Soon, banks may recruit elementary school students for internships 15 years in advance.

So, what happens if you complete a liberal arts major, have no finance-related experience, and then decide to apply for investment banking roles in your late 20s?

Most people would say it’s impossible – you’d need to complete a top MBA or think about non-IB roles at that stage.

But others would welcome the challenge.

I recently spoke with a reader who fell into that “Challenge Accepted” category.

Here’s how he accepted the challenge and won offers at a boutique investment bank and then a real estate debt fund:

From Broadcasting to Investment Banking… via Eastern Europe

Q: Can you summarize your story for us?

A: Sure. I went to a semi-target university in the U.S., chose a liberal arts major, played sports on campus, and then studied abroad in an Eastern European country after learning some of that country’s language.

I went back to that country after graduation to bring my language skills up to the “business professional” level and won a media/broadcasting job at a major company; they liked the novelty of a U.S. citizen who lived there and knew the language.

They put me on the business desk, so I gained a lot of exposure to Western companies attempting to expand into the region.

I worked there for a few years and then completed a Master’s degree in a different European country, interned at a policy think tank, and became interested in international development.

Specifically, I wanted to know how Eastern European and Former Soviet Union (FSU) economies could grow without solid infrastructure and a history of private property protection.

Someone recommended that I go into investment banking to learn more about that, so I moved back to the U.S., became obsessed, and networked like a madman to win a job at a boutique in New York, successfully moving from broadcasting to investment banking.

The bank worked on small M&A and capital raising projects (under $10 million), the Partners didn’t take salaries, and they paid me close to minimum wage.

I gained experience with financial modeling, presentations, and deal marketing, but I wasn’t able to use this job to move to a bigger bank.

Instead, I caught a break when a networking contact at another bank won an offer at a real estate debt fund and then recommended me for interviews there.

This real estate group wanted more mature Analysts who could work with less experienced ones and help get them up to speed on deals, so I was a good fit.

After my contact referred me, I interviewed there and won and accepted an offer.

Currently, I focus on underwriting bridge loans (i.e., temporary loans used to fund acquisitions before permanent ones are put in place) across all types of properties.

Q: That’s quite a story, so I’ll have to dig into each part to find plot holes.

First, why did you apply for IB roles when you had been out of university for several years?

Wouldn’t it have been easier to use a top MBA to make the “broadcasting to investment banking” transition? Or to aim for non-banking roles?

A: I didn’t want to spend the time/money required for an MBA, and I wasn’t sure that I could even get into a top program.

Also, bankers were willing to meet with me in my initial networking efforts. Few of them passed along my resume, but they were at least willing to speak with me.

That told me that I had some chance of breaking in with the “broadcasting to investment banking” angle, even if I had to join a tiny boutique.

I didn’t apply to non-IB roles because I didn’t think I had a better shot at those.

Remember, I had no real finance experience – only my broadcasting gig was remotely close.

It’s not like I was a recent graduate with PWM and Big 4 internships who had started too late; I had nothing going for me other than an interesting story.

Plus, if I had gone for non-IB roles first, I would have been even older when it came time to move into investment banking.

In theory, banks cannot discriminate based on age, but in reality, they always figure out your age, and it’s almost impossible to win Analyst offers if you’re over 30.

Q: OK. On that note, how did you approach the networking process?

A: I knew that email and LinkedIn networking wouldn’t work that well because I didn’t have on-paper credentials that looked good.

So, I decided to focus on in-person events, starting with a few sponsored by my university’s alumni group in NY.

Then, I expanded into Meetups and used corporate events and parties to meet more people.

I also got decent results by putting on a suit and sneaking into recruiting events held by Columbia and other top schools in the area.

I told bankers upfront that I didn’t attend the school, but most of them were receptive anyway.

I always started by asking questions that had nothing to do with finance, as you’ve recommended.

Despite this site, your investment banking networking articles and tutorials, your Networking Toolkit, and other resources, most students at these events still ask awful questions and bore bankers to death.

I also joined activities such as soccer leagues and used them to meet people. In one case, a staffer in my league helped me win a bulge-bracket IB interview.

Finally, I did some LinkedIn cold emailing/messaging and got a few interviews by using their Premium service for about a month.

That indirectly led to my offer at the boutique bank, though I met a lot more people at large banks via my in-person networking.

Q: OK. So, switching gears, let’s discuss that boutique IB role.

How did you survive in New York on only $2,000 – $3,000 per month (roughly minimum wage)?

A: I came close to not surviving!

The short answer is that I also worked several part-time jobs, including as a bartender and as a server in restaurants.

My job did not have traditional investment banking hours (i.e., 80-hour workweeks); they acknowledged that I could barely survive on my salary, so they gave me time for other jobs.

I also took on quite a bit of credit card debt because there were times when I couldn’t cover expenses with my income.

Believe it or not, this role was almost unpaid.

When I showed up on the first day, they asked me to complete a valuation exercise because they were skeptical that I knew how to do anything.

They didn’t start paying me until I had submitted the work sample, proved I could do the work, and consistently worked late to finish projects.

Investment Banking to Real Estate: Moving Up… or Sideways?

Q: It sounds like you gained some good deal experience, despite the absurdly low pay and randomness of the work.

Why couldn’t you leverage this role to move to a larger bank? Didn’t other firms find your “broadcasting to investment banking” story inspiring?

A: I did make it far into interviews at a few elite boutique and bulge bracket firms, all because of my aggressive networking.

