I think you all agree with me when I say: it’s REALLY hard to learn how to become an investment banker.
Let alone even becoming an investment banker!
Or is it?
Well, it turns out, recently students from non-target schools without perfect GPAs are beating out ivy league students for even the best investment banking jobs.
As an example the average first year total compensation for graduates of our Analyst Program is just over $80,000.
And you can do exactly the same after reading this guide.
This guide with show you exactly how to become an investment banker (even without a perfect GPA), step-by-step.
The 5 Hiring Factors You Need To Understand To Learn How To Become An Investment Banker
Note: These are ranked from most important to least important
#1 – Your Connections
This might seem ridiculous, but it’s entirely true.
If you have an ‘in’ or a connection at one of the investment banks that is pretty high up, your chances of landing the job or internship will increase dramatically. It’s a funny career path.
That’s why the most important thing you can do to become an investment banker is network, network, and network some more.
A popular blog agrees:
“It’s never too early to start networking with peers, older students who are on track to join the financial services industry, faculty and professionals currently working at an investment bank. You need to build network during your college career to get internships and eventually a full-time job, then you have to build a whole new network once you’re in the industry.”
But there’s a caveat here:
It’s much more effective to network with higher up managing directors or vice presidents at investment banks that can actually influence the hiring decision versus an analyst or associate who has no pull.
Simply put, the old guy will help get your resume through the door, not the young guy.
Going back to that blog:
“One big thing I noticed, and I didn’t think it made any sense, you can have a high G.P.A., the best internships, the best work and activity experience while at university, but if you don’t have someone to put your resume through, it doesn’t matter. Applying through a bank’s careers portal isn’t effective. HR directors at the big banks don’t look at them – they don’t have the time or inclination to look at random resumes that come through their website, so networking is key.”
#2 – Your School
Let’s be real:
The Ivy league students are exponentially favored to get into investment banking.
The reasons are obvious, and more importantly, most big investment banks only recruit at the best schools.
So if you’re coming from a non-target, you’re going to have to work a lot harder, and network a lot harder.
And to be clear, your major doesn’t matter a whole ton, whether it’s a bachelor’s degree in finance, business administration, or even computer science. A master’s degree doesn’t help much either unless it’s are from a top 10 MBA program.
If you’re not from an Ivy, you’re going to want to read the next few factors.
#3 – Your Experience (And How Early You Started)
What’s the #1 thing investment banks look for on your resume?
You can have a perfect GPA but if you have no clue how to do the job (business analysis, financial modeling, even valuation) you’ll never get the job.
You should try and have some sort of internship each of your summers during school. Ideally, you’d want to have something pretty investment banking related under your belt going into your junior year.
We give students this type of experience through our hands-on analyst program so they can stand out as they’re going through the application process.
We’ll get into some more examples below.
#4 – Your Resume
I’ve met some really smart student who have these great experiences, internships, etc.
Then I look at their resume and shake my head.
If you don’t have your resume structured properly to convey the right information, you’ll never get an interview in the first place.
The trick? The spin and bankify technique.
You need to exaggerate a little and make your resume seem as analytical and banking based as possible.
Here is a great example I saw recently via BIWS:
Software Development Intern, Cell Phone Company
- Developed cell phone applications for collecting demographic and user/revenue data in team of 3 and investigated new web technologies. Presented findings to CEO.
That just tells an employer you did absolutely nothing finance based over summer.
Now let’s use the “spin and bankify technique”:
Technology Consultant, Cell Phone Company
- Recommended development budget of $100,000 to CEO based on analysis of ROI on similar projects in the past.
Worked in team of 3 to design applications for analyzing demographic data; optimized revenue per user for mobile software and made recommendations that led to 20% higher RPU.
Why is this better?
The Title – “Technology Consultant” sounds more related to finance than “Software Development Intern,” which sounds more like a shorts-and-t-shirt job.
Recommendations and Analysis – You recommended specific numbers here and analyzed the financial returns of previous projects – just like what you do in real finance.
Results – At the end you have a tangible, monetary result: a 20% higher revenue-per-user number.
This example is a bit of a stretch because you might not have done everything I’ve listed above – maybe you didn’t achieve specific results, or maybe you didn’t make a budget recommendation.
That’s fine – just try to spin your title and emphasize any recommendations and analysis you did complete.
#5 – Everything Else
Here I’m talking about things like worrying about cover letter templates for investment banking, career fairs, etc.
People barely read cover letters in investment banking and I doubt big investment banks go to your school to recruit.
Focus on everything else above and if you did it right, you’ll at least be able to get an interview.
Next Up – Personalized Advice Based On Where You Are In You Education / Career
The next few sections are going to be personalized based on where you are in your education and career and what you’ve accomplished up to now.
