1. Why Is Networking Important for Investment Banking?
With extreme competition in the investment banking industry, networking with bankers and having them push your resume is very important to get your foot in the door. If you are not from a target school or are in off-cycle recruiting, networking is probably your only real shot.
1.1. Stand a higher chance of winning an interview thanks to referrals from bankers
Getting referrals from bankers through networking will help you tremendously in winning an interview – the first and probably most difficult goal to break into investment banking.
Investment banking is a lucrative career with extremely high salaries, so it attracts hundreds of thousands of resumes for each recruiting season. Simply applying online by submitting a resume cannot guarantee to get you an interview. Even worse, your resume may not even have the chance to be viewed by recruiters.
What’s more, the majority of applicants have the same background: graduate from prestigious universities, high GPA, and finance-relevant internships. So how can you compete against other high-profile applicants and get yourself an interview? And if you are a career changer or you do not attend target schools (schools that have on-campus recruitments by big banks), your chance of getting in is next to impossible.
To differentiate yourself from these tens of thousands of resumes, it is imperative that you have solid internal REFERRALS from bankers in your targeted investment banks. The Human Resources departments rely on referrals to cut down on the number of candidates for the first interview round.
Setting up an internal referral is all about disciplined networking. Candidates will need to spend extensive time developing relationships with bankers to get the referrals they need.
1.2. Solid connections are beneficial in the long run
Making solid connections will benefit you in the long run. Your contacts at an investment bank can do the following things for you:
- Flag your resume with HR so your resume will get pushed to the top
- Put in a good word to hiring managers
- The banker at smaller banks knows a group or his / her own department is hiring off-cycle
If you have multiple people pushing for you, your odds of getting an interview are going to dramatically increase.
2. When Should You Start Networking?
Your networking process should start right when you enter your freshman year, or 6 months before recruiting season at the latest (if you are at target schools where networking is much easier) to have the best chance of winning a full-time investment banking role at a tier-1 firm after graduation. This is because investment banks start recruiting ridiculously early.
The investment banking internship recruiting timeline varies among countries, but for the US:
- Undergraduate/ Master’s Degree (non-MBA): Recruitment for junior year summer internships starts over a year in advance, which means you’ll apply and interview in late sophomore year.
- MBA Level: Banks cannot recruit you before you start your MBA program. The interviews for the summer internship following your first year of business school are conducted a few months after your program begins.
The main takeaway is that you need to start prepping for an IB internship in your 1st year of undergrad because the recruiting season for 3rd-year internships occurs during your 2nd year. These 3rd-year internships lead directly into full-time offers after graduation. Without these internships, winning a full-time investment banking analyst role becomes a much harder challenge.
To have a shot at getting the summer analyst position at large banks in your third year requires you to have an internship right after freshman year. Therefore, a great deal of networking since day 1 is required to get decent internships, especially if you don’t come from a target school.
3. Investment Banking Networking Strategy 1: Informational Interviews/ Coffee Chats
An investment banking informational interview, also known as “IB coffee chat”, is the most effective way to network. You reach out and set up meetings to form relationships with bankers before recruiting, and later leverage those contacts to win interviews. Ideally, you should start requesting and conducting informational interviews 6-12 months before recruiting begins since the process takes a lot of effort and time.
3.1. Informational interview is a chance to connect investment bankers in person
For those interested in investment banking, an informational interview (or coffee chat) is a networking session to gain information from professionals who are actively working in the investment banking industry.
You conduct informational interviews by asking investment bankers at your targeted firms for 10-30 minutes of their time to connect in person (or via phone/Skype) to learn about what they do, how they got to where they are, additional professional experiences, and any advice that they may have for you.
While informational interviews often do not directly lead to job offers, they are critical in getting your foot in the door and eventually helping you secure an interview or job referrals, especially if you don’t attend target school or if you have mediocre grades.
3.2. An undergrad and incoming MBA student should follow this strategy
- You are an undergrad, with at least 6 months before internship recruiting begins (and ideally more like 12 months). Or, you are already working full-time in a related field, and you’re seeking a lateral role at a bank (whether you’re a recent grad or an older candidate).
- You are an incoming MBA student, and you want to have an IB summer internship that would later become a full-time role.
If you do not have 6-12 months for preparation, or you don’t fit into one of these categories, you’ll have to use other methods (see below).
