Inside Investment Banking

The Exploration Phase

When I was a freshman in college, I had no idea what investment banking was. In fact, I initially thought it had something to do with becoming a teller at my local bank branch.

In the first few weeks of arriving on campus, I saw hordes of upperclassmen suiting up to go to “information sessions.” The numbers of Barney Stinsons seemed staggering. Why did so many want to go into investment banking?

I wanted to figure it out.

During my sophomore year, I cast a pretty wide net and applied to a handful of different summer opportunities.

I ended up getting an offer for a rotational program on Wall Street. How did that happen? Sheer luck. Things have gotten more competitive over the past couple of years that this strategy of just submitting an application might not work anymore. But that’s what I did. I had a phone interview with a recruiter a couple months later, flew to New York for my final rounds, and got the offer.

I remember trying to decide between this Wall Street internship or a Chinese language scholarship. I went back and forth with my mentor and she ultimately said, “If you were to look back on this in five years, I bet you would regret not going to China. Would you regret not working [on Wall Street]?”

I was stubborn. Ultimately, my professional aspirations of exploring a career in financial services superseded my personal aspirations of learning Chinese. “I’ll be able to use this as either a confirmation or a reality check for if this industry is really where I want to be,” I told her.

Even though investment banking wasn’t a part of my rotational program, I used my summer internship opportunity as a way to learn more about it. One of our projects was even to put together an Investment Banking 101 presentation. At a high level, investment bankers have two main roles: advisory and execution. Corporations want to maximize shareholder value and look to banks to help provide M&A (mergers and acquisitions) or capital structure advice or actually execute those M&A, debt, or equity transactions. There are plenty of resources out there on this that go into more detail.

Even if I understood what investment banking was, I didn’t understand why people did it. But it’s an easy sell for recruiters, from the six-figure “entry level” salaries (or almost, depending on when you look) right out of college to the potential to work on transactions that could change the face of an industry. Wouldn’t you want to be part of the $130 billion Verizon Vodafone buyout? Then there were the attractive exit opportunities in private equity. And let’s not forget the highly coveted “investment banking skill set” of technical, analytical, and communication skills.

Through my informational interviews with current investment banking interns, people who had left banking, and people who were still doing it, I realized that all of that comes at a price. One-hundred plus hour work weeks, not getting weekends and holidays, an unhealthy obsession with formatting PowerPoint presentations and Excel models, bending over backwards for senior bankers…

But the more I heard those horror stories, I felt less deterred and more curious and intrigued. I had one more summer internship before I joined the “real world,” and I was determined to do it in investment banking. Lo and behold, at the end of the summer, I received an offer to return to the bank as an investment banking summer analyst.

That was the summer of 2008. A lot has happened in the past six years and looking back, I think I made the right decision. No regrets.

To be continued…