What’s life really like as a young, wide-eyed investment banker? What skills do you need to thrive, or even survive? And if do, what do you come out looking like on the other end?
We spoke to an anonymous former investment banker who left the industry after a few years to start his own business. He offers his brutally honest portrayal below.
What kind of people are born to fail as investment bankers?
People who don’t have the social skills to befriend their clients while also communicating how the bank will deliver value for them are born to fail as investment bankers at the director level. If you are solely a numbers guy or to be an efficient lower level employee all you need are the analytical skills, but to generate business you need to have the social skills to acquire the client. Lots of banks offer the same product, the client will work with the banker he trusts, understands and likes.
Honestly, how were the hours?
Brutal hours, 8:30am-10pm almost every night. Many midnight/1-2am nights. Lots of weekend work. 80 hours a week on average.
What are some of the tricks of the trade to stay away from marathon days?
Be efficient early in the day, get all your little things whenever you can, never put anything off that can be done immediately. Ask your higher level team members for as much foresight as possible so you can prioritize and knock out work before deadlines make emergency fires pop up that pushes all your other work to the back burner and it snowballs while you can’t touch it. This is inevitable sometimes, but when proactively managed it can be minimized.
And to stay awake? Is the culture of amphetamines true?
I didn’t see much amphetamine use, maybe people were taking Ritalin or Adderall privately but mostly it was coffee, 5-hour energy and soda. I think the days of the 1980s cocaine cowboy bankers are gone.
Are all pitchbooks legitimate attempts at specific deals? Or were some just tools to get a meeting for future business?
We were building a new investment banking division of a large pre-existing company, so our pitches were targeted for specific deals but designed to introduce our team and capabilities to build a relationship for future business. Our directors knew we were unlikely to get the deal, but we could make the introduction and work towards future deals. It is frustrating as a junior team member to build these elaborate pitch books only to have it sit on the desk and never be opened.
What did your experience as an investment banker do to help you run your own business?
Getting an understanding of how to project financial statements and markets; build and run a team; and the ability to work a 100+ hour week are key to running your own business and skills you acquire as an investment banker.
A lot of people I meet who run small businesses never put in the hours or understand the time required to be a success and crush their competition. They think working 9-7 is a long day and don’t contemplate all nighters or working nonstop until everything is done.
People I work with think I’m lying when I say the hours I put in in banking or what my wife does as a lawyer. They don’t seem to realize they work half the hours and don’t sacrifice their personal life and time, and that’s why they make $50k instead of $250k.
Any advice for incoming investment bankers?
Dive in 100%, understand it will be your life and you will be working-sleeping-working in a Groundhog Day cycle.
Don’t ever sit quietly and enjoy a slow day or week, find more work, take on more responsibility, make yourself an essential member of the team.
Point out if you think something you are doing is a waste of time, find a better solution, make the product better, create and add value – don’t just do what is asked of you.
Never complain, if you don’t like something you need to highlight the problem and offer an alternative. Of course you don’t like making pitch books at 3am but unless you can complete the project more efficiently you don’t have an option, so figure out a better way or deal with it.
What was life like for interns at your firm?
The young bankers (1-2 year analysts) tried to befriend them and take them out at night and show them a good time and try to be the ‘coolest’ analyst. These same analysts would also dump as much work as possible on them, the book binding, mindless ‘monkey could do it’ work.
I would always be very friendly to the interns for the first month, talk about how the other analysts were jerks for dumping their work on them, and then just unload on them the second month they were there. I would do nothing but review their work and coast for the last 4-6 weeks of the internship season.