Lateraling with little modeling experience?
Ive been at sector focused boutique for almost 9 months as an AN1. While I’ve gotten great exposure to the overall M&A execution process, I’ve had very little to any opportunities to model. That being said, I’m not sure the sector I have been in is for me and I’m potentially interested in exploring other options after / around the summer. Understand that most firms if not all have modeling tests for lateral hires and I’m not sure how well I’d fair if I was put up to it. Does it make sense to wait until I have more experience modeling to consider moving? How have others approached this aspect of the lateral recruiting process?
Based on the most helpful WSO content, lateraling with limited modeling experience can indeed present a challenge, especially considering the importance of modeling tests in the interview process for lateral hires. However, there are strategic steps you can take to mitigate this and still position yourself as a strong candidate:
Leverage Your M&A Execution Experience: Highlight your comprehensive understanding of the M&A process in your resume and interviews. Emphasize any analytical work you've done, even if it wasn't strictly financial modeling. This can demonstrate your ability to understand complex transactions and your potential to quickly pick up modeling skills.
Self-Learn and Practice: Take initiative to improve your modeling skills through online courses, such as those offered by WSO Academy. The WSO Elite Modeling Package, for example, covers various types of financial modeling and can provide a solid foundation. Practice regularly to build confidence and proficiency.
Network Effectively: Networking is crucial in the lateral hiring process. Use your connections to gain insights into what specific firms are looking for in modeling tests. Sometimes, knowing the type of models commonly tested by your target firms can help you focus your preparation effectively.
Be Transparent: If asked about your modeling experience during interviews, be honest but focus on your eagerness to learn and your proactive steps towards improving your skills. Many firms value a candidate's ability to learn and adapt over existing expertise.
Seek Feedback: If you have the opportunity, seek feedback from peers or mentors who are proficient in financial modeling. They can provide valuable insights and tips to improve your skills.
Consider Timing: While gaining more modeling experience at your current role could be beneficial, don't let the lack of it deter you from exploring opportunities that interest you. The lateral hiring market can be competitive, and waiting too long might mean missing out on great opportunities.
Many have successfully navigated the lateral recruiting process by focusing on their strengths, being proactive about learning, and effectively communicating their value to potential employers. Remember, firms are looking for candidates who can bring a diverse set of skills to the table, not just technical proficiency.
Sources: How long was your lateral process ?, Guide to Lateraling in 2021, Guide to Lateraling in 2021, Lateral hire from another consulting firm to MBB, PE Lateral Recruiting Advice/Stories/Help?
You can lateral without knowing how to model but crushing it when you get there is tough. On your free time I’d practice modelling so you can get yourself up to speed.
Why don’t you actively try to get in the model more? You have been long enough there to start taking some model responsibility. If not possible try looking at the model on your free time, and maybe try to rebuild them. I’d consider lateralling later with more experience under your belt
Thank you for your perspective. I’ve asked to have more opportunities to model but at my firm it’s really the associate who owns the work stream with sometimes the help of a 3rd year analyst (depending on how the deal team is structured). I’m hopeful the next few months will present more opportunities to get involved since I have been vocal to my staffer/VPs
You seem really humble and well meaning so please do not take this the wrong way. Your shop may not model, but the learning is on you. While associates may hold the model, you have access to the file, right? Open it, look through it - in detail. Get confused. Why is X being driven off of y, and why does z not get included in k when I thought it should be? If you find yourself asking yourself these questions, you’re learning. Now come up with a list of questions and go to the associate with the following message: “hey fuckface (that is a joke), I wanted to get more exposure to the modeling side and building my valuation knowledge and I spent the last few days looking through it and I had a few questions that it would be great to hear how you think about. Would you have any time to connect this week and discuss?” If you two are close, then keep this less formal. Do the above. Go back and dig further. Repeat in a few weeks or with another associate. Try to rebuild or build a new model. It’ll work.
Thank you for the push here. I did exactly as you suggested and just had the chance to take the lead on a valuation / transaction analysis for one of our buy-side mandates. Very much appreciate your advice!
I’d check out rareliquid on YouTube. I was in the same boat as you and he really helped me get my modelling skills up to speed. I’d focus on the learning right now and enjoy the process of learning how to be a good modeller. Overtime you realize it’s an art more than a science and there is no right way of going about things.
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