After a long and hard-fought interview season, you made it through recruiting alive and came out with 4 summer offers: Blackstone, Goldman Sachs, Evercore, and JP Morgan.
Getting them was hard enough, but now you have an even more difficult task in front of you: deciding which one to accept.
This is a complex analysis that will require years of data, math skills, and top-notch spreadsheet wizardry, so fire up Excel right now and learn how to create the model that you’ll need to make your decision.
First, you’ll need historical and projected data for summer intern to full-time offer conversion rates – over at least 5 years, though 10 or 20 years are better if you can get them.
It should be a fairly simple task, especially since you need it on a per-office, per-group level and you can only have a 1% margin of error.
Next, you’ll need complete bios on everyone at the bank along with how nice they are to interns on a scale of 1 to 10, how much decision-making power they have on a scale of 1 to 10, and what percentage of the work they give out in the form of pitch books compared to live deals.
Finally, you’ll need data on exit opportunities for every single analyst and associate in the office over the past 5 years, along with projections for at least the next 5 years.
Mega-funds should receive a rating of “10″ while smaller places should scale down progressively to 1 based on their assets under management ($30B+ USD AUM should be 10, while less than $1B USD should be a 1 on that scale).
And if the analyst or associate decides to join a normal company or starts a non-profit to save the world, that should be rated a 0 – Helping people?!! Blasphemy.
Remember that there’s a high likelihood of death if you cannot get into the largest, most prestigious PE firms and hedge funds in the world – especially ones that non-finance people have never heard of – so this step is extremely important.
Now, Open Up Excel
…and please stop before you do anything above.
The suggestions above are all horrible, and if you thought any were serious, you should re-read everything on this site until you learn what really matters and what doesn’t.
Most people are better off not going to mega-funds; “ranking” anyone by what they do is ridiculous; and if you assess your self-worth based on where you work, you have some issues.
The scary thing is that I’ve seen suggestions similar to the ones above – and they haven’t been in jest.
Why This Much Data is a Horrible Idea
I could just say, “common sense,” but to go into more detail:
- The more data you collect and the more analysis you do, the less satisfied you’ll be with the final outcome.
- It doesn’t matter that much, especially for internships.
- You don’t have the data that does matter, nor can you easily or accurately get it.
- By asking around to find this information, you’ll freak out all your contacts – and Wall Street is a very small place, where emails never die.
Where you choose to intern does not, in fact, determine the rest of your life - just look at some of the interviews with readers who followed extremely random paths.
There is a much bigger difference between having AN investment banking summer internship and having nothing than there is between which bank you complete the internship at.
So please don’t whip out Excel and create an internship-decision financial model.
What Really Matters
The only 3 variables that you can accurately assess upfront are brand name/prestige, people, and geography.
Sure, you can try to find how much “real work” there is, but as an intern you’re not likely to get much real work anywhere – and if you do, only a completely random set of circumstances will allow it to happen.
You might also believe that full-time offer conversion rates matter, and they do – but unless you have someone on the inside that you’ve known for a long time, you won’t be able to accurately assess them.
You can’t exactly just call an interviewer you met once and say, “By the way, how likely am I to get a full-time offer in your group if I work there over the summer?”
And online sources tend to be unreliable or out-of-date due to high industry turnover (this is why I feature almost nothing on specific banks here – plus I would want to kill myself updating the data every week).
So if you know someone well and you’re sure he won’t screw you over, sure, go ahead and ask how many interns received offers – but don’t assume that this should be the #1 factor in your decision.
What about the industry vs. product group distinction? Surely it must be huge since M&A is 1,567x better than ECM, right?
That’s not even close to true, and for an intern it’s even less true.
So back to what matters most:
Brand-Name / Prestige
Let’s see if I can get through this without ranking the banks (you thought I would give in and do it, right?)…
Yes, a better name on your resume/CV will get you more attention and full-time interviews if you want to move to another bank.
Elite boutiques and bulge brackets are about the same, middle-market banks are slightly worse than that, and unknown boutiques are worse than middle-market banks in terms of overall reputation.
So all else being equal, you’d prefer a bulge bracket offer to a middle-market offer, and you’d prefer to take the middle-market offer over a local boutique with 2 people.
But as an intern, the specific bank you work at does not matter as much as you think it does - you will get full-time interviews elsewhere merely by having “investment banking summer analyst” on your resume.
Yes, you will get more interviews with a top name, but plenty of readers and customers have done middle-market or boutique internships and have still received interviews with much larger banks for full-time recruiting.
So use common sense but don’t obsess over ranking specific firms – other factors may play a bigger role depending on the offers you’ve lined up.
