This post was written by a friend of the site. He is an army veteran who went to a HSW (Harvard, Stanford, Wharton) school for his MBA before heading into investment banking after graduation. While I think anyone can learn from this, the post is mostly tailored toward veterans going to get their MBA and thinking about investment banking afterwards.
Estimated reading time: 19 minutes
I think most veterans hear careers like “investment banking” or “private equity” and honestly have no idea what the hell that really means.
That’s totally OK. To tell you the truth, most people at an MBA program probably couldn’t really explain in great detail the differences between the various parts of the financial sector. We are in school to learn, after all.
Now that we’ve all established it’s OK to be an idiot and admit you don’t know….what is investment banking?
Investment Banking 101
To start, the industry is split into two sides:
- The “buy” side
- The “sell” side
The “buy” side does what you are probably thinking. They invest in securities to seek a return. “Buy” side investors may work for pension funds, hedge funds, mutual funds, private equity funds, or insurance firms for money management. It’s easy to understand: they want to invest money with the intent that money grows and those investments increase in value.
Great. That’s all pretty straight-forward.
What’s the “sell” side, then?
Well, those people on the “buy” side need something to buy, right? And they need to know about what they are buying.
And just like that, bing, bang, boom…we have the “sell” side.
The “Sell” Side of Investment Banking
Let’s take a company you all likely know, Amazon.
Are you reading this and thinking, “Mark, I don’t care about investment banking. I was just sitting on the toilet and scrolling through my phone and clicked on this. But I AM interested in how Amazon can help veterans.” Great, check out this post about opportunities for veterans at Amazon and this podcast with Beau Higgins, the Senior Manager of Military Talent Acquisition at Amazon.
Amazon had their initial public offering (IPO) in 1997. But this didn’t just happen because Jeff Bezos called the NASDAQ and said, “Yo, put me on that.” Although I’m sure he could now if he wanted.
Instead, Amazon worked with an investment bank. The bank not only helps with all the paperwork and regulatory issues, they help the company raise capital.
The bank working with Amazon likely bought some shares before the IPO (and they are currently swimming in rivers of money because of it). They likely got those shares at a discount and made even more off the gains of the stock.
Bankers there also used their networks of high-net-worth individuals to help Amazon raise capital before the IPO. These people got first dibs, again getting the stock at a price cheaper than it was listed after the IPO.
Now take this example with Amazon and apply it to any company. It could be for a company that wants to go public, or a company that is already public but wants to issue new shares. It may also be for a company or government that wants to issue bonds. The investment bank is putting together the deal and then selling it around to raise money for it.
It’s important to know that investment banking and commercial banking have government regulations that separate them. Following the Great Depression, the Glass Steagall Act was signed into law in 1933 and separated commercial banking from investment banking. This was to prevent banks from using grandma’s money to buy oil futures in Russia, for example. The legislation was repealed in 1999 and then the successor, the Dodd Frank Act, came onto the books in 2010 following the 2008 Financial Crisis. The Dodd Frank Act is not an exact replica of the Glass-Steagall Act, but the intent is the same.
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So how do you get into investment banking?
IB is a very hierarchical industry. The career path is well-defined and the promotion ladder is fairly straight-forward.
First, know that IB is competitive. When you have career path where people can stand to make huge sums of money, it attracts super-smart and highly talented people. The top IB firms mostly recruit from the top schools.
For MBA programs, the “core” schools for IB recruiting are considered HBS, Stanford, Wharton, Kellog, Columbia, Chicago Booth, Darden, and Stern. But each bank differs so don’t let the fact that you don’t attend one of these schools totally curb your career goals.
The process for non-core schools will mostly differ in that banks don’t send representatives to each school. As a result, you gotta hustle and figure it out on your own.
This is an important thing to think about as a veteran. Going to a school with a formalized recruiting process with the top banks will be easier considering that you likely don’t have a good network in the banking world. Trying to build that network from scratch while also trying to get a job or internship is going to be tough.
Investment Banking Recruitment Timeline
Step 1: Decide if you actually want to go into IB.
Duh.
Step 2: If you can, structure your coursework appropriately.
