by Brian DeChesare Comments (109)

How to Break Into Investment Banking as a Career-Changer in a Part-Time, Non-Target MBA Program

How to Break Into Investment Banking as a Career-Changer in a Part-Time, Non-Target MBA Program

No clever introductions for this one because this story already has more twists and turns than 24 or Lost – so let’s get right into it.

Background

Q: Walk us through your resume.

A: I came from a liberal arts background as an undergraduate, and worked in commercial property management after I graduated.

After a few years I got interested in investment banking, but by that point I had already been out of school for awhile and I didn’t have much of a quantitative background, so I decided that going back to business school was my best bet.

I went to a well-known, though not “target,” program – you would know the school if I mentioned it here, but not many large banks actively recruited there.

To make things even worse, I was enrolled in the part-time program there – so I only had access to the career center and its resources in my last few terms.

Q: So I’m guessing you had to do a lot of networking. Can you tell us about what your overall approach was?

A: Sure. Before I even started networking, I wanted to make sure I had my “story” right, so I spent a lot of time on that.

My basic “story”: I came from a background where I had to work with tenants constantly and develop relationships with lots of different people – which is a critical skill if you want to make it to the top in investment banking.

I said that in the long-term, I wanted to be a trusted advisor to CEOs and other executives, and that I saw investment banking as a way to leverage my previous background to get there.

This story worked very well for Associate-level interviews – they want to see more evidence of leadership and client relationship skills because they’re grooming you to make it to the top one day.

In terms of networking, I ignored bulge bracket banks for the most part and focused on middle-market and boutique banks because they were much more receptive to someone like me.

I didn’t focus that much on the “results” per se – I was genuinely interested in getting to know people in the industry and learning more all the time, which made a huge difference.

Too many people go into the process only looking forward to the outcome, which makes it hard to stay motivated and actually make a good impression on everyone you meet.

Overcoming Roadblocks

Q: Ok, so you have your “story” laid out and you’re in the right mindset. How did you decide who to contact each week? What did you say, and to whom did you say it?

A: I focused on 2nd and 3rd year Associates, as well as some 1st Year VPs – I wanted people who had been there long enough to actually have influence over the hiring process.

These types of people were also more likely to be staffers – and to therefore have even more influence on hiring decisions.

I sent around 2-3 emails per day, pretty much every single day – I was pretty direct and told them explicitly I was interested in moving into investment banking or moving to their firm specifically, and that I wanted to get their thoughts on how best to position myself.

I would always request either a call or a meeting in the initial email, and would then spend most of the time asking about the other person’s background.

Q: What kind of resistance did you face because of your background? Was the part-time MBA program an issue, or was your non-finance background a bigger problem?

A: I was always very upfront about attending the part-time MBA program, and it was never an issue. When it came time for full-time recruiting, I already had an internship by then so no one looked at me differently.

My non-finance background was more of a problem – in every meeting I had they always said, “So why do you want to move into finance, and why now?”

By this point I had gotten really, really good at telling my “story” and answering these objections before they even came up, so that wasn’t much trouble after the first few informational interviews.

Q: What tactics were most effective in going from meetings and phone calls to actual interviews? Did you have to do anything differently at the MBA-level?

A: Not really – it was mostly just continuous pressure that led to interviews at most places. I kept emailing people and saying, “Just wanted to reiterate my interest in your firm, and re-visit our conversation.”

You can’t take it personally when you don’t get a response – a lot of people purposely ignore you just to assess how serious you are.

The (Partial) Results

Q: Ok, so you’re networking extensively… how did you end up with an internship?

A: Continuous pressure – I was speaking with a local bank and kept contacting them to say I was interested. I could tell they wanted an intern but weren’t 100% certain they actually wanted to hire one – those types of leads are often better to go after vs. places that have no clue what they want.

Q: And how well did you do in full-time recruiting with this internship under your belt?

A: I mentioned it was a really, really bad year, right? I interviewed with a lot of banks but came away with no full-time offers at well-known banks that year – even though I had done a ton of networking and actually had an investment banking internship.

