by Brian DeChesare Comments (25)

From Boutique Consulting Firm to Top Bulge Bracket Bank: How to Dominate the MBA Investment Banking Recruiting Process

MBA Investment Banking Recruiting

You know you can’t buy bottles with Starwood points, but what about investment banking internships?

It’s still tough.

And if you haven’t worked at MBB, it’s even more difficult to move from consulting to IB.

But it gets easier if you combine that boutique consulting experience with a stint doing internal consulting at a PE firm and a top business school – as our interviewee today did.

He came out of the recruiting process with multiple offers at bulge bracket banks and elite boutiques, which is somewhere within the top 1% of results for MBA-level candidates.

Among other points, we discuss:

  • Why it’s probably a bad idea to accept a boutique consulting offer over MBB.
  • What the recruiting environment at a top business school is really like, and how to stand out when everyone else is as smart and hard-working as you.
  • How to be prepared without being overbearing – a crucial distinction that sinks a lot of otherwise great candidates.
  • Differences between bulge bracket and boutique interviews at the MBA level.

From Boutique Consulting Firm to Top Business School

Q: So what brought you to business school initially?

A: I had been interested in investment banking coming out of undergrad, but I graduated in the middle of a recession, and most banks were only hiring from their summer intern classes that year.

I hadn’t completed an IB internship, so I recruited for consulting roles and picked a boutique firm over MBB (McKinsey, Bain, and BCG).

That was a BIG mistake. But I was young and stupid, so…

Q: Why was it such a big mistake?

A: There is a much bigger difference between smaller consulting firms and MBB than there is between middle-market / boutique banks and bulge bracket banks.

You also gain access to a much wider network at the top 3 consulting firms and better exit opportunities all around, including options that would be very difficult coming from a boutique firm (e.g., private equity).

If you want to stay in consulting for the long-term, a smaller company might make sense, but it’s much better to work at one of the top 3 firms if you can do so.

Q: OK, and what did you do next once you had accepted this offer and worked there?

A: I ended up moving into the internal consulting group at a private equity firm and worked with several portfolio companies there.

A lot of my job was due-diligence-related and involved making recommendations to boost companies’ revenue via pricing changes and other operational efforts.

That made me even more interested in IB for a few key reasons:

  1. First, I won’t lie: compensation was a big factor. Investment professionals in PE were earning quite a bit more than me, and the only difference was that they had ~2 years of banking experience.
  2. “Deal work” had a much faster pace, more urgency, and more importance. With consulting, no one really cares what you do. Your report or presentation is the 4th or 5th item on the person’s priority list.

A lot of the people I interacted with as a consultant were junior finance managers; CFOs and other executives were rarely involved.

By contrast, capital markets and M&A activities are some of the most highly leveraged things you can do to create value for companies – so all the C-level executives are heavily involved with those.

Finally, I became more interested in finance than determining a company’s marketing strategy as I saw more and more transactions from the PE team.

Q: All that makes sense. But why did you apply for business school instead of networking aggressively?

A: I did want to get in at the Analyst level because there’s a clearer path to buy-side opportunities.

I did a fair amount of networking, but most of the MDs and senior bankers I spoke with told me to go to business school.

I had already had several years of full-time work experience by that stage, so it was tougher to win entry-level roles.

So, I ended up applying to MBA programs and won admission at one of the top schools.

Recruiting at a Top MBA Program: Shark Tank Meets Survivor?

Q: So what was the first thing you did when school began? Or did you start preparing before school began?

A: The two most important points were preparation and outreach.

Oh, and don’t listen to the “career coaches” or “career advisers” at your school – even at a top school, I got useless advice from them.

For example, one person there told me that I’d be OK if I spoke with two bankers at each firm; I thought it was bogus, so I multiplied that by five just to be safe.

Remember that these advisers are most concerned with avoiding embarrassment.

They know that someone from their school will win an offer at GS or MS, and they don’t necessarily care if it’s you or someone else.

Their goal is to make sure a reasonable percentage of students win job offers in their desired industry, but, as we both know, not all banking jobs are created equal.

Q: I agree with you on the general uselessness of career offices.

Going back to my original question, what kind of preparation and outreach did you do?

A: I didn’t do a ton of work far in advance; I got started around the time my first semester began.

For my outreach, I focused on alumni and only contacted bankers in the specific coverage group in which I wanted to work.

The PE fund where I had done consulting also specialized in that industry, so it made sense to focus exclusively on those groups.

To prepare, I went through your courses and guides and sacrificed quite a bit of time that my peers spent partying or “networking with each other.”

Q: So most of your peers who did not win offers spent too much time partying and not enough time preparing?

