How to Prepare for Your Investment Banking Summer Internship (If You Haven’t Already Started)
Everyone already knows that to properly prepare for your investment banking summer internship, you need to memorize every single Excel and PowerPoint shortcut key, know your models as well as you know your bottles, and read the Wall Street Journal cover-to-cover each day.
Then there’s the matter of training yourself to sit motionless in front of a computer for 28 hours straight, and reading Monkey Business, Liar’s Poker, and When Genius Failed 3 times each.
If you’re reading this site and you have an upcoming summer internship, you’ve probably done all that already.
But what else can you do to maximize your chances of getting a return offer?
Conventional Preparation Tactics
I hope you didn’t actually believe what I wrote above, because it’s not true (sarcasm is difficult to detect on the Internet) – or at least, it’s not the whole story.
I’ve received a lot of these questions: “How much Excel should I learn? Should I take all these extra modeling classes? How many books do I need to read? Should I memorize what happens in the market each day?”
The short answer is that you just need to know the basics. You can get by without knowing anything, but I think it is helpful to have at least some idea of how to use Excel and PowerPoint and what investment bankers actually do.
You’ll learn or re-learn this once you start, but keep in mind that:
- Training programs for summer interns are sometimes poor – and smaller firms often don’t have real “training programs” in place.
- Competition for offers this year will be tough, to say the least – so if you don’t have to spend a week learning basic Excel shortcuts, that does give you an advantage.
If both of those are true, then why not bother going all-out and learning everything you’ll have to do as a Summer Analyst or Summer Associate?
Because you can’t.
Why Conventional Tactics May Result in Ambush or Capture Behind Enemy Lines
There are multiple problems with trying to learn “everything” before you start, but the most immediately obvious one is that you can’t really do it.
Why?
1. Because every bank does things differently – from simple pitch books to PIBs (public information books, another common task you’ll get as an Analyst) to complex models.
I received requests to add this type of material to Breaking Into Wall Street, but it’s nearly impossible to teach anything useful – whereas a basic DCF is pretty much a DCF from bank to bank, each firm has their own process, logos, graphics, and templates for other tasks.
It’s worthwhile to know the basics (e.g. a sell-side pitch book usually has a bank’s credentials upfront, then an overview of the company and market, then a valuation, then a buyer list, and then process recommendations at the end), but if you want to learn how Goldman Sachs specifically creates pitch books then you have to be at Goldman Sachs.
2. To quote Jon Voight on 24, “Stress is the fertilizer of creativity.” We can re-phrase this one as, “Stress is the fertilizer of learning.”
You can try to get your bank’s internal models ahead of time (if you can get someone to violate confidentiality agreements) and learn the in’s and out’s, but it’s not likely to stick with you unless you need to use it.
Wait, What Do You Actually Do as a Summer Intern Again?
And then there’s another, less obvious reason that trying to learn “everything” in advance is futile: you rarely do much “real” work as a summer intern.
Even as a full-timer working in Mergers & Acquisitions, there’s a ton of administrative work and far less “modeling” than you imagine.
A reader wrote to me the other day asking about a summer internship he had lined up, concerned that he would mostly be doing grunt work based on the description they gave him. Here’s my reply:
“To be honest I think that’s about what you’d find in most SA gigs – it’s very, very rare to get an internship where you actually do “real” work. And even in banking, most of the time you’re editing pitch books, fixing things, and making lists.
There is WAY less technical work than most people think – even in an M&A group, I spent most of my time doing administrative tasks. So I’d say it’s at least as good as anyone else’s summer internship.”
Even if you’re working at a top bank in a “top” group you’re still unlikely to do much “serious” work – because there isn’t that much to begin with, especially with the dearth of deals these days.
Conventional Tactics That Work
This doesn’t mean that all preparation is futile.
It just means that you should adopt the 80/20 approach with learning Excel and other topics related to finance and not stress over every single detail.
Knowing how to create “advanced” models and pitch books is unlikely to give you an advantage – and if you go around telling people you know how to do that, you’ll be at a disadvantage because they’ll think you’re weird.
You always want to under-promise and over-deliver when it comes to work – and going around acting like you’re an “expert” will result in failure, whether in interviews or internships.
So if learning every single detail of Excel, PowerPoint, and other programs doesn’t help you, what does?
