Finance 101:
If I Only Knew Then…

     Nick Sayers
      W&L ‘02
Table of Contents


I.     The Three P’s
       • Preparation
       • Persistence
       • Perfection

II.    Res...

        The best way to learn is to make mistakes and learn how not to make them again.
I am not writing this as ...
letter, companies put you on a clock to see if and when you would follow through with a
callback, thank you letter, or wha...
two decimal places; otherwise you may arouse suspicion and discredit your

•   Middle/Bottom: Here is whe...
•   Last Tips: To make your resume more aesthetically pleasing and thus competitive,
    use all the space on the page and...
•   Third Paragraph: Mention your relevant jobs and internships you performed and
    how the experience you obtained in t...
•   Career Potential: Where do people go when they leave the firm, basically, what is
    the career path that can begin a...
the major New York and other large regional firms. It breaks down for you the company
description, where it ranks, corpora...
2. Find Contacts: One of the best sources to find alumnae contacts in various cities and
fields is through the Colonnade C...
•    November: At this point, the rush is over and only a few companies will post drop
     deadlines. Second rounds will ...
11. What experiences or internships that you have had demonstrate that you will be a
    great investment-banking analyst?...
Interview Preparation:

        You can never be too prepared or know too much information going into an
interview. Throug...
o Internal Rate of Return and Net Present Value (IRR, NPV)
              “Hurdle Rate”
       o Enterprise Value vs. Equi...
an onsite first round interview set up, you are likely to have 3-4 different one-on-one
    interviews, with the much the ...
about these things. Instead of relaying that you are a lazy bum and have a huge
    drinking problem, find weaknesses in w...
referred to as a “Shepard.” Interviews normally last 30 minutes but could go
       longer (usually a good sign, unless yo...
advisory or bond trading. This is not to say there is less expected of an analyst. Often
times, the analysts take on great...
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  1. 1. Finance 101: If I Only Knew Then… Nick Sayers W&L ‘02
  2. 2. Table of Contents Forward I. The Three P’s • Preparation • Persistence • Perfection II. Resume Building III. Cover Letters • What Kind of Letter? IV. Researching Companies • The Company • The Position V. Networking VI. Applying • The Senior Itinerary VII. Interviewing • First Rounds o Sample Questions o Interview Preparation o Inside the Interview • The Second Round VIII. Overview of Investment Banks • Bulge Bracket • Middle Market & Boutiques IX. Resources 2
  3. 3. Forward The best way to learn is to make mistakes and learn how not to make them again. I am not writing this as someone who had a perfect job-hunt, but more as someone who made numerous mistakes, large and small. From misspelling the names of companies and people on letters, to sending letters to the wrong companies, I had a variety of mistakes that, in some cases, clearly cost me the job. Luckily, there are more than three firms out there and you are given a little leeway if one application falls through. I applied to over twenty firms and went through forty interviews, including the first and second rounds, and while I remembered the good things, I always paid careful attention to what I would have liked to said or done in my letters and interviews. This is an informational piece that serves as an overview to the job search and provides some tips from what I have learned going through the process the past few years. I guess you could call it an “insider’s perspective” to the job search, but how “inside” is clearly debatable. I remember last year how many times I wished someone would just tell me the answer as to how to get a job. I asked a lot of questions and received some valuable advice. From my experience, and from others before me, I wrote the following guide to help others out in their search for a job in finance. Please keep in mind that it takes much more than a couple of pages to be fully prepared and make sure to use the links that expounds on the specific topics. If nothing else, think about the job search as one large audition where you have to sell yourself better than the hundreds of other candidates, and you will be one step ahead. I. The Three P’s Every informational guide has some kind of corny acronyms or letter pairings: this one entails the three P’s. While my friend has mentioned that there are actually seven P’s (prior proper planning prevents piss poor performance), I will try to notch out my own path with Preparation, Persistence, and Perfection. And no, you do not have to be perfect. These are the basics you should stick to throughout the course. Preparation: Just like anything else, if you have not practiced or do not know what you are getting into, failure is imminent. I can recall my first interview experience that occurred right at the end of the summer with an investment bank in Chicago. Through a contact I was able to land a coveted first round interview on location. Luckily the office was in the same building as my internship. The night before I bought a book on investment banking and briefly glossed over it and came up with a couple of potential questions they might ask me. It never occurred to me, however, that they might ask me why I wanted to do investment banking. They did, I stumbled, and the rest is history with that company. Do not take preparation lightly, interviewers and contacts know immediately if you have done your homework. This is simply a brief overview; there will be much more on preparation for resume writing, interviews, and contacts to follow. Persistence: The job search is more of a marathon than a forty-yard dash. In my own cynical way, I always had a sneaking suspicion that once you applied or sent a cover 3