The main issues that prevented me from were winning an offer were:

• No Closed Deals – You can get good experience even if a deal falls apart at the last minute, but it’s still tough to sell yourself if you can’t point to any closed deals over several years at a bank.
• Age Bias – In a lot of cases, bankers just wanted a 22-year-old who could work non-stop and had no other commitments, even if this person knew less about deals.
• Lack of Brand-Name Schools/Firms – If you did not go to Princeton or Harvard, but the two candidates next to you did, it’s tough to explain why they should hire you over the Ivy Leaguers.

When the real estate debt fund opportunity came up, I realized it might be a much better fit.

RE firms care less about pedigree because they just want people who can get the job done.

My lack of closed deals also mattered less because, as lenders, they turned down the vast majority of deals they saw, and they understood that deals didn’t have to close to be valuable experiences.

Finally, real estate linked back to my original interest in international development and infrastructure quite well.

It was much easier to link that and my Eastern European experience to real estate investing than to relate them to investment banking.

Q: OK. What was the interview process at this firm like?

A: I started with a phone interview with the staffer and an MD there, and then I went for in-person interviews, met everyone, and went out to dinner with them.

They spent 90% of their time asking me about my deals and how I contributed. They did not give me any formal case studies or modeling tests.

They knew that real estate financial modeling and credit analysis are not rocket science, so if they hired people who knew deals and understood valuation/modeling, they could easily learn real estate.

After I won the offer, they spent the first ~6 months training me by having me create deal synopses and analyses and reviewing previous deals the firm had done.

There are some groups here that require more knowledge going in, such as the mezzanine team, but with the bridge loans and permanent loans common in commercial real estate lending, you don’t necessarily need to be an expert.

Q: Very true. What has the job been like so far?

A: Overall, I like it quite a bit. It’s an improvement over my boutique IB experience because I actually close deals and earn a reasonable salary now!

I usually arrive at 8 AM, do a daily deal call, and listen to originators present to the credit committee.

Then, I’ll meet with my group to review the status of current and upcoming deals.

The rest of the day is a mix of working on models, preparing documents for the credit committee, conducting due diligence on properties, and putting together applications for borrowers.

I work on 4-5 deals at a time, which includes building the models, finding expense comps, and figuring out the proper assumptions for rental growth.

Most bridge loans have 3-year maturities with two 1-year extensions, so we pay a lot of attention to the projections over 3-5-years.

The office environment here is quite relaxed (we’re in the Midwest/South), so people often take hour-long lunches outside the office.

On a bad day, I might leave around 10-11 PM; on an average day, I might leave at 7:30 PM, and on a slow day, it could be 5:30 PM.

We’re fairly selective with the loans we fund. On the multifamily side, only ~10% of screened loans go to the application process, and of those, ~90% close.

On the industrial/retail/office side, ~5% of loans go to the credit committee, and only ~5-10% of those close.

These are low success rates, but we see so many deals each month that closed deals are fairly common.

Q: What are the best and worst parts of the job?

A: The best part is that I get to analyze local real estate markets in-depth and dig into the assumptions and lease structures.

It’s satisfying when I can defend my numbers to the credit committee and answer their questions.

The worst part is that I also spend a lot of time cleaning up data and working with disastrous rent rolls, like ones for individual tenants in a 600-unit multifamily property.

There’s a lot of data scrubbing required to create presentable real estate pro-forma models.

Also, it can be frustrating to present deals to the credit committee when they’re always looking for reasons to reject deals.

It’s a very different mindset from investment banking, where everyone always wants to close deals.

Q: Awesome. Thanks for your time and sharing your story!

A: My pleasure. Happy to contribute.

The post From TV Broadcasting to Investment Banking: How to Jump Off the Airwaves and Into the Abyss appeared first on Mergers & Inquisitions.

We get a fair number of questions about this one, but in the past, I’ve always said, “Sorry, keep dreaming.”

But… I might have been overly pessimistic.

I recently spoke with a reader who made it into investment banking, including a summer internship and a full-time offer, after graduating from medical school.

Oh, and he had no finance experience before his final year in school.

Here’s how he did it:

Through the Emergency Room Side Door: Financial Consultants

Q: Can you give us a quick summary of your story?

A: Sure. I had always done well in school and been interested in science, but I didn’t know what I wanted to do with my future – so I ended up in medical school in the U.K.

(Students begin medical school after secondary education, rather than university, in the U.K.)

I became interested in finance when I was working part-time at a bar in London and I kept running into bankers and other finance professionals.

They nudged me toward finance, and I decided to cancel my medical career and complete a flurry of self-study and networking in my last year of medical school to break in.

I studied for and completed two levels of the CFA, worked part-time for a financial consultant who was advising a med-tech startup, and then leveraged that experience to recruit for IB roles.

I used LinkedIn and cold emailed extensively to win an internship in the healthcare team at a large bank, and then I interviewed around again and won a full-time IB offer at a different bank.

Q: To start with, how did you win that part-time role doing finance work for the med-tech startup?

A: It was my last year of medical school, and I didn’t have time to do a real internship. Also, I knew that most legitimate banks and PE/VC firms wouldn’t hire someone like me.

But I also knew that startups increasingly needed help with finance and accounting tasks and that consultants in the industry had more work than they could handle.

So, I started looking for financial consultants who advised biopharma/med-tech startups, and I found quite a few on LinkedIn just from keyword searches.