Do you have friends in this group/office? Did you like the senior bankers you met, or did they remind you of Patrick Bateman? Did they talk about sports and travel, or did they spend 30 minutes grilling you with brain teasers?
While the people in a group change from year to year, and while there is high turnover, the people will not change dramatically only a few months after you finish interviewing.
Depending on your co-workers, your internship may resemble Monkey Business - or it might actually be fun and worthwhile.
But this is the least sexy factor to look at, because it’s more fun to rank the banks and debate which group has the best “exit opps.”
The location of your offer is both important and commonly underestimated – you need to think about it because:
- If you do get a full-time offer, you want it to be somewhere you could see yourself working for a few years.
- If you decide to recruit elsewhere (or you’re forced to), you have a big advantage if you’re in the biggest financial centers – it’s much easier to network over the summer and as your internship is ending.
So all else being equal, you should prefer offers in New York to those in other cities in the US, offers in London to those in continental Europe, and offers in Hong Kong to those in other cities in Asia (the same applies to the major financial centers in other countries/regions).
The only exception would be if you’re 100% set on working in a different city to begin with – so if you’re certain you want to do tech banking and then venture capital, then sure, do your internship in San Francisco.
So How Do You Decide?
Pick the best-known bank with the best people in the best location.
Easier said than done, right?
If one or more of those variables is tied, then you have to decide based on the other one(s).
If you have a tie for all 3 – or one factor is counter-balanced by other factors (better people for one offer, but worse location for another one) then you have to decide which difference is bigger, or roll the dice if you really can’t decide.
Rather than looking at the easy decisions (bulge bracket in NYC vs. boutique equities in Dallas), let’s look at a few calls that are tougher to make.
Bulge Bracket Industry Group vs. Elite Boutique M&A, All in NYC or All in London
Prestige-wise, both of these are about the same since you can access a wide variety of exit opportunities from either one (assuming you get a full-time offer) and since everyone knows the names. The locations are also exactly the same.
You could decide on the basis of M&A being “better” than industry groups, but that’s a poor way to think about it – remember that not all industry groups are the same, and that you don’t necessarily do more modeling in M&A anyway.
So decide based on which group you liked more and where you think you would fit in better.
And if that still doesn’t work, find those dice or flip a coin.
Middle-Market M&A Group in NYC vs. Bulge Bracket ECM in HK
This one’s easy, right? A bulge bracket always beats a middle-market firm! Rocks, paper, scissors!
Not so fast.
If this were the same location I would agree, but working in New York and working in Hong Kong are very different.
Experience outside of New York is generally discounted if you want to return to New York – and if you’re in Hong Kong it will be extremely difficult to network with bankers based in NYC and go through accelerated recruiting processes at banks there.
The bulge bracket name is an advantage, but if you do M&A at a middle-market firm for your internship and you’ve networked well, you will still get full-time interviews at larger banks.
So in this example, I would lean toward the middle-market bank in New York if you want to be in New York after graduation – but if you want to work in Hong Kong, go with the HK offer.
If it’s an unknown 2-person boutique in NY vs. a bulge bracket bank in Hong Kong, then there’s a much bigger difference in reputation and the HK offer may make more sense, even if you don’t want to work there full-time.
Unknown Boutique in New York vs. Middle-Market Firm in Chicago
Now we have a bigger difference in brand-name/prestige and a smaller difference in geographies.
Yes, New York is a bigger financial center than Chicago – at least for investment banking – but it’s not even close to the difference between, say, Dallas and New York.
You do lose the networking advantage by not being in New York over the summer, but in this case I would lean toward the middle-market offer in Chicago because having a name that everyone has heard of – even if it’s not a “top” firm – is better than something that no one has heard of.
The difference in brand-name/prestige, in this case, is bigger than the difference in geographies.
Should You Renege on an Internship Offer for a Better Offer?
This is not a great idea, especially if you have offers at 2 bulge brackets, one with an arguably better reputation, or an elite boutique and a bulge bracket.
If you don’t even have an offer and you want to renege just for a potential offer, please stop and cancel that plan.
Even if you’ve accepted an offer at a middle-market or boutique firm for a summer internship and then you suddenly get a last-minute invitation to interview at a bulge bracket, you do not want to renege until you have a real offer in-hand.
But I Have No Summer Offers! / I Have a Different Question
Then make sure you read these related articles:
- No Investment Banking Summer Internship Offers – What to Do?
- How to Pick Your Group as a Summer Analyst
- How to Dominate Your Investment Banking Sell Day
- How to Prepare for Your Summer Internship
And whatever you do, do not actually attempt to build that spreadsheet I suggested in the beginning.