3.3. Step-by-step guide to conducting an investment banking informational interview
These are 8 basic steps leading you to a standard and well-prepared informational interview:
- Step 1 – Find names: Find names of bankers on LinkedIn and via your school’s alumni network, if applicable. You will get higher response rates from junior-to-mid-level bankers (Analyst through VP), so focus on them first, and then get referrals to reach senior bankers.
- Step 2 – Find emails and facts: Determine the appropriate email format for each person, check that the email address exists via Email Checker, and add the person’s name, email address, and key facts (school, major, firm, previous experience, interests, etc.) to your list.
- Step 3 – Request the interview: Email the person to request an informational interview, and follow up 2-3 times if you do not hear back at first. This email should be 5 sentences at most, and it should reference very specific details you have in common with the other person.
- Step 4 – Set up call: If you do hear back, set up the informational interview call and do 15-20 minutes of additional research on the person right before the call.
- Step 5 – Conduct the informational interview on the phone: Spend your time listening and asking questions about the person’s career and tips that he/she has for your job search.
- Step 6 – Make the ‘mini-ask’: At the end, make a “mini-ask” in the informational interview, such as passing your resume along to others in the group or for referrals to other bankers. Drop a hint about a possible future in-person meeting or weekend trip to their city.
- Step 7 – Send updates: If it is logistically possible, conduct a weekend trip several months after the informational interview and meet up with the person just before recruiting begins. If you can’t do this, send 1-2 email updates/ speak again on the phone to ask more specific questions.
- Step 8 – Make the ‘real ask’: Make your “real ask” and ask if the person can pass along your resume or otherwise plug you into the recruiting process at their firm.
4. Investment Banking Networking Strategy 2:
Cold Emailing to Ask Directly for Internship/Job
Cold emailing is emailing someone that does not have any interaction or connection with you to ask for a favour. In terms of investment banking networking, the goal of sending cold emails is to convert a cold connection into a coffee chat with those at prospective banks or ask directly for an internship.
If you sell yourself well, they can help you forward your resume and land an actual interview.
4.2. Cold emailing is an effective strategy regardless of your backgrounds
- You are an undergrad, and you are seeking an initial finance internship in your first or second year of school, especially at smaller firms.
- You are an incoming MBA student, and you want to complete a pre-MBA internship to give yourself a leg up.
- You are about to graduate from university, you missed recruiting, and you need to find something ASAP.
Cold emailing to ask directly for internships or jobs will not work well if you’re already working full-time or you’re aiming for summer internships in the formalized recruiting process. In those cases, you should be using investment banking networking strategy #1 (informational interviews).
4.4. Guide to cold emailing
The steps in the cold-emailing process are very similar to the ones for informational interviews: you still find bankers, guess their email addresses, email them to request calls, and then do the calls.
The main differences between cold emailing to ask directly for an internship and cold emailing to ask for an informational interview are:
- When you send the initial email, you ask directly about internships or jobs the group might be offering.
- On the call, you stay focused on possible openings in the group or other groups at the bank. There is no need to make a mini-ask; get to the point.
- If you get a “no” answer initially, which is very likely, it’s always worth following up a few months later to see if anything has changed. But you don’t need to schedule a weekend trip or do another call – just send a quick follow-up email.
For an in-depth guide (with templates) on how to write cold emails and sample cold emails, please read Investment Banking Cold Emails.
5. Investment Banking Networking Strategy 3: Cold Calling to Ask Directly for Internship/Job
5.1. Cold calling involves contacting current professionals at your target firms
Cold calling is the practice of contacting workers at your target firms directly by phone, without any prior contact and marketing yourself to them.
The thought of making a cold call to bankers makes most people feel intimidated. But the worst that can happen is that your contacts say they’re not hiring, or don’t have the time to help you. If done properly and persistently, cold calling can help you to grow your career and get hired for your next job.
If your goal is to simply find a job or an internship and it’s last minute, the best approach is to be upfront with your intent. When time is limited, cold calling would be a better option than cold emailing since emails tend to get ignored and require many follow-ups, which is time-consuming.
5.2. Cold calling works better for inexperienced job seekers
- Cold-calling tends to be effective only for undergrads and recent grads who lack work experience and have no other way to market themselves.
