Revealed: The True Story of How I Got Into Investment Banking and What You Can Learn From It
As I’ve been speaking with readers here in China, I’ve been getting one question over and over again.
No, nothing about models and bottles.
But rather how I broke into the industry in the first place.
I’ve never written about this in detail before, and I figured it might be helpful to anyone working their way in right now.
Those who ordered The 200 Investment Banking Interview Questions & Answers You Need to Know are familiar with my advice to always say you’re focused on banking when interviewing – even if you’re torn between opening a zebra ranch, traveling around the world, starting a business, or making the difficult consulting vs. banking decision.
I was in this same position when it came time for recruiting. I had just returned from living and working in Asia and switching between about 5 different industries and had no clue what I wanted to do.
In addition to all of the above (ok, I wasn’t thinking of opening my own ranch), I was also considering hedge funds and trading, as well as random positions at “normal” companies.
So I did what everyone does: apply to everything and hope at least 1 of them would work out.
Step 1: Be Clueless Until the Last Minute
Everyone knows how critical it is to start early. In my infinite wisdom, I did the exact opposite and only became interested in finance mere months before recruiting began.
I had quite a random background and had worked at everything from nonprofits to tech companies. But I had no finance experience and I didn’t even know what the 3 financial statements were when I started applying to banks.
As you might expect, my most common question in interviews was “Why banking?”
Lesson 1: You need to start early – especially in a bad market. As we’ll see below, I had some other things working in my favor so this did not sink me.
Lesson 2: If you don’t have a finance background you need to anticipate objections in advance and plan out how to handle them.
Step 2: Haphazardly Get Lots of Contacts at Banks
One thing I did right was making lots of friends in financial services, even before I was interested.
I won’t lie – going to a target school helped a lot with this one.
I didn’t develop relationships specifically for getting into the industry – I wasn’t trying to use people. Instead, I knew them to begin with, started to ask questions as I became genuinely interested, and then met even more contacts through those connections.
Lesson 1: People are much more receptive when you’re actually interested and not just using them.
Lesson 2: Even though I “started late,” I had developed relationships much earlier than that – so it wasn’t really that late.
Step 3: Come Up With a Good Story Despite Having a Random Background
I firmly believe that telling a good story is responsible for 90% of your success in interviews.
Since I had a tech background, I told banks that I was interested in venture capital and being an investor one day, and saw banking as a good way to get there. I showed how I moved closer to the “business” side of the industry with each successive job, and how I realized I like the business side more than the technical side.
Obviously, this story worked best for TMT groups at banks – for consulting, hedge funds and everything else I was considering I had to modify it.
For hedge funds and trading the story was more about how I thought of everything in terms of risk and reward, and going through past cases where I “thought like a trader.”
Lesson 1: You need to turn your weaknesses into strengths – maybe you don’t have a business background, but you have gained some insights from what you’ve done that could be applied to finance.
Lesson 2: Associate candidates should not say they are interested in “exit opportunities” – this is risky and I would only recommend it for Analyst interviewees.
Step 4: Bankify the Resume
My own resume at the time was incredibly bad – it looked more like I was a former llama herder than someone who was serious about finance.
A lot of my early applications were outright rejections because I didn’t focus enough on the business side of what I did and was too technical.
If you’re from a finance background, you have no excuse not to be specific with numbers and results. But if you’re not, you must be “creative” and re-position what you’ve done to make it resemble business.
The new resume I created actually resulted in interviews.
Lesson 1: You need to have a good resume/CV to stand out. With so many people applying, it’s easy for banks to toss your resume if it’s poor.
Lesson 2: The resume is actually more important if you don’t have a finance background – it’s your chance to “prove” that you have what it takes.
Step 5: Stumble Through Ace Interviews
I made 2 mistakes when preparing for some early interviews:
- Being overconfident in my abilities, I didn’t prepare at all and figured I could just “wing it.”
- I spent all my time trying to learn accounting/finance.
The first mistake needs no explanation – but the second point may surprise you.
Since I had no finance background, I received few technical questions. Sure, there were a few interviewers who liked to play “bad cop,” but I wasn’t tested nearly as much as I had been expecting.
90% of the questions I received were variants of “So why are you switching careers now?” Preparing a good answer for that one helped far more than memorizing my accounting textbook.
Lesson 1: You need to be prepared, but probably not in the way you think you need to be prepared. Focus on your “story” and the big questions over everything else.
Lesson 2: There are a few exceptions. If you’ve had a banking internship or have worked in the industry before, you need to know what you did and be prepared for many technical questions.
The End Result
I ended up with offers in everything I was considering, and decided on banking in the end. Looking back, that was definitely the correct decision – although there were a few hedge fund offers that were quite tempting (some of them collapsed in recent years, so I’m glad I didn’t go that route…).
If there’s enough interest, I’ll try to do more case studies / interviews like this in the future. Everything will be anonymous, of course, but from recent conversations I’ve had it seems a lot of readers are curious about how “normal” people get in.
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