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Welcome back everyone,

For this piece, we’re going to do Part II of II of the Investment Banking Analyst series started by FlexUpFirstYear (“FlexUp'“). FlexUp recently completed the standard IB stint and as a Gen Z Analyst can give the best rundown of what the IB Analyst grind looks like in 2023. I appreciate him being forthcoming with how to handle stress in an intense work environment.

After this foundational investment banking piece, I’d love to get PE or senior Credit folks with time to kill to contribute as I look to build out more resources for buyside folks.

First, earlier this month I put out Premium Pieces on Florida & Texas - listing out funds in Miami, Dallas, Austin, and Houston. The goal of these City pieces are to help finance professionals that are making the move down south, or to alternatively provide a list of Sponsors & Lenders that can help with deal flow.

Secondly, ICYMI, I was on the Odd Lots podcast last week. I really enjoy Odd Lots so I’m glad the stars aligned and I was able to talk to Joe and Tracy about the credit markets and the meme account.

Lastly, I’m working on better understanding reader demographics so I can best serve you all. If you have 15 seconds for this survey below it’d be really helpful:

But without further ado, let’s hear from FlexUp:

I’m a Banker, What Now? - FlexUpFirstYear

Introduction

         You land your full-time offer. You are overjoyed with excitement. But what now? In this piece, I’ll take you through my experience before starting the classic investment banking analyst program, tips, and tricks on how to survive banking, and ways to interview and find a path out (if A2A is not for you like it was not for me). I’ve always wanted to write a piece like this for those going through their analyst years, as there were so many questions I had, with little to no resources for answering them. I hope this can be a resource to the thousands of kids working as analysts across the street, so without further ado let’s jump into it:

The Analyst Program

         The first six months on the job may be some of the most exciting times as an analyst, but also bring about immense levels of pressure and uncertainty. I’ll dive into navigating all of this in this section.

Train or Be Trained

         As most investment banks do, the analyst program typically starts with a month or so of training, bringing together all analysts across the firm in one space. In my experience, training was one of the best times to get to know your fellow analysts and build relationships with the ones that you might be working with closely. During training, you will not be staffed on live deals and are typically given the time to study for your FINRA exams, as well as to get to know one another after training is done for the day.

         The most important part of training is making sure you are “a sponge” and trying to absorb and learn everything you can, no matter how fast-paced it is. I hate to be typical, but you are drinking water out of a firehose at training, so you should not expect to fully understand everything you are taught during your first month. Typically, you will be given a full-length, in-depth education on Excel and PowerPoint, as well as the necessary skills and tools needed to understand and create financial models, be it a DCF, LBO, or even a nice-looking comps template. A lot of becoming proficient in Excel and PowerPoint is repetition, no different than many other things in life, so the more you just go with it and try your best in training, the faster you will learn. Of course, try to take the time to understand why you are building out certain parts of an LBO, or why the WACC is what it is in your DCF, but most importantly take the time to learn the basics of Excel modeling and any PowerPoint tricks they teach you. I remember feeling as if I had no fucking clue what I was doing in training despite spending the prior 3 years taking classes on M&A, Excel modeling, and Investment Banking, yet no one truly knows what the job is like until they start it.

         Now aside from learning as best you can about Excel and PowerPoint, your two new best friends, definitely take the time given to you to knock out your FINRA Exams. I was tasked with taking the Series 7, 63, 79, and SIE. To preface, most banks do not require you to take the Series 7, so we can leave that one aside for now. You should try to knock out the SIE and are typically required to do so before starting the job, with the Series 63 and Series 79 being your next two daunting tasks before fully hitting the desk. The Series 63 is the easier of the two in my opinion, with much less content to digest, however, the Series 79 is an investment banking-focused exam, which can help you better understand the content you are being taught during training itself. I took the Series 79 first, knocking it out quickly after starting training as most of the material you need to know for that test typically overlaps with the material you are learning in training. The Series 63 is concerned with a lot of the state laws and legal framework of the industry, and has much less material, so I suggest leaving that for last as it is the easiest of the 3 (or 4) in my opinion.