Q: A lot of people would have probably given up or set their sights on a different field at this point. What did you do?

A: I decided to postpone my official graduation date by a year – just to keep myself “in school” – and I kept networking and ended up with an offer at a local boutique.

But it was quite a bit different from a large bank, and the learning opportunities were uneven – we spent a lot of time chasing after lower-probability deals.

The other problem was that it was unpaid – I received no base salary, and was paid only when deals closed.

That’s fine if you’re an MD with millions of dollars in savings, dozens of different clients, and you expect deals to close – but it was a huge issue when you’re just starting out and need to pay the bills.

M&I Note: One of the advantages of a part-time MBA program is that you can more easily move around your graduation date.

Moving Into Industry?

Q: Ok, so you’re at this small firm where the work you’re doing is not quite what you expected and where you’re not getting paid. What then?

A: I had to leave because of the lack of any base salary. I had worked on several deals and at least had something substantial to talk about in interviews now, so I felt that it had served its purpose.

One of the MDs was from a larger firm, and brought in a lot of deals – I worked with him a few times, so I got decent experience in the time I was there.

After leaving, I went to a local company “in industry” and became Director of Finance there.

Q: Most people would say that going FROM investment banking back TO industry is the kiss of death and that you can’t move back into finance if you’ve done that. What were you thinking?

A: I took the job because it was a management-level role and because it allowed me to interact with the CEO pretty much every day.

I knew I could leverage it for investment banking interviews in the future because now I could say, “I understand both finance AND how company executives in a particular industry think.”

It allowed me to go into investment banking interviews and say 2 things:

  1. I can get inside the heads of CEOs in this industry because I know exactly how they think.
  2. Other people are coming in from the Ivory Tower, but I have real-world experience related to investment banking.

Q: Right, but did banks actually take you seriously? Most people in finance view “industry” in a very negative way.

A: You need to get creative. Any experience is better than sitting on your butt doing nothing.

Believe it or not, this industry experience actually helped me more than my investment banking internships because I applied to matching industry groups, and it helped me stand out vs. everyone else.

Sure, in a perfect world we’d all work at Goldman Sachs – but things rarely go as planned, and you need to improvise and spin what you have into sounding relevant when that happens.

Back Into Banking?

Q: Ok, so you’re at this local company as Director of Finance for a few months now. How did you move back into banking after you had already left for industry?

A: It’s not as difficult as you might think, at least if you do it the right way. Here’s what I did:

  1. I considered A LOT of other options, like startup banks, public finance firms, and more – if nothing worked out in banking, I wanted a Plan B, C, and D.
  2. I never stopped networking – I continued talking to everyone and browsing my business school’s job board even after I had been through 2 other jobs by this point.
  3. I focused on highly relevant groups – investment banking industry groups that matched my background when I was Director of Finance at the local company. I made sure I wasn’t just applying for the sake of applying – I knew that I’d have to be more targeted given my history.

Q: How did you change around your resume in light of everything you had done – and how did you get it in the hands of bankers?

A: I re-wrote my entire resume to “bankify” it and to add more meaty material, focusing on what I had done at the boutique and also as Director of Finance at the local firm. It looked significantly better than when I had only had the internship from the year before.

I got interviews at a bulge bracket bank and at a well-known middle-market / boutique firm by applying to off-campus postings on my school’s job board.

I also noticed that I had spoken with a guy at the middle market / boutique firm a year ago when he was at a different bank, so I called him up again, told him I was interested in interviewing there, and got his thoughts on the company.

Q: Had you had any contact with him since you spoke with him a year ago?

A: Nope. I contacted lots of others I had last spoken with 2-3 years ago as well – obviously after that length of time you can’t go and request an in-depth conversation, but if you’re friendly and casually reach out to people, good things will happen.

A lot of people think you need to stay in touch with 500 industry contacts 24/7 and that the sky will fall if you don’t – but so few people ever bother networking that simply by reaching out at all you put yourself in an elite group.

