[Very Long Post] Stepping Off the IB Train

[Apologies in advance for the excessive anonymity - using a throw away]

Throwing in the towel after a year and a half in IB.

BUT, instead of making this another post of woe is me, I wanted to share some hard truths I’ve had to face over the past couple months while struggling to see myself doing this long term.

In this post, I will speak on the following topics. These are indicative of my own experience, and I completely understand that it does not apply to everyone. I wanted to share just in case there are others who can relate.

1. Why and How I Got Into IB
2. My Experience in IB
3. PE Recruiting
4. Hard Truths
5. Social Pressures of Quitting IB
6. My Two Cents and Next Steps

1. Why and How I Got into IB

For some background, I went to a top target (HYPWS) and graduated into a non-traditional high finance track. I didn’t come from money. Growing up, I was always interested in learning about businesses and knew that finance would most likely be the best avenue to achieve this. I was also interested in investing – having little money growing up, it fascinated me how rich people could make money with money. I knew I wanted to eventually reach a point where I could have some capital myself and learn about all the possible ways I could put it to work to build wealth.

When I was an upperclassman, I knew I wanted to go into finance, but was unsure of what field I wanted to pursue. In addition, I wasn’t the best student, so I wasn’t the best at proactively informing myself or networking. I was of the mindset that any internship is a good internship, so I had worked at a couple corporates in roles tangentially related to finance during my summers. This meant that I was already behind – not only did I not have a clue about how to recruit into high finance, let alone IB, I also didn’t get out ahead of my situation through networking. The onus was on me to network as hard as possible, especially since I attended a top target which are known to have strong networks in the finance industry.

As a result, by the time I had learned what IB was and how to recruit for it, the train had long left the station. Luckily though, through networking, I was able to land a front office role in an IB-adjacent field.

This role was great. I enjoyed the people and enjoyed the work for the most part – it was enjoyable at that point because everything was novel, as with any role, which necessitated constant learning, which is exciting. WLB was great too – I averaged 40-60 hours a week and had plenty of time to pursue hobbies.

By the time the job market began heating up, I had read up significantly about IB (a few years too late) and grew interested in making the jump. Even though I may not have been ready to leave my first role in hindsight, I knew that I would gain more exposure to working closely with businesses directly and getting hands on experience analyzing them inside and out. To boot, I would be able to develop a robust technical skillset.

Even though I hate to admit this, the prestige and the prospect of earning copious amounts of money may have played a role in my decision-making as well. Additionally, M&A deal flow was booming at the time and many of the banks on the Street were hiring. Analysts and Associates were receiving bonuses of 80-100% and 150-200% of base, respectively. Despite knowing that I would have to give up my life upon entering IB, like most, I figured I would just grind it out for a few years, and hey, things would get easier as an Associate. Usually, the saying goes, “if the shoe fits, wear it.” There should have been an addendum in my case – “If it doesn’t fit, make it fit.”

Being the time that it was, I was in the right place at the right time and ended up landing a role within 2 months of beginning my search, the interview for which I had landed about 2-3 weeks into my search. I successfully became a boom hire and was soon on my way to gaining some highly coveted M&A experience.

2. My Experience in IB

I think almost everyone can relate, but for the first couple of weeks, I was riding high on the feeling of landing a highly competitive seat in IB and was the usual eager beaver that most are when first starting on the desk. I was immediately put on 2 live deals and dove headfirst into consistent 1AM nights.

It wasn’t unexpected though. I knew that banking would have days like this. I even had a thorough discussion with my gf at the time about exactly how significantly my job would impact both of our lives. She doesn’t work in finance, so even though I explained it, it was still a complete shock to her once I actually began the job – our first joint reality check was when I had to ditch her on a Saturday, mid-birthday brunch, to run back to my apartment and take a meeting.

Every couple of weeks, I would work really late, followed by a week that was semi-normal. At first, it was a few weeks of 1AM nights, followed by a week 11PM nights. It didn’t seem too bad. Then there would be a few weeks of 2AM nights, followed by a week or so of 11PM nights. This must be the worst of it, I thought. Then it became 3AM. Then 4AM. Then finally my first few 6AM nights. Every time I thought I had experienced the worst, it kept getting worse.

Then deal flow finally slowed when M&A activity essentially froze. I felt like I was saved by the bell. I was finally able to sleep again and pursue some of my hobbies. It’s incredible how quickly the human brain forgets pain though – during this time, I felt that this lifestyle was sustainable and that I would be able to stick it out for at least 2 years. This time period was so tame to the point that I became anxious that I wouldn’t close any deals during my first year on the desk. I was told not to worry since we usually get busy very quickly, but I still couldn’t shake that thought.