  4. 4. letter, companies put you on a clock to see if and when you would follow through with a callback, thank you letter, or what have you. Persistence can afford you recognition and get a foot in the door if used properly. I applied with a New York firm junior year for an internship, and while it was not the one I ended up with, I made sure to contact them after the interview process and during the summer and early fall. Although I did not end up with the firm, the rapport I had built granted me a first round interview in the fall. Many firms today are initiating hiring freezes, but at the same time the human resources department is filing information on applicants and remembering who was naughty or nice. Discouragement is the number one killer of persistence and eventual success in the job market. Many people start believing that just because one or two firms ding them, every firm will conspire to do the same. It is important to understand there are hundreds of companies and thousands of opportunities. Failing to apply out of an attempt to save face is the same if not worse as cutting yourself from the running. Cast the net wide at the beginning and treat every opportunity as if it were your last. Perfection: In this context, perfection does not mean you have to be the perfect candidate; it has more to do with attention to detail. Initially employers are looking for reasons to cut applications before they get to the substance of your application. A misplaced period or misspelling will signify to the employer that you do not care about the application and that you are likely to screw up again. Back to my perfect fall season, I sent out a cover letter and resume to another large New York firm. Having written the documents at the end of the summer at quite a remedial level, I misspelled the firm’s name the first time and kept on going. I wanted to make my application important, so I sent it second day FedEx (actually not a bad idea) to inspire intrigue at the other end. As I was driving back to school I received a call from the managing director I sent the application to, and let’s just say he was more than displeased, if not embarrassed, for me. An investment banking analyst needs to have great attention to detail and that is one of the first things employers look to find. Proofread, proofread, and then proofread a little more to ensure that your application makes it past the wastebasket and on to the part where the employers actually care about who you are. In other words, don’t shoot yourself in the foot, like I did. II. Resume Building The resume is perhaps the most important piece of your application, serving as a story-teller to what you have been up to for the past 4-6 years of your life and beyond. It is important to tell your story clearly and in the best marketable way possible (without exaggerating of course). There are multitudes of formats people use and I am not going to suggest a single format, but there are some pointers I picked up through career services and feedback from employers. What I have learned: • From the Top Down: At the top you are going to want to include your contact information at home and on campus so the employers can call you with the offer. Also at the top should be your primary education with expected degree, GPA, major GPA, graduation date, as well as academic honors. Make sure your GPA goes out 4
  5. 5. two decimal places; otherwise you may arouse suspicion and discredit your application. • Middle/Bottom: Here is where you will have to make a decision based on your own experience. If you have very little work experience, but more activities and leadership, you will want to have the next section highlight what you have achieved on campus and place your activities after education. If you have had a great internship or a series of jobs to highlight then make that your next section. Employers see the resume from the top down and thus you can emphasize your achievements based on placement. At the bottom, you should also mention your relevant skills. This can include all the programs you can work with on computers, language skills, and other superhuman talents you may possess. • Format: Depending upon how much information you wish to divulge, text should range from 10-12 point and be one of the more widely used fonts. Bullet points are helpful in breaking up descriptions and involvements in various activities. Using bold and italics can emphasize and help to separate various roles and activities as well. • Last In First Out: When listing activities and jobs, place the most recent experiences first to make it more readable and understandable for the employers. For instance, under academics, you will list your Washington and Lee information first and High School information last. • Seniors/Juniors: Seniors going after full-time jobs should not include very many items from high school, as employers expect to see that you have done something in your four years at college. Juniors applying for internships are allowed more leeway, but do understand that high school was three years ago and employers place less emphasis on the fast times at Ridge Mont High. If you had a monumental high school career and were student body president, track captain, all city football, which can help to distinguish you from other candidates then you should include the relevant information. • What to Include: This sounds very basic, but include activities where you played a leadership role or had extensive involvement. Highlight and emphasize these activities with an explanation of the club or activity, a description of your role, and individual and group accomplishments in which you took part. Make sure to include dates after each job or activity for a frame of reference. • What Not to Include: Employers can recognize resume fodder and will grill you in the interview on a thoughtless listing, changing the tone of your interview from talking about what you wanted to highlight to something meaningless and irrelevant to both parties. You will be better off including one activity that you would love to talk about and highlight than two activities where you were a passive member. 5
