by Brian DeChesare Comments (53)

How to Quit Your Investment Banking Job Without Getting Executed

How to Quit Your Investment Banking Job Without Getting Executed

Midway through every year, a whisper starts growing at investment banks everywhere.

“This sucks. I’m gonna quit.”

Sometimes it’s so bad that you just want out immediately.

Other times, you plan to wait and stealthily make an exit as soon as your bonus hits your bank account.

So here’s how you can break out of investment banking – without dying in the process.

Your Mission

It’s not as simple as announcing that you’re leaving and storming out of the building.

Yes, you could do that… but it will create some problems for you in the future.

To make your quitting successful, you need to:

  1. Make sure no one else knows anything about it beforehand / prevent rumors from circulating.
  2. Avoid burning bridges (if you can) because you might need recommendations in the future.
  3. Line up another offer first or have a plan for what you’ll do after you quit and spend a week on a tropical island.

You probably understand the importance of point #3, but I’ve seen many quitting bankers forget #1 and #2.

How to Escape the Executioner

Here’s what you need to do once you’ve made the decision to jump ship:

Get Over Yourself

Repeat after me: no one cares about you… at all. You are a very small cog in a very large wheel.

In “normal” industries if you tell your boss you’re leaving, he might say, “We really need you right now! Can you stay for a few more weeks?”

Or who knows, maybe he’ll even offer up a promotion or try to bribe you into staying longer.

You don’t have to worry about any of that in finance: as soon as you say you’re quitting, they’ll say, “Good, here’s the door. Please leave now.”

A lot of junior bankers overestimate their own importance – “Trophy Kid” syndrome.

But most people won’t even remember you the next day.

Prepare for an Immediate Exit

Next, understand that once you announce your plan to quit your exit will be immediate.

You don’t get a “going away party” or presents or any of that nonsense – you get escorted to the building exit.

There’s a practical reason for this: you have access to a lot of confidential information about public companies.

If you continued to have access to that information, you could spread it around to other people, competitors, or make a quick million or so with insider trading.

It’s almost as fast as getting fired, but sometimes – depending on the bank and group – they will let you stick around for a few days to a week to hand off your tasks to other analysts.

Save anything important – both physical possessions and computer files – in advance of quitting, because you won’t have time later.

Make Sure Your Exit Strategy Is Lined Up

No matter how bad you have it, it’s a really, really, really bad idea to quit if you don’t already have another offer lined up or at least some idea of what you want to do next.

So if you’re quitting to start your own fashion company, obviously you won’t have an “offer” but you should have some idea of how much money you’ll need, what you’re going to do, and an understanding your market.

And if you are continuing on within finance, you should have an offer somewhere else.

In “normal” industries it’s much tougher to get hired when you’re unemployed, and it’s exponentially harder in finance.

So you should not go and “announce” anything to anyone until you have a signed, accepted offer with another bank, hedge fund or PE firm, or a concrete plan of what you’re going to do if you’re leaving finance.

Make a Clean Break

Once you’ve prepared yourself, you need to avoid screwing up the final step of quitting – actually telling people that you’re quitting.

Here’s what NOT to do:

So once you’re set, go directly to your MD, in-person, and explain the situation:

“I’ve enjoyed my time here, but I’ve just received an offer for [Name of New Job], and they want me to start immediately – so I’ll be leaving.”

At this point your MD will probably jump in and act professionally about it – or he’ll complain about how much work you’re leaving behind, especially if it’s at a smaller bank.

Do not get emotional or give into any demands or last-minute requests.

You’re quitting. If you say “no” to these demands, what will they do? Fire you?

Saying “yes” won’t put you on better terms, either – if they make last-minute demands of you, they wouldn’t write a good recommendation in the first place.

Once you’ve told your MD, go around and say the same thing to your other team members, keeping it brief and unemotional.

Then, depending on whether you have to leave immediately or you have a few days to a week, go and craft a brief farewell email with your new contact information.

Don’t send this out to the entire investment banking department or the entire bank – you’re not that important.

Just send it to your own group, or to anyone you’ve worked with in the past.

A Tale of 2 Analysts

Similar to a tale of 2 summer interns, a quick tale of 2 quitting analysts will illustrate just how important the above points are.