Feel free to click one of the links below to jump to your current situation.
Why It’s Important For Freshman To Start Preparing For Investment Banking Analyst Jobs Even With No Experience
Have you ever heard of what Albert Einstein called the 8th wonder of the world?
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
Now if you’re a currently a freshman, why the heck should you care about compound interest?
Because you need to learn how to start compounding yourself.
Let’s say you put in some work to finding an internship your freshman summer. Maybe something that’s not completely related to investment banking, but it might be somewhat close, and you potentially had a family member or connection hook you up.
Because you did that internship your freshman summer, you’re able to leverage that into an even better internship your sophomore summer (potentially even investment banking related).
Remember, most investment banks aren’t looking for freshman as interns.
Throughout all this, maybe you’ve been doing some extracurricular programs to learn more about the field, whether it’s our Invest Like The Street Analyst Program, or something else.
Now by the time you have to start applying for the real investment banking internships your for your junior year summer, you’re in awesome shape.
If you did all the of the above and maybe a bit of networking, you should be easily able to get into investment banking for your junior summer, and as long as you don’t slack off during summer, you should be able to get the full time offer.
Get the idea?
The earlier you start, the higher your odds of breaking into investment banking.
So if you’re reading this as a Freshman, good for you.
Here are the things you should be focusing on doing this year:
#1 – Signing Up For Your School’s Finance, Investment, or Investment Banking Clubs
One of the first and easiest things you can do is find all the finance-related clubs your school has. Check them out, and figure out which ones are actually active.
Some can be total B.S. but schools usually have at least one active finance club.
Occasionally, you’ll see some that actually have investment banking specific clubs.
Join the ones that look good so you can add them to your resume. If you want an investment banking career, you have to put in the effort.
#2 – See If Your School Has A Student-Run Investment Fund
One of the biggest resume boosters you can add is being part of your school’s student-run investment fund, where you actually get to manage money from the school’s endowment.
Why is this so important?
It’s real world, relevant, hands-on experience. It’s exactly what employers, and especially investment banks, want to see on your resume.
Here’s a brief overview:
“University investment clubs are student organizations at many colleges and universities, but unlike clubs that emphasize a hobby or socializing, the university investment clubs primarily focus on providing real world experience for students keen on a career in finance. … The clubs can be hardcore and often serve as boot camps for Wall Street.“
Some schools can have programs that are extremely selective and only allow upperclassmen or seniors to be a part of the fund.
If that’s the case, make sure you will be in the best position possible to get accepted when the time comes.
In other cases, they even let Freshman and Sophomore’s join. If you can find a way to get on as a Freshman, do that as soon as possible.
#3 – Start Boosting Your Technical Skills
If you want to be able to get a pretty cool internship as a Freshman, you want to have your technical skills as strong as possible. I’m talking things like financial modeling, business analysis, valuation, IPO’s (initial public offering), capital markets, know what FINRA is (financial industry regulatory authority) etc.
For your first 2 years of school, you probably won’t even touch any real finance material, and when you do, it’s often high-level and not nearly detailed enough to cover everything you would need to know for an investment banking job.
So, you’re likely going to have to teach yourself on your own. Trust me, you’re going to want to as well if you really want to stand out over the rest of your competition.
We’ve had plenty of freshman graduate for our analyst program that have done quite well, receiving internships in banking and even buy-side gigs their sophomore summer.
Trust me, it’s not impossible.
Wrapping It Up
If you’ve started your networking, joined a few clubs and begun working on your technical skills, you should be in great shape to landing some sort of internship your freshman summer, whether it’s banking or something else.
Move onto the next section and keep it up.
Why It’s Not Too Late To Get A Head Start On That Investment Banking Analyst Job
So if you read the first section as a freshman, and have transitioned into your sophomore year, great! You’re on track.
If you’re a sophomore who’s just getting started, that’s okay, there’s still plenty of time.
Read through the previous section on Freshman year, and make sure you start working on those tasks. You can easily catch up.
Sophomore year is, in my opinion, the most crucial year. Why?
That’s when you prepare to apply for the big investment banking internships for junior year summer.
Most investment banking blogs agree:
“Summer internships are important because having one will dramatically increase your chances of getting full-time interviews and offers.
If the economy is bad, you might not even have a shot at full-time interviews if you haven’t had an internship – and many bulge bracket investment banks (Goldman Sachs, JP Morgan, Morgan Stanley, etc) fill their entire analyst classes with summer interns.
Even if the market is frothy, an internship still gives you a big advantage, and even more importantly, gives you more options than someone without an internship.”
By the end of your sophomore year, you should have a solid understanding of the technicals (modeling, valuation, financial analysis, etc) and some sort of relevant experience on your resume to help yourself stand out when you start applying for internships.