  6. 6. • Last Tips: To make your resume more aesthetically pleasing and thus competitive, use all the space on the page and make sure there are not large gaps. These can be distracting and detract from your candidacy. Be active: write in the active voice and use strong verbs in describing your activities. This is a very basic crash course in resume building, but there are a number of sites with helpful advice and examples. The career services site is full of good advice and sample resumes: III. Cover Letters Cover letters are an absolute must for most applications and should be used even if the employer does not require one. Cover letters allow you to express yourself in paragraph form and further highlight and demonstrate jobs and activities on your resume. It presents a golden opportunity to do a little bragging. By the same token, you will want to keep in mind PERFECTION and proofread your cover letter thoroughly. In the course of uploading eighteen different cover letters in one night to apply on e-recruiting, I mistakenly saved a cover letter under the wrong company name. As it turned out, the employers really liked my resume, but were stunned by the negligence. After calling the company, I was still able to secure a first round interview, but my candidacy was pretty much dead in the water before I even started. So here is what I have learned along the way about cover letters: What Kind of Cover Letter? There exist many different kinds of cover letters, but it essentially boils down to employer contact and networking cover letters. I will talk mainly about employers in this section and expand upon networking in the following sections. • Employer Contact: These letters are going to be more formal than networking and highlight your interest in the job and why you should be selected. They should be catered to the individual employer and demonstrate that you have done your research on the company and know a little bit about what you want to get into. To go back to my horror story about cover letters, I essentially used the same first three paragraphs (changing the company name) and retooled the fourth to illustrate what I knew about the company and why I would be good fit. Most letters are 4-5 paragraphs, here is a breakdown of a five paragraph cover letter for employers: • First Paragraph: This is introductory and tells who you are, why you are interested, and how you found out about the position. This should be fairly short: a couple of sentences will do. • Second Paragraph: Highlight specific achievements you have accomplished at school, further indicating why you would be a great candidate for the job. Also talk about your relevant business, accounting, and finance courses that will provide you with an excellent base of knowledge. Make sure to emphasize any leadership positions you mentioned on your resume and applicable skills you utilized. 6
  7. 7. • Third Paragraph: Mention your relevant jobs and internships you performed and how the experience you obtained in those positions will make you the best fit for the firm. Stress the skills you enhanced and obtained while working and how they will be beneficial to the firm. • Fourth Paragraph: Here is where you mention a couple of reasons why you are interested in the firm and why you would make an excellent fit. For example, for a smaller firm, you might mention how coming from Washington and Lee would make you the ideal candidate in their corporate culture. For a larger firm, you might mention how you like the broad opportunities and global reach that a firm of their size can offer. • Fifth Paragraph: Indicate to the employer what the next step will be: when and how you will contact them to inquire about the status of your application. Also, this is your opportunity to add a thank you and a courtesy appreciative note. If you are enclosing your resume in the same package, mention that it is also attached. I made use of the career services site on cover letter writing and found it helpful as well. It explains a number of different cover letters and provides some helpful samples: IV. Researching Companies The more you know about the company you are going to apply to the more knowledgeable you will be in the interview. Thoroughly researching the companies can also help you determine those you would like to work for and those that may not be suitable to your interests. Your two main research objectives should include finding out first about the company and then the position. The Company: • Size: What size is the firm and what is the scope of its business? Will you be in Toledo, OH, or will you have an opportunity to be in Paris, France? The size of the company can also help indicate career path potential. For example, the bulge bracket firms in New York run a two-year and out analyst program, where the money is good, but the recognition and imminent career path within the company are very limited. At smaller financial firms, there may be opportunity for greater advancement and learning opportunity, but these may come at the cost of location, pay, and prestige. • Niche: Find out what the company’s bread and butter is, where it specializes, and has a comparative advantage: is the firm the leading underwriter on the street or does it have greater focus on mergers and acquisitions? • Culture: Try and gain an understanding of the corporate culture of the firm: is it a meritocracy and has superb bonuses for overachievers, or is it a rigid bureaucratic institution? 7
