Working at a non elite botique

I have been working at a small, under 50 person boutique. Industry specific and typical LMM - MM deal size. Here are my true thoughts and comparisons to friends working at BB / EB banks:

  • Lifestyle: I work, maximum, 75 hours a week. Typically I'm in the office from 8:30 - 6:30. Everyone knows what large bank hours are like. Now, this probably isn't truce across the board, though in my experience most of the "no name" banks tend to have better hours. We simply turn down deals in order to provide good w/l balance for the team. No EB or BB is doing that. Basically no weekend work either.
  • Compensation: More emphasis on bonus, meaning good years are above street and bad years are below street. Analyst 1: A bad year comp would be around 100-120k. Good year like this year probably expect 150-170k. So, wider range of comp compared to BB. Still less than many EB, but on an hourly rate we are much better. All other benefits (health, 401k, etc.) are equal.
  • Culture: We have a much more relaxed culture. Drinks after work, co-workers are legit friends outside of work. Really tight group, plenty of nice dinners and drinks after work and on weekends. No one I know at other banks is much more than working acquittances. The guys I work with all came from 2nd and 3rd tier schools, had to grind for what they got, or came from non IB/PE backgrounds. i think that makes them much more enjoyable than a lot of the spoiled kids at other banks. I went to a semi-target and they all joke that I'm the "smart guy".
  • Exit ops: Basically everyone at my bank who wants to go to a decent PE has to lateral to a MM first. Exit ops are not non-existent, I've gotten a handful of corp dev and VC reach out. But not comparable to what my friends are / will be seeing.
  • Basic role: I probably work on a wider range of work than analysts at large banks. I have already been communicating with clients directly, I basically run building pitches, CIMs, and valuations. That being said, the finance work is a lot less complex and it feels more like a sales job than a finance job (which it is at the end of the day). I am fine with this as like I said I'm in IB for the long haul. So, if you are more interested in the sales aspect of IB than the finance modeling aspect, a boutique might be preferable. As a disclaimer, we have much more problems with organized databases and stuff for putting this work together than those at other banks. We simply do not have the back and middle office availability to keep that stuff organized which can lead to frustration trying to find basic info for slides, though being in the office makes that much easier as we can just ask people where they saved stuff.

This is just my personal experience compared to who I know at other banks. Every bank and group is different, but I graduated with the least "prestigious" IB gig out of school. Now, multiple friends at big name banks are in awe of my work life balance, compensation, and laid back culture. To be honest, I'm in IB for the long haul so exit ops are not particularly important to me. If that sounds like you, seriously consider smaller, "no name" boutiques with an industry focus / unique differentiator. I think people overlook these banks but they can have plenty to offer from an experience and lifestyle perspective even if they lack some of the exit ops and prestige of other banks.

Comments (46)

Most Helpful
Aug 24, 2021 - 11:24am

Great post. I'm in the same role at a small boutique and have to say, it is so overlooked.

I understand if all you have grown up around is prestige prestige prestige then maybe it's hard to turn that off. Similarly, if you want to chase the MF PE life then boutiques aren't for you but as someone who doesn't want to exit to the buy side, boutiques are totally the move.

I have gotten direct experience working on so many things and holding the pen on the model, pitch and CIM. Sure, our work is probably simpler than a complex model ran at a BB but I still would argue in getting incredible experience and I don't really care to follow the template of an option pricing model.

I work directly with my MD everyday and have direct phone calls with CFO's pretty regularly. I also have built a sense of trust from my MD that he lets me take off when I need to and work on my own time more so. (Still grinding but nice when I can get dinner on a Tuesday night with an old friend without asking)

Agreed with the coworkers, they are more humble and down to earth people. Just enjoy working w them a lot. We had one individual from a BB when I started and he did not seem to fit In at all, and they left shortly after.

Interesting to hear you speak on the limitations to exit opps. Prob definitely the case for PE, but Curious If you think Corp dev would be limited as I am very confident I have so much more direct experience to speak on than someone at a BB. Obviously their experience is fantastic too but just saying.

  • Analyst 1 in IB-M&A
Aug 24, 2021 - 11:33am

I think it depends. Currently, the best exit ops I would have revolve around corp dev. Having spoken to several people in corp dev about what they are looking for, it is 100% deal flow. They say they want people with 6-12 months experience in M&A. They want banks they know have deal flow, and being in a MM bank on a boutique platform is pretty ideal for them - they care about you understanding the transaction process and rationale a lot. Now many of the corp dev positions I've gotten interest from have been PE backed - maybe an independent strategic would care more about modeling experience than a PE-backed one (in my experience the sponsor will take care of financials and the platform takes care of the strategic aspects). Likely an independent buyer will have more emphasis on the modeling but less so than a PE. I think growth equity / VC would be more similar to corp dev in that they are not major hardos about putting together intense models. i know that was kind of a ramble, but Corp Dev to a mid-sized company is probably the easiest exit op from a no name M&A shop. It's probably the least interesting exit to me unfortunately, but I have no plans to leave my current bank.

Aug 27, 2021 - 3:19am

Very interesting. What kind of hours do your associates and VP pull?

I'm probably same boat as you, in that I don't plan to leave my shop soon but nonetheless, prob won't stick with the banking hours much more than 2-3 years unless I see a significant decrease in hours. I feel like my VP hardly works but I can never say for sure.

