From Biology to Investment Banking: How to Become an Even Better “MD”
A long time ago, an angry reader kept leaving comments saying that my estimates for MD-level compensation were off.
He posted an analysis showing why my estimate of $1,000 per hour was wrong and explained why MDs make more like $100-$200 per hour.
His numbers lined up, but then I reached the end of his “analysis” and read the punchline:
“People have been led to believe that MDs make a huge salary, but the ones that are really making money are the hospitals; doctors are just employees at the hospitals and clinics.”
I can understand the confusion.
But on this site, MD means Managing Director.
And the pay differences above are one of the many points that lead many students to switch from biology to investment banking – as our reader today did:
Switching from Biology to Business
Q: Can you summarize your story for us?
A: Sure. I graduated from high school as one of the top students in my class and started university at a Top 25 school in the U.S.
I began as a biology major, mostly due to my personal interest in the industry, but within a few months, I realized I had no idea what I was doing with myself.
So, I transferred to a much smaller and lesser-known school.
It wasn’t even ranked at the national level, and it had approximately 3-5 alumni, total, in investment banking.
I stuck with biology at first, but I began to lose interest in it after two years of classes.
My roommate was an economics major, and after speaking with him, professors in the business school, and those 3-5 alumni, I switched into economics.
I liked that a lot more, but I got such a late start that it was almost impossible to win a finance internship in my junior year, let alone an internship in investment banking.
I applied to more internships than anyone else I’ve spoken to – maybe 500+ applications – but nothing worked because all my experience and coursework had been in healthcare.
I read about valuation groups at accounting firms and learned how the skill set might be relevant for IB roles, so I gave myself a crash course in accounting, valuation, and financial modeling.
Then, I applied for and won a role at a non-Big-4 firm by heavily spinning my background.
About 9 months into that job, I began networking for IB roles.
I spent 10-15 hours per week on informational interviews, emails, and calls, and won a full-time IB Analyst role at a bulge bracket bank after about 9 months of the job search.
Q: To start with, how did you spin your background to win the valuation role?
A: I pointed to my self-study and relevant coursework and de-emphasized my biology and healthcare work experience.
Many valuation firms look for students who held leadership roles on campus, so I emphasized those in place of my non-finance work experience.
Networking also works well at these firms since fewer students do it; it’s easily the best way to get through the resume screen.
Biology to Investment Banking: Networking Strategies
Q: You mentioned earlier that you had used some “creative” networking strategies.
Can you share them with us?
A: Sure. The standard tactics worked well for valuation roles at accounting firms, but I had to become more creative as I began searching for IB roles.
Initially, I sent mass cold emails to bankers and received a total of 0 replies.
That was because I had a weak story and no mutual connections; also, I looked like a non-traditional candidate.
So, I changed my strategy and began writing physical letters (i.e., snail mail) to decision makers at banks.
If they could ignore my email in 1 second, it would take them at least 5 seconds to open my letter and decide whether or not to read it.
Q: OK, but how did you find the physical addresses?
A: If you think about it, it’s easier than finding email addresses: Just look up the bank’s address on Google Maps!
I searched for bankers’ first and last names on LinkedIn and combined that with the address data from Google Maps to send the letters.
After I sent the physical letter, I also followed up via email.
If the bank used middle names or initials in their email address format, I searched FINRA registrations to find that information.
This process of writing letters to explain my background, story, and why I wanted to work in banking was time-consuming (~1 hour per letter at first), but then I remembered your suggestion to outsource networking, and I began doing that.
I hired a virtual assistant on Upwork to gather the data and draft letters for me, which took the bulk of the time.
I then reviewed each letter and made minor edits, and my girlfriend and I sent them out weekly. Even today we joke about how we’ve perfected the trifold.
The process became so streamlined that I could easily send out 20 letters per week.
Which banks or groups did you focus on, and how did you follow up with them?
I took their advice and began to research other industries so I could discuss trends and deals anywhere.
I started with the bulge bracket banks and moved down from there.
After I sent a physical letter, I waited a week, and if I didn’t hear anything, I followed up via email.
If I still didn’t hear anything, I followed up a few days later and kept following up every few days for a week or two after that.