Don’t obsess over details and individual words in emails… as long as you’re networking at all, you’re well ahead of most people.

M&I Note: Never, ever, ever overestimate the competition

Associate-Level Interviews

Q: Ok, so you have 2 solid leads and interviews lined up at both the bulge bracket and the boutique / middle-market bank. What were interviews like, and how were they different from what an Analyst might face?

A: The interviews themselves were not dramatically different – it was the usual set of phone interviews, followed by in-person rounds later on, with technical and “fit” questions similar to what you normally see.

The bulge bracket featured a case study in their interview process, where I had to talk about how to analyze a company in a dying industry and how to establish what kind of cash flows they might achieve should they expand into more lucrative markets.

Overall the interviews were no more technical than what anyone else interviewing for entry-level positions might get, but they do expect you to be more polished at the MBA-level.

There was also more thought required – a lot of the questions were not standard “Walk me through a DCF”-type questions, but were about specific companies or more unusual scenarios.

Q: So how did the interviews go?

A: With the well-known boutique / middle-market bank, everything just clicked and I fit in with the team from the start, so I got an offer there. I came very close at the bulge bracket bank, but lost out to other candidates in the final round.

Q: Did you try to negotiate your salary or bonus at all?

A: No, because I felt the offer they gave me was in-line with the market as a whole, and that negotiating it might have damaged some of the goodwill – the relationship kind, not the accounting kind – that I had built up throughout the interview process.

I’m not even sure that it’s possible to negotiate much with well-established banks, at least for Analyst or Associate positions.

Future Plans & Final Thoughts

Q: You went through quite an ordeal to get into a well-known investment bank. Are you planning to stay there, or will you try to hop into PE as soon as you can?

A: At this point, I’m planning to stay here – for two reasons:

  1. My whole pitch was that I wanted to be a trusted advisor to companies and executives. I had to believe that for it to be believable, and I still do want to do that.
  2. Getting into PE is a fairly well-defined path, and it’s hard for anyone who hasn’t been an investment banking analyst.

If I got tired of banking at some point, I would probably look at opportunities within industry instead – I already have the experience and could easily go back to that.

While the life of an MD may not be all peachy, it would also be hard to leave if I got there one day.

For Associate-level interviews, you need to show that you’re committed to the industry for the long-term or else no one will take you seriously.

Q: You were very successful breaking into investment banking, even though your story had more than its fair share of twists and turns. Looking back on it, is there anything you would have done differently? Any advice for readers?

A: I made two main mistakes with networking:

  1. My tracking tool was very poor. I should have tracked the “temperature” of each lead to see whether each person was “warm” and to properly prioritize my efforts. I also should have included an agenda for each person with an idea of how he/she could be helpful – Referrals? Advice? Interviews?
  2. I failed to explore all avenues for networking – I completely neglected undergraduate alumni, professors, and people at my church, for example. While you could argue those are lower probability to begin with, all it takes is one.

My only other advice is to enjoy the networking process itself. If you don’t like talking to people, you’re never going to make it in the industry – as an investment banker you spend a lot of time emailing and calling people, even as an Analyst.

Have fun with it, and keep in mind that no matter how screwed you seem or how many “fatal” moves you make, you never lose unless you give up – just re-read my own story if you want a reminder of that.

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 (387)

Can You Really Use Business School to Re-Brand Yourself and Break Into Finance?

rebranding“Just go to business school.”

“Go to a top MBA program.”

“With HBS on your resume you can do anything you want.”

It’s one of the most common pieces of advice given to anyone interested in consulting or finance: get into a top MBA program.

Even if you went to a no-name undergraduate, did nothing finance-related since then, and you don’t know anyone in the industry, a top MBA program will let you break in.

Or will it?

The Short Answer

Getting into a top MBA program may narrow the gap between you and former bulge bracket investment bankers.

But it won’t level the playing field.

Business school is often thought of as a magic bullet – a way to break into finance when all else has failed or when you have no shot normally.

