What to do as a Freshman to Break into Investment Banking
For most people, breaking into investment banking is a multi-year long quest. It takes years of cultivating a strong resume, working the right internships, and getting involved with the right extra-curriculars to land a high-quality offer. The roles are so competitive and the jobs are so high paying, that it’s becoming increasingly harder to break into investment banking without prior work experience.
In this post, we’re going to break down a couple of key things you should be doing to maximize your candidacy. There is a huge range of things you can spend your time on, but a lot of them won’t materially impact your chances. However, if you start early enough and consistently work towards deepening your knowledge of finance, then you’ll be in a good position to land interviews and secure offers.
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1. Learn the Lingo
Objective: Read 5-10 minutes of financial news per day. Observe trends and systematically take notes on things you don’t know.
Time per Week: 1 hour
The easiest thing you can do is start reading financial news and literature. Everyone from beginners to seasoned veterans need to spend time reading some news to understand what’s happening in the markets and with businesses.
Reading well-written newsletters every day will give you a sense for what people care about and how people talk about business and finance. Reading the news will help you understand trends and naturally develop an opinion on potential stock pitches and investment ideas.
There is a ton of information out there, but for newsletters, I’d recommend two free ones that take less than 5 minutes to skim through:
Fortune’s Term Sheet
This is a daily newsletter that covers the most important deals and often has focused pieces on interesting transactions. It goes in depth on financial transactions and is used by a lot of people in the industry. It also includes a list of transactions, financings, and new hires, which helps you easily keep tabs on the economy.
Robinhood Snacks gives you easily digestible information on big stock movements and also updates you on key indexes. This one is more focused on public stocks and will cover a lot of the more boring economic data too.
I would also recommend trying to sign up for a traditional financial news provider (WSJ, Bloomberg, Financial Times, etc.) You may be able to get a free account from your school.
I personally find that the marginal utility of reading the news is at about 15-20 minutes per day. There’s no need to go crazy on reading the news because you generally aren’t learning tangible skills, but it’s a great place to start.
When reading the news, I took diligent notes and kept a big word document where I would keep track of things that I didn’t know.
2. Meet the Right Finance People
Objective: Speak with one new finance person per week. As a freshman, your first priority is meeting with juniors and seniors at your school to see if you can cultivate any mentorship relationships. Then you should shift your focus to alumni who work at places that might hire freshmen. It can be helpful to speak with professionals in different geographies and different offices, so you start diversifying your network.
Time per Week: 0.5 hours
This step becomes more and more important the less of a target school you attend. As a freshman, the most important people for your career are going to be junior and senior college students with banking internships. Banking recruiting is heavily driven by first-year and second-year analysts, so making connections with them while they’re still in school is going to pay long-term dividends.
If you’re at a non-target, the path is going to be a lot more sporadic and the people with investment banking experience are the ones who know the elusive keys to that path.
Keep in mind that you want to reach out and talk with people without being overbearing or too intense. Take people out for coffee, ask thoughtful questions, and keep them updated on your progress as you win internships or have career questions. Your goal is to be likable enough that they don’t mind helping you.
3. Get Involved with Good Extra-Curriculars
Objective: Obtain leadership positions on one or more finance clubs with a strong track record of recruiting success.
Time per Week: 1-2 hours
One of the most common resume traits of people in my investment banking class was to hold a finance executive club position. I think at least a third of my investment banking class at Evercore was the president or a key executive of an investment club at their respective school.
These clubs are the best way to help communicate your interest in finance to future employers and to introduce you to helpful alumni. It’s much more convincing to tell an employer you’re interested in finance when you have multiple data points to reference.
More importantly, being part of high-quality finance clubs exposes you to a community of people with the same goal. This will give you a sense for the competition at your school and the level of intensity you need to have in order to succeed.
If your school doesn’t have a finance club, then you need to seek out an intercollegiate investment club (like Global Platinum Securities or ACIIC in Canada) or a non-school activity.
You could be the campus representative for a financial institution like Bloomberg. You could start your own investment club at your school, even if you’re just trading paper money. You could submit articles to Seeking Alpha. You just need to do something that shows initiative and that is finance-y.
The best way to tell if a club or extra-curricular is worth your time or not is to check where the past club executives and members have gone to work.
4. Build Relevant Technical Skills
Objective: Learn the technical information required to succeed in interviews by spending 30 minutes or so per week reading technical material.
Time per Week: 0.5 hours
The prior steps are all more important because they have longer lead times, but at a certain point, when you’re about to enter recruiting, you’ll need to start ramping up your technical skills.
This means you need to review actual stock pitches, read equity research, and learn valuation. You need to spend time sharpening up your resume and cover letter, doing basic modeling, and practicing with Q&A guides. I would recommend spending 30 minutes or so per week to go through this information so you don’t overwhelm yourself. When the time is right, you should shift gears to mock interview with friends and mentors.
We have a Private Equity Recruiting Course available, where you can dig through 5 LBO models and learn everything you need to know for recruiting. We also have several videos on YouTube explaining the fundamental information you must know.
5. Cold E-mail to Get Your First Internship
Objective: When you are looking for your internship, you should be reaching out to 1-2 people per day to schedule calls and inquire about internships.
Time per Week: 1 hour (during recruiting)
The most important thing you can do for yourself is land a solid finance-related internship in your freshman year. That is going to be the ultimate signal to future employers that you have been committed and are serious about a career in investment banking or private equity.
It doesn’t even matter what specifically, you just want to do your best to be working for any finance company. Any bank, any boutique, any investment firm of any size will do the trick.
In order to get a job in your freshman year, you’ll likely have to do a lot of reaching out. Maybe you’ll be lucky enough to have a strong job board or school system, but most likely you’ll have to reach out to tons of people to get something good. Companies don’t invest a lot of time into hiring freshmen because freshmen are generally useless and the companies have a very low chance of retaining you as a full-time employee.
So you’re going to need to put in a lot of diligent effort to reach out to people. I reached out to over 300+ people to get my first paid internship in my sophomore year. It’s not easy, but it is necessary so that you don’t fall behind the competition.
In summary, here are the five things you should be doing every single week. Collectively, this should probably take you a total of 3-5 hours per week:
Read 5-10 minutes of financial news per day (subscribe to Fortune’s Term Sheet)
Speak with 1 new potential mentor or recent alumni per week
Get involved with one or more finance club that has a track record of success
Spend 30 minutes or so per week reading technical material and guides
Start reaching out to 1-2 people per day to schedule calls and inquire about internships
If this feels like too much work, then either don’t go into banking or make sure you can get into a target school where you can afford to hustle less.
The good thing about investment banking recruiting is that it is insanely accelerated. So after you secure your junior year internship, you’ll have plenty of time to chill.