience?
- Vision: Beyond playing a more active role in deals, what do you want to do and how does this group fit in with that? Can you point to an industry or deal focus?
Q: What about my story? I just finished my MBA a few years ago:
- The Beginning: Initially, I went to College X as a pre-med and planned to become a doctor.
- Spark: But then I took an economics class that sparked my interest in finance, so I changed to a double major in finance and economics.
- Growing Interest: And then I completed an IB internship at Bank X, and joined their energy group full-time. I enjoyed it, but wanted more of an international perspective, so I got my MBA at a leading business school in Europe and then spent several years working in energy investing in London. Then I joined Energy Company Y and have been working in their corporate finance team ever since.
- Your Future / Why You’re Here Today: I’m interviewing at [Bank Name] because I want to go back to my original passion of valuing companies, and leverage my language skills and knowledge of different cultures to work on cross-border deals – and your bank has a great reputation for that.
A: There are more serious issues with this one:
- More Specific Spark: A class is “OK” for your spark, but can you point to the professor or a more specific topic that made you interested?
- Better Transitions: Why did you move from IB to the buy-side to corporate finance? You might say that you wanted to understand everyone involved in the deal process – sellers, buyers, and investors.
- Synthesis: Your closing could use improvement because you’re pointing to one specific skill you learned rather than explaining how you want to use all your experience to go back to working at a bank.
Explain how your experience at an energy company and on the buy-side gives you insight that other bankers won’t have, and how it lets you understand potential buyers and institutional investors in more depth, ultimately helping to close more deals.
Q: I’m a current MBA student looking to move into hedge funds – can you critique my story?
- The Beginning: I was born and raised in the Middle East, and my family worked in PWM [Insert anecdote about family growing up]. I decided to attend College X and major in math.
- Spark: I got interested in investing after reading books like Margin of Safety and The Intelligent Investor, and I started trading stocks in my spare time.
- Growing Interest: I started out in Bank X’s rotational program, initially working as a credit analyst; I liked the work, but wanted more interaction with management, so I moved into a relationship management role, and then a structuring role where I got to interact with company treasurers and assist with hedging. Then I took a business development role at another bank to help build their hedge fund relationship management team, which made me interested in pursuing hedge funds as a career – so I decided to attend Business School Y.
- Your Future / Why You’re Here Today: I’m here today because I want to professionalize my investing hobby and combine it with my hedge fund experience, and get the opportunity to apply my skills to larger-scale investments.
A: And there are even more issues:
- Too Much Setup: You’re spending too much time on your previous experience, and not enough on why you want to work at a HF and which strategies you want to pursue. Cut the anecdote as well.
- Too Many “Hops”: Simplify your roles at that first bank and reduce it to working in the rotational program and then getting the HF experience.
- Logical Transitions: You need to re-frame your experience and say that ever since university you wanted to become a professional investor – so each step along the way has brought you closer to that goal by…
- Vision: Which strategies are you interested in? Which companies would you invest in? How is this firm the right cultural and strategic fit for you?
Because it’s just more fun to break in with 10+ years of full-time experience.
Q: I’m a seasoned CFO that just got the opportunity to interview at a bank.
I’ve worked in the US and Asia at 5 different companies, spent some time doing consulting, and have worked on several turnaround and restructuring efforts recently.
How can I present my story, and what else should I tell them?
A: The biggest question is what level you’ll come in at – my guess is they will try to “discount” your experience and bring you in as a VP or Director because you haven’t “officially” worked in investment banking before.
So if it doesn’t make sense or it’s too much of a pay cut, decline or push for better terms.
I would use something like this for your story:
- You’ve had experience as a CFO across different industries, geographies, and companies, including [Mention names].
- Over time, you’ve gotten more and more interested in transactions and taking an active role in spin-offs, turnarounds, and restructuring scenarios that banks often advise on.
- In one case, you [Describe one of the recent deals you worked on and how you contributed to a solid outcome and exit for the investors].
- You enjoyed that experience and did quite well at it, but your involvement was limited since you only worked with that one company – but you have ideas for efforts like that across other industries. Getting to win clients and execute those plans via advisory assignments for companies is what excites you about IB.
- You’re here today because [Firm Name] has an excellent reputation for these types of deals, and a long history in the sector – so you view this bank and this team as the best place for you to contribute.
And yes, as always, leave out consulting: sorry, but you still can’t buy bottles with Starwood points.
Q: Help! I’m a senior associate at a boutique, and I’ve had no luck applying to bulge bracket banks. What should I do?
A: It sounds like you’re stuck in “no man’s land” because you’re too experienced for associate-level roles, but not experienced enough for VP roles.
Looking at your CV (note: he sent it), you’re describing both associate-level tasks (financial analysis, due diligence, pitch books) and VP-level tasks (project management, client relationships, etc.).