There’s some truth to that – but there are also a lot of problems with it.

“Non-Target” Programs

Ranking banks, schools, and anything else is a massive waste of time and brain cells – which is why there will never be “rankings” of any kind on this site.

But the relative “prestige” of your business school is important, even if the specific “rank” doesn’t matter: if you don’t go to a school that banks recruit at, you’re wasting your time and $150K.

So even if something seems prestigious on paper or it’s in “The Top 10” you need to go there in-person and ask students how recruiting really works.

There’s a less obvious conclusion as well: if you have a very small chance of getting into the top programs, then you’re better off pounding the pavement to get in.

Start with informal and unpaid internships and temporary positions at smaller places, and then leverage that to move up.

Cold-calling may not be fun, but it’s a far better use of time than going to a school where no banks recruit and where no alumni are in finance.

Part-Time vs. Full-Time

Until recently, there wasn’t much respect for part-time programs.

This is starting to change, but they’re still not on-par with the most well-known full-time programs.

If you can’t afford to go back full-time and are only looking at part-time options, you need to visit the school in-person, walk around and ask students and faculty how many banks actually recruit there – otherwise you’ll end up with $150K in debt and access to 0 recruiters.

Running Away From Your Past

If you’re coming from an unknown school, you have a lower GPA, or you have less “prestigious” schools or companies on your resume, you might feel like The Fugitive: you didn’t do anything wrong, but you’re always running away from your past anyway.

But here’s the problem that often gets overlooked: your past will still come back to haunt you, even if you get into a top program.

There are some people in finance who just don’t understand anyone who’s not from a wealthy, blue-chip background, and you’ll always have to deal with it if you have the misfortune of running into them.

Getting into a top business school may reduce your sentence, but it won’t clear you of all the false charges.

Geography

“What about top MBA programs in Europe / Asia? Are they as recognizable as ones in the US?”

The short answer: the best programs are still well-known, but no, they are not viewed the same as Harvard/Wharton/Stanford etc. if you want to work in the US afterward.

It’s not because they’re “worse” – it’s just that most US positions are taken by people who go to US business schools. Recruiting is a lot easier when you don’t have to cross multiple oceans for an interview.

If you can get into top schools in Europe / Asia, but can’t get into the top US programs, then sure, go abroad.

No Network

You might be motivated to go to business school if you don’t have a great network and don’t feel like cold-calling dozens of firms each week to get into a local boutique and then working your way up.

On-campus recruiting is convenient, but it’s almost too convenient. The temptation is to sit around and wait for companies to come to you – but that doesn’t work when everyone else at your school is also impressive.

So you need to start building your network even before you even get there. Start calling alumni, say you’re going to attend XYZ school next year and wanted some advice, and take it from there.

Experience: Too Much vs. Too Little

Another dilemma: you might have too little experience or too much.

Going straight for an MBA right after undergraduate is a losing proposition (yes, there’s Harvard 2+2 but that is new and unproven) – you need at least a few years of experience and often more than that to be competitive.

I get emails every week from students asking, “Should I go for a top MBA program right after I graduate?”

No. Bad idea.

Many Associate-level resumes have 5 or more years of work experience – even if you get into a top school, it’s tough to compete with that.

You can also have “too much” experience to make business school useful, but this is less of a problem than having too little.

If you’ve been working for, say, 15 years, it’s almost easier to work your way to the top in another field and then move into finance at a much higher level.

The Solution?

All these pitfalls go back to the original point made in the beginning, and something that Kevin and Jerry brought up on Management Consulted (Why Harvard Business School Does NOT Equal McKinsey):

Going to a top MBA program helps, but that alone will not solve all your problems.

It’s Just Like Breaking In As an Undergraduate

I still get a lot of questions on the CFA and other certifications, despite repeatedly bashing them in the past.

Many students think that adding these lines to their resume will seriously boost their chances, forgetting that they’re just small pieces of the big picture.