  8. 8. • Career Potential: Where do people go when they leave the firm, basically, what is the career path that can begin at the firm? Does the firm have strong business school placement? This is an important consideration if attaining an MBA is in your future. For example, a smaller firm may not have the same name recognition as a Merrill or Goldman, but may provide a better opportunity for you to distinguish yourself down the road for B-school, by allowing you to take on greater responsibilities and leadership roles. • Hiring/Firing: Find out about the current environment in which the company is operating and how well it is coping: is the firm in a growth phase or retrenching? Did they over-hire last year and have a hiring freeze on now or vice versa? • Dates: Know when the deadlines to apply are and make sure you schedule them. For the most part, full-time employment dates for financial services firms are from September-October and internships are anywhere from Christmas vacation to early spring. The Position: • Job Description: Find out what the company is going to expect you to do and come up with your own ways to convince them you can fit the job. For example, if it is a research position, be prepared to demonstrate what you have done in college to best aid your research ability. This is also a good opportunity to find out who you will be working with and who you will be meeting. • Stress Factor: While jobs in finance are not the most difficult in the world, they are very demanding in terms of the time you are expected to work. In the interviews employers will be screening to see if the candidate can hack it working 80-100 hours a week under intense stress. Not all companies are the same, however, and tend to have different expectations out of their employees. • Responsibilities: Analysts in different firms take on different roles with differing degrees of responsibilities. It is important to find out what you will ultimately be responsible for and to whom you will be responsible. • What’s Next? Find out what happens after two years, is there an opportunity to make associate or do people find other work and go onto grad school. This can play a major factor depending on what you are looking for in terms of a career path and how accepting you are of change. Resources: My favorite resource for finding out about the industry, companies, and the positions is on The vault has a great book on investment banking and free use of its site if you registrar. The vault was my bible I consulted before talking to 8
  9. 9. the major New York and other large regional firms. It breaks down for you the company description, where it ranks, corporate culture, and the entry-level positions. If you are interested in financial services I strongly recommend the guide to investment banking. Also, talk to alumnae who are actually working at the banks. While they are not always accessible, they can be extremely helpful and are usually very willing to help out W&L undergraduates. It will be important to understand they may have a strong bias toward their company, but talking to them can only help in the information gathering process. To get in touch with alumnae, use the colonnade connections site: You will need to register first before you can use it, but it categorizes the listed alumnae into cities and positions for ease of use. Getting the Job: Networking, Applying, Interviewing V. Networking: Coming from W&L, you have a decided advantage in the strength of the alumnae connections. Alumnae can open doors that might otherwise have remained closed to W&L students. For example, last year most of the New York banks cut W&L from their active recruiting. The Alumnae at the various banks were able to secure a precious few interviewing slots for the students who contacted them and made the grade. Beyond networking alumnae, use any resource you can and hit your dad or mom up for their friends in your desired field, but my focus will be on the Alumnae factor. Networking does not have to be job-specific and in most cases can lead to information on other opportunities. The main thrust of networking is to get a job, but that is the last step. The first step is to get the feelers out there and inquire into what might be available. Alumnae, in most cases, want to help students, but they need help themselves. I remember thinking that if I sent a letter out to alumnae stating my love of business that a job would magically appear in the mail. You need to help them determine what your interested in and guide them to what might be a good fit for you. In most cases the person who receives your letter does not have your dream job, but he/she likely knows of a friend or another W&L graduate that might. A friend of mine decided that he was going to live in Minneapolis for family reasons. While the W&L representation is relatively low in Minnesota, he was able to find a job three weeks after sending out around twenty networking letters. Networking can be crucial for locating those hard to find internships as well. Here are a few steps to follow: 1. Write Cover Letter: This letter differs slightly from the cover letter to the employer in that it is more informal and informational. You should tell the alum what your interests are and what kind of career you are looking to begin. Personalize each letter and include how you were able to find them, as cold letters from strangers can be a little scary. Also, make sure to include in the letter how and when you will contact them so they will be expecting your call and will not be surprised. Giving them a call the next week is pretty standard. The Career Services site in the “Cover Letter to Employer” section is quite useful in how to write a networking cover letter. 9
