Success in IB - Not Taught in B-School

Long post alert. 

Someone asked me about skills / advice that aren't taught, but are important in IB

The below is stream of consciousness and in no particular order.  

  1. Always ask why. General curiosity is a lost skill. I always ask myself why things are the way they are. Why is the business growing, what is this account, why did this customer leave, etc. You can't ask yourself why enough times. Write down questions you have and always understand the "why". 
  2. Have empathy. This is another lost talent. Try to recognize and understand the feelings of others. This makes each of us more human. Whenever you walk through a facility (usually manufacturing, distribution, etc.) the employees will always wonder "Why is that young person in nice clothes walking through our plant?" Employees are always scared that a business will get sold and they will lose their livelihood. I come from a very blue collar family. That person in the plant is my dad. Whenever I walk through a plant and see that person I think that it is someone's dad who is concerned (or scared) about what is going on. Think about that. We are all people. Empathy will keep you humble.  
  3. Think about how businesses operate and make money. Look at every file or piece of information you receive and think about how it fits into the operations of a business you are representing. There is a reason for everything. For example, you receive a file of 1099s - Ask yourself what are these? Why do we have them? It may mean that the business uses an outside sales force that are not W2 employees. How much revenue is generated from each? How are they paid? Is there liability with the 1099 vs. W2 classification. There are dozens of examples like this. Just think about how everything you interact with fits into the business. Ask why.
  4. If you have bad news, always lead with it. This is a great lesson I learned on the job. I ran a marketing process to sell a company and we received only one bid after discussing the opportunity with 100+ buyers. We had to present the results to the business owners. I lead with "We received good feedback about your company from the market." Big mistake. They thought good feedback was in terms of a lot of interest at high values. What I meant was that we found out how buyers viewed the business and what made them "pass" on the opportunity. I should have lead with "We received one strong bid to buy your company and received valuable feedback from the market on their concerns."
  5. Always look at percentages. Percentages (or margins) don't lie. The first thing I always do when analyzing a business is look at margins and annual (or monthly) % change. You can really tell a lot about a business this way. A high value-add client will usually have strong gross margins. Although an EBITDA margin that is too high will always be scrutinized by a purchaser with the question of "is this sustainable". If a buyer asks it, we should also wonder the same. 
  6. Network with the intent of building genuine relationships. This is a good lesson from one of the most successful financial advisors that I know. When he first started in his career (right out of college) his plan was to go to the med-school and law school to network with people that would eventually be high net worth individuals. He took them out golfing, coffees, lunches, etc. He didn't go into these meetings with an ask, he built genuine relationships. Those relationships blossomed and the individuals eventually invested with him or bought financial products from him. Everything started to snowball for him and his practice just kept growing. While this networking paid off in the long-term, he led with building true relationships. 
  7. Take detailed notes. This is something I do multiple times on a daily basis. Every call, meeting, interaction I have I always take notes. All my notes are saved in a folder. This has helped so much with trying to recall a topic or question that was discussed. Clients hate when they tell us something, then we forget it and they have to explain (or provide) it again. My brain is in the cloud.  
  8. Ask at least one pre-thought of question per meeting. This gives you the opportunity to show that you have looked at the business / thought of it carefully and have curiosity. Come up with ~3 in case your other two are asked.
  9. Don't fear being on the phone. It seems like most people now would prefer to email. If you want an answer the best way to contact someone is probably calling them (call their cell is even better). It is easy for people to ignore an email. Whenever I am contacting buyers for a company we are selling, I always call their cell phone, then immediately follow up with an email. Staying persistent gets responses. 
  10. If you can't answer something, always follow up. You aren't expected to know everything. Especially early on in your career. There is no shame in saying "I'm not sure. Let me get back to you on that.". I still do it all the time. Just make sure you actually get the answer then respond to the inquiring party. 
  11. Never be the reason a deal gets delayed. If there is a diligence request that needs fulfilled, a question that needs answered, a slide that needs completed, anything - make sure you aren't the reason there is a delay. 
  12. Speak with confidence. This goes a long way. We deserve to be in our roles and we deserve attention. Have ice through your veins, we don't have anything to lose. Be confident, but not arrogant. 
  13. Have a really good organizational system. I am a stickler for using a template folder structure and consistent file names. I always use the same folder system (same names). I use naming conventions so files are always in chronological order when sorted by name. Most recent dates on the bottom. When naming a file I always ask "What is this?", then name it as such. Files should be named so that a person looking at it for the first time should know exactly what it is. Never have files that are "Xerox Scan 615qad23. You are responsible for finding everything and anything on a moments notice.  
  14. Triple check your work. Self explanatory. Take the extra time to review and review again. It doesn't matter if a document is out five minutes faster, but it will matter if there are spelling errors and old forecast numbers. 
  15. Play your underdog card. A lot of people may not have gone to target schools and fought like hell to get into this field. You deserve to be in this line of work just like everyone else. Have a chip on your shoulder. Constantly prove yourself with your work and results. It will pay off. 
  16. Have Grit. This is sometimes overused and everyone thinks they have it. Grit is the passionate pursuit of a long-term goal with persistence - no matter the obstacle. Have a long-term goal and every day move the boulder up the hill to get there. Build up on the small successes. They will be big successes one day. 
  17. You will mess up. You won't mess up more than me. I have sent the wrong CIM to a buyer, messed up forecasts, provided information I shouldn't have, replied all to a group that shouldn't receive the email. Everything you can think of that is wrong, I have probably done. Just learn from the mistakes and don't make them again. Be like a pitcher who throws a home-run. Forget about it, move on. Focus on the next pitch being a strike and striking out the batter. 
  18. Be concise. Explain things in a way "a third grader would understand." Speak thoughtfully, clearly with sentences and in a way that makes sense. 
  19. Be creative. Don't be a robot. Think. We have a brain, use it. If you aren't creative, use resources to make yourself more creative. For example, look at investor reports from publicly traded companies that are in the same (or complementary) industry as your client. This is how you can "get in the weeds in an industry". It gives insight into how people in the industry look at themselves and others.   
  20. Operate in a manner as if the investment bank you work for is your business. This is John Smith, LLC. How would you want the business to operate? This gives you a sense of pride in everything you do.   