Then, seemingly out of nowhere, I was on three live deals, all of which ended up closing. When all was said and done, I was glad to have had the experience because now I had something to show on my resume. But during? It felt like I was in the layer of hell that Dante forgot about. 4 months of 3AM nights during the weekdays, being married to my laptop, gaining significant weight, you name it. By the time it was over, I was so burnt out that I wasn’t sure if I could do another deal and that it would be a matter of time before I would no longer be able to get myself to work and subsequently get fired. This was the first time I began contemplating whether I made the right choice switching to IB. Luckily, we rejoined the broader industry in the M&A lull, so I was able to take a breather and self-reflect.

3. PE Recruiting

During this period of self-reflection, which occurred around my 1-year mark, I began recruiting for PE. I had concluded that IB is not for me over the long term, but that now I was in IB, I can switch to a role in high finance where I could continue extensively learning about businesses, while having an investing angle with a supposedly better WLB. I skipped on-cycle recruiting because I knew I wasn’t cut out for MF PE (but also because my academic record wasn’t the best) and was completely fine with recruiting off-cycle since I knew, based on the research I had done, that there would still be plenty of excellent opportunities. For a couple of months, I networked my way into a few interviews and had significant traction. I was even the runner-up for an UMM fund and had tasted the possibility of successfully making the jump to the buyside.

For various reasons, my luck dried up. I think my biggest mistake was that I was too picky. Despite my poor academic record, I tried to shop for firms with good WLB and culture as if I had the luxury to choose. I pursued these criteria, like many other people, in hopes that I can do PE for the long-term. As you all know, PE is like a box of chocolates when it comes to both WLB and culture, regardless of whether the firm is MF / UMM / MM / LMM. Furthermore, even if you might not be working as long of hours, it often requires an extra amount of neuroticism of that required in IB.

As the looks from HHs decreased, in combination with my gradual realization that life may not be any better on the buyside, I let myself get discouraged and stopped networking. This one is on me. Mental toughness and unrelenting persistence are must-haves in this industry, and I allowed myself to let them get away from me. I understand that it’s not too late to continue recruiting – if I wanted to, I could continue recruiting for the next two years, but I’m not so sure I have that in me.

Compounding upon this was my gf having been through the ringer because of my current job. Spending little time with her, always being half-engaged when I do spend time with her and her life now also revolving around IB have all taken a toll on her. All I could do was constantly apologize profusely and try to reassure her that this would all be temporary. Additionally, in her mind, PE is a guarantee to a better WLB where I would be able to dictate my schedule and take time off for vacations whenever I want. I saw this mentioned in a different thread on this forum, but trying to find a PE firm with good WLB is akin to looking for a skinny sumo wrestler. Yes, some sumo wrestlers are smaller than others, but at the end of the day, they’re still sumo wrestlers. There will for the most part always be IB 2.0 weeks regardless of the firm. If WLB does improve, it would be by the time I’m 40-45, at which point I’ve made work my life, especially if I’m trying to wait around to realize carry.

During the time I spent recruiting, my performance at my IB job began to take a hit. My team is super lean, so I always felt like I was held to a higher standard. As an An1, I was encouraged (perhaps even required) to operate like an Associate. This meant that I had to think bigger picture like an Associate, while also doing the grunt work of an Analyst. For most, this would be a wonderful opportunity, but I couldn’t rise to the occasion. It felt like no matter how hard I tried, I couldn’t get anything right and kept making mistakes. I’m always told that I would make a great MD because I’m an outstanding team player, have a very positive and eager attitude and am great at facing people / clients. But that’s not my job – my job as a junior banker is to turn out grunt work quickly and accurately, on which my superiors believe I still need to improve quite a bit, making me realize for the first time that simply working hard isn’t going to help me survive. Balancing PE recruiting on top of this made it that much more difficult to meet the elevated standard expected of me.

Just as PE opportunities began drying up for me, I was hit with three live deals once again. I no longer had time to think about PE recruiting and began to get grinded to the core all over again. This time, I had added motivation because I was given significant responsibility for one of the deals, which was a buyside. Because my team was in the middle of turnover, I held the pen on valuation and ran DD. Remember how I said that every time I thought I had experienced the worst, it became worse? For a period of three weeks including weekends, I went to bed before 4AM only on three occasions. 3AM on a Friday night, 1:30AM on a Saturday night, and 12AM on another Saturday night (granted, the weekends did have some down time during the middle of the day). The Friday night when I went to bed at 3AM was preceded by 4AM, 5AM, 7AM and 8AM nights consecutively. I felt physically ill during this period. Despite this, I believed I was doing well considering the circumstances, so I was able to continue giving everything I had. Unfortunately, my work overall needed more attention to detail and quicker turnover according to the feedback I received. This demoralized me since I was still receiving this sort of feedback right before my annual performance reviews. To top it all off, I woke up one morning to find that, during the two or three hours I went to bed, our client for the buyside I was running had killed the deal.