A: The most common mistake, by far, was falling into the trap of thinking that IB recruiting is not as competitive as it used to be.

A lot of students went into the process thinking, “I’m at a top business school. Of course they’ll want me!”

But it is still pretty competitive.

To give you an idea of numbers, one of the bulge bracket banks at our school had these stats:

  • 60 people applied.
  • 40 people received interviews.
  • 15 went to the final round.
  • 6 received offers.

Most students apply to multiple banks, so the overall success rate was NOT 10%.

Some students who failed to win offers in that process did win offers at other banks; the student success rate might have been more like 30-40%.

But it’s still competitive, and going to a top school doesn’t guarantee anything.

You need to have the technical side and your response to the “Walk me through your resume” question mastered, but it takes more than that at this level.

Q: Like what? You have me intrigued.

A: The truth is, any idiot can walk into the interview room and tell a story about why they “want to work on deals.”

So the best way to prove your interest in the field is to know a lot about the investment banking business and recent deals before you step into the room.

I spent a lot of time on the following activities:

  • Learning the “qualitative technical” side (the process behind a deal, but not specific analysis) by reading DealBook and by running screens on Capital IQ to research deals done by the group I was interviewing with.
  • Finding proxy reports on deals, reading everything about them I could on Capital IQ, and even asking friends in banking about them.
  • Reading annual and quarterly reports from publicly traded boutique banks and looking for comments from the CEO and management team on the business itself.

The last point is particularly important: the large, diversified banks’ reports don’t have much useful information since they do a lot more than just IB advisory.

So I scrutinized boutique firms’ public filings to understand major business trends.

I treated investment banking and M&A deals the same way someone would treat football if he/she were a football fan.

I didn’t go as far as creating a “fantasy M&A team,” but I did go far beyond spinning a good story and learning the technical questions.

Q: That’s an interesting strategy, but it also has some risks.

For example, sometimes people who do a lot of research come across as “overbearing” in interviews.

How do you prevent that from happening?

A: I think there are two main problems:

  1. Becoming a Robot Who Just Recites Facts – To avoid this, you should not just memorize deal information and financial figures. Instead, you should focus on the “why” and then use that to remember the numbers. Bankers will also be more impressed if you can explain the rationale behind a deal rather than citing dozens of figures.
  2. Coming in Acting Like You Know More Than the Banker Interviewing You – To avoid this one, you must understand that you could spend hundreds of hours researching the industry, completing modeling exercises, case studies, etc., but you will still only understand 10% of the job like that.

To really “get it,” you need to be a banker first.

Much of the job cannot be taught in books, training, or online courses: understanding how to calm down an angry client, getting team members to like you, or effectively prioritizing your work tasks.

So you have to admit upfront that even if you have good technical knowledge, you still don’t know as much about the job itself as your interviewers.

Q: Can you give an example of how that attitude could lead someone astray, and what you could do to correct yourself?

A: Sure.

In one interview, the banker asked me a question on depreciation of PP&E, and then asked a follow-up question about how I would value that PP&E if it generated a certain amount of cash flow.

In my answer, I made a reference to LBO modeling, and the interviewer then asked me if I knew how to do it.

Instead of saying, “Yes” or “Sure, I’ve done some practice exercises on my own,” I made a joke out of it and said, “I can try.”

You want to come across as “informed, but humble.” You’ve done your homework, but you still have plenty to learn.

MBA-Level Interviews: Case Study Extravaganza?

Q: That neatly leads us to the next topic: interviews themselves.

Beyond what we’ve already covered, were there any surprises or key differences at this level?

A: Not really, but I got a lot of ethics-related questions.

A lot of banks like to test your “moral compass” and make sure you won’t short those CDS that a client just bought.

They also frame many of the qualitative questions differently. For example, instead of asking the standard “greatest weakness” question, they asked about a group exercise at my school and the peer feedback I received.

It was still a “weakness” question, but I had to come up with something on the spot because I hadn’t prepared for that specific question.

Technical interviews turned out to be easier, because I was much more prepared than the average candidate.

Q: Were there any differences between different banks? How common are case studies at this level?

A: Technical questions varied tremendously at different banks.

The large banks tended to ask predictable questions about changes on the financial statements, picking the right comps, etc., while the elite boutiques asked questions that were closer to case studies or extended exercises.

It makes sense if you think about it: the top boutique banks compete by hiring the best and brightest.

But you’re a bit more of a “cog in the wheel” at a large institution, so you don’t necessarily need to know the underlying concepts as well.

The most challenging technical interview I had was with an elite boutique: they asked me to build a 3-statement model based on a company with long-term contracts and a high deferred revenue balance.