A few people replied to me, and one asked me to help him research valuation multiples for a project he was working on.

I helped him for free, and he contacted me again a month later when he had been hired by a med-tech startup to assist with their fundraising.

He wanted to me to help with the valuation/DCF analysis, so I volunteered once again, knowing I’d gain valuable keywords and “internship experience” on my CV.

Q: OK. So, just to clarify, you worked for a consultant who worked for a med-tech startup.

A: Yes, the experience was indirect. But I could still use the startup’s name on my CV and say that I had assisted with valuation/DCF-related tasks to support their upcoming fundraising.

This consultant also had an investment banking background, so he was happy to back up whatever I wrote.

Q: I see. And what was the timeline like here?

A: I did this work for the med-tech startup in my final ~6 months of medical school, and right after I had enough to write about on my CV, I began applying for summer internships.

I was set to graduate in the middle of the calendar year, so I was far behind all the official deadlines from banks.

So, during those last few months of medical school – while I was working for the consultant/startup – I conducted an intense networking effort.

Cold Emailing Your Way Into Investment Banking

Q: And what did that effort look like?

A: I used LinkedIn and cold emails for everything.

First, I requested a free trial of LinkedIn Premium and used it to find the names of specific bankers.

Then, I used tools like Email Checker to guess the email address formats of different banks and verify that each person’s address existed.

Next, I wrote a heavily tailored letter to each person and explained my background and why I was applying for internships now.

I said that I had decided against medicine in my second year, but continued with it to finish what I had started and learn an industry in-depth.

At the same time, I studied for two levels of the CFA, taught myself more about valuation and financial modeling, and completed modeling projects for the med-tech startup – during medical school.

Q: How well did that approach work?

A: Quite well, but I had better luck contacting senior bankers (Managing Directors and Executive Directors) rather than junior bankers.

I tried contacting Analysts and Associates in the beginning, but the response rate was low, and they didn’t have much hiring power.

Overall, I reached out to at least 2-3 senior bankers in healthcare teams at most bulge bracket, elite boutique, and middle market banks.

I received a 20% response rate to these initial emails, and of those who responded, 10% eventually granted me an interview.

So, if I contacted ~250 bankers total, I received approximately 50 responses, which led to ~5 interviews.

I also reached out to professionals such as the Chiefs of Staff at banks and received responses from them as well.

In total, I received 5-10 interviews from this effort over several months and converted one of them into an internship offer at a bulge-bracket bank.

Q: Those numbers sound off.

Are there ~250 senior bankers in healthcare teams in London?

A: To clarify, I didn’t contact senior healthcare bankers exclusively.

I also reached out to a few other teams, such as consumer, chemicals, and TMT groups, and I also contacted some offices in the U.S.

Also, sometimes I contacted regional boutiques in addition to BB, EB, and MM banks, though I did focus on the bigger firms.

In total, I contacted hundreds of bankers, but they were spread across more banks, groups, and regions than just healthcare IB in London.

Q: You got results, but it also sounds like a lot of effort for only a few interviews.

A: It was! The biggest problem was timing – because I had missed the deadlines, I had to apply for “off-cycle internships” at banks.

While off-cycle internships are more common in London, they’re still tough to get, and the process is quite random.

But at that point, I had no other choice. I couldn’t just stay unemployed following med school graduation – I needed some IB internship to win a full-time role.

The detailed letter I wrote helped the most. Many bankers saw it and could tell I was putting in far more effort than undergraduates and recent graduates, which impressed them.

Into Investment Banking… and Beyond

Q: OK, thanks for clarifying. What was your IB internship at this large bank like?

A: Originally, I had applied for “off-cycle internships,” but they ended up lumping me in with everyone else, so the internship began in June and ran until mid-September.

I did well in the internship since I had valuation and modeling experience and was used to the long hours from medical school.

Also, I felt much better prepared than other interns since I had completed two levels of the CFA.

I knew from the start that I was unlikely to receive a full-time return offer from the group because they weren’t hiring many Analysts.

So, as the internship was ending in early September, I began contacting other banks, applying online, and also going through recruitment agencies, which few other interns did.

Q: Were they helpful? I was under the impression that headhunters are only useful for experienced candidates who match the exact profile that firms want.

A: They were helpful for me.

These agencies might not be good for generalist roles, but many of them had roles for healthcare groups and other teams that wanted candidates with specific industry expertise.

I ended up accepting an offer from a bank where the process started with an online application, but it was still good to have more options.

Q: OK. You’ve made this entire process sound quite straightforward, but what were the biggest challenges you faced?

A: The hardest part was the initial outreach when I contacted hundreds of bankers and corresponded with dozens to win the first interviews.

Many of them were impressed that I had completed two levels of the CFA, gained valuation experience with the med-tech startup, and graduated from medical school at the same time, so hardly anyone raised objections about me not being able to handle the work.

The most common objection was also the most obvious one: “Why are you making this switch now? Why did you complete medical school if you decided on finance in your second year?”

And I responded with what I described above: I said I wanted to become an industry expert and move to the business side of the industry to advise companies on deals.

I knew I would complete the CFA and gain finance experience in the future, but I also felt that medical school would set me apart from other candidates.

Q: Would you recommend your approach to anyone else from a medical background who wants to get into finance?

A: Potentially, yes, but it’s not necessarily “the best” approach.

For example, if you just want to enter life science venture capital, you might be able to do that without IB experience first.