Change your CV and pitch to focus on only one of those, and then go for only the corresponding roles.
Q: What do they ask you about in VP-level interviews?
I worked at the same bank for 6 years and I’m going in for my first VP-level interview at another firm tomorrow.
A: Deal experience, plus how well you can transition from “project management” to “winning new clients.”
So even if they ask you about a specific deal, make sure you insert hints that you are capable of sourcing deals and maintaining client relationships.
For each deal, make a list of ways that you might potentially go back to the client to win more business in the future – or how you might use that experience to win future deals in the industry.
Private Equity Recruiting, Case Studies, and More
Even if zombies invaded, people would still want to get into private equity; PE firms would also start investing in zombie-backed companies.
Q: Help! I have an in-person PE case study tomorrow. How detailed should my model and write-up be?
A: Not that detailed for an in-person case (usually these are 2-3 hours).
Don’t even build a full 3-statement model unless they ask you for it – simplify and create FCF projections so you can project debt repayments and calculate IRR at the end.
Focus more on the revenue and expense numbers, and make sure you can look at those under different scenarios for units sold, average selling price, etc. (use at most 2-3 key drivers or you will not finish on time).
The write-up should be no more than 1 page for the same reasons.
Q: What structure should I use?
A: “I would recommend / not recommend investing in [Company X] because it is likely / unlikely that we could achieve a 20% IRR by doing so, under the baseline assumptions for [revenue and expense drivers]. Even if these numbers are [higher / lower than expected], my recommendation still holds up because [Explain how the IRR is still reasonable].
The qualitative factors also support my recommendation, because [Explain how factors such as competition, positioning, management, and operations play in and make the company more / less appealing].
Risk factors include [Assume that each of the key drivers above is more negative than expected and explain the impact each would have]; but even if some or all of these come to pass, my recommendation still holds up because… The company could also mitigate some of these risks by…
Based on all those factors, I recommend doing the deal at a price of [X].”
Q: I completed undergrad 5 years ago, and then I started several companies in my home country (one of the BRICS).
But nothing worked out, so I need to find a real job again.
Do you think I can get into private equity? Will PE firms find my operational experience attractive, even though I failed?
A: Normally, you wouldn’t stand a good chance of getting into PE with a background like this – but since you’re in an emerging market, anything could happen.
Get some experience there, and then use it to move to a more traditional PE firm (this wouldn’t work as well in a developed market).
And then you can pitch yourself as someone who can work with portfolio companies based on firsthand operational experience, and someone who understands finance and deal-making.
Q: It seems like it’s really hard to become a Partner in PE anyway – why does everyone want to do it? Is it actually any better than sell-side roles?
A: Yes, your chances of becoming a Partner are astronomically low. Many associates at the mega-funds actually move to smaller funds because it’s so difficult to get promoted there.
Still, there are many advantages over sell-side roles, even though it’s still a grind and a ton of work.
It comes down to whether you want to spend your time looking at a lot of opportunities but rarely doing deals (PE), or working with a few companies in-depth and getting deals done, even if there’s little critical analysis involved (IB).
Q: PE interview guide?! PE interview guide?! PE interview guide?!
A: Maybe? Talk to me after Massive New Modeling Course #1 is complete first…
Responding to Critiques
Because “responding to ‘criticism’” sounds too harsh.
Q: All you’ve done lately is promote other products/services!!
Where is the new content??!!! WHERE?!!!!
A: Yup, sometimes I send out promotions… but there is also at least 1 new article each week, and over the past ~9 months there has been 1 new YouTube video almost every week.
Yes, we could publish 25 articles per week and make this a true multi-author site, but remember what happened last time I tried this? You hated it.
And if you’ve signed up for any of the BIWS courses you’ve seen a huge amount of new content in the past 6 months: certification quizzes for all the industry-specific courses, a brand new Oil & Gas course, new bonus case studies, and the first part of a brand new Fundamentals course.
Q: Why / how are you still running this site? It’s obvious you’re bored!
A: I wouldn’t say I’m “bored” – though there are definitely topics I am bored of (GPA rounding, PLEASE DIE).
I agree that most “general purpose” topics such as resumes, interviews, and so on have been covered, so a lot of articles these days relate to more niche areas.
But I’m still personally interested in exploring these new industries and topics, so that’s why you’re reading this right now.
And even within investment banking, there are still topics that haven’t been explored after 7 years (see: communication skills).
Q: What’s next? Book? Podcast? New TV show? PE interview guide?
A: Book – no.
Podcast – yes, coming soon. I got a lot of great S&T-related questions for this one last week.
New TV show – just give it a few hours…
PE interview guide – didn’t you read my strong “Maybe” above?