And yes, business school is different and much more than just another certification, but the same principle applies: a top school and access to recruiting there will improve your chances, but you need to do more than just go to a good school and drop $150K to break in.

What to Do?

Let’s say you are committed to going to a top MBA program to re-brand yourself and then using that to break into finance – what should you do to make sure it’s not a waste of $150K and 2 years of your life?

  1. First, make sure that banks actually recruit anywhere you’re seriously considering. Visit in-person, meet with students and career services, and see what the real story is.
  2. If you come from a more “random” background then start addressing “objections” to your background even before you arrive at school.
  3. You also need to start networking long before you ever get to business school – all the former bankers will have a big advantage over you otherwise.

Think about pre-MBA programs in finance – if you can, take time off to do an unpaid or part-time job related to finance.

Think about activities and professional organizations that might take you closer to business, or at least ones that let you spin your resume more aggressively.

And start contacting alumni and going through referrals in the months before you arrive so that they know who you are when it’s summer recruiting season.

But Sometimes You Have to Go

Business school is not a magic-bullet solution, but sometimes you pretty much have to go just to have any shot of breaking into finance.

Recent graduates would be better served by going to boutiques and then working their way up to larger banks – but if you have 5-10 or more years of experience, banks only take you seriously if you’re coming from an MBA program.

And if you had a completely random background that had nothing to do with business – like a traveling bard – then you might have to go just to have more than a 0.000001% chance of getting in.

Got Brand?

There’s always a temptation to buy more degrees, certifications, or anything else that gets you more “prestige” and makes you seem more qualified.

But not only does HBS not equal McKinsey, it also doesn’t equal Goldman Sachs, JP Morgan, or any other top bank.

Think of recruiting as a court case, with your key witness representing business school: a great testimony can push the odds in your favor, but you need plenty of “supporting evidence” as well.

That might be informal work experience, anything that can be spun into sounding like business, or a solid network.

So make sure you have both the supporting evidence and the key witness – otherwise, you’ll end up with a hung jury and no offers.

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 (142)

If You Can’t Get a Paid Finance Internship or Job, Should You Offer to Work for Free?

unpaid_internships_jobsAs graduation and summer internship season approach, you may be considering unpaid options more seriously if you’re still looking for an internship or job.

On the surface, this seems like an easy one, supported by straightforward logic:

  1. Banks and other financial services firms are hurting due to the recession.
  2. Therefore, they don’t want to pay anyone very much – or anything at all – to work for them.
  3. So if you ask for pay, you may not get interviews or offers
  4. But if you offer to do it for free, they’ll be a lot more receptive!

After all, who wouldn’t want to give up some short-term earnings if it ensured long-term success?

One small problem: the logic above is 100% flawed.

It’s usually a bad idea to propose an unpaid work arrangement – except for a few specific instances, which we’ll get into below.

“Your Logic Is Flawed!”

The logic above assumes that firms are not hiring because they can’t afford it (see statement 2).

But with the way the market is right now, most firms are not hiring because they don’t have enough work to go around.

It doesn’t matter whether they pay you $10,000 or they pay $0: if they don’t have any work for you to do, you’re still “costing” them (just in time rather than money).

There are some exceptions: Restructuring groups and hybrid consulting/banking firms focused on turnarounds are relatively “hot,” and most PE firms and banks still hire a minimum number of interns and entry-level Analysts/Associates each year.

Funds of funds and tiny startups that have sprung up recently (many of them formed by ex-bulge bracket guys) are also looking for people, though in many cases more so at the VP/MD-level than at the Analyst/Associate level.

But aside from the tiniest of boutiques, your salary or requested salary makes almost no difference in whether or not they’ll consider you.

And by “boutiques” I don’t mean Lazard or Evercore – I mean extremely tiny firms with 3-4 guys max, because they’ll care about even small expenses.

But Will It Work for You?

Offering to work for free is most appropriate if you’re an undergraduate or a recent graduate. If you’re any older than that, you’ll look a bit desperate immediately asking for an unpaid opportunity.