         Back to my earlier point about making friends while at training. I felt that training was no different than that first week or month at college, where everyone is a bit out of place and just trying to fit in and get to know one another. Given that you’ll be spending 60, 70, 80, or more hours a week with the people you are in training with, you should seek out a few people to become close with. I met some of my closest friends in my analyst class that were not even in my office and keep up with them today even after leaving banking. Building camaraderie with your friends at work is important because I guarantee you, they are just as nervous about starting to work in investment banking as you are. Now even more important, become friends with the people who will be in your immediate office or on your team (if you are not in a generalist program or have been given your team assignment already). I became immediate best friends with the other analysts on my team. When you spend 12-16 hours a day with the same people every day of the week, it is a great idea to become friends with them! Being able to take a break during the day or vent to your coworkers is important, and especially needed as the bonds you’ll oftentimes form from banking are some of the strongest in your early twenties. As training wraps up and you’re nearing your first week on the desk, cherish the free time you have now, because your life is about to get a whole hell of a lot busier.

The Beginning, or Is it the End?

         Your first week on the desk may feel quite daunting and exciting at the same time but remember to just sit tight and breathe – this is what you have been waiting for since graduating college and are about to embark on the interesting, weird, and volatile journey that is a career in investment banking. When people told me I truly knew nothing during my first weeks, I didn’t believe them. Looking back, trust me when I say you truly know nothing about the actual job itself. Once again, be a sponge and try to intake and absorb everything you can.

The First Month

         During your first week, you’ll meet your team, get adjusted to your desk setup, and meet your favorite person of all: your staffer. During your first week, you’ll begin to be staffed on deals, pitches, trackers, or any annoying admin-like task that randomly gets assigned to a first-year. This is absolutely an exciting time as it’s your first real exposure to the industry and your first time getting your hands on live-deal experience, however, you’ll be treated like an idiot your first few months. Going into the job, everyone expects that you’re smart, hardworking, and know about finance, right? Nope! That is not the case. During your first month, you will quickly get up to speed, whether you are working with your second year, associate, or vice president on a deliverable, helping in any way you can. A month in, your Excel and PowerPoint skills will seemingly be quite lackluster compared to those above and around you. During this period, I recommend you ask as many questions as you can, as this will help you learn the quickest. Even ask questions to your peers that you might not expect them to know so that you can both learn on the fly together. During the first month, you will not be as busy as you are not entrusted with much work, however, this is a great time to get to know your coworkers and team and show that you are committed to the job. I highly recommend staying late and even just shooting the shit with your team during your first month, as this is a great sign of someone willing to be a team player and work the late hours that this job requires while having a bit of fun doing so. Whether you’re at the office late going over a specific aspect of a model with your associate or asking a question on how to format a slide, you can always find ways to have a conversation about sports, the weather, or life. Trust me when I say this, liking your coworkers, especially your junior team, will make the investment banking experience that much easier.

The First 6 Months

         In investment banking, I truly believe the learning curve is at its steepest during the first six months on the job. During this time, you will not only learn how to work well with others on your team, but you will learn how to deal with the intricacies of the job itself.

         The biggest part of the learning curve during the first six months is learning how to properly use Excel, and how to use it fast. I was good at Excel before starting full-time, thanks to some outside prep and schoolwork, however, I was not anywhere where I needed to be proficient at building out a DCF or LBO. While most reasonable second years and associates will not let you touch the model during your first six months, I highly recommend taking the time to look at older versions and ask any questions you can come up with to the person on your deal team who owns the model. Learning how to use Excel, and how it is properly used to create models is a very good thing to learn early on, as making models dynamic helps your workstream flow much easier when it is your turn to own the model fully.

         You will spend a ton of time in PowerPoint during your first six months. Making sure you’re able to navigate PowerPoint and use the shortcuts you were taught during training is a huge skill to own. This will help you create slides with ease, and help you get home earlier in the night as opposed to spending hours aligning logos without using your Quick Access Toolbar. While it may be “boring” to spend a lot of time creating slides, keep a positive attitude and try to learn from what you’re creating – maybe it’s an EBITDA Bridge slide, maybe it’s a slide highlighting key operational efficiency of the business, always try to learn when you can on the job – it’ll make banking feel a hell of a lot easier. Excel and PowerPoint Shortcuts are included in a HYH Premium piece here

         So, if you can set a few goals for yourself during your first six months, I’d say it should be the following: 1) be a sponge and take every opportunity you can to ask questions, whether it’s about a shortcut, a model, why Adjusted EBITDA is the way it is, really anything that does not make sense. This will make the final six months of your first year much easier for both you and your deal teams. 2) Always keep a positive attitude, especially during these first six months. I’ve been reading a book lately, called The First 90 Days, and while it focuses a bit more on going from one job to another, its core concepts still apply – what you do during the first 90 days of a job will strongly impact the success you have going forward. The impressions people have of you in the first six months will genuinely influence what deals you get placed on, the trust your team has in you, and your bonus. 3) Finally, I’d recommend appreciating the downtime you have but also taking the time during the day you have free to practice modeling yourself, as this becomes a huge portion of your role very quickly as an analyst and as an associate. Do these three things, and you’ll be in great shape heading into the latter half of your first year on the street.