Then they asked a lot of detailed questions about:

So you had to understand the fundamental concepts at these firms.

Memorizing questions and answers or completing simple exercises would not have worked at all.

Picking an Offer: Decisions, Decisions

Q: You were very successful with your recruiting efforts, winning multiples offers from the elite boutique and bulge bracket banks.

How did you decide on an offer?

A: There was a lot of conflicting advice, but only people in the finance industry recommended the elite boutiques.

Their rationale was that the elite boutiques offered a better lifestyle, less office politics, more independence, and more interesting work.

And I agreed with them: if I wanted to be a career banker, it would have made more sense to start out at an elite boutique.

But there are also some downsides.

First off, no matter what they tell you, deals and clients will generally be smaller.

Also, the elite boutiques have little brand-name recognition outside of finance. Everyone worldwide knows “Morgan Stanley” or “JP Morgan,” but only finance professionals know the top boutique banks.

I wanted to keep my options open, so I decided to accept an offer at one of the bulge bracket banks.

Finally, this option may sound crazy, but I might even end up going back to consulting – but at MBB this time – in which case a bulge bracket bank also looks more impressive.

Q: Back to consulting? Yes, that is crazy.

Before we wrap up, any final thoughts, questions, or tips?

A: What are your thoughts on exit opportunities for Associates?

Is it “impossible” to move into buy-side roles at that level?

Q: That’s a great suggestion for a future article…

UPDATE: I ended up writing this article on post-MBA investment banking exit opportunities. Check it out!

A: Great! Thanks for writing that one. And I hope your readers found this interview helpful as well.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Hi Brian,I am currently a business major student from Central America hoping to land a job in investment banking in the U.S or in Europe(Depending on where it is easier to get the working visa at the time).I was planning on working for (3-4) years on a finance related job and then apply to a top MBA program I was wondering if you can help by telling me which of the following job prospects would be useful as a steppingstone for Investment Banking and which wouldn’t:
    1.Wealth management
    2.Private equity at boutique local firms
    3. Big 4(valuation side)

    All of these roles would be in Central America, as I would work in one of these fields for 3-4 years and after apply to a top MBA program. I was also wondering if bankers would be skeptical of any private equity or big 4(valuation) experience in Central America.

    1. #2 is best followed by #3 followed by #1. Yes, the experience will be discounted, but that’s all you can do in this case, and it’s not worth the risk of waiting to enter another country and then looking for an internship there.

      1. Thanks for the fast reply Brian, I was also wondering if I have a decent shot at landing a associate role in investment banking at a Bulge bracket at a major financial center(New York, London).All of this, if I were to get into a top MBA program either in Europe or in the USA and if I were to have as relevant past work experience private equity in a boutique Central American firm.

        1. Yes, but your chances are probably higher in the US because MBA recruiting is under-developed in Europe.

  2. Unfortunately there is no OCR at my school… I really crack my head to try to make new friend in front office but all efforts are in vain :S

    1. Yeah, it’s frustrating but I can’t offer much specific advice beyond “Keep at it and expand your horizons.” Networking is mostly a brute-force effort… perspiration, not inspiration or intelligence, wins. If there really is no recruiting at your school, perhaps also consider fields outside of pure IB.

  3. Awesome. Thanks for the tips!! Hopefully I breaking into front office.

    One more question, as I am now studying part time MBA, do you see if I have better chance to apply thru MBA program or just apply per normal track?

    1. By “apply thru MBA program,” do you mean applying through on-campus recruiting?

      If so, yes, it’s always better to go through OCR because banks will pay a lot more attention to you.

      If there is not on-campus recruiting at your school, though, you’ll have to network your way into those roles.

      Even if there is OCR, though, you should still do some networking to maximize your chances.

  4. I really appreciate this inspiring story! I am studying part time MBA (not top school, but still top 40 in FT rank) and target to enter IBD too! I’ve been trying to network with front officers but it is totally impossible because they don’t even bother to reply my message!

    So does this special guest manage to get interview? I would really appreciate if I can approach him!

    1. Thanks!

      Yes, it can be difficult to get replies to your messages, but it depends on the people you’re contacting and your relationship with them. For example, are you contacting mostly alumni? If not, it will be quite tough to get good responses at the MBA level. You’re better off going for alumni, former co-workers, and even alumni from the undergraduate level if you can find them.

      If you still can’t responses online, I would actually recommend offline events such as deal competitions sponsored by banks (See above) and also CFA Society events in your area because people can’t just ignore you at in-person events.

      1. Sounds great. Will follow your suggestion :)

        Also, do you see there’s a point to contact other school’s alumni as well? I tried to work with my school career consultant (which is… Like what you said, sorta useless) and I can’t find any alumni in IBD. I can’t even find from Linkedin or whatever portal.