Yes, everyone knows the market is awful, there are no jobs, and that you would take whatever you could get right now – but no, you still shouldn’t openly admit any of this.

So if you’re in an MBA program or you’ve been laid off recently – or you’ve been working for awhile – I would not recommend leading your call or email by saying, “I’ll work for free!”

If whomever you’re calling happens to raise it as an “objection” (e.g. “We can’t afford anyone right now”) then it might make sense to offer a rebuttal (e.g. “What about an unpaid experience?”).

But you should wait until they actually raise an objection before you make your “counter-proposal.”

This strategy will not work very well if you’re more experienced – most firms don’t like to take experienced people on for free, just due to legal/HR reasons and general principle.

But if you are targeting somewhere truly tiny, it can work… one MBA-level reader last year actually got an internship at a start-up prop trading firm using this strategy.

Strategies for Undergraduates

If you’re younger and want to use this strategy, I would state this upfront (“I wanted to ask about unpaid summer intern openings…”) only if you’re going for the tiny, no-name, 3-4 person firms.

Even most “boutique,” middle-market, and other, smaller banks have formal recruiting processes in place and will not be receptive to this approach – so I’d save it for an objection rebuttal if it comes up.

Other Tactics

If you’ve already spoken with firms and tried to propose unpaid internships with no success, what else can you do?

Talk to Places That Already Have Standard, Unpaid Internships

Plenty of firms actually have a culture of taking on unpaid interns, whether during the school year or in the summer.

Rather than trying to pitch yourself to a bank that doesn’t actually want unpaid help, why not try these places first?

One that comes to mind in the SF Bay Area is FT Partners; and there are other regional boutiques that like free labor, often found through university organizations and business frats.

If you ask around within business frats and other groups you can find a lot of information on other tiny firms in your area that do this.

Go Into Finance Industries That Are Known for Not Actually Paying People

The most obvious example: prop trading firms, especially small ones, are known for paying extremely low (or non-existent) salaries and only giving you a percentage of your P&L as pay.

Not all companies do this, obviously, but it’s far more common in the world of prop trading than it is with investment banks and PE firms.

So if you went to a tiny, no-name trading firm they might just assume that you’re willing to work for no salary, on a 100%-commission basis.

That’s not great for you, but at least it gives you the possibility of making money – as opposed to a real “unpaid” internship where you’ll just get experience and contacts.

Related Finance Jobs

If you can get something that’s finance-related but not directly in banking/PE/investing of any kind, there are 2 advantages:

  1. You are more likely to actually get paid… and therefore stay afloat for awhile longer if that’s a major concern.
  2. You’re more likely to actually get a job or internship in the first place – especially if you target firms that are not used to receiving cold calls and cold emails from random, well-qualified, and well-spoken strangers.

Lateraling from this type of role into banking is 100% dependent on the market, which no one can predict. But doing something is a better choice than going for banks that just aren’t hiring right now.

The Non-Profit Angle

Another approach: if you can afford to work for free for a summer or for an extended period of time, apply to non-profits or similar organizations that have some relevance to finance.

Why?

Well, unlike most “normal” companies, pretty much any non-profit in existence would love to have additional free labor at their disposal.

On paper, it might not seem too relevant to finance – so you’ll have to spin it appropriately and focus on the “business results” of what you did, whether that was getting additional donors, raising money, or recruiting.

Also (and this is something I’ve only seen mentioned once elsewhere), there’s actually increased M&A activity among non-profits, because they are strapped for cash.

If you could work at one that was in the midst of some type of deal, you could use that experience to look like you did something finance-related and tell a good story about your interest.

The Unpaid Conundrum

So, should you offer to work for free if you can’t find anything that pays you?

Only if you’re a student or recent graduate, or you’re going for a truly tiny startup firm (or maybe a non-profit).

Otherwise it will just backfire on you, especially if you’re not a college student.

P.S. We got lots of great networking questions earlier this week – we collected them all and will be answering as many as possible in our live discussion next week.

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.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

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