Bitter Quitter

Bitter Quitter was at a bulge bracket investment bank and received a hedge fund offer just before bonuses were announced – right around the 1-year mark.

He hated his life and desperately wanted to get out, but he made the mistake of telling all the other analysts in his office before anything was official.

“I’m really close to getting this hedge fund offer… then I’ll be out of here!”

Rule #1 of quitting your job: don’t tell anyone you’re quitting.

Assume that anything you tell a single person at your bank will instantly spread to everyone else – office gossip happens 24/7.

Bitter Quitter eventually won the offer, but he made the critical mistake of not telling anyone higher-up directly – they found out through the grapevine instead.

So he didn’t even get to “quit” – instead, the staffer approached him and said, “We know what you’re doing. Please get out right now.”

Result: He never got to tell his MD himself, so he left on poor terms and would have trouble getting a good recommendation for business school or anything else in the future.

Clean Breaker

Clean Breaker was working at a middle-market investment bank, and received an offer to move to the corporate finance department of a Fortune 500 company, a few months after bonuses had been awarded.

He also hated his life (notice a common theme here?), mostly because one VP he worked for could best be described as “evil incarnate.” He was incredibly out-of-shape, had no life outside work, no friends, and spent all day making his analysts and associates miserable.

Even though Clean Breaker was miserable, he wasn’t foolish – so he didn’t tell a single soul that he was even interviewing until he had the signed offer in hand.

“Trips to the dentist” and “personal days” are plausible if you don’t use them every single week.

When the time came, he went directly to his MD first and told him the news, then informed Evil VP and the rest of his team.

Evil VP got visibly angry and spent 30 minutes trying to convince Clean Breaker to stay (this only happens at smaller banks), but Clean Breaker held firm and said, “Thanks, but I’m out.”

Result: Clean Breaker probably can’t get a recommendation from his VP, but there’s nothing he could have done to prevent that. But since he handled it professionally, he could easily go back to his MD and ask for help in the future.

How to Quit

Quitting your job is like removing a band-aid: make it quick and clean, and accept that it’s going to be painful in the short-term.

That’s way better than spending an eternity peeling it off and enduring the pain over weeks or month.

So make it quick, professional, and confidential and you might just escape with your head intact.

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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by Brian DeChesare Comments (49)

Why Do Investment Banking Associates and Analysts Secretly Want to Kill Each Other?

Why Do Investment Banking Associates and Analysts Secretly Want to Kill Each Other?

“Dude, this new ex-consultant Associate is such an idiot. Why do they even hire people like this?”

“At least yours didn’t make you spread the same comps ten times for no reason.”

“Why is that Analyst so annoying? Why does he think he knows more than us?”

It’s some of the most common chatter you’ll hear when walking through any bank: Analysts and Associates talking trash about each other, and occasionally plotting to kill each other.

And they’ve been at war for a very, very long time.

So how did it all start, and what can we do about it?

Definitions

First, let’s define “Analysts” and “Associates” more specifically.

There is a big difference between new 1st Year Analysts and ones who have been there for awhile, and there’s also a huge difference between Associates without banking experience coming straight from MBA programs vs. ones who have done banking before.

New Analysts and new Associates don’t “mingle” too much – higher-ups rarely place them on teams together for fear of the blind leading the blind.

And experienced Analysts and experienced Associates usually get along, because they both “get it” and understand how the game works.

But you run into trouble whenever an experienced Analyst gets assigned to work with a newly minted Associate with no finance experience – whether he’s there for the summer or he’s a full-time hire.

Analyst Expectations

When the average 1st Year Analyst starts, he/she doesn’t come in acting as if he/she knows everything about finance.

They’re in “sponge mode” and ready to absorb all they can.

Everyone is eager to please and willing to work long hours, all in the name of “learning.”

But by the end of most Analysts’ first years, this feeling starts to fade – if you’ve had decent deal exposure, you can learn 95% of investment banking in a few months.

So Analysts shift into a different mindset from their 2nd year onward: it’s less about “learning” and more about “Please just let me get out of here alive and reduce my hours by avoiding unnecessary work.”

…Where It Goes Wrong

But by the time the average Analyst has been working for a year, new Associates start working at the bank as well.

And for the ones who haven’t done banking before, they’re entering in “This is the best job ever! I’m going to impress everyone here and move up the ladder!” mode.