How to Prepare Like a Ninja
The most useful way to prepare for an internship is intelligence gathering – figuring out how your group operates, who’s really in charge, and who’s most influential.
Why?
Because your chances of getting a return offer will be largely dependent on who “goes to bat” for you in the full-time selection process.
At the end of the summer, senior bankers and anyone who worked closely with interns gather around to discuss who should get return offers – and you maximize your chances by getting to know one or two influential people well rather than by spreading yourself thin.
It’s good to know others at your office, but it’s way more helpful to figure out who has traditionally helped interns get return offers, and then spend most of your time working with that person (or people).
Infiltrating Your Enemies & Gathering Intelligence
How do you actually gather intelligence and figure out who’s helpful ahead of time?
You need a friend on the inside. If you got to know anyone at the office particularly well during the interview process, you should reach out and see if he/she can meet up with you briefly before you start.
Don’t jump into the meeting saying, “So, can you tell me who’s the best person to work with and who helps interns the most?” but instead go in with more innocuous intentions (“I wanted to find out more before I start working there next month”) and use this structure to gather your information:
- Start by asking some relatively innocent questions, seeing how your friend is doing, and if he/she has any updates.
- When your friend starts mentioning senior bankers or talking about other people at the office, take this opportunity to ask more questions about them and see who’s good and who you should avoid.
- Don’t dwell on this – just extract what you can in the middle of the conversation, and then shift the topic to something else at the end.
If you don’t have an inside source, then you can’t gather too much intelligence in advance.
Once you start, focus on learning as much as you can from the other junior bankers – pay close attention to what they say among themselves, because it’s often far different from what they tell you.
Summer Analyst vs. Summer Associate
All of the above applies whether you’re a Summer Analyst or Summer Associate – despite what your bank may have told you in the “sell” process, the two roles are not that much different.
The main difference is that as an Associate, you’ll be expected to know more about corporate finance and how to conduct yourself in front of clients – so the bar is higher.
As a Summer Associate your inside source(s) should always be other Associates, and as an Analyst your inside source(s) should always be other Analysts – it looks weird to ask someone at a different level for information, unless you happen to know him/her very well already.
Other Tactics
Aside from intelligence gathering, what else can you do to prepare?
Well, networking always helps – but you have to be careful doing it in advance because it may send mixed signals. Use discretion and start speaking with friends at different banks if you want to hedge yourself, but an extensive, all-out effort is probably not worth it.
Oh, and make sure you have the appropriate attire (less of an issue for MBAs than it is for university students).
So learn the basics of the work at a bank, but don’t obsess over the details – because the intelligence you gather matters way more than knowing yet another clever trick in Excel.
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Quick question about returning analysts (As in doing a summer internship then coming back as full time). Do you essentialy get a fresh start after you come back from training?
You mean, do people remember how good/bad you were or are you starting over in terms of reputation?
It’s basically starting anew, but if you stood out for some reason people will remember it… though if you got a return offer, presumably you will have stood out in a positive way.
Ya thats exactly what I meant. I worked at a boutique firm (think GHL/Evercore) so obviously not that many people. I only really worked with one or two people and got no training. I don’t wan to be at a disadvantage compared to the group of non-summers that will be joining.
Yeah I mean it’s good to know the basics but with that few people it’s not worth going all-out because competition is lower to begin with.
I think more than anything, SA stints need more of a mental preparation than technical. I think walking into it with the right set of mentality and mindset is the utmost important thing. Interesting work and learning will naturally follow those with the right mindset.
Also, little things you do make a huge difference in getting recognized as a hard-working summer analyst by Analysts/Associates/VPs – it’s not so much how much you know about running valuations and how complex you can create the models. Even the first year analysts/associates – with no banking experience – aren’t very good at modelling.
Yup it’s all about mindset (try telling that to the 50 emails I get per week asking about how to learn to create pitch books in advance…).
Great article!
I specially liked the point on figuring out who is important to one.
I know one should be enthusiastic, willing to work hard and smart, but could you expand on what mindset is valued? Thanks.
Best,
S
They want someone who will do whatever it takes to get the job done, even if it requires pulling all-nighters, forgetting about your personal life, and so on. “Accomplish the mission at any cost.”
M&I, Thanks for this great post.