This will depend on your school. For example, if you go to Wharton, you will have more flexibility on the classes you take first semester. So you may want to load up on things like finance and accounting. Other schools, like Darden, will have you in core classes to start and you will not be able to choose any additional coursework. Most likely these classes will included finance and accounting, but you may not be doing a deep-dive in these subjects like people at another school.
Step 3: Prep your wardrobe for recruiting
Veterans in particular tend to underestimate this one. The time of wearing the same set of cammies day in and day out are gone.
If you want to go into banking, you need to look the part. This also means that taking a suit off the rack at Joseph A. Bank ain’t gonna cut it.
To look good, you are going to need a custom suit. Actually, you will probably need a few. During the recruiting season at MBA programs, you can expect networking events 5-6 nights a week.
Look, there are some good sites out there that can help you with style, but here are a few recommendations that I have:
State and Liberty
State and Liberty is a great place to go for dress shirts, especially for guys with an athletic shape (a lot of veterans likely fall into that category). I have one of their shirts and love it. The fabric is a great mix of performance and style. And a huge win: it doesn’t need to be dry-cleaned or ironed. You can just throw it in the wash.
Step 4: Start making connections and showing off how awesome you are
Your school will dictate when companies are allowed to start recruiting. The school wants to give you at least some time to get used to class before you really have to put your head down and start the recruiting process. But you can expect that it will start around the end of September or early October, and that November will be hot and heavy with classes and interview prep.
During the process, go network with a variety of banks. There’s a good chance they will have some veteran-only events as well. These are fantastic way to get the real scoop on what the culture is like at that firm. Vets are known for giving you honesty and not sugar-coating it.
I’d be remiss if I didn’t share some great veteran-specific organizations here as well.
- American Corporate Partners can pair you with a mentor who wants you to succeed. I know lots of people who used ACP and they have nothing but good things to say.
- Veterati is a great way to connect with a wide swath of people who want to help veterans.
- Veterans On Wall Street….well the name kinda says it all.
Learn more about ACP and Veterati here.
Step 4: Interview and get offers
Interviews will happen somewhere around December and January and you can expect offers to go out January and February. These aren’t hard and fast timeline by any means, but you can use them to get a broad idea of when you will have key events in the process.
How to crush the process
If you are a vet, you likely don’t really know much about business. That’s totally fine. You also won’t be the only one in your class like that. I have teachers, congressional aides, and nurses in my class. They were also learning what a discounted cash flow model is, just like me.
But once you decide that IB is the route for you, you definitely need to start brushing up on your business acumen.
Knowing the news
Here are a few recommendations for news sources:
The Morning Brew
I start every morning reading this newsletter. Why?
- It’s witty and extremely well-written.
- It gives great updates with quick analysis and takeaways about the big stories happening at the moment.
- It’s my favorite price: FREE
Sign up here get this awesome newsletter delivered to you directly.
The Wall Street Journal
If you plan to work in finance you need to read the WSJ. Simple as that. It’s THE news source for the business world. Alas, it is not free. But your school or club may have a subscription. Worst case, they also have a student discount.
Another good one is DealBook. Written by the New York Times, it also has top-line business news.
Podcast
If you didn’t know, there is also a podcast paired with this site, The Veteran (Semi) Professional.
Find the podcast here.
Deciding if you want to do investment banking
Your classmates will be your best resource here. Many of them will have just finished stints as analysts/associates at investment banks. Pick their brains about their experiences to determine if it is right for you. Second years at your MBA program who just finished their summer internships will also be great wealths of knowledge.
If a candidate is seriously considering pursuing IB, it is important to answer the question as to “why”. Connecting the dots in one’s background to logically explain one’s motivation to enter the field is critical. Candidates will have to “tell their story” at the beginning of every interaction with a banker. Many of them will attempt to poke holes in the story to test how serious a candidate is.
This can be tough for veterans. How do you connect the dots from being an Air Force logistician to wanting to be an investment banker?
Look, everyone has this problem. First, definitely talk to those who have gone before you (you will hear me recommend this one A LOT). They had the same challenges so don’t think you have to re-invent the wheel here.