This is exactly the wrong mindset for the experienced Analysts, who want nothing more than to stop “impressing” and to start getting out of the office before 2 AM each night.

By the time new Associates start, the 1st Year Analysts have already been working 80-100 hours a week and know how banking works, what’s useful, and what’s a waste of time – while new Associates are still climbing up the learning curve.

So Analysts get pissed off easily at new Associates for making them do unnecessary work, and the Associates get confused and frustrated at the Analysts who push back at every request and argue with them all the time.

On top of all this, some Analysts also believe that post-MBA Associates “couldn’t make it” back in undergraduate, and are therefore less qualified.

But that’s not true in most cases: most Associates who are new to finance simply got interested at a much later stage.

Associate Expectations

Meanwhile, Associates are coming in with far more full-time and “life” experience than Analysts.

While they may not have done banking before, they are significantly better at networking and office politics, because they’ve been doing it for years.

And so they come in expecting that this experience will give them an advantage over the younglings.

They also expect to be “in the game” longer than the average Analyst, even if they ultimately want to move to the buy-side or get out of banking.

And that makes popularity with senior bankers even more important – which often prompts them into ordering unnecessary work done just to impress others.

They might reach the “Get me out of here” stage that most Analysts get to at the end of their first years – but it takes longer to get there.

…Where It Goes Wrong

  1. Analysts believe that Associates “fresh from business school” lack technical skills and that they waste time on unimportant tasks.
  2. Associates, meanwhile, believe that they understand the workplace, business, and how to get ahead better than Analysts and that they can pick up the finance and “process” of banking along the way.

Who’s right?

Both sides are “right” – but they’re right at different stages.

At first, understanding investment banking and how to create pitch books and build models matters more – no matter how great you are at schmoozing, you’re never going to get anywhere if you don’t know the basics.

So newly minted Associates have a lot to learn when they first start.

But in the long-term, the soft skills matter a lot more – despite the obsession with modeling and technical skills, investment banking involves elementary school-level math at best.

Moving to the top and becoming a rainmaker has nothing to do with how slick your Excel model is, and everything to do with how good a talker you are.

And so anyone with more real-world experience is more likely to move to the top than Analysts who are just out of university.

So, How Do We Get the Peace Treaty Signed?

If you’re an Analyst, how do you tolerate a new Associate and “train” him/her to be more effective?

And if you’re a new Associate, how do you work with experienced Analysts and not make them want to kill you?

It’s simple, but much like networking and reaching out to contacts at banks, most people never do it because it requires stepping outside your comfort zone.

Here’s what new Associates should do to get along with Analysts:

1. Drop the “In My Finance Class…” Attitude

One time a Summer Associate spent 30 minutes arguing with me over how to factor a deferred revenue write-down into a merger model, because he thought he could “do it more accurately” based on what he had learned in his MBA-level finance class.

This is exactly the wrong attitude to have when you start.

Everything in banking is last-minute, inaccurate, and is based 100% on what the MD wants to see – not on what you learned in your finance class.

No one has time to make things perfect – “good enough” is the name of the game.

2. Forget About Where You Got Your MBA From

There is no correlation between your school, grades, previous accomplishments and how good you’ll be as a banker.

Sometimes new acquaintances will say to me, “Wow, you went to an elite university, there must be so many smart people there!”

The truth is that most people at “elite universities” are incompetent and fail miserably in the real world – you spend a lot of time debating minutiae that has 0 practical value at these places.

No one cares that you went to Harvard or Wharton, because so did a lot of other people in finance – all they care about is how much money you can generate.

3. Take One for the Team

No, I’m not talking about your trip to the bar last weekend and how you had to hit on the ugly twin to help your friend out.

If an Analyst is overwhelmed or can’t finish everything, drop your “I have an MBA, therefore I will only do rocket science work and manage others” attitude and pitch in to help with grunt work and other basic tasks.

Yes, it may cause you to go home later – but you’ll then be able to ask that Analyst for favors whenever you want.

4. Know When to Back Off

Likewise, when you have a star Analyst who really knows what he’s doing and can run a deal by himself, know when to back off and observe rather than trying to interfere with every last detail.

