by Brian DeChesare Comments (52)

So, What Should You Do at Investment Banking Summer Training Besides Getting Wasted Each Night?

So, What Should You Do at Investment Banking Summer Training Besides Getting Wasted Each Night?

You’ve just been through a warzone to get your offer: 53 interviews, 3 weekend trips to New York, and so much time spent staring at Excel that you’ve developed a monitor tan.

But things worked out, you accepted your offer, and you’re about to start work in 2 weeks.

You just need to make it through the training program first.

But that should be the easiest part of the entire process, right? Right?

Does This Really Matter?

When I first got questions about training programs, I was confused: it seemed like a topic that didn’t warrant much advice.

“It would be about as stimulating as all those suggestions over the years to create a recommended reading list,” I thought.

But then I sat down to think about it in more detail and started asking around, and realized that there might be some important and not-so-obvious points to make.

Why Training Programs?

They’re a combination of marketing and education: banks pride themselves on offering “the best investment banking training” – even though banks use the same companies to train you – and they want to get people from non-finance backgrounds up to speed quickly.

Beyond just teaching you about accounting, valuation, and finance, lots of banks bring in speakers from different groups and use them to introduce you to their culture and how things work.

For some inexplicable reason, a few banks really like to tout their training programs and use them as a selling point when interviewing candidates, which might just be the strangest recruiting tactic ever.

No one joins Goldman Sachs because their training program is so great – they join because of the name “Goldman Sachs.” Their training program could disappear tomorrow and it wouldn’t matter.

The “education” from these programs is most helpful if you’re not from a finance background.

You will indeed have a tough time at first if you know little about accounting, valuation, and finance – but then it would also be difficult to get an offer these days without knowing those topics to begin with.

Even if you are completely new to finance, training programs are still not that helpful because different groups have different standards and it can be hard to focus when everyone is talking to each other and chatting online.

So don’t stress too much over all the content – there are more pressing concerns during training, beyond just getting enough bottles every night.

What is a “Training Program”?

Right before you start working, the bank will fly you and all the other incoming analysts and associates to New York or London (or wherever your bank is based) and spend 1-2 months “training” you.

Translation: You get to spend each weekday in a crowded room learning all about Excel, accounting, valuation, and finance from outside training firms and occasionally internal speakers from the bank.

You follow along on your screen as they instruct you, and you keep Facebook and Gmail open so you can chat with everyone else about how bored you are and how the instructor has a receding hairline.

You may also get tests and case studies to complete, and group exercises similar to what you find at assessment centers. And then there are those fun standardized tests you have to pass – the Series 7 and 63 back in the day, and the Series 79 in recent times.

Sometimes banks also determine group selection during training, but most of the time it happens well before that – either at your sell day, or as part of the interview process itself.

You’re not working banking hours during this time – weekends are mostly free and you rarely stay late at night, which is the first and last time that will happen as long as you work in the industry.

If you’re going into an internship rather than a full-time job, you’ll get just a week-long crash-course rather than the 1-2 months that full-timers get.

Many boutique banks don’t offer training programs at all because it’s beyond their budget – you’re also not likely to go through training at private equity firms or hedge funds, because they’re small and they expect you to know everything you need once you start working.

If you’re going into sales & trading or another non-IB area at a bank, you’ll probably have some type of training as well but the material will be different and it might be shorter.

As you’ve probably guessed by now, the 2 most important words in everything I’ve written above are “crowded room.”

If you’re not meeting other people and networking during training, you’re wasting your time.

So How Do You Approach Training?

Ask most bankers about what to do during your training program, and you’ll get 1 of 2 responses:

  1. “Just get drunk every night! Party! It’s the best part of the analyst/associate program.”
  2. “Study hard and take all the homework assignments and case studies seriously! Oh, and if you don’t pass those exams, you’re screwed.” (This one usually comes from students who aren’t even in the industry yet)

Neither one of these is quite right.

On #1, yes, you should go out and have fun since this will be one of your last chances to do so in the next few years.

But you need to be strategic about how you do it and also make sure you meet the right people in the process.

On #2, despite rumors to the contrary, most of the work they give you does not matter that much. Just do reasonably well and pass what you need to pass – it’s almost irrelevant next to your deal experience in your first year.

But I Heard This Person Got Kicked Out for Slacking Off!!!

Most of these rumors are greatly exaggerated. Yes, if you do something incredibly stupid – kidnap the Managing Director’s son, start drinking at work, etc. – you might be removed from training, but that hardly ever happens.

If you already have your group placement, homework assignments and tests during training aren’t important – the senior bankers at your office don’t have time to read the details of what you did and then change your group based on that.

If you’re really concerned about not knowing enough or being disadvantaged next to everyone else there, learn some material before training starts.

If you’re reading this site you’re probably a Type-A overachiever anyway, so you’ve already signed up for modeling courses before you even got interviews.

Just dust those off and start going through all the material and you can doze off during training and still do well.

What About the Series 7, 63, and 79 Exams?