If you really want to become an investment banker, that experience is key.
The big bulge bracket investment banks open their applications in mid-July now. It’s getting earlier and earlier every year.
This is what the investment banks will be looking at on your resume:
- Your Previous Experience
- School and GPA (obviously)
- Who You Can Name Drop (this is why networking is key)
Here’s how you should prioritize your sophomore year:
Boosting Your Resume (Early Fall To Spring)
- Join some clubs
- Spend a lot of time learning the technicals
- You can do so via our Analyst Program to really boost the resume
- Find stock pitch competitions or case competitions to participate in
- These are great to add to your resume, we discuss this in another post on getting into investment banking here
Find An Internship For Sophomore Summer (Fall Semester Maybe Into Spring)
- This is trickier to do and most likely might be accomplished via networking
- BUT, you’d be surprised how many small hedge funds / private equity firms / boutique investment banks you can find that would be willing to hire an intern
- The easiest way to do this is by trying to reach out to alumni on LinkedIn that you’d want to connect with
Use The Spin And Bankify Technique To Perfect Your Resume
- Like I mentioned earlier in the in guide, the trick is learning how to spin and bankify your resume in order to stand out
- Use sub bullets to highlight specific things you worked on (ex: deals, stocks pitches, portfolio returns, etc)
- You can take a look at proper investment banking resume template here
Why Junior Year Is Your Last ‘Easy’ Chance To Become An Investment Banker
So if you played your cards right and followed what I said in the previous sections, you should be heading into junior year will plenty of investment banking interviews lined up.
If not, things are going to be exponentially harder for you.
Unless you have an in at one of the big bulge bracket investment banks, you might as well give up on those.
Like I mentioned before, most of the bulge brackets fill their full time analyst positions with their summer interns.
At this point, your best chance is getting an investment banking job at one of the boutiques.
So what can you do now to keep yourself in the game?
Start Early As Possible
Don’t try and procrastinate until winter break to do something.
The best investment banking internships will be gone in the fall. If you wait until winter or spring, you’ll be really screwing yourself over.
If you have no experience at this point and still no knowledge of the technicals, you’re in a tough spot.
For students in our analyst program that are in this position, we tell them that once they are about 25% through the program we will give them some sort of language to add to their resume to help themselves stand out as they apply now.
Again, the first thing employers are going to look for is experience. If you don’t have that, you have no chance of landing the internship.
Going off of that, your resume needs to be in as best shape as possible right now. You want to make sure you are highlighting things like:
- Being part of a student-run investment fund
- Make sure you use sub bullets to highlight the stocks you pitched. You can see on our resume template here
- Participating in any stock pitch competitions
- Again, utilize the sub bullet structure as mentioned above
- If you did have a previously internship that wasn’t exactly very banking related, utilize the spin and bankify technique mentioned before
Start Networking Like Crazy
Have I mentioned this enough yet?
If you’re in this situation, you still have some time to salvage everything through some persistent networking.
Here’s a good way to think about networking via BIWS:
“If you’ve been submitting applications online, please stop immediately. It doesn’t work, and you’ll never get a critical mass of interviews like that.
You need to get on the phone ASAP and start talking to real people and then meeting them in-person – if you’re coming from a non-target school and you haven’t done that, you stand a 0.0000000000001% chance of breaking into investment banking.
If you’re at a better-known school, networking is still essential but your resume / lack of solid work experience is more likely the culprit.
Then, take a look at your resume and your experiences – if you haven’t had impressive-looking internships then you need to get them if you want any chance of getting interviews.
Finally, take an honest look at your networking efforts – have you contacted at least 100 alumni? Cold-called 100 local boutiques? Talked to at least 20 people on the phone and hopefully met most of them in-person?
If not, then you need to put your nose to the grindstone and keep at it until you ninja your way into invesment banking interviews.”
But note the size of the networking reach he mentioned.
100 people and 100 firms. Investment banking is no joke, and this is often what it takes.
If you get someone willing to talk to you, the key here is to make sure you really understand the industry and a lot of the technicals so you can have good conversations with the people you are talking to.
Here’s what you want to show them:
- Your knowledge of the industry and the technical work. They have no time for inexperienced people who don’t know what they’re doing
- Prove that you’ve done your homework on them and can ask good questions based on that. Make the conversation seem all about them at first. Don’t just go ask for a job or internship. No one likes those people.
Here are some things you DON’T want to say:
- “I just want to get my foot in the door”. No kidding. Why would they care?
- And my personal favorite: “I’m really just looking to get experience anywhere and get some training”. This is the worst possible thing to say. It shows that you have no experience, don’t care enough to train yourself and that you can care less about investment banking, you just want a job anywhere. Please don’t be that guy.