        Sometimes I wonder if Singapore culture is still conservative as 30 years ago. People just simply ignore my friendly “Hi” :(

        1. Yeah, people in Singapore are not always the most helpful with networking…

          If you really cannot find any alumni in IBD or even find anyone on LinkedIn, then yes, reach out to alumni from other schools.

          Also, in a place like Singapore I almost think you might have better luck going to in-person events because so many people there work in finance and they’ll be more responsive in-person. Maybe take a look at the CFA Society events there:

  5. Great article but any tips from the reader or M&I for someone working in an almost no name 6 member boutique bank who wants to move to a Bulge Bracket after his MBA ? I have worked at a BB before in the Ops division and moved to a small boutique where I have been working on M&A transactions for the last couple of years. I am planning to go to B School next year. Also, how do competitions such as the JPM / Credit Suisse deal competitions work ?

    1. I think you already have a pretty good shot if you aim for the best MBA programs and win admission to one of the top ones. Not that many other people going for IB roles have actual deal experience like you do. Assuming you know the technical side very well already, outreach and networking in advance will be the most important points. A pre-MBA internship might not necessarily even help since you already have IB experience, so networking should be your top priority.

      Deal competitions are more helpful for undergrads, but we have a few tips here:

      1. Thanks Brian. I had a follow up question. Do deal closures matter ? In the sense, could they be ‘Deal breakers’ in terms of recruiting ? Although I have worked here for 3 years and over 10 transactions, only 2 of them have actually closed ! Another 5 of them fell apart post the term sheet stage and 2 fell apart post due diligence. So technically, I have only closed 2 deals in 3 years. Would that be a hindrance ?

        1. Closed deals definitely help, and if you don’t have any closed deals it might be tough to tell your story. But 2 closed transactions should be fine. It’s quite common for at least 50% of deals to fall apart, so interviewers sort of expect that. As long as you can tell a good story around the deals that closed or advanced to later stages, you should be fine.

  6. Interested to understand why he is potentially interested in moving to MBB longer term?

    1. I believe he viewed as a “Plan B” option just in case he ended up not liking the IB internship and deciding against that path. Consulting at MBB is very different from consulting at a boutique firm, and you get access to higher-level executives there (depending on the project). So the work still may not make as much of an impact as M&A deals, but it’s a big step up over what he was doing previously.

  7. A ratio of 6/60 translates into 10% success rate (instead of the 1% in the article)

    Thanks for testimony. Really appreciated

    1. Thanks for reading. He meant that it was NOT a 1% success rate, i.e. that it was higher than a 1% success rate… the language:

      “So it’s not a 1% success rate, but it’s still not easy… and this was at one of the top schools worldwide.”

      1. Avatar

        To be fair, 10% is a little disingenuous. In reality, everyone that does banking recruiting is going to apply to all the top banks so while at any given one bank, there might be an average of 5 offers given across the 10 desirable OCR banks (50 total) out of that 60 applicant group. Taking into account multiple offers for one applicant, the success rate is closer to 30-45%.

        At my M7 school, there was ~60 candidates for 35 OCR banks and almost everyone got an internship (granted some of those offers weren’t from bulges or elite boutiques)

        1. Right, I think the point was just that it’s still not “easy” to win an internship at the top 2-3 banks (which this interviewee did). A lot of people have, or have had, the attitude that since banking is no longer as popular, it’s less competitive to win offers. And that’s not really true, at least if you’re aiming for the top firms. Like you said, though, if you count banks beyond the bulge brackets and elite boutiques, the success rate goes up.

  8. Great article for someone starting business school in the fall.

    I am interested to know how to approach the technical questions mentioned:
    1. How to value PP&E that is generating cash flow
    2. How to build 3-statement model for a company with long term contracts and deferred revenue


    1. Thanks for reading! For valuing PP&E that generates cash flow, you would set up a mini-DCF like you would for any other asset. I think he mentioned an LBO here because you could also assume that leverage is used to buy the PP&E, look at its cash flows and the exit value, and then use goal seek to back into the price you could pay to achieve a certain IRR.

      For a company with long-term contracts and deferred revenue, assume a certain amount of bookings in each year and that a certain % actually get recognized as revenue in the given year… with the remainder going into deferred revenue. Do that across multiple years. You will get a waterfall-looking schedule, which is not really complicated but does require keeping track of the bookings from each year and how much gets recognized as revenue in subsequent years.

      1. Brian,

        A follow up question to question 1 – I assume we would use the WACC to discount the cash flows since the cash flows generated by the PPE is available to both shareholders and bondholders of a company, right?

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