Comments (34)

Aug 26, 2021 - 10:36am
whatsapitchbook, what's your opinion? Comment below:

just started in corporate banking as an analyst, really appreciate this very helpful and informative post. SBed

  • 3
Aug 26, 2021 - 6:53pm
overandout, what's your opinion? Comment below:

This is literally a guide to being a top bucket banker. Aside from the obvious addition of "get good at the technicals."

  • 2
Aug 26, 2021 - 8:19pm
weaslbee, what's your opinion? Comment below:

About to start my first IB gig after years of trying to break in. Great points and some very relatable. Thank you immensely.

Aug 26, 2021 - 9:00pm
Purple9988, what's your opinion? Comment below:

Amazing advice! Although I only have experience as an intern, leading with bad news, always thinking about things in terms of percents and not absolute dollars as well as always having a question just in case a superior asks you, are all major pieces of advice which I wholeheartedly agree with and got to see firsthand and maybe a little bit too personal haha. (Sent this using text to speech so hopefully it's not too shit)

Thanks for sharing your advice. It's always great to hear from successful people who are a few steps further along the path than you.

  • Analyst 1 in PE - Growth
Aug 27, 2021 - 4:58am

Comforting to hear it is part of the process to mess up and is not the end of the world..

Aug 27, 2021 - 4:04pm
NoEquityResearch, what's your opinion? Comment below:

Good stuff but a good B-school should teach you a few of these. In particular, 1, 3,5, 7, 12, and 18. 

Always ask why.

Think about how businesses operate and make money.

Always look at percentages.

Take detailed notes

Speak with confidence.

Be concise.

Honestly curious, did your b-school not cover topics like this?