The First Year, Your Bonus, and Beyond

         The latter half of your first year will be filled with much more Excel, and modeling, so get excited! (or don’t, this stuff takes a bit more brainpower!) A big thing for me when modeling and coming to understand what I was doing was understanding what the key drivers of a model were and how to build it properly so that certain things were tied out. Like in your first six months, looking through some prior deal folders your team has can help tremendously when looking at how older models were built. This will help you get a sense of what senior bankers are expecting to see and will give you a head start to building the model for your current deals. In the final six months of your first year, you are expected to display proficiency in Excel modeling, as well as have your PowerPoint skills top-notch, as this is a skill that you will now have had 6 months to hone. Furthermore, as you head towards your second year, a lot of associates, VPs, and MDs like to see more leadership out of you, especially when summer interns come on board before the new first years start. As you improve upon your modeling skills and near the end of your first year, begin to work on your mentoring skills so when the interns start you can easily teach the first years. A big thing that I have learned works well is having patience with any intern or first year you are teaching during their first few months. A strong leader and mentor will always be approachable, smart, and patient in his teaching and these are some of the best practices I employed when teaching first years and interns about PowerPoint, Excel, deal specifics, or random questions about finance and banking. I can tell you that taking the time to teach and mentor a first year will help, as you will be able to earn their respect much quicker than if you are simply a douchebag to them and just hand off work 24/7. Taking the time to walk them through building a slide, or simple chart in Excel goes a long way, and you will both benefit from it in the long run. As you venture into your second year, focusing on being a good mentor and homing in on the plethora of skills you gained during your first year are important, yet I highly recommend beginning to think about where your future is in banking or not. I’ll get into more about staying in banking or recruiting to leave in a later section. Up next, I’ll discuss how a lot of the questions I had about banking and life as I began my career.

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Is This What “Adulting” is Like?

         Here, I’ll delve into a lot of the “life” questions I commonly asked and hope to answer any you might have as a resource. When I began investment banking, I knew it was tough, and had heard from family and friends about how to survive the brutal experience, yet I want to share advice they gave me and advice of my own.

Sleep, Exercise, and Your Diet

         While in banking, your time will be limited outside of the office and away from work. I highly recommend trying to create some semblance of a routine with exercise and sleep when you can. Of course, there are weeks where you get wrecked and are up till 3 am every single night, however, you must take advantage of the weeks that are calmer to offset the lack of sleep or exercise.

         While I can’t justify joining Equinox for everyone (I personally am a huge fan, yet I did not get a membership till after my banking stint), I highly recommend joining a gym or utilizing your office’s gym if it has one. Try to build a routine – exercise 2 to 3 times a week, if possible, even if it’s a quick 15-minute run on the treadmill. During the weeks in which I was able to exercise, I can without a doubt say I felt better and clearer both physically and mentally. Taking care of your body means maintaining healthy habits like exercising as much as you can, as well as sleeping as often as you can. Upon entering banking, my cousin preached to me to not burn the candle at both ends. I cannot stress this enough if you are tired and feeling out of it, do not force a 3 am night out with your friends, you will just feel like shit for the rest of the week. While I only half-listened to my cousin, I can speak from experience when I say the weekends when I did not take time to exercise, nap, or spend one night in early, I felt like shit the next week.