Senior Year: Are You Sure You Really Want To Get Into Investment Banking?
Welcome to your senior year.
At this point, you’re likely in one of these buckets:
- You started earlier, listened to the advice in the previous sections and have already been offered a full-time role as an investment banking analyst. Well done!
- You had an internship last summer that was somewhat related to investment banking, but still not banking. (Maybe something like credit analysis, equity research, a small gig at a hedge fund / private equity firm)
- You had an internship last summer that was unrelated to banking (Sales, marketing, operations, etc)
- You still have no internship or relevant experience
Let’s start in reverse order.
You Still Have No Internship Or No Relevant Experience
If you’re in this bucket, you clearly slacked off really hard, or maybe had some personal / family issues that set you back.
So the first question is:
Are you sure you really want to become an investment banker?
Let’s be real for a second:
It’s going to be dramatically harder to get in at this point. Unless you are extremely proficient with the technical work (modeling, valuation, business analysis, etc) and have a decent GPA, it’s going to take a lot of work.
Here’s a quote of a great example that happened:
“It seems unbelievable, but most of the resumes we got were poorly formatted and had typos. What are they thinking? Also, it was shocking to me how many people had no idea about basic business and accounting concepts like enterprise value and working capital. Even more shocking was how many students claimed their ignorance was understandable because their university did not have a business program.”
Point being that if you’re incapable of doing something like making your resume look pretty for investment banks and have no clue about even the simplest technical questions, you’re in trouble.
So let’s segment one more time:
- You know your stuff
- You know don’t know your stuff
If you have the knowledge, there’s still a chance you could potentially land something at boutique investment banks out of school.
You still need something to add to your resume to prove you have that knowledge though. If you do actually know your stuff, I’d assume you have something to put there.
If you’re a senior, still have no experience and no knowledge of the technicals, things are looking pretty bleak for you.
Also, don’t try and lie about it either. That will just dig you a bigger hole as you can see here:
“Had a guy who told me he has ‘built financial models and performed relative valuation such as trading comps and transaction comps.’
I asked him to walk me through how he spread those comps… and then he just stumbled and started going off on a tangent for 5 minutes without actually answering the question. Not knowing is one thing, but his biggest mistake was lying about it.”
Here’s what I’d recommend doing:
- Get the experience through our Analyst Program, some part-time internship somewhat related to banking, or maybe participating in a student-run investment fund
- Network like crazy
- Consider taking level one of the CFA in December or June (chartered financial analyst). It will be a great thing to add to your resume and show that you’re committed to the industry as a whole. Maybe not so much for investment banking, but at least it shows initiative. Plus, everybody does investment banking just to get to the buy-side right?
Do NOT go get your master’s degree just to do it. Unless it’s a top 15 business school (which is pretty much impossible to get into without previous job experience), it’s a waste of your time and money and won’t help you become an investment banker.
That likely still won’t be enough though. Therefore I’d consider a ‘stepping stone’ job that can position you to get into the industry after a year or two. Things like:
- Equity Research
- Credit Analysis / Credit Risk
- Valuation / Advisory at One of the Big Four Accounting Firms
- Maybe Commercial Banking
And whatever you do, try and get to one of the big financial hubs (NYC, Boston, Chicago). It’ll dramatically increase your chances of recruiters reaching out for future job opportunities.
You Had An Internship That Was Unrelated To Banking
If you’re in the position, everything from the last sub section applies to you as well.
You’re late to the game and need actual experience that is relevant to banking.
In the meantime, you can use the spin and bankify technique to turn your previous unrelated internship into something that seems more related to investment banking.
In addition, if you have other more related experience like being part of a student-run endowment, participating in stock pitch competitions or even case competitions, you can put that above your unrelated internship on your resume, so that’s the first thing to jump out at employers.
So maybe you’re in a little better of a position than those with no internship experience at all, but still, the odds are stacked against you.
You Had An Internship Last Summer That Was Somewhat Related To Investment Banking
If you’re in this bucket, you might have had an internship in something closely related to investment banking like equity research, private equity, a hedge fund, credit analysis, etc.
So you still have a chance.
If you were lucky, maybe you got an offer to stay on full-time.
If it’s a buy-side gig, you did great and should just hop right to the buy-side. No need for investment banking at that point unless you want to work for one of the bigger private equity firms or hedge funds.
For now, just keep that offer in the back of your pocket and keep your options open.
You can try applying to some of the full-time bulge bracket positions, but that might be tough. It’s a competitive career path.
If you network well enough, you should be able to get into boutique investment banks.
Worst case, you take a job in a field somewhat related to investment banking like I mentioned in the previous sub-segment. If so, you have a good shot of transitioning into a banking after a year or two of experience.