Do "no-name" boutiques really open doors to MMs and BBs?

Have an offer at a "no name" boutique, I'd guess around 20 employees.

I have a call lined up with an analyst to ask questions regarding deal flow and size, haven't had time to do my due diligence yet because this sorta came out of nowhere. Let's just assume small.

MD has a BB IB background. He said under the previous MD they were more consulting/advisory focused, now they're trying to do M&A exclusively. Seems like a good team. Pretty technical interview (including a basic modelling test) so I assume I'd get decent modelling experience.

For better or worse, I want to have the experience of working at a BB one day. I've heard numerous people on here claim they were able to make a lateral switch after a few years experience at a micro boutique.

For those who have made the switch, how hard was the hustle? Getting interviews?

For those at MMs/BBs who are involved in the hiring process, how do you view candidates from no name shops? Is there anything in particular you expect them to demonstrate to prove themselves?

 

We tend to get referrals from business brokers, relationships with past CEOs, and the rest probably from organizations that cater to small businesses. Basically the comp is what you expect from a regional boutique. Just wanted to bump to see what anyone elses thoughts on how they lateraled because FT recruiting across the board is coming this fall. I would say if you cant get anything else start at a no name and see where you go from there. Its better than having to start over with an MBA or getting snuffed out the game to start somewhere else to then lateral to banking. PM me if you have any other questions, appreciate the post on here!

 

For what it's worth, everyone* in boutiques and MM has prior BB experience, but when you ask someone from MM and BB on topics like "how to get to MM and BB?", they will tell you — surprise-surprise — to go to a boutique and "build it up from there".

*As in, everyone I've talked to and/or did some research on.

If you come to battle, bring a shotgun.
 

Yeah, I've heard similar. It's just, while lateral hiring is relatively common, you're still competing with a lot of other experienced bankers. My mind tells me that coming from a no name shop would put one at a significant disadvantage in these cases, but I've seen posts by plenty of people claiming it's both possible and not that difficult.

 

I interviewed at a few of these size shops and ultimately interned at a ~15 man boutique not in NYC. Deal flow was constant, zero cold calling, and pay would’ve been close to street for FT, very high for the particular city. All the MDs have BB experience as well.

That being said, one of the other shops I interviewed with was an ~8 man team with significantly worse offices, a focus on cold calling, and much lower pay (according to the database).

I think there’s a wide range of possibilities, but that you should be able to tell roughly how the experience will be before you start. Perhaps you can reach out to someone who interned there before (and is no longer with them)?

 
Galt93:
Update: just stalked literally all of their past and present employees on LinkedIn. One got into a MM IB role eventually (via an ER role at another bank first). Another got into a slightly better boutique. Lots of the others either went to Big 4 or into a corporate finance role of some kind. Make of that what you will...

This may be hard to understand coming from this forum, but you have to realize that moving to a BB or moving to better MM is not the end goal for many of the bankers in these small firms. In general the hours are significantly more manageable at these smaller shops and most do not have the appetite or desire to move into a 100+ hour a week role.

That said I'm sure there are a handful of analysts/associates there who do desire to do that and are unable. If you are at a no-name boutique, the best way to position yourself to get noticed by other firms is to 1) come from a top a school, 2) have great deal experience (preferably M&A), and 3) have great performance reviews. If you are lacking in one area then you need to make up for it in another area. Having closed (strongly preferably M&A) deals on your resume is highly transferable to other banks so make sure the bank you are joining has strong deal flow even if it lacks a name brand.

 
Funniest

I guess I'm under the impression that most people who apply for these micro shops (myself included) just wanted deal experience anywhere they could get it in the hopes of moving to a name brand and becoming a big swinging dick one day.

 

Best of luck man! But if you dont wanna take any chances then I would say just run with it. Whats the worse that can happen? I mean if you get the MM offer by all means, but realistically you just never know whats gonna happen in the future. I had an offer revoked from an MM because all of a sudden they decided that they werent going to take a first year off-cycle because of their headcount and since their analyst left they just were gonna hire another junior guy. Shit happens, but ultimately its up to you. To echo @Sil, as noted read that lateral guide for sure and think about whether you really want to do this. Also, wanted to thank Sil again for the post even though its nearly 2 years old. Im probably gonna PM soon as well. Let me know if you need to know anything else on my end. Cheers!

 

I think it's worth noting that the founders / MD's of all of these non-name bucketshops generally all have BB experience which is important depending on what you want to do with your career. You need the BB stamp of approval to do something like this so if you want to bank for a very long time it's better to try and establish yourself on a big platform and cultivate relationships that you can use at an independent later on. People answer the phone when you call from JP Morgan; less so when you're calling from Wanker & Wanker.

 

This is just my experience, so take it with a grain of salt.

I worked at an M&A boutique for a summer internship (different from your situation, I get it). Deal flow wasn't great, but the MDs and senior bankers had some pretty stacked CVs, so I thought there was potential. After I finished and went to my final year of university I had an offer from a BB pretty quickly for graduation.

 

Working at a regional boutique in NYC area as an Associate (M&A) and can definitely comment on this.

I originally came from a non-traditional finance background and a non-target MBA and jumped from a poorly run, low pay boutique (one of the horror stories you hear about) to a fairly well paid (just under street) boutique with a great work life balance and excellent deal flow (90% M&A).