         Falling in line with the sleep and exercise portion of taking care of yourself while in banking, your diet also matters. As part of the glorious world of being an investment banking analyst, you get a dinner stipend you can spend on just about whatever food you want. In my personal experience, it is better to eat healthy and not order pizza or chicken wings every night, but hey, who am I to judge? In all seriousness, look to maintain a healthy diet during your time in banking, as what you put into your body is all connected to how much you sleep or how often you exercise. It is totally fine to occasionally get the tasty Chick-fil-A or 99 Cent Pizza dinner, but do not look to make this a routine. The weeks where I had gone out over the weekend a ton, and wanted to just have a feel-good meal for dinner that week are the weeks where I felt the worst. Another key thing related to your diet is watching your caffeine and nicotine intake. Some people called me insane, but I do not drink coffee and did not during my time in banking, nor did I ever vape or Zyn during my time (well, I lied, maybe on random Saturday night). Being conscious of your caffeine and nicotine intake is a huge part of maintaining a healthy lifestyle during investment banking, and it is not something you should go overboard with to compensate for lack of sleep or general discontent during a rough week on the desk.

Let’s Get Real

         Whether we all want to admit this or not, investment banking is oftentimes a pretty bro-y culture. I, myself, was a fan – I loved talking sports, shooting the shit at 2 am with my associate, or telling my coworker about the most recent Hinge date I went on. However, within a culture that banking promotes, we oftentimes feel the need to just push through and be relentless with our work, social life, or home life. At the end of the day, we are all human, and we all deal with pressure and stress differently. Investment banking is without a doubt a field that has a culture of high stress and a fast pace to it that is a lot to keep up with. I’ve always considered myself a pretty grounded person, experiencing the occasional bouts of anxiety or depression from time to time whether I had lost someone close to me, started college, or made a big change in my life, yet beginning banking is not just about starting a new job. When you begin your career in investment banking, it is your first time in the real world, except you are given the expectations and responsibility of someone who has been in their career for years as only a 22-year-old. This is not just your time doing banking – it is your first job, your first time in the real world, your first time living in a big city on your own after school. Those are some BIG changes for anyone, especially a 22-year-old who is sleep deprived, has 3 deliverables due the next day, and is hearing their roommate play Fortnite through their Murray Hill bedroom flex wall at 2 am.

         My mental and physical health were most definitely the most volatile they had been during my time in banking than they had been at any other time in my life. And I can guarantee you for a fact if you feel the same way that I did, so do a lot of other people in your analyst class, and so do thousands of other kids across the country in your same position. Investment banking is a high-stress job out of college, probably one of the most high-stress jobs you can get, and you have to take care of yourself to the best of your ability. It often does not get talked about enough, but people go through rough weeks while on the desk, and I know that from experience. I talked to a therapist every two weeks while in investment banking, and it was the best decision I felt I could have made for myself. I truly do not know where I would be without him. Taking the time to speak to someone who can give you an objective opinion on not just your stressful job, but your life is truly a privilege and something you should take advantage of if you can. While your VP and MD may make banking seem like it is your whole life (and trust me, it definitely is at times!), you still go through things outside of work that you need to take time to deal with. In my time as an analyst, I went through the classic post-grad breakup with a girl who was back at school and lost a close family member. Both things were not easy to deal with whatsoever, yet you must deal with them in the little time you have, or they will nag at you while on the desk. While my bank was extremely kind and gracious in giving me the time and space I needed to grieve, not all companies would do so. That is why it is so important to make sure you’re talking to someone, especially when you’re in moments of overwhelming feelings. If not a therapist, talk to a friend, talk to a parent, but please take the time to vent and air out your stress from the job, do not let it build up, I can speak from experience in telling you that that is not the best way to make it through the rough patches of investment banking. So, if there is one thing I can recommend in terms of taking care of your mental health, always talk to people if you’re having a rough week and you will make it through!

Making Your Leap of Faith

         While it may be the goal to be a career banker for some, I know that a large portion of those who are investment banking analysts typically do not see a long-term career for themselves in the industry. Thanks to the prestige that investment banking has garnered for itself, many other industries oftentimes love hiring bankers out of the role because they know how hard-working and competent one must be to have made it into investment banking in the first place. If you are looking to stay on the A2A path, great news for you, a lot of the skills and qualities I mentioned earlier hold true in terms of employing those to make a good associate. However, if you are looking to shift into Private Equity, Corporate Development, Strategic Finance, or even lateral to another bank, I will get into all of that here.