However, I am still very worried about my preparation for summer. I am a liberal arts major from a top college and I really believe the only reason I landed my internship was because of my great personality and networking skills, (which your posts really helped)
I would really feel more confident spending time reading the Vault guide just to have a better sense of this field (bc right now my knowledge is 0) but I attend a school that is still in session and will continue until I start.
Do you really think I shuld not worry, or should I chill in one of my classes to gain time to review?
Thxs
I would spend like 20 hours reviewing the basics before you start your internship.
Thanks for the informative article.
Is it better to have a regional boutique i-banking summer internship or a lower MM private equity summer internship? I’m currently a sophomore.
Thanks.
both are about the same.
hey M&I,
havent heard you talking about much on what’re you up to besides your traveling and your cool online business?
or is this it? this online business is your FT job or are you actually working/looking for a job right now?
In addition to this, I’m becoming an actor and starting a cocoa company soon.
I would never get a FT job again haha
Kind of sad saying this but, I would suggest getting in the habit of waking up in the morning (7AM – 8AM) and sleeping at around 1AM. I would reduce sleeping hours to <6 hours maybe about two weeks before starting the internship.
Even though hours very a lot by group and deal flow, it’d be much easier adapting to bad hours (6 hours of sleep would be considered golden!) if you get rid of the habit of rolling out of bed at 11am for class at noon, and taking naps around 4pm after classes.
Also would try to get in the habit of running or working out 7 in the morning or really late at night before sleeping. Really the only time to work out while doing ibanking is before work and after work (sometimes dinner time). Coming into SA stints relatively healthy and physically ready really helps when you are mentally trying to sink everything in for the first time.
Correction: *vary
I am currently on my placement year with national grid an electricity and gas transmission company and I am an electrical engineering student. I want to apply for investment bank internship but I have no knowledge of investment, finance and economics etc.. but I have very good grades throughout I have obtained 1st class in my two years and awarded various awards and scholarships..What is best way for me to develop the knowledge in this area and apply for investment banking internship?
Self-study training, informal internships, student-run investment clubs, finance organizations, learning from friends, reading books…
I am deciding between two summer internships right now: one is in structured products at a trust bank, and the other is a large hedge fund of funds. I am currently a sophomore and I do not know which internship will put me in a better position for investment banking analyst interviews next year. Which internship would be better to transition to investment banking next summer? Any advice at all would be appreciated!
See my reply on the other article – private firm is probably better.
With internships, how far through university do you typically have to be? For example, is it fine if apply for summer internships while I’m in my second year of study?
Thanks
Usually they only want 3rd years, but sometimes they also take 2nd yeas.
Hi,
I am going to attend NYU for their part time MBA program in Aug. I’m looking to get into PE. I’m the meantime do you think getting a A+ certification in Microsoft will look good to put on my resume?
I’m going to have to learn it all sooner or later and was thinking the certificate might look good..
Thanks,
Brad R
http://www.mergersandinquisitions.com/degrees-certifications/
Since I have 3 months before school and will be using Microsoft excel and other programs often I have 2 choices. One take classes on the side and then put Excel proficient or take the class which will be 200hours and 2k to be able to put A+ Microsoft certified. Which would you do?
I’m assuming you’re joking, but to spell it out in case you’re not: certifications like that don’t mean crap. So take a class and put “Proficient” and save yourself the time/money.
You’re saying that most of work will be grunt work as an intern. I’m having a phone interview with 3 bankers next week, and I’ve been invited because of a good contact I have in the company. But as stupid as I am I completely forgot to ask my friend what my work actually would be if I got this internship.
Earlier on, he said to me that I shouldn’t expect much technicals in the interview because this isn’t expected from an undergrad student in his internship either. So I thought to myself: if I’m not getting much technicals, I must expect that I won’t doing “cool” work either. And for this internship I would have to take a semester free from uni, because it would be an off-cycle internship. I don’t want to waste one full semester for solely admin work.
What do you think will a student who just will have finished his 2nd semester do when he gets this internship?
I hope you’ve understood my question.
Thanks!
It probably will be quite a bit of grunt work that seniors don’t have time for. However, if it is a firm with a solid reputation, I’d go for it because at least you’ll get some work experience. It would be better if you could postpone that internship to the summer. I’d also speak with the team to see what they have in mind for you