Learn about investment banking
Banks have different reputations so you should be trying to decide where you want to pinpoint your efforts when recruitment starts. This will probably start in the form of “Bulge vs. Boutique” banks. “Bulge bracket” banks are the big ones most people can name (Bank of America, JP Morgan, Citi, Morgan Stanley). “Boutique” or “Independent” banks are generally smaller and focus on M&A specifically vs. the loan or wealth management that bulge brackets also have. That’s probably too technical at this point. You should be looking at any bank that will talk to you at the start of your process. As the process goes forward you can start to be selective about the specific banks and types of groups within each bank.
Resume prep
The resume you used to get into business school is not the same one you need for recruiting.
Yes, you read that right.
Each time you are searching for a job, and even in factoring between firms, you need to think about tailoring your resume. You now have a new audience and the resume needs to be addressed to them.
For this process, lean heavily on the people in the class above you to help you out. They can provide real and valuable feedback on your resume.
You also need to lean on the veterans’ club and the career center. Both can help you with our resume and through all parts of the recruiting process.
How to succeed during recruiting
When I started at the Infantry Basic Officer Leadership Course (IBOLC), our instructor gave us a piece of advice to use in all situations:
“Just be a good dude.”
I know. That sounds overly simplistic. But it holds up.
You will be “competing” against everyone in your class for a set number of internships. At some point you are going to find yourself in a circle with ten classmates surrounding one banker, all trying to stand out. The easiest way to turn off potential banks (and certainly your classmates alongside you) is to try to dominate or show-off in this conversation. You need to make an impression on bankers while not alienating or belittling your classmates.
The importance of demonstrating modesty and a willingness to learn cannot be overstated (even if feigned). No matter how impressive a candidate’s resume may be, he/she is likely not to get an interview if perceived as arrogant by a firm (then, after working at a firm for some time, arrogance evidently becomes part of the job…).
Expect to recruit at 10-12 banks when you begin the process. You will be attending 1-2 events every day for the first couple weeks of the process so it is important to stay organized. Keep a spreadsheet with your contacts to keep track of who you’ve spoken to and when your last contact with them was (this will fill up quickly and is important to stay on top of).
Mark’s note: One of my classmates here at Darden recognized that using a spreadsheet for this is super tedious. He’s in the process of creating a service called Touchpoint that helps you keep track off these people. I’ll be honest, I haven’t dug into it too much, but it’s definitely useful.
Coffee chat and less formal connections
You will have lots of coffee chats. Lots and lots and lots.
These will be short (15-20 minute) sessions. They are usually one-on-one or one-on-two (one banker with two candidates). This is a great way to make an initial contact and get your foot in the door with banks.
I actually worked with some Northwestern Kellogg School of Management grads to put this book together:
What Now? The Admit’s Start to Maximizing the MBA
It’s a GREAT reference to help you make the most of your time and make valuable connections to help you keep on crushing it during and after your MBA. It’s focused on coffee chats and how to make the most of them.
Each interaction with a banker at a networking event should be followed up not just with a thank you email, but a request for a call. The objective of the call is to demonstrate one’s interest by “asking questions” and getting the banker to talk for 30 minutes. Coming up with the right set of questions to ask is important (not too banal, but nothing that is beyond the candidate’s scope of financial knowledge that may backfire).
This was probably the most challenging part of the process, especially as networking progressed. Moreover, banks generally look for a consistent pattern of interaction with a candidate once the networking process has been initiated (they maintain a tracker to record the details of each phone call).
At the end of each call, the objective is to be passed on to another banker at the firm. Sometimes the banker will volunteer to do so; other times the candidate will have to ask. Depending on the firm (“high-touch” vs. “low-touch”), a candidate will be expected to speak with anywhere between 6-30 bankers before being invited to interview.
A good way to end a call is to ask:
“Who else do you think I should speak with?”
This makes it THEIR ideas and helps you then connect with that person.
Informationals / Days at banks / Invite Only events
At core schools, each bank will come to your school and give a presentation. The presentations are all pretty much the same but the value of these events is in the networking portion after. For non-core schools you will either have to set up visits to each bank yourself, or some programs do organized weeks in NYC (or Chicago / SF / LA if you are recruiting in those specific locations) where you will spend a few days going to each bank in person. After these general information sessions, most banks start inviting select groups of people to cocktail events or dinners to get to know you better.