Private Equity & Lateraling

         I figured it would be easier to break this section up by similar career paths, so I’ve grouped Private Equity (“PE”) and lateraling to another bank together. For Private Equity, I did not decide to take this path out of banking but have friends who have done this. If you are dead set on leaving banking after 2 years and know PE is right for you, on-cycle recruiting has begun to take place during the summer as analysts are literally starting training or just hitting the desk. If not, there are plenty of recruiting opportunities that will come in through headhunters as you make your way through your analyst program. Some of these PE opportunities are immediate starts, while some acknowledge that most investment banks’ analyst programs are 2-year programs (except for some investment banks still having 3-year programs), so your start date will be after you complete your bank’s analyst program. A lot of these interview processes will be multi-round, comprised of case studies, LBO model tests, and behavioral questions focusing on your background and why you want to make the move to the buy side. Similarly, for lateraling to another bank, these interviews will have modeling tests, and behavioral questions focusing on your background as well as why you want to leave your current bank and why the bank you are interviewing with makes more sense. I will implore that if you do lateral to another bank, it is highly in your best interest to stay at that bank for a minimum of another year or two, as you do not want to be seen as a job hopper so early on in your career. Headhunters, like Henkel Search Partners, will flood your inbox with recruiting emails, so make sure to stay tuned to emails like those if you are thinking about leaving for an opportunity in banking or PE.

         When it comes to Corporate Development, Strategy, Strategic Finance, or careers similar to these, the interview processes and means of finding these jobs may be a bit different. I came across my job from a friend in the industry sending me a link to a LinkedIn posting, but I also definitely recommend creating LinkedIn job notifications for anything that might interest you in a space like this. Of course, headhunters are your “friends” here and will send opportunities in both Corporate Development and Strategic Finance, however, I oftentimes thought it was best to pinpoint an industry you’d like to go into and do your research from there. This is typically the best method of finding a job in this space, and networking can go a long way when you know which specific companies you might want to do a job like this at. I had hopped on a call with a Director of a Corporate Development team in the industry I wanted to enter and had a great conversation, which ultimately led to him sending me a job opening once their team was hiring 7 months later. Like networking for banking, you just never know who is going to call back and present you with an opportunity you otherwise would never have had. The interview process for Corporate Development or Strategy jobs is similar to PE and banking, yet a lot less focused on modeling. Of course, modeling is important, however, they are not going to make you sit down through rounds of LBO tests and case studies. Typically, these interview processes may involve a case study (which at times may be a live case study mid-interview), and potentially some form of a modeling test. Otherwise, a lot of these jobs are industry-specific, so you will absolutely get asked why you want to enter the field you are applying for. Additionally, you must have a great answer as to how your skills learned in banking can transfer to your new role and why you want to leave banking. Simply saying “I’m tired of the hours and want something new” is not going to cut it, you should thoroughly think through if leaving banking is the right move for you.

As cliché as it sounds, when it comes to looking for opportunities outside of banking whether it be PE or Corporate Development, your network is your net worth. I can’t tell you how many friends of mine have found great jobs from being forwarded headhunter emails or random job posting notifications. These are truly some of the best ways to find great opportunities and are also great ways to socialize with others and make important connections.

As always, remember that investment banking and your career does not need to become your whole life. What we do with the time we have is so important that we make sure we chase things that make us content, even if we must make sacrifices along the way to get there. By all means, investment banking is a wonderful career path – you learn strong technical skills, how to work hard, and how to work with others at all times of the day and night. I truly feel like it is the military boot camp form of the corporate working world, as it makes everything else from there on out feel much lighter and easier. Since, leaving I have been able to see the forest for the trees, and can say I am extremely grateful to have had the opportunity given to me by my bank to work in the field, as I’ve made friendships and learned skills on the job that will stick with me forever. However, no job is worth your happiness or health, so if you feel that making a change is right for you, follow your heart. If not, work as hard as you can and follow your passion for finance and investment banking, you create generational wealth by sticking it out for a career in the field. Till next time, over and out, FlexUpFirstYear.

Harry here - thanks again to FlexUp for sharing his wisdom to the college students and first year investment banking analysts out there. I appreciate him being real about some of the struggles you have to deal with in an intense work environment. Always good as well for the old timers too to see what IB is like in 2023/2024 from a Gen Z perspective. Remember, I’d love to get a Private Equity Associate & up, a Direct Lending Senior Associate & up, or another mid-level buy side professional & up to contribute. To be clear - we are paying ppl for their time and insight, so calling on some semi-entrepreneurial person who wants beer/dinner money.

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Lastly, if you’re looking for my internal resources on how to grow and succeed early in your career, make sure to check out my Premium Resources. If you’re looking for outside resources to break into IB, the team at The Pulse is my recommendation.

That’s all for this edition, talk soon,

Harry