Emails sent around office open time in the local time zone got the best response rates; I won informational interviews or referrals from three Vice Chairmen (!) at different banks like that.
Q: Yeah, you want the email to arrive after they’ve cleared away everything received overnight, but before the craziness of the day begins.
What were the biggest challenges you encountered in this process?
A: The biggest challenge, by far, was telling my story effectively to answer the “Walk me through your resume” question and convincing them I was serious about the biology to investment banking move.
I had an unusual background – I had transferred to a smaller university, I had switched majors, and I had become interested in finance very late – and I struggled to explain all that at first.
Also, I had to use my story to preempt the inevitable “Why haven’t you done a previous IB or finance internship?” and “Why didn’t you get in earlier?” questions.
I did not encounter problems with firms never getting back to me after interviews.
Lateral opportunities come up as a result of unexpected departures, so teams usually need to hire someone quickly.
Investment Banking Non-Finance Backgrounds: How to Tell Your Story and Handle Surprises
Q: Agreed; it’s also more of an issue at small banks rather than the bulge brackets.
On that note, how did you tell your story effectively?
A: I stripped my story down to its bare essentials and resisted the urge to “explain” too much.
For example, I left out the part about transferring to a smaller university because it didn’t help my case at all.
I also left out my university’s name because it wasn’t well-known, and I already had full-time work experience.
My rough story outline was:
- Beginning: Entering university, I majored in biology. I had family members in medicine, and I also wanted to go into the industry.
- Spark: Halfway through, I realized it wasn’t for me, and I became more interested in economics because of [Specific Professor/Class].
- Growing Interest: I liked economics, but I also wanted more practical, hands-on applications of the topics, so I became interested in investment banking and valuation, which led to my current role.
- Preempting of Key Objections: I started late in the process, so I was not able to complete an IB internship. But valuation work seemed like the next-best alternative, and I felt the skill set would apply to IB roles as well.
- The Future / Why You’re Here Today: So, I’m here today because I want to take the skills I’ve gained in my current role and apply them to major transactions. I’m interested in IB because you influence deals rather than just weighing in one aspect, such as valuation, or analyzing deals after they’ve taken place, and I’m excited about this firm and group because of [Recent Deals the Group Has Worked On].
Q: That story outline is better than 99% of the ones we see.
What other surprises or challenges did you encounter in networking and interviews?
A: I was surprised at how my story worked very well with some bankers but very poorly with others.
Anyone who had attended a non-target school or moved in from a different career responded well, but it was harder to connect with graduates of elite universities and business schools.
Also, at some banks, I kept getting “referrals to HR” from bankers.
They were trying to be helpful, but these calls tended to be useless because they were often with teams that had no open positions.
One HR group at a bank asked me to stop asking for referrals since they had no open roles!
Since lateral roles pop up unexpectedly, staying in touch with bankers was crucial.
If someone quits randomly in the middle of the year, you need to be #1 on senior bankers’ list of “candidates to call.”
Q: Yeah, it’s even more critical than in on-cycle recruiting because of the timing.
What else did they ask you about in interviews?
A: My valuation experience and perspective put me in a good position since I had more real-world experience than most candidates.
Bankers did not ask me that many conceptual questions, but focused on topics like the selection of comparable companies and how to tweak the set to get the results the client wanted to see.
Other than that, they focused heavily on my story, how much I knew about the bank, and recent deals they worked on (which you need to know about).
Q: Great. Any final thoughts for students who also want to move from biology to investment banking (or another non-finance major to IB)?
A: The main points are:
1) Think of networking as a process, not a series of results.
It’s discouraging to focus on the results because most networking efforts turn into dead ends.
It’s better to think of it as an extended process and not worry too much about how many responses you get in one week.
2) Frame your story for your audience.
You can have the best story in the world, but it’s useless unless the person you’re speaking to can relate to it.
3) Be persistent.
If there’s anything that bankers care about besides academic background and work experience, neither of which you can immediately change, it’s persistence.
Some people track how many times candidates have contacted them and recommend the ones with the most attempts, even if they never respond to those candidates!
Q: Thanks for your time! Great tips.
A: My pleasure.
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