While its not BB work and deals are typically under $250MM I do have to say that the amount of 90% of the work is live deals and the opportunities to gain experience early are much better. In a Boutique you have a chance to stand out and often get opportunities that have more depth on top of the more typical transaction experience. Also, while you may not have a brand name, networking and refferals are much more important for winning business rather than just going to every beauty contest, although those still do happen.

The caveat and question for you really comes down to what is your end game. I am coming up on 2 years total and do wonder whether a larger MM with a balance sheet is really what I will need to progress on the sell-side as a Banker (VP and beyond). Also, what is the concentration risk of a firm of small size (+/- 20) and if I stay long term will I have a stake going forward or will I be more exposed to a downturn or the concentration risk later?

If you have no other offers, I would certainly take the Boutique. But with that being said, if it is an Analyst role, in M&A, a high volume/quality shop, I would have a harder time deciding between that and a MM or a BB. I would probably go to a BB, but if you want a better work//life and less pitches and could see yourself doing an MBA at some point, the Boutique wouldn't be a bad call.

 

Spent 20 years at a BB running a large industry team, 5 at a boutique we founded, then last 10 at a MM, to which we sold our boutique. My experience has been that the BB experience or a large, name boutique, was what the MM was looking for, though there is perhaps more flexibility the lower you go in title. No-name boutiques that specialize in one industry and have some traction there are the best credential. A generalist no name boutique is going to be of limited interest to a MM and none to a BB unless you have a deal sheet that is impressive. If the no-name has the potential to be acquired, it may also be a viable alternative, as generally the junior team is dragged along. Look at the relationships the top people in the boutique have, both to generate business and to sell the business. Good luck. Maybe boutique, then MBA, then path to BB might be easier.

 
Entrepreneur Hero:
Arbank:
No-name boutiques that specialize in one industry and have some traction there are the best credential.

Can you elaborate on why this is the case?

They tend to punch above their weight and have deal flow that can directly translate to industry coverage groups at MMs, possibly higher.

For instance, a boutique focused on consumer might where an analyst closed a few deals and pitched a few more can be easily inserted into a consumer team at a good MM shop. He may need some help on the technical side to get up to speed, but likely is above his peers with respect to industry knowledge, which helps in comps, positioning, buyer universe, etc. (not suggesting he won't be given guidance still by VPs-MDs, but less hand holding)

 

My case was similar yet a bit different. I landed a Summer role at a small "no-name boutique" and then succesfully landed a FO role at a top Asset Manager. Not IB but nonetheless leveraged the boutique experience to secure something at a well known firm. It's definitely possible and should not be discounted. Think about the situation like the efficient market hypothesis. There may be opportunities that have not been "arbitraged out" in taking the less traditional career steps. A lot of young people I've spoken with that are trying to break in say they would never take an offer from no-name boutique. That reality may just end up making your story that much more unique and potentially appealing to a BB hiring manager. Who knows, I'd say it can definitely be done. Good luck

Carl Van Loon Van Loon & Associates
 

I know what you mean about the desire to have BB on your resume, but stop for a minute and think about what you want. "No-name boutiques" often have a much better work life balance with comparable pay. Further, because many of them are in secondary cities, or let you work from home, you can often save more money. I work for a tiny boutique based in SF and NYC with 5 or so people. I work from home in the middle of nowhere and have gotten the reputation and trust with my MDs that no one really bothers me because they know my work will get done. So if I don't have any calls, I can roll out of bed at 9:30am and no one is the wiser. Another thing to keep in mind is the fee split. At a BB or top-tier MM firm, the group and MD's are lucky if they get 15-20% of the fees. At boutiques the splits go as high as 80% so there is more money around the table for when deals do close. Only you know what you really want, but you have to decide if work/life balance with very good pay is your endgame, or if you want the swagger of saying you work at Goldman, but feel its worth getting shit on for 10 years at 100+ hours a week for a little more money. When I was younger, I definitely wanted the latter, but now I am pretty satisfied with the former.

 

I went from a BB in NYC to a boutique in a second tier market. The variability of quality in boutiques is high. Some will expect you to cold call and source deals, while others have plenty of high quality deal flow and a high close rate. I was lucky enough to land at a good boutique.

One way that I would assess a boutique for analysts is to look at where their analysts land and also how many get promoted internally. Many of the junior analysts I worked with are still there as associates and VPs (I left 6 years) ago. If people stick around and move up, it signals two things - 1) people don't hate working there so there has to be a reasonable balance between comp and lifestyle, and 2) the senior bankers value training people up and giving them more responsibility. Banks that don't want to invest in their people tend to churn through analysts. Life at a boutique in a smaller market can be really great so many people are happy to stay, particularly for people who value quality of life with really good comp versus trying to become extremely wealthy.

Of the analysts I know who left my former boutique, a couple went to clients/startups (boutique was tech focused), a couple landed at MM PE funds, a couple went to top MBA programs and left finance altogether, 1 lateraled to GS and two others to solid MM shops (Harris Williams, William Blair).

 

Why shoot for a top MM firm if you're not interested in the industry? In any case, hang out for a little while. It sounds like you haven't been there terribly long. I'd stay about a year, and then leave for something else. With transaction related experience, you should be able to exit to the buy-side, albeit it might be an uphill battle. I would think VC, PE, HF, and AM would be open to you. Although the specific opportunities in each space may vary.

"Even if you're on the right track, you'll get run over if you just sit there" - Will Rogers
 

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