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.