Guide to effective networking

Hey, 

I've been getting a lot of networking requests via LinkedIn and my work email, and since they have pretty similar concerns in general, I thought it might be better if I write something that can help many prospective candidates here.

By following the steps below, I sincerely believe you can save a lot of time and effort. (I'm going to assume you have no access to Bloomberg Terminal or FactSet)

The purpose of networking should be to get an interview. To get an interview, you should prioritize sending your emails/messages to the individuals in the order presented below:

1. Managing Director who's looking to hire an associate

   Find his/her name by:

   A. check each company's career website -> see which sector coverage team is looking to hire an associate -> find the MD's name by googling (ex. if JP Morgan is looking to hire an associate for their restaurant coverage team, then google "MCD JP Morgan target price". Obviously, it doesn't have to be MCD, just any publicly traded company within the restaurant sector would work.)

   B. check each company's career website -> see which sector coverage team is looking to hire an associate -> Go to LinkedIn -> Type in the sector into the search box -> refine search by typing MD or Managing Director at the title section and the company you're looking to apply to (ex. for the same case as above, type in "restaurant" in the search box, refine search by typing "MD" into the title section and "JP Morgan" in the company section)

2. Associate Director of Equity Research

   Find his/her name by:  LinkedIn -> search using company name and title (ex. company = JP Morgan, title = associate director of equity research)

3. Other people (associates & VPs)

Find his/her name by:  LinkedIn

The most effective way to get an interview is by directly contacting MD. MDs have the most say in the hiring process and if she/he likes you, the interview process becomes much easier/faster. Also, even if some associate or VP passed along your resume to HR, there's a chance that HR will scrap your resume for some reason (no past experience in ER, non-target school, low GPA, etc.) When sending emails to these people, you should attach your resume, a 2-3 page stock pitch (PDF), and a financial model of your stock pitch (Excel). Attaching these files shows that you've put in the effort and makes you stand out amongst many people who simply reach out for a coffee chat. The email should be brief and to the point. Write that you have X, Y, and Z skills and A, B, and C experiences that make you a suitable candidate for the job.

I believe you should focus mainly on sending these emails to MDs and director of ER, but there are a few reasons why it might be a good idea to network with associates:

1. To learn about the culture of the company

-reason: so that you can answer "Why this company?" question during an interview. It would be good if you could say something like "I spoke with this person and he/she described the culture of the company as X, and that really resonated with me etc"

-caveat: as you might already know, each team at the same company can have a completely different culture. But you can still show that you did your research and display your enthusiasm.

2. To have your stock pitch reviewed by that person

-reason: it's good to have as many people to look at your work before sending it to MDs.

Lastly, few miscellaneous tips:

A. Interviews come very rarely so make sure you can answer technical and behavioral questions with ease.

here are some questions that I was asked during the interview:

1. Walk me through your resume

2. Why Equity Research?

3. Why this company?

4. Why this sector?

5. what happens to the three statements when depreciation increases by $100

6. how do three statements link to each other

7. how do you calculate EBITDA

8. when would you use P/E vs. EV/EBITDA

9.  Walk me through the Income Statement starting from the revenue

B. make sure to have a stock pitch ready.

1. just one is fine

2. it doesn't matter whether it's a well-known company or not. What matters is your thesis.

3. For your thesis, you must focus on a certain point of contention and take a stance while providing evidence for your claim. Most companies have some kind of issue they're dealing with (acquisition, starting a new business, general sector downcycle, launch of new product, new regulation, change of management, change of business plan, etc.) So mention one or more of these issues and say you think the company will do well because of X, Y, and Z reasons. 

4. the pitch should be ~2 minutes. You must time yourself when you practice because you'll realize 2 minutes is a very short amount of time.

5. Don't spend too much time learning every little detail about one company. Instead, research the company's competitors and be able to articulate why your company is better than other companies in the same sector.

6. Memorize a few things: the gross and operating margins of the company you're pitching and its competitors. The revenue growth rate of these companies. 

C. sending messages to the person's work email is most effective at getting their attention. I'd recommend sending it in the afternoon. Don't send it on Monday, any other day is fine. If you don't get a response, send another one the following week. Don't send emails more than twice, they read it and chose to ignore it.

 D. if you're not a strong candidate (ex. non-target, no background in finance/business, older than average, etc), I would strongly recommend you apply to the lowest-tier ER companies. You can then build some experience and jump to some other company. 

E. Asking for referrals at the end of the call just wasn't as effective in my personal experience. 

It's a long post, but I wanted to share this information with some people who are not having any luck networking with other people because I went through a similar struggle. In the end, I really think it's a numbers game so keep at it. 

Thanks