  10. 10. 2. Find Contacts: One of the best sources to find alumnae contacts in various cities and fields is through the Colonnade Connections site mentioned previously. The site contains a database of alumnae and has their contact information as well as job description online. If this site fails to suffice, then go to the career services office to get a printout of alumnae in the city and career field of your choice. 3. Send Package: While this is pretty basic, there are some important things to keep in mind. You should include an updated version of your resume and print out both the cover letter and resume on nice paper using a laser printer. You can get the paper from the bookstore on campus. Write down a list of everyone you sent your information to so that later you will not second guess yourself and get confused in the shuffle of sending out 20+ letters. 4. Follow Up: Make sure to follow up with the alumnae according to what you told them in your letter. When you follow up, be prepared to answer the question, “so, what do you really want to do?” While this is a simple question this is perhaps the hardest to answer in depth. Also, in your conversation be active and do not sit on your hands waiting for the alum to facilitate the conversation. While alumnae want to talk to you, they cannot read minds and are looking for guidance themselves as to how they can help you. Once again, write down everyone you talked to and keep calling the others you were not able to contact in the days to follow. Be polite and send a thank you to keep yourself fresh in their memory and on your side. VI. Applying Applying should be pretty straightforward, now that you have your preparation down, but remembering the dates is essential. It helps to have a schedule to follow so you are ready for the deadlines and not scrambling to make the drops. Below is a basic itinerary to follow: Seniors • July: This is an opportune time to start contacting and networking alumnae and employers. You will likely be finishing up your summer job and will be able to talk about all the wonderful projects you worked on. • August: At this point, you have wrapped up your summer job and should have your resume prepared and updated. If you are in the vicinity of potential employers, contact them and see if you can set up a lunch, or even a first round interview. At this point it is early in the game and you will have a jump on the competition. • September: Deadlines are fast approaching and you should have a resume and cover letter prepared. Deadlines come in late September on through to November. This is when you should set up a practice interview and prepare for October interviews. • October: Deadlines keep coming and interview dates are here. Go through the interview guides and be prepared for the first rounds on campus and the second rounds on site. 10
  11. 11. • November: At this point, the rush is over and only a few companies will post drop deadlines. Second rounds will likely still be ongoing. Juniors Internships are less uniform as full-time jobs and the dates are more sporadically placed. You will want to check the e-recruiting web page for a list of deadlines. September is a good time to start networking and searching for internships. Most deadlines for internships are late fall to early winter. Modes of Application: For all companies connected to W&L recruiting, you should be able to apply on, where all you need is to upload a resume and a cover letter and wait for an electronic response. For companies not affiliated with W&L, check their website information under “careers” and follow the instructions. In most cases it would be advantageous to try and find a W&L alumnus at the firm and either apply through him/her or just run your resume by them before you apply officially. VII. Interviewing First Rounds To make a sports analogy, first rounds are pretty similar to the playoffs, you were good enough to make it to the post-season, but now it is do or die to make it onto the championship. The first round interview is a chance for the employer to see your resume speak and evaluate your personality, ability to handle stress, and how you can think on your feet. Normally from first rounds, 2-4 people will make it on to the second depending on how large the new analyst class will be. You will be asked to run down your resume and talk about what you put down, and answer questions that the employer will have about internships or activities. Here is a list of potential first and second round interview questions that came up when I interviewed: Sample Questions: 1. Why did you decide to go to W&L? 2. Why do you want to be an investment-banking analyst? 3. What is investment banking? 4. Why do you want to work at our firm? 5. Why do you want to work in our city as opposed to New York or elsewhere? 6. What qualities make a good analyst? 7. What do you think an analyst does on a daily basis? 8. Basic accounting questions (i.e. how do calculate working capital? Know how the financial statements link to each other) 9. What experiences or internships that you have had show that you can work this hard? 10. Walk me through your resume. 11