These events are crucial to attend and are where you should be winning stakeholders at each bank. As the process moves forward, you want to ensure there are people at each bank who have had positive interactions with you. From my experience at Credit Suisse, up until final round interviews most banks are slowly crossing people off their list that they have been turned off by or have not interacted enough with. As a candidate, you want to ensure there are people in those offices advocating to keep you in their process.
Key stakeholders you should be networking with at each bank:
- Veterans- There will be veterans at every bank. Get connected with them and they will undoubtedly help.
- Alumni from your school (especially the recent alumni)- Every junior banker has just gone through the same process as you. Most people will be looking to pay forward the favors people gave them during their process.
- Recruiters- Each bank will have HR personnel organizing / running the events. While these people won’t actually give you the job they are invaluable resources and if you make a good impression will work to connect you with bankers they already have relationships with.
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Applications
You will have to send cover letters and resumes to each bank you apply to. These are mostly a formality but something you must get right. You won’t get an offer because of your amazing resume or cover letter, but you may NOT get an offer because of a typo or any error in your paperwork.
Investment Banking Interviews
When you start preparing for interviews will probably depend on each individual. If you are like me and were financially illiterate before starting your MBA you should aim to start prepping technical questions about 2 months before the actual interviews. You will be balancing this prep with the ongoing networking events so will need to plan your time accordingly.
The reality is that once classes start, it will be hard to do the necessary prep to get ready for IB interviews. The more you can start ahead of time (before school starts), the better off you will be. Especially if you go to a school where your first few months will not provide you much, if any, flexibility in class selection.
As a veteran, banks are immediately going to assume you have the necessary discipline, work ethic, and professionalism to succeed on Wall Street. It will be on you to convince them you will be able to handle the technical rigor (spoiler alert: you can but it will take time and effort to sound smart enough to convince bankers).
Resources
- 400 question guide
Online resource every interviewee has used to prep and every interviewer uses to come up with questions. This isn’t rocket science and will be a lot of memorization to start. The trick is to get comfortable enough that you understand the underlying principles so when people ask the inevitable follow-up questions in interviews you know what you are talking about. Find it here.
- Training The Street / Wall Street Prep courses
These may be offered through your school or finance club and are definitely worthwhile, but are probably more geared into prepping for the actual internship. For now you should just be worried about getting one.Find it here.
Take Finance and Accounting first semester
I can’t stress this enough. This will help you with basic interview questions but will also show banks you were thoughtful in determining your course load and are trying to set yourself up to be a successful junior banker.
- Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions by Joshua Pearl and Joshua Rosenbaum
Basically the IB textbook written by senior bankers. I bought it and tried to read the “Leveraged Buyouts” section since that is what my group at CS specialized in…never made it through. Probably unnecessary and “a bridge too far” for lowly vets, but good on you if you want to really go for it.
Get your copy HERE.
Mock, mock, mock
In my opinion, you can’t do enough mock interviews before you actually sit down with banks. Use second years, career management, and your own classmates to drill you with questions.
Conclusion
The great thing about a career in banking after the military is that the pathway is pretty straight-forward. Veterans don’t need insider knowledge or extreme expertise to get a career in investment banking
Here are the final thoughts on how you can succeed:
- Leverage the Vet Net. The power of the veteran community always astounds me. Lean into that.
- Know your weaknesses. Realize that you likely have some gaps in hard financial models and tools. You will have to work to overcome those weaknesses.
- Use your military experience to your advantage. You probably picked up some discipline from the military. Use that to help you study. Show respect to bankers. Be on time. Be polite. Talk about your experiences in dealing with uncertainty and times you showed leadership.
Go crush it.
Related Articles:
Military to MBA (Part 1/7): Is It for You?
Interviews with Private Equity Alums
5 Purchases That Are Totally Worth It For Your MBA
16 Ways Veterans Can Buy a Small Business
P.S. This page contains affiliate links, including to Amazon.