How to Position Yourself for Investment Banking as a 1st or 2nd Year University Student or High School Student: Be a Line, Not a Dot
When do you start?
Your first year of university?
Your mother’s womb?
No one knows, but it seems like you need to start “preparing” for your future career earlier and earlier each year.
One day, parents might start modifying their unborn babies’ DNA to give them an advantage in the recruiting process… 20 years in advance.
In the absence of time travel or genetic modifications to boost your accounting proficiency, though, you need another way to prepare long in advance of the recruiting process.
Especially if you just entered university, you’re still in high school, or (gasp) you’re even younger and just realized you want to break into finance in the future.
Wait, What? DO People Actually Start Preparing When They’re 5 Years Old?
Not exactly, but standards have definitely increased over time.
Here are a few examples:
- Internships: In the 2000-2005 time period, plenty of people “stumbled into” investment banking internships and even full-time jobs. I was one of them! Today (10-15+ years later), that doesn’t happen – you need previous work experience.
- Expected Level of Technical Knowledge: Many interviewees 10-15 years ago got into IB without being able to walk through simple changes on the financial statements – good luck with that today.
- The Hiring Process: More and more interviewees are getting case studies, modeling tests, and other extended exercises – yes, even in the US, and yes, even for internship roles.
So even though the emails and questions from high school and middle school students frighten me, they’re right to be concerned.
But there’s a straightforward solution:
Be a Line, Not a Dot
I’m stealing this analogy from Mark Suster’s excellent article on how he, as a venture capitalist, “invests in lines, not dots“:
“The first time I meet you, you are a single data point. A dot. I have no reference point from which to judge whether you were higher on the y-axis 3 months ago or lower.
Because I have no observation points from the past, I have no sense for where you will be in the future. Thus, it is very hard to make a commitment to fund you.”
Even though he’s using the analogy to explain his investing process, the same logic applies to careers and the recruiting process.
After all, any company that hires you is effectively acting as an “early-stage investor”: they know you won’t be useful right away, but they’re happy to pay for you to learn the ropes and eventually contribute to the company.
Why Most Students Present Themselves Like Dots
Here are the top two recruiting mistakes I’ve seen from university students:
- Interview / Networking Pitch: “Hi, I’m here because I want to do investment banking… because I will learn a lot, and it’s exciting, and I want to work on deals!” (And… um, what have you done in the past to demonstrate interest/commitment?)
- Resume / CV: No prior academic, student group, or internship experience that indicates any interest in finance.
In some cases, it’s an issue of presentation and not telling your story effectively; in other cases, it’s because you actually don’t have a track record to point to.
You can avoid both these mistakes if you start early enough.
- The Beginning: Your original interest, family background, etc.
- Finance “Spark”: What specific event made you interested in IB / other finance roles?
- Growing Interest: How have you developed this interest over time with clubs, activities, and internships?
- Why You’re Here Today / The Future: Your future plans to advise/invest in companies.
To become a “line” rather than a “dot,” you need to spend the first 2 years of university doing activities and internships that will develop those first 3 points of your story.
If you’re much younger than that (i.e., just entering high school), there isn’t much you can do to prepare besides reading about the industry, learning more about the stock market, and asking family members about their jobs.
If you’re approaching high school graduation, you have more options: you might be able to get a (legal) internship somewhere if you have family connections, and you should focus 100% on getting into a top university that banks actually recruit at.
One Small Note: In the UK, there are “insight” programs or “Finance Insight Days” you can apply to even in high school – so those are definitely worth doing, solely for the connections.
Getting Specific: Timing and Tactics to Make Yourself Into a Line
You might understand this concept, but then stumble when it comes to the specific timing and tactics to use.
So here is exactly what to do in each time period:
Step 1: The Beginning of Your 1st Year in University (Or 2nd Year If You’re Starting Late)
Before you begin making a detailed 3-4 year plan, you should answer a simple question first:
Do you actually want to go into the finance industry? Do you find the work interesting, or does it bore you to tears?
To answer this, do something very simple and join a student finance/investment club or case competition.
To find them, do Google searches for banks’ names and “competition,” or look within your school network and ask officers at clubs.
If you like it and you do well on your first stock pitch or case study presentation, great: now you’ve answered that question and you have the first segment of your “line.”
If not, try other student groups and competitions in other fields until you find what interests you.
Do NOT even bother applying to internships or rotational programs or anything like that until you’ve done this “trial run” first – otherwise, you’ll have less to write about on your resume/CV, less to speak to in interviews, and less certainty over whether or not it’s for you.
Step 2: The Rest of Your 1st Year Into Your 2nd Year
Now you add more segments to your line, and make them bigger!
Step 1 above corresponded to your “Spark,” but Step 2 corresponds to the “Growing Interest” part of your story.
You need to “level up” that first experience and show your increased interest and commitment over time:
- If you’ve been participating in a student club, go for a leadership position there.
- If you’ve done one or more case competitions, host your own competition and invite student clubs to join.
- If you’ve done a spring week in the UK, apply to more spring weeks and/or part-time roles at boutique firms.
And yes, you should also start thinking about internships.
In your first or second year, you don’t need an official investment banking internship to have a shot at winning IB / PE / HF roles later on – almost anything could work:
- The famed private wealth management internship that everyone does.
- A rotational internship at a bank.
- A business development or accounting or other internship at a local company.
An internship in your second year matters a lot more than it does in your first, because interviewers focus on more recent experience during recruiting season for 3rd year internships.