Also, some med school graduates have better luck winning consulting roles and then moving into banking from there.

(Equity) research is another option, and the “industry expert” story might play better there.

But research is also quite different, the industry outlook isn’t great, you don’t get to influence companies in the same way, and you don’t gain access to the same exit opportunities.

Q: What else would you tell someone with a medical background who wants to make this transition?

A: First, bankers will not cut you any slack on the technical questions just because you come from a medical background. You must know accounting, valuation, and financial modeling like the back of your hand.

That might mean completing the CFA, reading books, completing online courses, or getting 1-on-1 tutoring.

Next, find any internship that you can spin into sounding relevant for finance. Your chances of moving into the industry without a previous internship are small.

To find this internship, look for small businesses and freelancers/consultants doing finance-related work because they always need help.

Finally, you should focus on healthcare, but you shouldn’t be too rigid in your choices.

In one interview, the bank said they were hiring generalists, so I said, “My expertise is in healthcare, but I’m very happy to work in other sectors as well,” and I pointed out how I had also gained knowledge of technology and financial sponsors from my med-tech experience.

Q: Great. Thanks for your time!

A: My pleasure.

—

If you liked this article, you might be interested in reading Healthcare Investment Banking: The Best Group to Check Into When Human Civilization is Collapsing?

The post How to Move from Medical School to Investment Banking appeared first on Mergers & Inquisitions.

You would think that after many years of covering networking tactics across hundreds of articles, videos, and even a full-fledged course on networking, there would be nothing left to say about it.

But you’d be wrong.

I was skeptical when our interviewee today contacted me and offered to share the story of how he went from minimal finance experience to a full-time investment banking offer.

After all, haven’t we already covered that story dozens of times?

It turns out I was wrong: he shared new tips and tactics, and even shed light on a few topics that have generated tons of questions over the years:

• How off-cycle recruiting works in London and the differences in the process
• How to move from a private equity internship to investment banking, the key objections you’ll encounter, and how to answer them
• The truth about how to cold call and cold email effectively… and why even bulge bracket banks might still respond to cold calls and cold emails
• What to do if you just graduated but have no internship or full-time job lined up

Let’s get started:

From No Job Post-Graduation to Bulge Bracket Banking Offer in Less Than 1 Year

Q: So, let’s kick things off by describing what exactly you did in the past year.

A: Sure. I graduated about a year ago (as of the time you’re publishing this) without a clear plan or a full-time job offer.

I did have a consulting internship for a few months after graduation, but that was a temporary thing and they would not be extending it.

So I started applying for full-time jobs in October and November because I didn’t want to end up with a 1-year gap on my CV.

I won a PE internship in January of this year, which I completed in February through May.

It was at a small, lesser-known firm, but it gave me the experience to network and interview at bulge bracket banks – and by the end of the internship, I had won a full-time offer at a bulge bracket bank here in London, all via off-cycle recruiting and aggressive networking.

Q: OK, so we’re going to dig into each part of that… let’s start with what you did in university up until graduation.

A: Sure. So I did have an advantage in that I went to a “target” school in the UK, which definitely helped – but I had also completed 0 relevant internships during my time there.

I was much more focused on extracurricular activities and didn’t even think much about what I wanted to do after graduating.

Really, finance appealed to me because it was a high-pressure environment with a steep learning curve… and I’d walk away with more tangible skills than I would in consulting.

Q: I’ll give you bonus points there for taking another jab at the consultants.

A: Thanks, appreciated.

Anyway, I kept applying to jobs, but due to my lack of work experience all I could get was the consulting internship – and this was not at MBB, but a much smaller firm.

I even went through the recruiting process again after I graduated, but I came away empty-handed yet again because the consulting internship didn’t look that impressive.

Q: So you didn’t have much luck through 2 full recruiting cycles – what made you think you had a shot in private equity recruiting? Isn’t that even harder than IB recruiting?

A: My thought process went like this:

• Relatively few undergrads and recent graduates target PE firms, so the volume of applicants might be lower…
• And many of these firms are so small that they have no formalized recruiting process.

When you apply to bulge bracket banks in London, you’re up against a ridiculous number of applicants from all over the world.

But I figured I might have a better shot at small PE firms since it takes more effort to apply, and since many undergrads / recent grads are uncomfortable with the networking required.

Q: OK, so how’d you find names and start contacting people at these small PE funds?

A: I found a list of PE firms in the UK (partially via online searches and rankings) and focused on the really small ones.

I did not have the names of specific people, but they were simple to find because pretty much all PE firms have websites with a “Team” page.

So I guessed their email addresses by trying combinations like firstname.lastname@firmname.com and firstname_lastname@firmname.com and so on.

My process:

1. Initially, I narrowed my list down to 100 firms.
2. For each firm, I went to its website and focused on the more senior members of the team – Partners and Managing Directors – and tried different combinations for their email addresses.
3. I sent each person a very short email introducing myself, saying where I went to school and where I had worked, and expressing interest in interning at the firm.

Q: So what was your response rate like?

A: Out of the 100 firms, I got a positive response from 15 of them, where “positive” means they invited me in for an interview or informal chat.

The private equity interviews were all over the place – some interviewers asked technical questions, some were “fit”-focused, and some seemed to be making up questions randomly.

They did not give me any case studies or modeling tests because:

1. I didn’t “market” myself as having technical / modeling experience; and
2. Many of these firms wanted interns to source deals (i.e. cold call) or monitor portfolio companies, so technical skills were less important.