These are actually important to pass because some banks won’t let you start working for real until you’ve cleared the exams.

They’re horribly boring and you’ll forget everything you learned in about 2 days, but you need to pass them anyway.

I’m never going to produce a course on these because they’re too boring even for me – but I’ve heard that the Knopman materials are good.

Do not underestimate these exams because they are more difficult than you initially think.

There’s a lot of rote memorization (certain questions will give you choices of 5 days, 10 days, 15 days, or 20 days and you just have to know which one is correct), and it’s hard to cram and learn everything in a few days.

So yeah, make sure you pass these – but don’t spend every waking moment studying at the expense of networking.

OK, So Then What About Networking – What Do You Mean by “Make Sure You Meet the Right People”?

Going out and getting bottles every night is almost a good idea, but there are a few problems:

  1. You won’t have much money yet since you just started and may not even get a paycheck until training ends.
  2. It’s more helpful to know people in different offices and different groups instead of always hanging out with the same crowd.

Let’s say it’s 2 AM, you’re working on a pitch book for an industrials company, and you need to include a case study of a deal the Chicago office did but you don’t know where the files are.

If you don’t know anyone there, you’d be screwed – yes, you could just email the entire office and ask for someone to help you, but everyone is busy with their own fire drills and deadlines so they may ignore you.

But if someone sees your name and recognizes you from training, you’re in much better shape and you might actually get the answer you need.

It’s almost impossible to get to know people from every group and every office, so focus on 5-10 analysts/associates.

Get some geographic diversity (if you’re in the US, know people in a few different cities and also a few in Europe and Asia) and industry diversity (if you’re in an M&A group, get to know people in industry groups and also ECM and DCM).

Doing this is not difficult and I would feel silly writing a “guide.”

Each day there are plenty of breaks, and most banks throw lots of events and parties during training – take advantage of these and go up to meet new people there.

Just think of it as a big information session, only without seasoned bankers. And it’s even easier than information sessions because you have an enforced time limit and everyone else is new and wants to meet others.

Does It Really Help?

The main problem is the high turnover rate in finance – by the end of your first year, at least 50% of your incoming analysts/associates will be gone.

So it won’t help you forever, but it doesn’t matter too much because your first year is the most critical anyway – do well at first and you’ll get better work and better exit opportunities, and do poorly at first and you’ll get the MDs laughing at you and bottom-tier bonus.

During training, I made the mistake of constantly going out with the same group of people and not getting to know others.

Things still turned out OK (see: this site), but there were quite a few times when it would have been helpful to know people in different groups.

It’s not a question of life-or-death, but it will save you some headaches and possibly let you get 6 hours of sleep rather than 4 hours – at least on some nights.

In Short…

So do what you need to pass everything and learn the material, but don’t take any of it too seriously at the expense of meeting other people.

If you’re concerned about not knowing enough when you start working, start preparing beforehand and learn as much as possible from classes or training programs.

And make sure you find out about your office and who makes decisions there before you start working as well.

Get to know 5-10 people well so you have contacts in other groups and other geographies when you need something and no one else in your office can help.

It’s tempting to befriend only the incoming bankers in your own office or your own group, but that defeats the purpose of training: you want to spread your net wide and meet people from all over.

And if you’re already doing all this and you know accounting, valuation, and finance like the back of your hand, have some fun and try to show up for training every day without passing out on your desk – they might actually notice that, especially if you’re in the front row.

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 (74)

How to Dominate Your Investment Banking Sell Day

Investment Banking Sell DayAfter setting up 114 informational interviews during recruiting season, you made it through alive and got 3 bulge bracket investment banking offers.

You picked your top choice, and now you’ve spent the last 5 months in Buenos Aires partying.

But then one day you get a letter from your bank: your sell day is coming up next week.

So what do you do now?

Why?

You already have an offer, so why does anything else matter?

Because your performance on sell day determines which group you’ll be placed into.

And that determines which exit opportunities you’ll get, which business school you’ll get into, and your life 30 years into the future.

Screw up your sell day, and you could just fail life.

What?

It’s called a “sell day” because the bank is courting you for once. You already have the offer, and now different groups are lining up to recruit you.

Each group will present and pitch you on why you should join them: they’ll pull out league tables, PE / business school placement stats, and will do everything short of bribing you with cocaine to convince you to join them.

At the end of each presentation, you’ll get a chance to network with the bankers who presented and also “sell” yourself to them.

The ranking mechanics are simple: you rank your group preferences, and then each group ranks the incoming analysts or associates it wants.

HR then tries to match up everyone so that you get into one of your top-ranked groups and each group gets their top-ranked recruits.

Speed dating meets investment banking.

Who?

Summer analysts, full-time analysts, summer associates, and full-time associates all go through the sell day process.

It doesn’t matter quite as much for summers because it’s only 8-12 weeks rather than 2-3 years.

If you’re a former summer analyst who accepted a full-time offer with a specific group, you won’t get to play unless you’ve asked to switch groups.