  12. 12. 11. What experiences or internships that you have had demonstrate that you will be a great investment-banking analyst? 12. What do you think is the weakest part of you resume? 13. What are your greatest weaknesses? 14. What has been your greatest failure in college (or in life) and why? 15. Do you see yourself as a leader or a follower? 16. What is your most significant accomplishment and why? 17. What is the most significant thing on your resume and why? 18. What accomplishment or experience in your life are you most proud of and why? 19. If you could change anything about your college experience/career, what would it be and why? 20. What is/was your favorite class?…least? 21. Describe a situation where you used communication skills effectively. 22. Describe a situation where you acted as a leader and were integral in a group’s success or failure. 23. What one person do you admire most and why? 24. If you could invite to dinner any five people, dead or alive, who would they be and why? 25. It is 6pm Friday afternoon, and your entire family is arriving in town in two hours. You have not seen your family in several months, but your VP just called to tell you that he (or she) needs a pitch done by Monday. How would you decide between your family and work? And what decision would you make? 26. I could give you a dollar every year for the rest of your life or I could give you $15 right now. Which would you prefer and why? 27. If you could spend an entire day doing whatever you want, what would you do? 28. What would make your analyst experience a successful one in your eyes? 29. What do you hope to get out of your experience as an analyst? 30. Where do you see yourself in 1,5,10, or 20 years? 31. What do you want to do when you grow up? 32. How would you select a company to invest in for your personal investment portfolio? What ratios and/or attributes are important? 33. Current events: i.e. How do you think the terrorist attacks will affect the economy in the long term? How do you think the decision to go to war will affect the financial markets and the economy over the next year? 34. How do you value a company? Do you have any idea how we might value a company? 35. You have a balance sheet with the assets being smaller than the liabilities, tell me three possible attributes of this company. More creative questions: 36. What is your favorite bar in whatever City? 37. Why are manholes round? 38. If you could be a car, what kind of car would you be? 39. How would you describe the color green to a blind person? 12
  13. 13. Interview Preparation: You can never be too prepared or know too much information going into an interview. Through forty interviews last fall, I never had the same interview twice and each one had its challenges on different subjects, most of which I had prepared for in advance. In preparing for your interview, I strongly recommend the’s Guide to Finance Interviews. The book goes over valuation techniques, the intricacies of the market, and has hundreds of potential questions. Even if you are on top of your game, the book provides a great overview of the basics you will need to know for the interview. The Career Services guide to interviewing is extremely helpful as well: • Research: I mentioned earlier the importance of researching the company, go over that section again and know everything you can about the position, the company, and the industry. • Stay Current: Know what’s going on in the news and be knowledgeable about what is going on in the financial world. Read the journal and other financial press, such as Fortune, and be prepared to point back to or discuss articles you have read. Being well read in the financial press will help you pick up the language of finance that you will need to speak in your interview. Also, know where the major market indices are and have a few stocks in mind to talk about. • Analytics: More than likely you will be asked a finance question and will need to demonstrate your grasp, if not mastery, of what you learned in the core classes. The interviewers have a transcript and have a basic understanding of how much you know and they will certainly test your knowledge. Some questions will be accounting oriented and cover the three main statements in a 10-K, some will be market related and cover various metrics involved in selecting stocks, and others will deal with valuation techniques used in investment banking. Check out the Guide to Finance Interviews to get a good overview of what you should know. The following is a rough guide to valuation techniques and other analyses used in investment banking: o Comparative Companies Analysis (Comps)  Finding comparable companies: operational and financial aspects o Comparable Acquisition Analysis  Most recent transactions with similar operations and financials o Discounted Cash Flow Analysis (DCF)  Projections  Terminal Value  Discount Rate (Weighted Average Cost of Capital, APV)  Sensitivity Analysis (different scenarios)  Adjustments o Liquidation Analysis  Assets sold off to pay for the liabilities of the business o Break-Up Analysis  Used to determine if the sum of the parts is greater than the whole 13