Private Equity Internships 101

Q: OK, so it sounds like the recruiting process wasn’t terribly formal.

I’m assuming you just went with the first firm to say “yes”?

A: Pretty much. One place was definitely the most responsive and interested, so I ended up interning with them.

There wasn’t too much technical work and I did not work on any live deals – they had 5-10 portfolio companies to monitor, but none of them were at the “deal” stage.

I did go to lots of meetings because the team was so small, and that definitely helped in future interviews.

I spent most of my time on “deal origination work” (cold calling and emailing to find companies) and tried to learn as much of the technical side as I could in my downtime.

Post-banking associates did most of the modeling, so I had to be proactive to get any real work.

Q: Were you getting paid for this internship?

A: The first 3 weeks were unpaid because I offered to do a free “trial” internship so they could assess me first.

After the 3 weeks had passed, they thought I could be useful so they started paying me and kept me there in the months afterward.

Q: And did they know that you wanted to move on and get into banking?

A: Yes, we had a mutual understanding that I would work there for a few months, I would go into banking for “training,” and then I might consider moving back after I had worked in banking for a few years.

If the firm likes you, they’ll support you in making the move – plus, most PE funds have solid connections to banks, which is yet another advantage of doing a private equity internship first.

The office politics side is easier to navigate and the hours aren’t quite as intense – so I also had more time to email people and network after work.

Off-Cycle Recruiting in London

Q: OK, so you were then able to write “private equity” on your CV, you had some networking help from this firm, and you had free time each day to network on your own.

What was your next move? And how does off-cycle recruiting in London work?

A: The off-cycle recruiting process in London isn’t much different from what you do in the normal process – bigger banks still have online tests and assessment centers, whereas smaller ones are more spontaneous and informal.

I spoke with quite a few boutique investment banks and middle market firms here that gave me interviews after chatting informally.

A few places said they would give me an online test or group exercise, but it never seemed to come together.

The entire process was more disorganized since off-cycle recruiting often comes down to: “We need someone ASAP to replace this guy who just left!”

Q: And what was your networking strategy?

A: I know you’ve written a lot about networking before, so here’s what I did differently:

1. I focused on Group Heads at each bank. You’ve recommended focusing on senior bankers and MDs before, but I went a level higher and focused on Group Heads because I figured they would have a better sense of vacancies in each office – plus, more “voting power” on offers.
2. I always made it about individual teams rather than “the bank.” So if one team turned me down, I did not give up – I would just move onto the next industry or product group.

Sooner or later, you’re bound to find a group where someone just left and where they really need a replacement because the turnover rate in finance is so high.

I did other things such as alumni networking and focusing on teams that fit my background – for example, the Financial Sponsors Group – but you’ve covered those before.

Q: So you went after very senior people and targeted multiple teams at each bank – but how did you decide who to contact in each of these teams?

A: Here’s what I did:

1. With alumni, I focused on those with similar degrees or another connection such as a shared club or activity.
2. I focused on people with difficult-to-find email addresses. All else being equal, you get a higher response rate from people whose contact information is difficult to find – I consistently got better responses when I had to try several guesses for the person’s email.
3. Sometimes I focused more on women – I got better responses from them when I had no connections to anyone else on the team. I can’t explain that one logically, but that’s what I observed.

Q: OK, so let’s take this a level deeper… are you willing to share the email you wrote to contact Group Heads and other senior people at banks?

A: I’ll share an example email and then explain each part of it:

“Dear Mr. [Last Name],

I am writing to you to see if [Bank Name] might be interested in taking an intern in its [Industry Name] team. I am available to start immediately.

I am a [Year] [University] graduate ([Grades and GMAT score]) with six months’ consulting experience at [Firm Name], fluent in [European Language] and technical skills which I have developed in my current private equity internship at [PE Firm Name]. My CV is attached.

I understand that [Bank Name] has a formalized recruitment process, but if the [Industry Name] team is currently experiencing high deal flow then I could be of assistance.

Would it be possible to arrange a call? I would be very grateful for an opportunity to discuss this with you.

Thank you,

[My Name]”

A couple things to note:

1. Language Skills – Even if you’re not “native speaker”-level, knowledge of another European language is super-helpful in London.
2. “Formalized Recruiting Process” – I wrote this because I did NOT want them to respond with: “Oh, sure, I’ll forward this to HR.” That means nothing – that just means they’re forgetting about you. In some email I actually wrote, “I know you might normally forward this to HR, but if you know of anything personally, please let me know directly.”
3. Aggressive Phrasing – I was very direct and I didn’t even bother asking for informational interviews. I figured there was no point since this was off-cycle recruiting anyway.
4. GMAT and Grades – I had high GMAT scores and grades, which helped my story since I had not worked at well-known firms.

Q: What was the process like after your initial email?