- If you attend even an average school and you have even mediocre internships, you’ll almost certainly get a higher response rate from cold emails. It rarely works at mid-sized-to-large firms, so this strategy limits you to boutiques.
Unless you have tried every networking strategy and they don’t work, cold-calling should only be your last resort because it’s a repetitive, ego-bruising process that entails more rejection than any other strategy.
5.3. Step-by-step guide to making an investment banking cold call
The standard process for any cold-call can be divided into four steps:
- Step 1 – Find contacts: Find a list of banks in your area, and then search for bankers’ names and contact information. You can use LinkedIn, Google, Google Maps, or, ideally, services like Capital IQ to do this.
- Step 2 – Prep your pitch: Plan your pitch and figure out what you’re going to tell them. Keep this very, very short (1-2 sentences) and state your university, major, and experience, and ask how to position yourself for an internship at this firm.
- Step 3 – Make the call: Place the call and be prepared to respond to their objections (we’re not hiring, we don’t take interns, we don’t have money, etc.). You will also have to be nice to assistants to reach senior bankers or otherwise ask for the person in charge of recruiting.
- Step 4 – Follow up: Afterward, assuming a negative response, follow up once per week. Move on when they stop giving you specific objections and start saying, “No” or “Please do not call us again”. Meanwhile, continue to contact and follow up with other firms on your list.
The numbers here vary widely, but you’re unlikely to get results until you’ve called a few dozen firms, perhaps 100+ firms, and tried to get through multiple times.
6. Investment Banking Networking Strategy 4: Information Sessions & Networking Events
During each recruiting season, investment banks will have firm-wide events where they bring members from different teams to campus for a 2-hour networking & information session. These sessions are your chance to learn specifics about each firm’s internship program, hear from HR about the application timeline, and speak directly with the bankers. As a general rule of thumb, you should be attending at least 1 firmwide event for each firm you’re interested in, if not more.
6.1. What’s an investment banking information session?
Investment banking information sessions are events organized by banks, usually right before recruiting season, to help students learn about the firm and its responsibilities. Current employees will speak about what investment bankers do and what it is like to work at their firms. You can also ask questions you may have, as well as network with bankers from different products and industry groups.
Most information sessions and networking events are held at target schools and conducted by firms’ representatives who are also schools’ alumni. If you come from a non-target, you are at a disadvantage since you don’t have direct access to these on-campus info sessions.
These info sessions are less about learning about the company and more about networking. Make a strong impression (for the right reasons) on banking staff at networking events, and you could walk away with an inside contact to help smooth your path through the recruitment process.
6.2. Freshmen, sophomores and non-target school students should follow this strategy
- 1st or 2nd-year undergrads: with early starters who still have time to develop relationships, going to networking events and info sessions can give a head start. Since you have more time, you can develop deeper relationships and gain a much bigger advantage in recruiting.
- Non-target school students: Most info sessions are organized at heavily recruited schools (or target schools). It’s not common for students to attend information sessions at other schools – so you can stand out quite a bit by doing so. Anything you do that others don’t automatically give you an advantage.
Even if you’re not in one of these 2 groups, though, you should still consider attending at least a few information sessions.
6.3. What to do in investment banking info sessions & networking events?
- Follow dress code: It is usually safe to go for a business casual outfit – Solid, dark or neutral coloured pants or knee-length skirt suits; long-sleeved dress shirts/high neckline blouses.
- Be ready with your elevator pitch: A short and crisp self-introduction should roll off your tongue easily and should be memorable. Maintain good posture and eye contact and smile when introducing yourself.
- Stand out with intelligent questions: The best candidates are interested, enthusiastic, and ready with a stock of good questions. Don’t ask close-ended or generic questions. Every question you ask should invite the other person to speak at length, and help you find mutual connections (school, organization, interest, etc).
- Be a good listener: Pay close attention and take note (or record) of anything the professionals say about themselves or the firm so that you can reach out to them after the event with a personalized email.
Collect business cards: Unlike cold contacting where you have to find leads and their contact info yourself, insight events expose you to many valuable networks. So take advantage of this by getting people’s cards for future contact. (Tip: use the back of each business card to note down any special thing about that person and his/her conversation with you).
7. What Networking Questions to Ask Investment Bankers?
7.1. Questions about experience and perspective
- Could you help me understand your specific responsibilities on a typical day?
- What tasks or responsibilities of your job do you consider to be your favourite?
