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Overview
Deciding between two investment banking offers can be one of the most stressful decisions in your career. Especially if it’s a choice you have to make in college.
You know that the earlier the career decision, the more likely it is to alter the course of your life. You know that both firms could lead to wildly different job prospects, industry focuses, and recruiting outcomes. What’s more, there’s more than likely going to be the imminent threat of time pressure working against you. It’s possible you only have a few days (or hours) to decide.
Of course, it’s an incredibly fortunate position to be in. You did it! You get to choose between multiple high-paying jobs!
But for some reason, when you’re actually in that position, it doesn’t always feel very good.
The first thing I always say is that recruiting decisions are super personal. You need to try to extricate other people’s opinions from the decision-making process, because you’re the only one who has to live with the decision. Your peers might “care” what you do, but they don’t actually care about how it impacts you. Making career decisions purely based on the opinions of others can set you up for a lot of grief.
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With that said, here are the main factors (in relative order) I think you should consider when deciding between investment banking offers, as well as some of the main questions to ask yourself.
1. Exit Opportunities
Is the firm supportive of buy side recruiting? What is the firm’s track record of recruiting like?
Particularly as an analyst, I think this is probably going be the most important factor to consider. I personally think it makes sense to be laser focused on buy side exit opportunities, because in general, people are trying to minimize their time spent in investment banking. At max, you’ll probably (hopefully) spend 2 years in banking and I have the belief that it’s your second finance job that has a stronger determination on your career.
Buy side recruiting for analysts also occurs so early that you want to make sure you have all of the traditional success markers on your side. In a chaotic process, the traditionally better banks will tend to perform better because headhunters and firms don’t have to take as big of a risk to hire you.
Where do past employees typically exit to (do your LinkedIn searching)? Would you be happy to go to those places?
I always try to do diligent LinkedIn research to support any hunches I have on buy side recruiting or recruiting in general. I think the trailing 3-5 years is a good indication of how that group or firm has been doing recently. The reputations of firms can change pretty rapidly and I tend to trust pure empirical data of where firm alumni have gone to recently. If for example, you have your heart set on tech investing, make sure you can point to a specific person who has gone down that path. It’d be the best if you actually spoke with that person and understood the support and help from being at that firm.
2. Firm Prestige and Branding
What is the firm’s reputation within finance? Does the firm have a history of success?
Prestige is a funny thing because although it can be mocked as an explicit job criterion, it does tend to exist for a reason. I find that over time, the most prominent and prestigious banks still tend to be better offers. I was an analyst at Evercore, which I think is reputed to be a top elite boutique, and it’s my personal opinion that you will have overall better career options from a top bulge bracket group (i.e. a top group at Goldman or Morgan Stanley). I observed that the firm’s longstanding history of success and prestige generally opened more doors.
I think at the outset of your career, it can be a better choice to go to firms with a long and successful history. Your firm’s reputation in finance is going to have a big impact on exit opportunities, deal flow, and ability to network and develop connections.
What is the firm’s reputation outside of finance? If you leave finance, will the firm be helpful to your career?
I hadn’t really considered the possibility I would leave finance back in college, but one big plus of bulge brackets is that they have a much stronger calling card outside of finance. The average person will recognize Goldman Sachs, JP Morgan and Morgan Stanley, but will give you a blank, slightly judgmental stare if you work at any of the elite boutiques. I think this tends to matter more if you want to go to corporate or do something more public facing.
How much do you intrinsically care about traditional markers of success? Do you want to be at a top firm?
Look, some people just want to work at the sickest firm and have people look up to them. I don’t think that’s a bad thing and if you think that’s you, it can be more helpful to be honest with yourself. If you want to chase the big brands and be a shining beacon of prestige, then don’t be ashamed to do it proudly.
3. Office and Industry
What office will you be placed in? Is it the headquarters or a satellite office?
I think there is generally a tangible benefit to being in a firm’s headquarters, which I’ve explained here. You get superior networking opportunities, get more face time with key decision makers, and likely have more lateral and industry opportunities. I would still take a superior offer in a satellite office vs. a declining bank’s headquarters, but it can help settle debates of similar quality firms.
Will you be placed into a specific industry group?
Similarly, if you want to angle your career to a specific industry or specialization, your banking group actually can matter quite a bit. There are certain industries like natural resources, real estate, and infrastructure that tend to be slightly more funneling.
4. Salary
What salary will you be paid?
I think salary isn’t the most important factor at the investment banking level, because unless you’re thinking about going to Centerview, the banking salary is going to be relatively similar across all firms. It varies between 10-20%, which in my opinion is not enough to sacrifice the other aforementioned benefits. I think it can be a good final deciding factor, but in truth, the real divergence comes in your subsequent jobs, so it’s not going to make a material difference on your net worth.
5. Culture
What is the firm culture like? What are the hours going to be like?
I think culture is a nice sweetener, but it’s my view that most investment banks are very similar and you’re going to get a relatively similar experience at the majority of places. It’s very difficult to try to select for a lifestyle-oriented firm because firm personnel changes quickly and how busy you are often depends on factors outside of your control (e.g. deal flow spikes up in a given year, the firm hires a new partner to your industry group).
You’ll have your ups and your downs working with different teams and on different projects. As such, unless you’re deciding on a firm with a horrible sweatshop reputation (like Moelis or… that’s probably the worst one actually), you can probably rest assured knowing that your experience is going to be within one standard deviation of everyone else’s.
I think this becomes a more important factor if you’re thinking about associate recruiting or thereafter. Then it becomes less of a 2 year thing you can grind through and more of a determinant of your potential lifespan.
What is the attrition of the group?
Attrition is a helpful factor that can indicate to you what the culture and morale is like in a certain group. Attrition is often a product of the remaining factors. It can indicate that places are extremely sweaty to work at, there’s not enough deal flow, or that the exit opportunities are not great. In some cases, it can indicate the exit opportunities are actually very good (i.e. a bunch of analysts leaving to go to hedge funds), so make sure you do your research behind the driving factors.
I wouldn’t stress it on the highest importance, but if you see people are leaving to go to other investment banks, it’s probably kind of a crappy place to work.
Summary
In summary, here’s how I would personally rank the different factors when deciding between investment banks:
Exit Opportunities
Firm Prestige and Branding
Office and Industry
Salary
Culture
Once you've decided on your offer and are ready to hit the desk, there are a handful of strategic things to be aware of to succeed as an investment banking analyst.