A: Sure, I’ll walk you through exactly what happened at one bank:

• One Week After Initial Email (Day #7): I hadn’t heard back, so I sent a 2-sentence follow-up email to the Group Head (“I’m following up to see if you have internships… if you are experiencing heavy deal flow then I could be of immediate assistance given my PE background.”).
• The Next Day (Day #8): He responded and CC’d another team member, who said they had filled all their internship slots.
• The Next Day After That (Day #9): I responded and asked if there were any openings on other teams at the bank and I cited a specific group (Oil & Gas) that I knew recruited for off-cycle internships.
• That Same Day (Day #9): He responded and CC’d someone in another coverage team at the bank (an SVP) and forwarded my CV to the O&G team.
• The Next Day After That (Day #10): Instead of waiting for the SVP to contact me, I reached out to him and set up a call, also offering to come into the office if it was more convenient (hint, hint).
• Monday the Next Week (Day #14): I spoke with the SVP, and then they invited me in to speak with 4 bankers on Thursday that week.
• Thursday (Day #17): I went in for the interviews and spoke with 2 SVPs and 2 VPs.
• Thursday the Next Week (Day #24): I hadn’t heard back, so I followed up with the original SVP again, mentioned that they were my top choice but I had another offer to respond to and asked about the time frame for making a hiring decision, reiterating that I liked everyone on the team.

And it went on like that at various banks – lots of emailing, following up, trying different teams, and always aiming for the Group Heads initially.

I always waited a week before following up.

I could have started attaching models or sending reports or presentations at that point, but I kept my emails short and avoided bells and whistles.

Into Interviews

Q: OK, so you sent a lot of emails and it worked well since you got at least a few interviews.

What were the most common interview questions you received?

A: I got the most questions, by far, on my story – consulting to PE to banking is a difficult one to tell.

My basic story went something like (this is an example of what I used in one Leveraged Finance interview):

“I wanted to work in ‘professional services,’ but consulting wasn’t technical enough for me – so I started thinking about banking, but recruiting had passed so I took the PE opportunity when I found it. In PE, I became more interested in Leveraged Finance and in what types of debt terms make a deal work or not work, as I gained more exposure to investment banking. I’m interested in the LevFin group because, in my view, it’s the one group where you can add the most value as a banker by getting better terms for clients and getting deals done, and that’s what I see myself doing in the future.”

Of course, some firms were not persuaded no matter what I said.

One well-known elite boutique, for example, prides itself on having everyone stay for multiple years, and they were convinced I would leap back into PE after 1 or 2 years on the job.

Other places were more relaxed and didn’t care about analysts leaving after 2 years.

I definitely got more technical questions than the average person – but I didn’t shy away from them, and sometimes I even encouraged interviewers to ask me about LBO models, for example.

Many questions just concerned simple LBO models, but they wanted to ensure I understood the mechanics.

Q: So what did you cite as reasons for the PE to banking move?

A: I said:

1. You spend a lot of time monitoring portfolio companies in PE, which is less interesting to me than doing deals – so IB would give me greater exposure to transactions.
2. Performance is less correlated to short-term results in PE, in the sense that you have to stick around there for years or decades to see investments pay off. With banking, it’s easier to correlate your work in a given year to your performance in that year.
3. The technical and modeling side appealed to me more than sourcing potential investments, and I would gain better exposure to a variety of modeling in IB.

Final Thoughts & Last Minute Improvements

Q: Awesome. I guess this strategy worked well since you won the offer.

With off-cycle recruiting, often you need to improve your profile quickly at the last minute to have a good shot.

What’s the best way to do that?

A: First off, look at your CV and see what experience you already have that they might find impressive.

I had a good GMAT score, which I knew might impress people who had attended business school.

Even if you have only 3-4 months to improve your profile, you can think about:

• Classes – accounting, financial modeling, etc.
• A part-time internship
• The FSA exam in the UK
• Language classes

While they care most about business-level proficiency in languages, even a lower level of proficiency can help in borderline cases.

Q: All good points. Any final thoughts?

A: Let’s see… you’ve mentioned this one before, but you really never know who will be helpful so don’t “write off” anyone prematurely – always stay in touch.

For me, the most important strategy was attacking from multiple angles – I’d go after clients of the group, the team itself, the Group Head, and even alumni that were loosely connected.

You do not want to contact 10 people in the same team repeatedly, but this type of “multiple angles” approach works quite well.

Q: Great, thanks for sharing all that! And good luck as you start your new full-time role.

A: My pleasure.

Want more?

You might be interested in this post that shows you how to cold email for an internship.

Or, you might be interested in my article about the private equity internship.

The post From Private Equity Internship to Bulge Bracket Investment Banking: How to Cold Email Like a Pro and Win the Offer appeared first on Mergers & Inquisitions.

If you’re interested in finance, you probably have a Type A personality:

• You’re highly competitive;
• You care a lot about achievement and money;
• You love multi-tasking, you’re a perfectionist, and you’re always rushing around to finish work.

And normally the finance industry would be a good it for you – except for when there are no jobs and few firms are hiring.

If you’re in that boat, there are always Plan B options to consider… maybe you could just accept that Big 4 offer, go to a normal company, or go back for a Master’s program…

Or you could just create your own job instead.

Today we’re speaking with a reader who did just that, hustling his way from a direct sales role to dental school to the investment banking industry.

And rather than jumping into it as an “employee,” he’s effectively a Partner and he works with other business partners to close deals and generate commissions – straight out of an MBA program.

This might just be the most “out of the box” story I’ve published on here (be on the lookout for that upcoming one on how to move from a male stripper role to a hedge fund analyst, though), so let’s get started:

Background Assumptions

Q: So let’s go back to your “Origin Story,” because I think it’s a good one…

A: Sure. I’ve always been an entrepreneur at heart, and prior to attending university I started my own direct sales company for satellite dishes. It was very profitable and we did quite well, but I felt obligated to get that “professional education,” so I ended up attending dental school.

