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WSO Free Modeling Series - Now Open Through
May 31, 2024
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
Of course, how could I forget
After this you cover more stocks if you are good and if sales likes you. They are your first client - if you can convince them, you can convince clients - that is the real make or break as an analyst. When that happens you really start to progress and make a name for yourself. When this breakout happens and sometimes it can fail, you pay starts to materially increase. After this, you then start to write your own ticket. I left my first place after 3 years because I was growing as a junior and need to progress to gain more coverage. This generally happens and is par for the course.
Expectations are high as you progress. Your calls need to be good, clients need to like you and you travel a lot. Right now, I am on the road at least once a month but it is normally a short trip. I travel 25-30% of the time, and it can be tiring but I've been to 30 countries so it can be exciting in some ways. I've definitely stolen my fair share of toiletries. After 7-10 years, you write your own ticket and you are your own franchise. I can move to any bank that wants me and get paid because I have a transportable client base. Clients like my work and follow me wherever I go. Even when I went to a boutique, they followed me there. You will have developed a strong following, good historical stock calls and relationships with key people. That stuff goes a long way in choosing how much money you can make and what firm will be attracted to you. Longevity is generally to late 40's or early 50's - after a while, the work and early starts are tiring so lots of people move to the buyside. Some who have killed it leave the industry and even fewer retire - but that is possible indeed.
If you have worked in some kind of business or done teach for america - I think that can be cool - it doesn't matter as long as you are interested and engaged in something creative and entrepreneurial. Most smart people hire this way but then you have idiot banks that hire very very conventionally. But, that is changing. A mock portfolio is always a good convo starter as well. Writing your own report would show some passion so that would be interesting for sure.
Couple of things
Don't call yourself a rising senior! What is that exactly? That you are good or that someone will therefore assume you are good? One of the things you must know about banking is that we are jerky and will call you on nonsense - think of bankers as Louis CK types - very unhappy about any fluff. We deal with a lot of money, stress and shit talking CEO's - we will see through this rising senior crap. Talk to us in a non-bs manner - bankers will respect you for that.
Breaking in continued I, just like all of you, was a fairly average ER candidate when I applied. Yes, I had a great degree and some cool extra curricula but that is tough to get past the obese and depressed HR lady. To get a job, you must network, try to meet recruiters for coffee, or people that work in banks. Don't ask for a job but just a chance to meet someone - that is your best way. I did not have an internship and fought my way in - I wouldn't take no for an answer and really tried anything I could. Consider smaller brokerages. There are so many that you just need a foot in the door and that is it. Don't rely on some 1st year associate at GS to 'hook you up.' They won't because they are not important yet - few people can hook you up unless they are VP or above. However, hook ups are hard because if you suck, I will get blamed for a garbage recommendation. I rarely recommend people and only when I am comfortable do I do so. Anyway, keep trying to get a foot in - small brokers, consulting, buyside. I used my experience in my family business as a transferable skill set to ER - find something in your CV that will broadly match the skill set of ER. The difference between successful ER analysts and crappy ones is tenacity - the job process is a good precursor of life on the sell-side
Do not apply for teach for america because I said so Look - I like teach for america and some progressive institutions like Capital and GS value it as well. At the same time, others don't and like skills like financial modelling(taking some modelling classes is a good CV thing as well) or strong quantitative acumen. I hate these types of hires because I can teach anyone modelling or writing, but I can't teach creative thinking. For every one person that likes TFA, there is another who will quiz you on how to determine the risk free rate in a DCF. If someone asks you that question, realize that guy is a shithead, answer that question and then metaphorically punch him in the face. Most of these idiots are gone but it is possible they are still around - especially at weak franchises. Just try and find a way to make your average CV more relevant to the ER role and what we do. Personally, I love writing and appreciate numbers - i tried to make that clear in my interviews and in my CV submissions.
Modelling It took me about 9 months to get pretty comfortable. I had a boss who sucked at modelling so my training wasn't great in this area but my next MD was great so I picked up a lot from him. About 4 years in, I was very very strong and now I think I am one of the best on the street. But, I had good training, a passion for numbers and I kind of like excel. M&A you will become a rockstar in a 12-18 months, sometimes quicker. the best way to get better at this is to build a model from scratch - that really accelerated my ability. Even if you don't know what you are doing - try diagnostically looking at a complete model and emulating that - that kind of training was great in my development.
Sell-side/buy-side
I am considering the buy-side for a couple reasons. Firstly I am bored. I have covered the same sector for close to a decade and the learning curve is limited for me at this stage. I can stick around but I feel like this would be intellectually redundant. Now, despite this - I don't really want to give up the money. You make a lot of money in sell-side ER by being specialized - and if you are good at it, it is an easy way to make a killing and not work that hard. But, it gets tiring and the 75% of the people you work with are mediocre douches - they will do anything to ruin your life because we are paid on a relative basis - as in I have to be better than everyone else. This leads to sabotage and has already happened to me a number of times in my career.
My situation is different in that my role on the buyside has a clear path to being a PM. It is exciting to be a PM - you live an easy life, get wined and dined, it is intellectually rewarding and you can make a very large sum while being home by 6. Plus, you don't have to deal with the politics and boredom that the sell-side can provide at times. It is a lifestyle and challenge thing for me - but I am reticent about a paycut - which is why I am 'considering' it rather than doing it at this stage.