  14. 14. o Internal Rate of Return and Net Present Value (IRR, NPV)  “Hurdle Rate” o Enterprise Value vs. Equity Value  Enterprise Value = value of all the business’s assets  Equity Value = Enterprise Value – Net Debt • Specificity: Know exactly what the company does; if it does mergers and acquisitions only, then be prepared to talk about the ins and outs of the “deal.” Go to the company’s website where you can learn about what they do and what is currently going on with the company. I even found some sample interview questions on Lehman’s site, as well as some interview tips. You are certain to be asked why you want to work for the specific company. Know why you want to work for the firm and have well planned out answers for this. Most of these answers will come from your research on the company and finding out more about their market niche and corporate culture. • The Obvious Question: Be prepared to answer the questions you think might be too obvious or vague. You will be asked why you want to do investment banking/sales/trading and you will need to have a well thought out and unique answer. Run of the mill responses will have you pegged as someone who is just doing it for the money, and quickly leave your candidacy in the dust. Tie into this preparation your past internships or activities you participated in at W&L that link together to understand your passion for finance. • Interests: Beyond understanding why you are interested in investment banking, you will benefit greatly from having a specific area of investment banking in which you are interested. If you have a substantiated interest in a certain sector or product, such as energy or bonds, it will come across to the employer that you are well prepared and have a sincere interest. It is important to follow this up in the interview by mentioning that you are very open-minded and would be able to fit in anywhere with any group. Inside the Interview: Once you are inside the door, relax and clear the mechanism. While it is absurd to think that interviews are stress free; the more relaxed you are the more confident and qualified you will appear. Take deep breaths to control your breathing and heart rate and be confident in the fact that you made it through the door in the first place. Here are a few pointers once you get inside: • What’s the Protocol? For on campus interviews you will be situated in a room with 1-2 interviewers, most of which are alumnae, for a 15-30 minute interview. The interviewers will ask you to talk about yourself, why you came to W&L, and then about your resume (check sample questions). Normally they try not to trip you up, but want to see if you are qualified and would be a good fit to the firm. If you have 14
  15. 15. an onsite first round interview set up, you are likely to have 3-4 different one-on-one interviews, with the much the same type of questions as an on campus visit. • Behavior o Use a firm handshake o Maintain eye contact at all times o Be energetic and enthusiastic o Avoid monotonic answering of questions o Use a forward posture to demonstrate readiness and enthusiasm • High Energy: One area you are being tested is on your enthusiasm for the job and your ability to carry on a conversation and carry it on well. Putting forth a high energy level, even when tired, can turn a potentially dull topic or question into a winner. You are telling a story and it is important not to put your audience to sleep, but rather leave them with a strong impression so you will be remembered when they go over the other 200 candidates. • Highlight: When asked to walk them through your resume, which often happens, do not go line by line, instead, highlight what makes you stand out and will help to differentiate yourself from the other candidates. Here you will especially want to point out where you took leadership roles or where you took initiative to enact positive changes. When they ask you to walk them through your resume they are really asking you to tell them what makes you stand out. • Relate the Relevant: When asked to talk about an experience: o Describe the job or activity in detail o Describe your role in the job or activity o Talk about a specific area where you were tested or excelled o Relate how that experience will help you in the position you are seeking -People will be happy to talk about their experiences, but will many times fail to achieve the goal: SELLING YOURSELF. Keep in mind that you are not there to enlighten the employer on what Habitat for Humanity does, but how building that house and running the finances of the group demonstrated your financial management skills, strengthened your leadership skills, and further developed your ability to work in teams. • TEAM! Financial services firms are looking for strong individuals, but they are more importantly looking for individuals who will be strong team players. Most of the groups in the banks are organized in teams and are interdependent. Make this point explicit in your interview by highlighting your past teamwork and how that can relate to you being a future team player with the firm. • Weaknesses and Failures: You will undoubtedly be asked to talk about your greatest weaknesses and failures. Reason being: it is very difficult for one to talk 15
  16. 16. about these things. Instead of relaying that you are a lazy bum and have a huge drinking problem, find weaknesses in which you can also find strengths. Talk about your weakness as a learning experience and how it actually makes you a better candidate. Make sure not to sound like you have no weaknesses or feed them a line like “I work too hard.” Here is a variation on “I work too hard:” o Example: Sometimes I am too focused on my academic work and tend to neglect and lose sight of my life outside of school. • You Don’t Know the Answer: You are not always going to know the answer to every analytical question they throw at you, so be prepared for this. If they ask you a question from a subject matter you have not yet studied, be honest and tell them. They know, as an undergraduate going into your senior year, you have not taken every finance class