6 months into my first job with a dentist, I realized I hated it and it wasn’t for me – I didn’t do well working for other people.

I ended up getting more involved with business brokering and used Internet marketing (paid advertising, search engine optimization, etc.) to get leads.

I acquired the InvestmentBank.com site a few years ago and have been building it ever since, focusing on selling baby boomer-owned businesses.

Over the next 10 years, around 7 million businesses owned by baby boomers will be sold as they retire – and so there’s a big opportunity to advise on the sales of those small and mid-sized companies.

Oh yeah, and in between all that I also found the time to attend business school – which I did mostly because I felt like I needed a more formal finance background to do all this and become more actively involved with selling larger companies.

Q: OK, so let’s keep going in chronological order here before we get to what you’re currently doing…

How exactly did you get into this type of “business brokering” role?

A: It was mostly through brute-force networking. I had the direct sales experience from starting my own company before, so I was used to everything that came with it: hours and hours on the phone all day, going door-to-door selling products, and getting outright rejected or ignored by people all the time.

After I quit the dentistry path, I kept contacting people I had met via my old company and networking with them to meet investment bankers and business brokers, and I positioned myself as someone who could deliver leads – companies looking to sell or buy.

Bulge bracket banks wouldn’t care about that, but these smaller places are always looking for business because few of them have a consistent, repeatable strategy for getting clients in the door.

Naturally, I churned through a lot of contacts on my way here; I went through at least a few dozen people before finding one who proved very reliable and good to work with.

The lack of technical skills also hindered me, which is why I did the MBA program and also started working with current students and alumni from that program from a very early stage.

What Do You Do, Exactly?

Q: Right… so, speaking of that, what do you do every day, exactly?

A: My role is to generate leads and refer these potential buyers and sellers to bankers, mostly at boutique firms, that will handle much of the process once they have the information and the marketing materials.

Here’s how it works:

1. A potential buyer or seller comes to me and indicates that they’re interested in doing a deal.
2. Then, I go through the network of senior bankers that I’ve developed and figure out which one would be best-suited to handle the deal, based on geography, industry expertise, and so on.
3. Next, we do the valuation work and create marketing materials such as the CIM and management presentation; sometimes this is split up between the banker we bring in and our team.
4. Once everything is finished, the banker gets to work selling the company (in most cases) and occasionally doing a buy-side deal.

Finally, we get paid for referring these leads whenever deals close.

Q: So how is this different from becoming an industry group Managing Director, building relationships, and then referring clients onto product group MDs when a deal is ready to take place?

A: In a sense, they’re very similar.

The difference, though, is that traditional Managing Directors at banks, and even other firms in our area, focus on “old school” methods of lead generation: putting on expensive conferences, using fairly high-pressure sales tactics, and so on.

The end result is that the cost per lead acquisition is very, very high.

There’s one firm called Generational Equity in Houston that does just this and puts on conferences and does other offline marketing to generate leads, then takes a retainer when a new client signs on, preps the business for sale, and farms out the entire process to a banker, taking a small percentage of the deal when it closes.

We’re approaching it from the opposite angle: we’re using content marketing to generate leads online, so that potential sellers find our site and all our content and contact us based on that.

It’s the same thing you’re doing with this site and your financial modeling programs: you’re using all the free articles and videos here to generate interest in your programs and sell them online, instead of relying on expensive phone or in-person sales.

Q: Anyone paying attention would have already seen the same thing happening in every other market online, but it’s fascinating to hear about the rise of content marketing even in investment banking.

So what sort of companies do you focus on?

A: Generally, we sell companies with between $10 million and $100 million in revenue – which you could call “the middle market” (roughly).

We also try to ensure that the companies have at least $1 million in EBITDA, because with anything less than that it’s more “business brokering” rather than investment banking.

We prefer sell-side deals because, as you’ve written about before, they’re much easier to close than buy-side deals; sometimes we help with capital raising, but that’s less common for these smaller companies.

Q: OK, thanks for clarifying that.

What about the process of finding Partners and MDs to work with? I’m assuming you have to narrow down that list somehow, right?

A: These days, we do that mostly via an extensive reference check. As our business picks up momentum, we’ve been getting more and more inbound inquiries from bankers who are interested in working with us.

In addition to the references, we also try to assess how quickly the banker can move and where this fits into his/her priority list, as well as what sort of expertise he/she has in the industry and geography.

Recruiting MBAs to help with the valuation, technical work, and marketing materials has been easier because, as we both know, most people are more comfortable running spreadsheets than they are marketing, selling, and working the phones all day.

We pay them on a contractual basis and hire them “as needed.”

Small Business Valuation and Wheeling and Dealing

Q: So what are the major obstacles you encounter when selling these companies?

A: With small to mid-sized businesses like these, you need to strike a careful balance between making the deal look good and also being as forthcoming as possible.

All companies have risks and potential downsides, but with these smaller businesses in particular you tend to see issues that you would rarely encounter with huge corporations – everything from leadership to properly audited financial statements to “unorthodox” business processes.

Q: So what’s the biggest issue you encounter? Too much dependence on the Founder or CEO?

A: That can be an issue, but I don’t know if it’s the biggest one or not; many times, our partners help find managers and new executive teams to help make the transition happen. And if it’s a strategic buyer, this is far less of an issue than it would be with a financial sponsor.

Sometimes, the owners will also agree to stay on for some time post-sale to ensure that the business continues to thrive.

