Im in VC and have been thinking about making the switch over to IB. From what I've heard analysts tend to spend most of their time working on decks. Is this true, and if so how much time are you spending on this weekly? I'm more interested in the modeling part of IB, which I'm sure most of you are as well. Would love to understand the breakdown of work being done throughout the week.
Trending Content
Career Resources
Group dependent, but realistically modeling is ~20% or less of the work. You're primarily going to be building decks and doing admin stuff the majority of the time.
20%? I’d say it’s less than 10% lol
Is it the number of decks that take so much time or are you spending a ton of time on 1-2 decks a week?
I would say that 2 client ready decks of 20 core slides each plus appendix slides, with each slide crafted through multiple iterations, and the data gathered and formatted, is already a lot of work. Nothing gets presented to the client that isn’t thoroughly produced.
The latter. It's often just a few slides in the deck that take forever compared to the rest of them. Tweaking around graphs can be insanely difficult for reasons that are hard to verbalize. And if it's anything beyond the most basic default graph . . like something with some layers or stylistic whatever . . forget about it. SO much time. And yes there's a presentations team with Powerpoint skills, but they need so much guidance that it's often better to do it yourself.
_
You really can’t prescribe a percentage here just as a sweeping generalization.
If you’re a LevFin/Sponsors banker and hold the pen on the model, you’d probably see upwards of 50% of your time over your whole analyst stint as being model focused. On the flip side, if you’re like a coverage banker in Tech or HC, you might literally never open the model once… the reality is the day-to-day and tasks of junior bankers are wildly different across groups and if you’re looking for a heavy modeling component then you need to pick carefully. Admittedly, all groups share the grunt admin work to a certain extent I think it just depends on what that remaining 70-80% then looks like (if maybe a little less).
I have a hard time imaging even the most modeling intense groups spend 50% of their time modeling.
The admin bitch work is the majority of this job as an analyst, no matter how much people on here like to pretend it’s not. Whether on pitch / live deal / coverage work it’s not actually the deliverable that’s the hardest, it’s the BS of scheduling a call, responding to emails, tracking NDAs, helping your vp find whatever file, taking notes on calls, etc. The admin work is never ending and no matter if you’re working on a CIM or a model, I always found the admin work was by far the most time consuming
Understand your point heavily on the amount of BS work the job entails, but as someone who’s sat in both coverage and LevFin/Sponsors the difference really can be dramatic.
Obviously not every week is the same, but I definitely had stretches where I almost exclusively lived in the model. We usually have industry teams pulling pages on anything remotely qualitative, which really just leaves you to fully click in on the financing. By no means was every day like that, but if I look back at my stretch I don’t think I’d be off in saying ~40% of it was solely modeling.
What about modelling interests you?
People saying 10-20% are on the money from everything I’ve seen and heard at large banks. Yeah there might be stretches of days / weeks where you do nothing but live in the model, but even then it’s 10-20% of days. I can’t speak to EBs where deals are 1 analyst and 1 director, or boutiques where the whole group is 2 analysts and 5 MDs, those guys might very well model 50%+.
I’ve never seen a company mandate us on a deal because the model outputs in our bakeoff were so pretty. I’ve never seen a sponsor put in an outsized bid because the model was so beautiful. Hell many sponsors are gonna build their own bottom up model anyway during diligence. There’s many interesting and extremely important aspects to modeling though, but partner at PE firm isn’t going to committee or calling capital for a $300 million bid because of an excel workbook he knows a god damn 22 year old made.
If you really want to just model all day every day maybe consider doing transaction advisory at BDO or an auditing firm. Sellside M&A is fundamentally about value discovery through marketing and sales and process and connectivity, and buyside M&A maybe can be argued is fundamentally about price discovery through technical analysis/modeling, but even then usually bidders are just trying to get their buy-side advisor to get to a price that they think will win the auction. In my experience IB is not fundamentally about creating models.
All accurate. A natural follow up question might be, why is modeling & valuation so emphasized in recruiting when its only 10% of the job. Answer is that when you do have a model for a client, it pretty important that its right. Not just right in terms of the numbers shown being correct, but also right in terms of not missing anything key. For example if you show EBITDA dropping last year but it was falling because of a one-off non-cash item like an impairment charge, it would be considered an error to not add it back. So the model needs to be free of errors of both commission and omission. If there are mistakes in the model and you don't win the business, senior bankers will assume (rightly or wrongly) that the business was lost because of that.
So if there's no confidence in the analyst, the associate/VP is going to have to spend a lot of time digging through info to make sure the model is right. Thus an analyst who can build a good model is valuable. But it's a very small % of the work and unfortunately the painful PPT stuff is at least 5x as common.
Lots of great Comments on use of time as an Ib analyst, so won’t add to that.
If you really want to do a lot of modelling, a few ideas:
Think growth equity or traditional PE, or corporate development.
I’m a director in a corp dev team, and a good 50% of my time is spent on models (and associated work i.e. liaising with functional teams, going through research for inputs, etc). If we had juniors in the team, you could assume that it would be 75% for then.
IB is more about 1) strategic advisory and 2) process. As a junior, your time is skewed towards process, in a way or another, and modelling is only a part of yhe overall output.
Clients who trust a banker with the model are scarce - usually need a high level of trust + a rock solid junior team on the bank side that the client will want to do the work. Usually it’s limited because no one wants their in house model sitting in a bank’s team shared drive. There are exceptions to this tule, but they are exceptions. So a bank’s model may be used on a deal as validation.
The other key thing is valuation. Rather than in operating model, this is where the time is spent (and drives a lot of research, scrubbing numbers, etc for the analyst). Valuation informs tactical advice and is typically something where the client wants external views.
For examplebuyside advisor using public sources to see what market is likely to think on a public deal, or using dd output and their own interpretation to share their view with the sponsor that they use as third party validation (for example on a large buyside with a top PE fund I ended up presenting our valuation to their LPs who were co-investing - a way for the sponsor to show that their own case was solid; with caveat that a lot of the discussion was valuation focused rather than operating model focus).
Surprised no one has mentioned creating buyer lists for broad auction style processes. Pulling contacts at hundreds of strategics and PE funds can be incredibly time consuming (depends on your firm’s resources).
From what I've heard, junior RX roles can be incredibly technical with lots of modeling and quantitative analysis
As someone who made the switch from IB to VC - why would you want to switch to IB? You are literally at an exit op.
Molestiae quia voluptatem ut enim enim quasi. Deleniti quasi nobis nostrum. Consectetur praesentium quia id id qui. Iusto voluptatem quo assumenda aspernatur et corrupti.
Possimus id iusto dicta nostrum repellat vitae vero. Nobis sequi porro sit quos omnis hic et vel. Velit omnis odit dignissimos reiciendis aut placeat qui. Sint et iure corrupti et itaque molestias velit ea. Tenetur pariatur libero in expedita ipsum consequatur. Et sunt quis ipsam enim necessitatibus consequatur. Provident omnis fuga a fugit eaque ex.
Et aut eveniet consequatur vel eligendi voluptatum cupiditate. Dicta et ut ut unde dolore dolorem. Enim necessitatibus placeat quasi et.
Et illo voluptatibus veritatis quos nostrum et numquam voluptatem. Voluptatum ratione rerum quidem perferendis. Harum neque ipsam sed eos ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...