there is and that there is still time to take courses. Non-business majors can use this excuse to get out of the more difficult questions. Be confident in your answer even if you are a little unsure of its correctness. • Questions: The interviewer will always ask at the end if you have questions, and you should always have questions for them. It gives you a chance to further the conversation and show a strong interest in the firm and the position. This is a great opportunity to find out more about the position and the environment in which you would be working. The following questions came out of the Career Services guide to interviewing: o What type of assignments can I expect the first year? o How is performance evaluated and how often? o Does a new hire have input on team assignments? o How would you describe the work environment? o What areas of the organization are expected to have the greatest expansion? o What is a typical career path for an entry-level position? Interviewing: The Second Round Second round interviews are similar to the first rounds, but with greater intensity and duration. In the larger firms I went through anywhere from 4-6 final round interviews in a day, with each interview lasting 30-45 minutes. In the smaller firms, where a great fit is essential, I had anywhere from 6-10 half hour interviews in a day, with the occasional 2-on-1’s. The firm is testing a variety of skills and traits: endurance, stress management, working well under pressure, personality, work ethic, communicative ability, analytical ability, quantitative and qualitative ability, and so on… I think you get the gist that these are not intended to be a walk in the park, but the final test to see if you can hack it at the next level. Most of this is covered in the first round, so this will be more to familiarize you with the process. • The Protocol: You will be flown to location for second rounds for what they call a “Super Saturday,” or whatever day it takes place. You will fly in the night before and the firm will take you out for a dinner and possibly cocktails. The next morning there will be someone who leads you around the office, commonly 16
  17. 17. referred to as a “Shepard.” Interviews normally last 30 minutes but could go longer (usually a good sign, unless you have to explain yourself over and over). At the end of the day, exhausted, you fly home and wait to hear their prompt decision, anywhere from a couple days to a month. • Final Preparation: o Gather as much information on the company and position as possible and be prepared to ask fresh firm-specific questions. o Know the position you are applying for cold, you can do this via website o Get a good night’s sleep, and whatever you do, do not drink too much the night before. Hung over candidates are rarely successful and tend to smell. o Relax, but do not drop your guard, no one is truly your friend until they extend an offer: remain professional. o Keep in mind your task: sell yourself and sell yourself better than everyone else. VIII. Overview of Investment Banks Bulge Bracket: This is your one stop shop for all the latest in financial products: IPOs, debt offerings, M&A, and secondary markets. These banks are the ones you read and hear about in the Journal and the news, making the largest deals and, recently, the largest layoffs. Bulge bracket firms carry with their name a level of prestige recognized on the Street by insiders. The prestige comes at a cost to the analyst’s personal experience. From what I have heard from past graduates working at these banks, personal recognition comes at a premium and lifestyle is an afterthought. The recognition of making it in one of the top Wall Street firms is often reward enough for those seeking a career path in finance. The typical path is two years and out, then you are off to another gig in finance or possibly B-school. If you are considering applying to one of these firms, make sure to familiarize yourself with the products they offer and have in mind an area of the firm in which you would like to work. Bulge Bracket and Larger-sized Firms: -Credit Suisse First Boston: -Merrill Lynch: -Salomon Smith Barney: -Morgan Stanley Dean Witter: -Goldman Sachs: -Lehman Brothers: -J. P. Morgan Chase: -Deutche Bank Alex Brown: Middle Market and Boutiques: Middle market banks are regionally oriented and work on deals that often fly under the Street’s radar screen. The bank’s product offerings are usually more specialized, especially with the boutiques, and may focus strictly on M&A 17
  18. 18. advisory or bond trading. This is not to say there is less expected of an analyst. Often times, the analysts take on greater responsibility because the deal teams are thinner. The career paths are not always limited to two years, and an offer for a third year is not out of the ordinary. When talking to the companies, they will sell the point that you can distinguish yourself and grow your knowledge quicker at a smaller firm, in a more fostering environment. The tradeoff for the experience and greater responsibility is perhaps a little prestige in the bank’s name, but who am I to judge. Middle Market and Boutiques (that target W&L): -Ewing Monroe Bemiss & Co (Richmond, VA): -Wachovia (Charlotte, NC): -Harris Williams (Richmond, VA): -Keefe Bruyette & Woods (Richmond, VA): -Legg Mason (Baltimore, MD): -Lincoln Partners (Chicago, IL): -Stephens (Little Rock, AR): -SunTrust Robinson Humphrey (Atlanta, GA): -Townsend Frew (Durham, NC): -Bank of America (Charlotte, NC): -BB&T Capital Markets (Richmond, VA): IX. List of Resources Resume Writing: Cover Letter Writing: Networking: Researching Companies: Applying: Interviewing: Financial Lingo: 18