Q: In the beginning, you mentioned that 10,000 baby boomers per day are retiring, and how that has implications for the M&A market and boutique banks in particular.

Can you talk about that trend and what it means for deal activity?

A: Sure – being in the middle of the “baby boomers retiring boom” creates some great opportunities, but also presents some threats.

First, a fairly high percentage of these retirees own their own businesses and are looking to sell them now, rather than later, because they assume taxes will be going up (even more) in the future – and also because they need the funds now.

On the surface, that seems like a great trend for us because there are so many potential buyers – but it also means that prices and valuations are going down since there’s a supply glut in some markets.

For example, if 5 major HVACs in the same region approach us and want to sell their businesses, it would be tough to find qualified buyers for all of them. They’re just too similar and the buyer pool is limited.

So far, this trend has favored us and resulted in more deal activity and fees – but anything could happen in the future, especially if prices go down and over-supply continues.

Q: Speaking of prices, what can you tell us about valuation for these companies (i.e. smaller private companies)?

A: It’s very “ad hoc” and we mostly base it on what our partners within the industry say.

The exact metrics used differ from industry to industry – software valuation is quite different from manufacturing, which, in turn, is also much different from healthcare.

As a quick example: recently we helped sell a day care center, and there the valuation was based on a revenue multiple and a “clientele multiple”, almost like what you see in TMT investment banking banking with multiples such as Enterprise Value / Subscribers.

I hesitate to give an exact figure, but valuations in the 2-5x “discretionary cash flow” range are quite common with these companies.

You are definitely NOT going to see (the equivalent of) 10-15x EBITDA multiples or anything like that here.

Another difficulty with valuation is that sometimes these companies lack audited financial statements – or at least, properly audited statements. If you don’t even have a set of quality financial statements, valuation will be nearly impossible.

Sometimes, we actually partner with an accounting firm that can “reverse engineer” financial statements and detect any suspicious activity from the past 3 years.

Q: Before we move on, I wanted to circle back to one of the interesting points you brought up: how you may also advise on financing deals sometimes instead of just sell-side and buy-side M&A.

How does that work for companies in this size range? And are these debt or equity deals?

A: Most of the focus is on the equity side; debt deals are pretty rare. There are two main methods we use to raise equity for these companies:

Method #1: We have a few different partners who work with high net worth clients in private banking – many of these clients simply aren’t getting the returns they want in the stock market anymore, so quite often they’ll be referred to us and we’ll arrange a deal where the client can invest and receive, say, a 10% dividend in a company.

Method #2: We also have lists of people who have frequently invested in $20-50K tranches. If we get enough of them together, an equity financing could also take place like that. The key is to show them good deals that actually result in positive returns, and to keep doing that over a long time period so that they come to trust us.

The institutional side is almost non-existent for companies of this size – it’s all “angel investors” and high net worth individuals.

A Day in the Life… and a Day in the Future?

Q: Thanks for explaining that. It’s so interesting because you see the same thing happening with private banking at large banks – especially in Asia, where high net worth clients are often brought into the investment bank’s IPOs and other deals.

So what’s an average day in your life like at the moment?

A: Right now, the rough breakdown is something like:

• 50%: Writing content and doing online marketing work to generate leads.
• 30%: On the phone speaking with partners, clients, and potential clients.
• 20%: “Running the numbers” and doing technical work.

Right now, we’re trying to get that “critical mass” of content needed for the site to start generating high search engine traffic on its own – but you know how that one goes!

In the long-term, I expect to spend more and more time and effort on the phone and less on content creation.

It’s tough to pin down an exact “schedule,” but I tend to place my calls in the morning and early afternoon, and I do other work earlier or later in the day when it’s harder to reach people.

The most notable thing about my environment / schedule is that it’s somewhat isolated – occasionally I’ll see a few others who are helping with models, but almost everything else is done remotely.

Q: Quite different from a typical bank, but I think you’d see that whenever you start something on your own, whether it’s an offline business or online business.

A: Yeah, and it’s something you really need to consider carefully before doing this – if you need to be around people 24/7, this is NOT the right path for you.

Everyone should read or re-read your article on why finance doesn’t guarantee you $10 million and your own beach in Thailand for more on that.

Sometimes I do have face-to-face client meetings and I’ll go visit regional offices, but almost all work can be done remotely these days.

Q: Now for the topic everyone’s really wondering about: how and how much do you get paid?

A: Generally we get paid a percentage for each lead that results in a closed deal, and sometimes we may charge a retainer depending on the client and potential deal.

As with larger M&A deals, the percentage scales down as you move up to bigger deals.

To give ballpark figures, I would say that a 7% fee is common for deals below $10 million, and that scales down to around 4-5% at the $50 million level. That goes down even more as you move up past that range.

I can’t comment directly on how much I get paid for obvious reasons – also remember that those fees are split between many different parties, so it’s not as easy as you might think to figure out the direct relationship between fees and your own take-home pay.

Q: It sounds like everything’s going well – so I’m assuming you’re planning to keep doing this for the foreseeable future?

A: Yeah. I also have a few other ventures generating revenue, which helps, but overall I’m super-excited about this and think there’s a lot of room for growth.

Q: Awesome! Thanks for the chat.

A: My pleasure.

And check out InvestmentBank.com – Mergers and Acquisitions when you have a chance!

The post How to Defy the Odds and Create Your Own Investment Banking Job appeared first on Mergers & Inquisitions.