I'm talking to an investment bank in the Seattle area regarding a fall internship, as I will be in England this summer studying at Cambridge. However, they said that how they pay interns is off of commission upon completed deals.
Basically, this is what they told me:
"There may be a possibility for a fall internship; however, our internships are somewhat unique as they are commission only. Interns will work primarily on prospective (business development) clients and opportunities. They will be compensated as we are compensated, upon the completion of a transaction. Transactions take on average 9 months to complete. So what does this really mean? Most interns will make money, but they will not receive it until the deal closes some 6 to 12 months down the road; however, there is a risk they will make no money during their period with our firm....just like real life investment bankers."
Would you take it? I would prefer to work in Seattle as I would save a bunch of money on housing, would have a car, etc. But does this seem like a cop-out on the firm's part almost?
Should I look for something elsewhere? Pretty much all the other IBanks in the Seattle area don't need an intern in the fall. Some of the other firms just never responded.
So, I would be looking for something in another city. I would really appreciate everyone's thoughts on this. (FYI I will be a junior in the fall).
Sidenote: Would an internship in the finance division of big firm such as Microsoft or Amazon be fine as well? Or should I search investment banking internships at boutiques, considering I want to pursue IBanking in the future?
Thanks in advance.
Firstly, not sure how many bankers work for literally $0 so I think that sounds like nonsense. Sounds like a bit of a bucket-shop but think of it this way, would you work there if it was an unpaid internship? Natural question for you would be what their dealflow is too.
I think an internship at one of the big tech companies can look pretty good on the resume but is this your last internship? If not, I would say go ahead with the big company and try again for banking next year,
Sounds more like a business broker, not a typical IB.
Sounds like you'll be doing a lot of cold calling / e-mailing. Is it better than nothing if you don't have anything else on your resume... yes. Is it ideal if you're trying to gain more technical / transaction experience... probably not. Like every other internship, if you do enough self-study, you can probably spin the experience in your favor come interview time. Keep in mind if you take this opportunity, you should go into it with the mindset that it is an unpaid internship and you will never see a dime, now or in the future.
Yeah I've tried to go through my school's alumni network and I've gotten a lot of helpful advice but pretty much all the alums could only help me with summer stuff next year.
I'm just trying to set myself up to be in a good position for an IB internship the summer after Junior year so I do have another chance I guess.
The name of the firm, btw, is ACT Capital Advisors. They are listed here on the WSO database but I didn't find much about them otherwise. Their website seems nice at least.
Definitely listen to the above advice and self-study. This is really a business brokerage, as evidenced by the listing of companies for sale on the website. I'm quite certain they aren't registered as a B/D, so the engagements will be quite limited.
You will pickup some deal jargon and understanding, which is key. But, these guys aren't going to provide the skill set you need to nail BB or MM IB interviews. I would suggest getting BIWS, WSO or WS Prep and taking time on the side to really learn how to model and understand valuation.
Good luck.
Probably shouldn't reveal the name of the firm if you're actively speaking with them--but at least your username isn't your actual name (which people have done).
If they at least help you pay for your living expenses considering you're going to be far from home then I say do it....if not then idk what to tell you I probably wouldn't be able to live that far away from home without being compensated at least a little while I'm there. But hey at least its something to have on your resume even though this place kind of seems like it screws over its interns (and maybe even its full time people) from the info you've given about it.
Thanks for the comment everyone. To clear things up it wasn't completely off the table simply because it is close to where I live so I could live at home and save on expenses that way.
I think I might pass on this though, and definitely do some self studying. Thanks!
Dont pass on this. I have done this - you will actually learn alot and there is alot of places where people are not compensated by salary (especially senior guys) and they work 100% based on work fees and success fees. I was compensated way more than I would have made as an SA in ANY BB. It's very true that some will go without making a dime in a year and others will make 200K a month as I saw a colleague of mine do. After seeing what the senior guys were up to all day I was quite impressed.
You need the "you eat what you kill mentality" some have it, others dont but I look forward to joining these types of shops in a couple of years. The potential money that can be made is quite impressive (On a small deal say $35MM Sale - if the shop is using say a Lehman Formula you will make roughly $450K and keep the majority after paying a percentage to the house and whoever helped you out - probably around 200-250K from ONE relatively small deal) I dont know about other people on this forum but those are attractive numbers if you close a couple a year. I have seen cheques upwards of 750K for one person - lets just say they are usually out of the office for about a week after that.
Thats just my .02
Really interesting, thanks for the insight! I'll probably try to get more details and see what exactly is going on.
It depends on the shop so ask as much as you can beforehand and how compensation will be granted after a closing. My best tip would be to get as close with as many MD's as possible and make sure to work on as much as possible so when it comes down to "cutting up the baby" they will say "shit this kid worked his ass off for essentially zero pay - here is a couple of grand". I worked with a great team and got really close with the senior guys so they would always give me interesting work. If you have any questions feel free to shoot me a PM - this place is full of random kids thinking they know the world.
Well if it is close to where you live then I STRONGLY suggest that you take the internship...you have nothing to lose plus you can self study anytime so don't pass up on an opportunity.
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