School-year internships also help, but you will definitely need something for summer break.
Step 3: How to Get the All-Important 2nd Year Internship
Start with these 3 methods if you’re a 1st or 2nd year university student:
- Ask the officers of your clubs if they host alumni events, or if they can refer you to alumni from the group.
- Go through your alumni directory and contact anyone you can find in a finance-related role, using our tips on informational interviews. Bonus points for attending information sessions (yes, worth it even if you’re younger).
- Use LinkedIn to find companies in your area – search by geography, find anyone you’re connected to, and send short messages to them asking about roles (yes, you will need a decent LinkedIn profile – see our article on LinkedIn for investment banking).
If you’re going for summer internships, you need to start at least a few months in advance to make this work.
If you don’t get a summer internship in your 2nd year, it’s not the end of the world but you’ll need to scramble for a school-year internship early the next year.
Have You Become a Line Yet?
By the end of your 2nd year and into your 3rd year, your trajectory should look like this:
- “Spark”: The club you joined, the case competition you completed, or whatever else you did to test the waters.
- Growing Interest: And then you took a leadership role in the club or otherwise “leveled up”… and then you leveled up again by completing an internship over the summer in [Insert Industry Here.]
Your 3rd year and onward will be all about fleshing out that “Growing Interest” section and coming up with something credible for your future plans.
Step 4: Your 3rd Year and Beyond
This is where you need to get that internship.
Technically, you can still win full-time roles in the industry without it, but it is difficult and will require a lot of networking / cold-emailing / cold-calling.
This stage of the process is covered in our series on how to make a 6-month game plan before recruiting season starts, but to summarize:
- Summer Between Your 2nd and 3rd Year: Start networking with alumni and setting up calls.
- 3rd Year, August/September-November: Spend these months continuing to network, ideally take a trip to NYC / London / another financial center, and edit your resume/CV for maximum spin potential. Apply to all the internships you can find. If you have no background in accounting or finance, start learning the concepts via interview guides / online courses / YouTube tutorials; if you already know the ropes, don’t do anything yet.
- One Month Before Recruiting Begins: Assuming you have the accounting / finance background, save your technical / interview question preparation until the month before recruiting, or you’ll forget too much and waste time re-learning material.
And a Few More Things…
Your major really does not matter much as long as you can maintain a decent GPA while completing it. If your major makes it impossible to network or participate in activities / internships, drop it and switch to something easier.
You should devote time to maintaining acceptable grades while doing everything above (I don’t even want to give a range, just check the FAQ), but you should NOT focus exclusively on school.
If your major or classes prevent you from serving in at least 1 student leadership position and completing at least 1 major internship, change your major and/or classes.
Finally, I recommend hedging yourself with a few non-finance-related classes, short non-finance internships, or a minor in another area. Engineering / computer science is a great bet.
You could easily graduate into a recession or financial crisis or other market calamity, in which case you do NOT want exclusively finance-related skills and work experience.
Take Me to the Examples, Please
Here are two examples of sequences that readers have previously followed to win internships and full-time offers:
From Non-Target School and No Finance Experience to 2 Bulge Bracket Offers
- 1st Year: Started out in engineering, but didn’t like it. Did a random “family business” internship after Year 1.
- 2nd Year, Fall: Joined a student-run investment portfolio, a business consulting group, and a trading group, and learned valuation skills.
- 2nd Year, Spring: No internship lined up, so he began cold-calling wealth management firms and won an internship at a boutique.
- 3rd Year: Networked extensively, but could not win an offer at a large bank so he went to the LevFin group at an independent lender instead.
- 4th Year: Didn’t get a return offer due to the economy, so he got referrals from his bosses and from alumni (it was a non-target, but also a very large school), and used those referrals to win interviews and multiple offers.
The Career-Changing Engineer
- High School: New immigrant from Asia; focused on learning English.
- 1st and 2nd Years in School: No finance internships – just engineering / technical ones.
- 3rd Year, Fall: Joined a finance group at school and used that to win a school-year internship at a hedge fund.
- 3rd Year, Winter: Didn’t tell his story well enough in interviews, so he won no internships offers.
- 3rd Year, Spring: Cold-called 120 banks and succeeded in creating his own internship at a boutique in the summer, which he later leveraged to join a bigger bank full-time.
Notice how neither reader really started at the “last minute.”
Yes, they had to find internships very quickly, but they started preparing anywhere from 9 months to 1-2 years in advance.
So if you’re in high school or you just started university and you’re wondering what you can do to “get ahead of the game,” read the examples above and follow what they did.
If you have no finance experience whatsoever, join a student group or case competition and use that for your “spark.”
Then, level up your skills by assuming a leadership role in a group and then winning internships – even if they’re not official IB/PE/HF internships.
And in the 6 months before 3rd year internship recruiting, ramp up your networking and interview prep.
None of this will guarantee you an internship or full-time role.
But it will significantly boost your chances – as long as you present yourself as a line, and not a dot.
For Further Reading:
- How to Write an Investment Banking Resume When You Have No Real Work Experience
- How to Prepare for Investment Banking Summer Internship Recruiting
- Investment Banking Competitions: The Best Way to Make Up for Average Grades and No Work Experience?
- Finance Recruiting Timeline, Part 1 – The First 6 Months
- Finance Recruiting Timeline, Part 2 – Two Weeks Before Interviews and Right After
Break Into Investment Banking
Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews
Read below or Add a comment