And if you interviewed for a specific group already, then you also won’t get to participate in the festivities – this is more common in regional offices and at middle-market / boutique banks.

Not every group recruits at sell days, either – sometimes a group might have no openings because summer interns already filled all their spots.

How?

There are 2 parts to the execution of a sell day:

  1. Preparation beforehand.
  2. Performance on-the-spot.

Preparation

You want to do some research on the bank, the different groups, and recent deals they’ve done.

You don’t need to memorize league tables or the names of everyone at the bank, but it’s good to have a few talking points.

Go and contact alumni or anyone else who’s already at the bank before your sell day to ask these questions and get your name out there.

Don’t bother “studying” for technical questions. Bankers will not ask you to multiply 35 * 17 or what a PIK note is – “fit” questions and chit-chat are far more likely.

You should also contact everyone you met during the recruiting process and set up in-person meetings around the time of your sell day – and before it, if you can.

90% of incoming analysts and associates never bother to set up these “off-book” meetings so you’ll have a huge advantage if you can get the real scoop on different groups.

During these meetings, cut to the chase and ask which groups are good, which aren’t, and how you can really get placed where you want – remember how you need to ask for what you want in order to get it.

Performance

This one’s very similar to investment banking information sessions: don’t do anything stupid, meet as many people as you can, and collect business cards.

What Not to Do:

  1. Ask lots of irrelevant questions during the presentation just for the sake of asking questions.
  2. Stand in a corner and avoid introducing yourself to anyone.
  3. Appear too casual and start talking about how you just got arrested in Vegas or anything else you would not mention during an interview.

After the presentation, introduce yourself to as many bankers as you can and try to chat with each one for at least a minute or two.

Unlike information sessions, where it sometimes pays to get into an extended discussion with a banker, on sell days you don’t have enough time to do this.

So talk to each person, collect a business card each time, and if you’re pressed for time focus on the staffer and the other senior bankers because they have the decision-making power.

Types of Questions

Unlike informational interviews or information sessions – where you’re better off sticking to personal questions – you can and should throw in business-related questions on sell day.

Examples:

  1. How do you like this group?
  2. What kind of deal flow have you had lately?
  3. Why did you decide to work here?
  4. How many / what type of deals are you working on right now?

You can still ask personal questions about their backgrounds, but sell day is as much intelligence gathering for you as it is courting recruits for the bankers.

Follow-Up

After you’ve gotten business cards from everyone, send follow-up emails quickly – within a day – especially to your top-ranked groups.

If you’re ranking 10 groups, you don’t need to follow-up with every single banker you met – focus on your top 2 or 3 choices.

Unlike normal networking situations where you want to ask a substantial question in each interaction, saying “It was nice to meet you” and writing a short note is fine for these emails.

The purpose is to get your name out there and to make them remember who you are – not to build a relationship with every single banker.

You can reference whatever you spoke about with them as well – but chances are you won’t remember dozens of conversations very well.

What Next?

Contact everyone you met during the recruiting process and anyone else you know at the bank to ask which groups are solid, and see if you can meet with or speak with them before sell day.

Figure out which group you want to get into, and then dominate your sell day by meeting as many people as you can, following up quickly, and doing what you can outside sell day to come out ahead.

And maybe, just maybe, you won’t get stuck doing equities in Dallas.

Questions & Answers

Q: Which group should I pick?

A: Depends on your goals. If you want to do PE, groups like M&A, Financial Sponsors (maybe not this one quite as much), and Leveraged Finance are better; if you want better hours or you’re interested in investor relations, go for Equity Capital Markets.

It also comes down to the people in each group – M&A might sound nice on paper, but maybe the hours are better and the exit opportunities are the same in another group all because of one Sycophant in M&A.

There’s no “right” answer here because it depends on your background and what you want to do in the future.

See: Investment Banking Summer Analyst Group Selection.

Q: What happens if none of my top choices ranked me highly?

A: Unlike speed dating, you can’t just be rejected by everyone – so they’ll place you in a group that wasn’t as popular or that couldn’t get their top choices either.

This doesn’t happen all that often – believe it or not, not everyone in the world wants to do M&A.

Q: I am obsessive compulsive and need to study something beforehand. Are you sure I shouldn’t study technical questions or memorize league tables?

A: Knock yourself out – some people are happier in hell.

The usefulness is close to 0, though.

Q: Are there any questions that I shouldn’t ask in the networking sessions after each presentation?

A: Don’t ask about the lifestyle or hours, because you might give the impression that you’re actually expecting to have a life.

Also don’t do too much “dirt digging” in these sessions – asking about which MDs are good and which are bad – because your conversation will be overheard. Save that for your off-book meetings.

Q: Should I meet my contacts for coffee or go to their offices if I’m setting up meetings before sell day?

A: Duh, go to their office so they can introduce you to everyone else.

Q: Do I need to get HR’s “permission” / go through HR to do any of this?

A: No, once again HR is useless. Do as much as you can without their involvement.

More questions? Ask away.

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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