I think that all of this in combination with gradually realizing that PE would likely not be for me sounded the death knell of my time in this area of high finance.  

4. Hard Truths

When I met my high finance grim reaper, I knew I had to begin making changes. I had to accept that I was no longer a good fit for this kind of role for various reasons and there were some hard truths that I had to face.

To begin, I had to accept that I may not be cut from the same cloth as the typical 2, 2 and 2 candidate and that I had sown the seeds to never be on the same path as such candidate back when I began my freshman year of college. I was not a good student – as a student-athlete, I prioritized athletics over academics. Although I was a successful athlete, I had grossly misunderstood why it is important to get good grades. Outside the obvious, getting good grades, even in classes that will not have a modicum of relevance to your post-undergrad life, is indicative of having developed exceptional study habits. For example, if you receive an A+ in a class, it’s not the content that you proved to be able to retain for that semester that is important. It is the fact that you repetitively put in the effort to critically analyze information provided to you, organize your thoughts to digest and understand the information and meticulously present your knowledge (in the form of problem sets, exams, etc.) in a timely and accurate manner. This is what is directly transferable to the next 40 years of your life. My academic record indicates that I did not necessarily build these skills to the potential that I could have. As such, when I began my role in IB, the cracks showed early on. As time progressed, I was unable to improve as quickly as my superiors had hoped.

In addition, I have had to come to terms with the fact that I do not possess the hunger to continue down this road. This was a hard pill to swallow. In college, I had that dog in me as a student-athlete – I was known as hands down the hardest worker, which was something I took pride in. It was disheartening to see that I could not transfer that into IB. I realized that to make in IB, I had to love it as much as I enjoyed being a student-athlete, which is something that will never be true for me. Further, I would like to become a family man one day, and being in this industry will hamper that in some fashion. If I ever want to become a family man, step one is to begin spending more time with my own family and my gf, who’ve all been affected by my role in IB.

5. Social Pressures of Quitting IB

Now for the social pressures. Being in IB, my network consists of many fellow investment bankers and private equity investors. They also consist of many more people who are very familiar with IB. Because of this, I find that I would feel like I am announcing to my network that I am an embarrassment and will be known as that person who was too weak to make it. I know that this is nonsense, and that the age-old adage is that as you grow older, no one gives a damn about what you do. However, in this day in age when information spreads like wildfire, it’s difficult to embrace that concept.

I also feel irresponsible for leaving IB. First, I am extremely fortunate to have a seat in IB – it is something that most undergrads pursuing a career in finance would kill for. Heck, people pursue MBAs to break in. Now that I’m in this seat, I feel like I must try and leverage it to a buy-side role. It would be a disservice not to do so. I’ve discussed pursuing alternative careers with older non-IB finance folks, and they tend to share this sentiment. To people on the outside looking in, being in IB implies that you will have a $20MM net worth by the time you are 40. They assume that everyone would and should strive to earn single to double-digit millions of dollars per year in IB, PE, GE, VC, PC, etc. and that they would do the same if they could in a heartbeat. For me, I’m beginning to feel that it is not worth the sacrifice of life. I think I will be just fine if my end game is making $500-$1,000K per year in, say, Corporate Banking as an MD. I will just have to ensure that my kids are disciplined and do not behave like trust-fund babies, which I will be able to do since I will have the time to spend with them.

6. My Two Cents and Next Steps

Overall, I am grateful that I had the opportunity to work in IB. Even though I played the game and lost, this was not a waste by any stretch of the imagination. I’m glad that I was able to gain exposure to, for better or for worse, the lynchpin of the global economy that is high finance. Without this role, I would not have been able to gain an understanding of the financial world to the extent that I did during my year and a half experience. Additionally, I have developed valuable skills that I will be able to carry with me throughout the remainder of my career.

To the folks who are / have successfully navigated the 2-2-2 train and made a career out of IB or the buyside – gg. This industry is Darwinism in the flesh and you have shown that you have the resolve to do whatever it takes to survive. Some of you may genuinely enjoy the job – that is the ideal outcome. Some of you may hate it but are willing to make it work through continual self-reassurance, and perhaps some denial. We all have our own experiences and our own truths to realize and do what we can to make it in this world.  

As for my next steps, I will be taking another job within another IB-adjacent field. Am I worried that I will no longer have reliable exit opps? – of course. Would I have still been on the 2-2-2 train had I lateraled to a different bank that could have been a better fit? – maybe. Will I think about what life could have been like had I made it to the buyside and made millions per year? – occasionally. These are things I will have to grapple with on my own moving forward. Nevertheless, it will be interesting to see how things will turn out.

To the people who have read this far, thank you very much. I hope I was able to provide some insight that was relatable in some way, and I wish you the best of luck throughout your endeavors.

Looks like this is my stop – time to get off now. Peace