People in finance spend 90% of their time in the office gossiping about others, so it’s not hard to figure out who’s good and who sucks: if you have an Analyst who not only knows his/her stuff but is also polished and can talk to people, back off and learn from him/her instead.

5. Fix Mistakes

In a lot of groups, most of your job as an Associate is to catch mistakes and fix them before clients see them.

So even if you have no clue what’s going on, pay attention to output from models and what’s being presented and look for and point out mistakes.

And if there’s something there that you didn’t catch, don’t blame the Analyst or tell the VP it’s not your fault – it’s your job to find mistakes and fix them.

6. Become Friends

You have to be careful because you don’t want to treat Analysts as your “pets” – you want to treat them as equals, even though you’re more senior.

But when you have the opportunity, take them out for drinks and get to know them.

If there’s a big age gap (20 years) – or you’re married and have 3 kids, while the Analyst is 22 and single – you can’t always relate 100%.

But you should still make the effort – otherwise you’ll both end up miserable.

7. Deliver Secret Messages

One advantage of being an Associate is that MDs and other senior bankers often make you privy to information that they don’t share with Analysts.

You can use this to your advantage by letting Analysts in on “secrets” and sharing points that they ordinarily wouldn’t know about, which makes them know, trust, and like you more.

You have to use discretion here and avoid sharing anything that’s too sensitive – so still apply some common sense.

For the Analysts

And here’s what Analysts should do to improve relations with new Associates:

1. Lower Your Standards

No, I’m still not talking about the bar last weekend when you had to take the ugly twin to help your friend out.

But realize that the new Associates simply won’t know as much as you do about Excel, finance, and pitch books – at least at first – and don’t expect them to just because they have more “education.”

Expect them to create useless work at first, and gently nudge them in the right direction when that happens.

2. Learn What You Can

Also realize that even if they don’t know as much as you do about finance, they know a lot more about how the world works and the big picture of why you’re doing what you’re doing.

So observe what they do, how they talk to people, and how they present themselves, and pick up what you can.

If they have an especially “interesting” life story, ask them about it and show interest in their background rather than just thinking, “Ok, I guess I have to tolerate him/her until one of us gets fired or leaves.”

3. Be a Teacher – Not a Preacher

When a new Associate doesn’t know how to do something or gets something wrong, don’t act like he/she is clueless and doesn’t deserve to be there.

“Hedge” anything you teach by prefacing it with, “I’m not sure, but I think…” or “Everyone does it differently, but in our group we usually do it this way…”

Even if he/she is completely wrong and makes a very basic mistake, you still want to do this – otherwise you’ll come across as a know-it-all and relations will get off to a bad start.

4. Confront Them If All Else Fails

If none of this works, and you’re constantly arguing or you’re in passive-aggressive mode no matter what you do, confront them.

Start by saying, “Look, I know Analysts and Associates aren’t always ‘friends,’ but we’ve been having some problems lately and I wanted to talk to you about this…”

Rather than immediately pushing back and arguing with every point they raise, accept and agree with their points initially, and then point out how your own view is different:

“I see what you’re saying there, and I agree that you could do it that way. I’m not an expert, but usually we do it this way…”

Even if you’re 100% certain that you’re right and they’re wrong, still hedge what you say and avoid preaching.

Why Does Any Of This Matter?

You might be wondering, “Ok, but why does any of this matter? After all, bankers leave all the time, new people are always moving in, and turnover is really high, so who cares if I don’t get along with one person?”

Imagine you’ve just been in a plane crash and you’re stuck on a deserted island.

You may not like some of the people, and you don’t expect to stay there very long… but while you’re there, you still need to survive.

And it’s the same with banking: you’re put in an extreme situation with a lot of stress and long hours, which means that even 1 week can seem like an eternity.

Even if that Analyst you can’t get along with leaves after 6 months, that 6 months is a very, very long time to be arguing all the time when you’re working 80 hours a week and dealing with him/her every day.

So stop trying to kill each other and reach a compromise instead.

Remember, only you can prevent further bloodshed.

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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by Brian DeChesare Comments (43)

How Investment Banking Analysts Get Ranked for Bonuses: Roll the Dice, Please

investment_banking_analyst_rankingOne question that comes up whenever banks announce bonuses is how you get ranked in the first place.

Sure, we all want to be “Top Tier,” but how do you actually get there?