Aug 27, 2021 - 11:25pm
prwinebr, what's your opinion? Comment below:

In synthesis: be prepared. It sounds obvious, but YOU should be the one who researched the clients business, chatted with them on the intro calls, took the client's messy financials, cleaned them, did the common sizing, projected the next 5 years, pulled the set of comps (with rationales and link evidence for each comp), took the time to understand the outlier and baseline multiples in each comp set, calculated the appropriate WACC, and then created the football field. If someone else did even one of these, take the time to understand their thinking (made vastly easier when you justify with links for comps or take notes on client calls etc).

This helps you catch errors, present with confidence (because you literally know EXACTLY what you did to get that WACC of 18.3%), and answer 90% of client questions.

  • Associate 2 in IB - Cov
Aug 28, 2021 - 12:34am

Great stuff - every incoming analyst / whatever role needs to read this. The ones that stood out were curiosity and empathy. You're never too senior to ask questions and be aware of what you don't know. And empathy will keep good people around you as you progress.

I really strive to get my analysts / associates to understand the bigger picture on everything. If you're making a slide - put yourself in the readers' shoes and try to figure out what is important. If done right, that 40 page deck becomes 10-15 pages of useful info.

Aug 28, 2021 - 7:35am
financeyeti, what's your opinion? Comment below:

Great write-up mate - really appreciate your effort in jotting everything down. In particular, I resonated with your advice surrounding empathy. All the best for the future!

Aug 28, 2021 - 9:56am
Fly_CONCORDE, what's your opinion? Comment below:

Great post! Really appreciated everything you shared.

Would you be so kind as to elaborate on your note taking system? What application do you use? What are some sample file names? How detailed are they (i.e.: how many pages is the document, typically)?

Thank you so much!

Most Helpful
Sep 1, 2021 - 11:09am
Quaneaser, what's your opinion? Comment below:

Great post, would highlight the following:

7. Take detailed notes - at every level you should be taking your own notes. I sometimes see my associates telling the analysts to take detailed notes but don't take any themselves, wrong approach. My MDs are scribbling notes throughout MPs as well - it's the only way you will retain information and track key followups. Eventually at the midlevel (associate/VP) you'll be leading calls and at the end you'll need to review followups. If you took no notes this will not be possible

13. Have a really good organizational system - don't be one of those people who have thousands of emails in their inbox. 1) you will 100% miss important emails (which my seniors do all the time...) and 2) it will be very difficult to find prior communications quickly without digging through a mountain of emails (or get very lucky on hitting the right keyword). Put stuff into folders, mark things off as followups, and only delete things you know you'll never need to reference again. Recently, my MD asked for the contact details of a strategic we reached out to in a process 2 years ago (and immediately declined) and I was able to find it in 4 clicks

18. Be concise - Juniors tend to get very lost in the weeds when explaining things to seniors or the client. While it is great that they know all the details (the mark of a top bucket junior), being able to decipher what level of information you need to communicate is a key skill. Also when crafting emails if you find yourself writing multiple paragraphs, rethink the approach. People have short attention spans and often what you are writing can be condensed significantly. If you do need a bunch of followups from a bunch of people, clearly outline who specifically should be doing each of the tasks - makes it much harder for them to miss/ignore

Sep 3, 2021 - 3:59pm
RI-finance, what's your opinion? Comment below:

This is great. One critical thing I'd add is learning how to promote your self in a thoughtful (i.e. not outright bragging or at inappropriate times) and effective way. If you're doing a really good job and people don't know it, you won't be able to reap any rewards. 

Sep 3, 2021 - 4:15pm
LaissezFaire1776, what's your opinion? Comment below:

Thanks for the clear and insightful advice! Got a specific follow-up question: What's your advice with respect to email folders in Outlook? I'm tempted to create rules that put all of my team mails into a team folder, but would like to sort by project as well.

Oct 15, 2021 - 5:19pm
Sherlock_One, what's your opinion? Comment below:

After I created rules for specific emails, some of them went to a project folder without any notification hence easy to miss.

Any advice on how to prevent this?

Many thanks

Sep 3, 2021 - 6:43pm
Deeper'N'Cheaper, what's your opinion? Comment below:

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Oct 28, 2021 - 7:09pm
LittleLordFuckleroy, what's your opinion? Comment below:

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