Breaking into Investment Banking

Investment bankers are the link between companies and investors. They have to raise money for their clients, the two ways in which they can accomplish it is by issuing debt or by selling equity.

Investment banks are usually hired by young companies planning to go public, big companies planning mergers and acquisitions, and established companies that want to raise money for major expansions.

Other duties investment bankers have are assisting clients with mergers and acquisitions and advising them on unique investment opportunities.

What is Investment Banking?

As mentioned, investment bankers raise money for their clients by issuing debt or selling equity:

• Issuing debt means selling bonds to investors: When an investor buys a corporate bond, they are lending money, or capital, to the issuing company for a fixed number of years, usually at a fixed interest rate. The issuing company makes interest payments throughout the term of the bond and then when the bond term ends, the company remits the principal back to the investor.

• IPO success: the success, or lack of success, from an IPO (initial public offering, first-time selling equity) often sets a company on an irreversible trajectory, for good or bad. Because of this, companies get the help of investment bankers to contact big investors and make their IPO a success.

Investment Banking is a dynamic sector, integral to global financial markets. It offers vast opportunities, particularly in areas like technology, healthcare, and renewable energy sectors. The demand for innovative financial solutions and expertise in mergers, acquisitions, and capital market transactions is continually growing. This growth presents lucrative opportunities for aspiring investment bankers, especially those who are adaptable and can keep pace with the evolving financial landscape.

Skills to Excel

To excel in Investment Banking, several key skills are crucial. These include:

• Persuasiveness.
• Tenacity.
• Being quick-witted.
• Having and exemplary work ethics.
• Ability to work in a fast-paced, team-based environment with minimal supervision.
• Strong communication and networking skills.
• Math abilities.
• Working knowledge on deal structuring and closing principals.
• Research skills.
• Analytical skills.
• Excellent organisation.
• Strong financial modeling skills.

Main career path within the function

Intern

Usually, an internship at an investment bank is considered part of their recruiting process. During the internship, the candidate is assessed for their cultural fit to the firm. The intern role consists of assisting analysts and associates. From helping out on anything to running presentations and financial deals. Also, they assist in pitching for deals (marketing) and working on deals for clients (execution). The salary of an Investment Banking intern varies widely among banks.

Analyst

Analysts engage directly with vendors, clients, and regional offices to develop business. They also examine and interpret complex numerical information from the economic environment and the portfolio companies, and forecast financial risks and returns to later provide investment recommendations. Finally, they coordinate with the firm’s accountants and financial experts to prepare legal documents.

💰 Download the full report for more insights on salaries

Associate

An associate identifies client’s financial needs and develops ways to meet their goals. Some tasks are data evaluation and portfolio creation for investment opportunities. They secure new funding sources, create marketing collateral, present financial information, manage and execute client transactions, and conduct due diligence.

💰 Download the full report for more insights on salaries

Vice President (VP)

The VP’s main responsibility lies in the execution of the merger and acquisition transactions, and also in making efforts to start and generate new deals. Other responsibilities filled by this role are conceptualizing, developing, and delivering new business presentations, calling potential clients, staying updated with the market, carrying out financial analysis, making legal agreements, and maintaining good client relationships.

💰 Southern Europe: €140k-160k | Nordics: €160k-170k | UK: £150k-180k

Director or Senior VP 

The responsibility of a SVP as compared to a VP is a shift towards creating mostly new business in different regions (hence more travelling as compared to a VP) and attending some of the meetings to close deals with the Managing Director.

💰 Download the full report for more insights on salaries

Managing Director

The Managing Directors goal is to bring the money in. Most of their time is spent in meetings with new companies, existing companies, pitch meetings, meetings with venture capitals and private equity firms to know which companies can have their IPO, and meetings with their team to discuss internal logistics and projects. Then, they are either winning deals or developing relationships with stakeholders.