- What would you say is the biggest surprise on the job from when you joined the firm?
- Has your experience matches your expectations in terms of responsibility, learning opportunity and pace?
- What were the main reasons you selected this firm vs. other opportunities? (this becomes perfect ammunition for your “Why this firm?” question)
- Could you tell me about an interesting deal or project you’ve had the chance to work on?
- What particular aspects drew you to your specific [industry group or function]?
- It may be a little early, but have you thought about the next steps in your career? Are there any career paths that appeal to you?
7.2. Questions about the firm’s business model
- What stands out to you about your firm relative to its competitors?
- I’ve seen that your firm has grown a lot in [this geography or function]. What have been some of the key drivers behind that growth?
- What is the organizational structure of the firm? How big is the team you work with?
- What is the level of interactivity between different groups/offices at your firm? Does there tend to be a lot of shared resources?
- I’ve heard from friends and read online that your firm specializes in [this function]. Would you say this is true? How does your firm differentiate itself in this aspect?
- How would you guys describe your approach to win deals and new clients?
- I’ve noticed that your group has announced a number of [buy-side / sell-side] transactions. What do you think enables you guys to win deals like that?
- I noticed that your firm hired [this senior banker]. How has that impacted your role and what do you think it does for the firm’s strategic direction?
7.3. Questions about the recruiting process
- What is the current recruiting process or system at your firm?
- What sort of preparation would you recommend for someone interested in your position?
- Are there any specific materials you would recommend?
- Who are the key people involved in the process / would you recommend me to speak with anyone else?
- How would you recommend the best position for myself to pursue an interview with your firm?
- Knowing what you know about me and my situation, do you have any general advice for navigating the recruiting process?
- [Regurgitate 1 or 2 things they said and comment on how it’s a very interesting insight]
- “I just wanted to thank you very much for the chance to speak with you. I’ve been looking forward to talking to you for quite some time and appreciate you taking the time for me. Would it be alright with you if I sent any follow-ups if they arise?”
Pick and choose your favourite 10-15 questions from the first few categories and organize them into your own document to prepare for the call.
Don’t expect to get through all your questions (some people in finance talk for hours), but it’s always better to be over-prepared with questions as opposed to the call ending awkwardly. And make sure that at the 30-minute mark, you do a check for time.
Remember, your goal is to make a positive impression and to get high-quality information. You do that by being polite and asking high-quality questions.
8. How Much Networking Is Enough for Investment Banking?
There is no limit to how many bankers you have to network, but aim for at least 200 contacts if you are at a non-target school and at least 80 contacts if you are at a target one. NETWORKING IS A NUMBER GAME. The more you network, the higher your chance is of getting valuable contacts.
Depending on the school’s alumni network and your personal profile, the email response rate may vary, but it is pretty standard to have a 10%-25% response rate for cold emailing. This means that among the 100 bankers you reach out to, you may probably just hear back from 10-25 and hopefully be able to make a call with 5-10 of them.
But don’t get discouraged seeing no response. Keep in mind that you are asking for precious time from someone who has to work 80-100 hours a week. It is understandable that your email will be at the bottom of his priority list. Be persistent and keep reaching out to increase your chance of meeting those who are willing to help.
A: Speaking of networking, it is about tipping the odds in your favour. So yes, many people don’t know that a specific person will select interview candidates. If you speak with dozens of bankers, your chances of winning interviews will increase significantly. There are no certainties in life; only probabilities.
A: Nobody is naive in the networking game. Once you’re in, you have got to have an objective for your action. Bankers already know it’s an internship or job that you are heading for. They’ll respond because if they recommend you, and you perform well, it will make them look good. And if you stay in the industry, you could become a valuable contact for them in the future.
A: There is no place that can undermine networking, but there will be variations in different regions, such as mainland China. Despite rumours to the contrary, networking works well in the U.K. and other financial centres outside the U.S., as our many case studies with the U.K. – based readers demonstrate.
A: If you can’t find chances to network with them in real life, try to connect with them online, using LinkedIn to find professionals in your target industry, and then contact them via email. Or, attend nearby events hosted by banks or organizations like the CFA Society.
A: Chances are you are using the wrong networking channel, or your opening message isn’t so good (many people are not good at concise and meaningful online messages), or your profile is somehow not suitable to get into IB. Good news is you can fix most of these.