There must be a complex “ranking” process at banks to ensure high standards for everyone…. right?

Nope. It’s actually more like spinning the roulette wheel – or rolling the dice.

Red or Black?

Ok, it’s less “random” than roulette – but there’s also less skill than poker.

And it’s far more random than how summer analysts get offers.

Freakonomics

At most banks, the “review” and “tier assignment” process goes something like this:

1. Several months before bonuses are awarded, people who have worked with you will “review” you – sometimes you see these reviews, and sometimes you don’t.

2. Then the MDs go off to New York (or London if you’re at Barclays…) and meet with other MDs to “fight” for how much of the bonus pool gets allocated to their groups.

This doesn’t affect Analysts too much – Analyst “tiers” are usually the same across different groups at a bank.

For anyone more senior, the amounts vary quite a bit depending on how many deals your group closed and how much you contributed personally.

3. Then, back at your own office the MDs discuss internally how they want to “rank” each Analyst, sometimes involving the VPs or whoever else worked closely with you.

Other than step #2, you might think this sounds similar to the summer intern offer process – but there’s one big difference:

Summer interns are awarded offers based on 2-3 months of performance, whereas full-time Analysts are split into bonus tiers based on 12 months of performance.

More often than not, this leads to strange and random things happening.

Turnover

The finance industry as a whole – and investment banking in particular – has an extremely high turnover rate. Friends have moved to 3 different firms within the span of 1 year (admittedly, this was when the market was better).

If you’re a summer intern and you get to know 1 VP or Associate really well, he’s unlikely to leave in the span of 8-10 weeks – but switching firms, getting laid off, or leaving the industry altogether in the course of a year are all  common.

Another friend spent 75% of his time working with 1 VP in his group, and then had the VP leave 2 months before bonuses were announced – you can bet that his bank account was not too happy.

Performance

Theoretically, Analysts are divided into tiers based on their “performance” – how well they did their work.

But it’s not quite that simple:

You don’t benefit much from being a “star,” but you can get screwed if you make the wrong mistakes in front of the wrong people, especially if it’s close to bonus season.

It’s impossible to do anything to “boost revenue,” but there are plenty of ways your mistakes could cost your bank money – so there is a strong bias against mistakes rather than going the extra mile.

And even though you’re being judged over the course of a year, most people forget what happens in the middle and only remember the beginning and the end – so it’s not the “weighted average” of your work.

So, What Can You Do?

If the ranking process is so random, what can you do to improve your chances of getting a decent bonus?

Beginning and End Bias & First Impressions

As mentioned above, the beginning and the end – roughly the first and last month – of your time as an Analyst are more important than anything else.

No matter what you do, you’re going to make mistakes when you first start – the key is to recover rapidly and show that you learned your lesson before you make another silly mistake.

And don’t be like one former colleague of mine who kept asking for “cross-border China deals” in his first week at work (unless you want bottom-tier bonus, like he got).

Be doubly cautious in the beginning and quadruple check anything before showing it to a senior banker – and get a 2nd year Analyst to look at it. No matter how much you think you know, every bank does things differently.

The same advice applies to your final months before bonus season: check everything more than you usually would, print it out, and make sure you don’t miss any meetings because you “overslept.”

Spreading Your Net

You need to get to know lots of different people as an insurance policy – just in case your staunchest advocate leaves or gets laid off midway through the year.

Summer interns are fine getting to know just their team and making a good impression on them, but you need to be more thorough if you’re a full-timer.

The easiest way to do this: get introductions from other full-time Analysts who know different people in your office, and take it from there.

Listen to the networking podcasts for more detailed advice.

Don’t bother getting to know people from different offices, unless you’re interested in moving elsewhere – they don’t weigh in on your bonus at all.

Stop Thinking About the Number

One final tip: stop thinking about your bonus number. Yes, if you do a better job than someone else you might get $5-$10K more, but that is not much over an entire year.

You should be more concerned with the quality of your recommendations, both for the buy-side and for business school – because those will actually make a big difference in the long-run.

Not all banks have a tradition of “recommending” Analysts to different funds, but most of the larger ones certainly do – they know that very few people stay beyond 2 years.

So you should spend most of your time thinking about that, and how to get the MDs with the most connections to “go to bat” for you and make the recommendation that gets you that interview at Blackstone.

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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