💰 Download the full report for more insights on salaries

Breaking into Investment Banking

Breaking into the Investment Banking industry requires a focused approach and a clear understanding of the industry's demands. Here's a more detailed breakdown:

1. Educational Background: Most investment bankers start with a degree in finance, economics, business, or a related field. Attending a top-tier university can be beneficial due to recruitment opportunities and networking, but it's not the only path. Relevant coursework in financial accounting, corporate finance, and economics is crucial.
2. ‍Skill Development: Key skills for investment banking include financial modeling, valuation, and data analysis. Proficiency in Excel and financial software is essential. Soft skills like effective communication, teamwork, and the ability to work under pressure are equally important.
3. ‍Internships and Experience: Internships at investment banks, financial firms, or related areas provide valuable experience and make your resume stand out. They also offer networking opportunities and a practical understanding of the job.
4. ‍Networking: Building a strong professional network is critical. Attend industry events, connect with alumni, and engage with professionals on platforms like LinkedIn. Networking can lead to informational interviews, mentorship, and job opportunities.
5. ‍Tailoring Your Applications: Customize your applications for each firm. Highlight your relevant experience, skills, and how they align with the role and the firm's culture.
6. ‍Interview Preparation: The interview process is rigorous. Prepare for technical questions related to finance and accounting, as well as behavioral questions. Practicing case studies and financial modeling exercises is also beneficial. Nebula's Break into Investment Banking program is a great option to prepare for the interviews.
7. ‍Certifications and Continuous Learning: Consider obtaining certifications like the Chartered Financial Analyst (CFA) for additional credibility. Stay informed about industry trends, market dynamics, and regulatory changes.
8. ‍Entry-Level Positions: Many investment bankers start in analyst roles. These positions can be demanding but offer invaluable experience and learning opportunities.

Persistence, a willingness to learn, and a proactive approach to building skills and relationships are key to breaking into investment banking. It's a competitive field, but with the right preparation and mindset, it is accessible.

Pros and Cons

To be equipped for a successful start in Investment Banking, understanding its pros and cons is crucial. Let's explore both the opportunities and challenges:

Pros

• Investment Banking offers high earning potential
• A fast-paced work environment
• Exposure to significant financial transactions
• It's an intellectually stimulating field that provides opportunities for rapid professional growth and learning

Cons

• The industry is known for its demanding work hours
• High-pressure environment
• Intense competition
• Work-life balance can be challenging, and the high-stress nature of the job can be taxing

We have created a comprehensive guide to help you Break into Investment Banking, and kick-start your career in one of the most prestigious industries. You can download it here.

A Typical Day at Work

A typical day for an investment banker might involve financial modeling, creating pitch books, conducting industry research, and meeting with clients. The day often starts early and can include long hours, especially when working on a deal. Investment bankers need to stay abreast of market trends, regulatory changes, and understand their clients' financial needs to provide effective advice and services. It usually involves:

1. Early Start: Many investment bankers start their day early, often before the stock market opens.
2. Financial Analysis: A significant part of the day is spent on financial modeling, analyzing data, and preparing reports.
3. Client Meetings and Calls: They frequently communicate with clients, providing updates and advice on financial matters.
4. Creating and Reviewing Documents: Preparing pitch books, presentations, and deal documents is a key task.
5. Collaboration with Teams: Investment bankers work closely with colleagues, often in team settings, to discuss strategies, review deals, and plan transactions.
6. Staying Informed: Keeping up with the latest financial news, market trends, and regulatory changes is essential.
7. Long Hours: The workday can extend into late evenings, especially when closing deals or during busy periods.

The role demands a blend of analytical skills, attention to detail, and the ability to work under tight deadlines.

Recruiting Process

The recruiting process for investment banking typically involves several stages:

1. Resume and Cover Letter Submission: Candidates submit their applications, highlighting their education, skills, and relevant experiences.
2. First-Round Interviews: These are often conducted over the phone or via video call. They typically involve behavioral questions and may include technical questions related to finance and accounting.
3. Superday or Final Round Interviews: This stage usually takes place at the investment bank's offices. It involves a series of interviews with various members of the firm, including both technical and fit questions.
4. Testing and Case Studies: Some firms include tests to assess candidates' financial modeling and valuation skills, as well as their ability to handle case studies.
5. Offer and Acceptance: Successful candidates are extended a job offer, which details the role, compensation, and other terms of employment.

It's worth noting that the process can vary depending on the bank, some banks may have multiple rounds of interviews, while others may conduct most of the process in a single day, and it also can take longer or shorter depending on the bank, the role and the stage of the recruitment process. The whole process can take anywhere from several weeks to several months.

Conclusion

As the technology industry continues to expand, opportunities for those with a passion for tech and sales are abundant. By combining your understanding of technology with sales acumen, industry knowledge, and a robust network, you can embark on a successful career in B2B Tech Sales and contribute to the digital transformation of businesses worldwide.