Also, I know it's a long way away question but if you didn't stay at your bank, what do you think you would do/ transition to with your experience? It's not that I want to leave, I just know that one day I'll want to and I have zero idea what that thing will be

  • Associate 1 in CorpDev
Aug 24, 2021 - 1:25pm

Great post and appreciate the insights. Few questions for you, if you don't mind: 

- What is the split in your comp numbers between base and bonus? Have heard that some of the regional boutiques with all of the WLB / Culture perks come at a significant haircut on base at least.

- Is this an industry focused boutique (ie all tech)? And, what about geography? I guess Non-NYC is enough. 

I'm really interested in eventually transitioning to this type of environment in the future because my current role has supreme WLB and culture that I would fear to get rid of.

  • Analyst 1 in IB-M&A
Aug 24, 2021 - 2:10pm

Of course:

- What is the split in your comp numbers between base and bonus? Have heard that some of the regional boutiques with all of the WLB / Culture perks come at a significant haircut on base at least.

  • Yes, base is low (I wont give too many specifics for anonymity but sub 70k). But the bonus structure is very attractive. Not broken into buckets - they are 75%+ tied to deal fees, so you can theoretically work more or less and somewhat change your total comp. A few people who just absolutely grind and make bank because they simply work on more deals = more fees.

- Is this an industry focused boutique (ie all tech)? And, what about geography? I guess Non-NYC is enough. 

  • Yes, this is industry focused in a niche sector. However, we are one of the few banks that focuses on the niche and somewhat dominate within it leading to great deal flow. Non NYC / LA HQ but we have offices in those cities.
  • Associate 1 in CorpDev
Aug 24, 2021 - 3:09pm

Thanks for the response, really insightful. Given variable comp, did you find it harder for allocating costs, for example like rent? Also, what has the timeline been for associate promotes at a bank like this? How do you get around the lack of formal training with modeling? Is there a lot of modeling? Are juniors supposed to have a partial BD role and source deals? Thanks again! 

  • Business School in IB - Cov
Aug 24, 2021 - 1:58pm

+ SB. Great post, very informative. If you don't mind answering I have a few questions:

1) Is your boutique located in a big market (ie. NYC, SF, CHI, LA etc.) or what someone would call a smaller one?

2) If so, did you find the recruiting process to be regional? Was your path a structured SA stint or did you use other means to find your current position (ie. cold email)?

3) How would you describe the depth at your boutique (how many analysts, associates etc)? Would you say career progression is any slower or faster than at a BB/.EB and is there pressure for mid-senior people to leave if a more senior spot doesn't open up (ex. VP to D/MD)?

4) How was the training?

Thanks again for sharing your experiences-  I think a lot of people who are turned off by the gruesome hours and lifestyle of some banks would at least take a second look at a boutique if they knew more about them (lol me) , so thank you!

  • Analyst 1 in IB-M&A
Aug 24, 2021 - 2:33pm

1) Is your boutique located in a big market (ie. NYC, SF, CHI, LA etc.) or what someone would call a smaller one?

  • A big market - HQ is not NY / SF but we have offices there.

2) If so, did you find the recruiting process to be regional? Was your path a structured SA stint or did you use other means to find your current position (ie. cold email)?

  • Recruiting process was def regional - OCR heavy at the 3 mid-tier semi-target schools in the city.

3) How would you describe the depth at your boutique (how many analysts, associates etc)? Would you say career progression is any slower or faster than at a BB/.EB and is there pressure for mid-senior people to leave if a more senior spot doesn't open up (ex. VP to D/MD)?

  • Dept is ok - we have a very rectangular (as opposed to pyramid) structure. By that, I mean we have basically the same number of people at each position. That's a result of low turnover. Career progression is unstructured - we are promoted when our seniors see fit. Nice thing is, people are making MD as fast as in 7 year if they shine (our youngest MD is like 29 or 30 - he came in as an analyst and kills it). Our management is very generous with promotions, I have yet to see anyone who is concerned about comp / promotion.

4) How was the training?

  • Very little. Sprinkled throughout first 3 weeks in 0.5 - 2 hour increments. Nothing too formal. Most of the learning is on the job - I was staffed on a live deal literally my first day on the job. Same with other analysts. I prefer learning on the job, I went through classes and lectures my whole life, so I'm hype to learn with live experience. Though I would see value in a more extensive training program as I occasionally have questions about very basic organizational and formatting procedures that could have been resolved with a day dedicated to training. I think this is just a point of personal preference. I do know some similar small banks have formal training programs through Wall Street Prep or similar programs.
  • Associate 2 in IB-M&A
Aug 25, 2021 - 12:31pm

was told about the promise land of boutiques when i was a student in college. ended up joining two boutiques and after not finding what i was looking for, joined a BB. can confirm hours are shit and pay is marginallybetter. i aged like wine when i was at the boutique, my first year at BB and I look like a used condom

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 1:47pm

What is the deal size you typically work on?

While some might argue your work is less complex, sell side M&A looks pretty consistent from 150m-3B having done deals on both sides of the spectrum. Buyers are different, management is more/ less sophisticated, but often processes are run the same more or less.  

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 2:54pm

Smaller deals can be as low as 15M; our largest deals (we will do one of these every other year basically) are ~300-500M.

I agree - there is complexity but in different ways. While we don't have to deal with complex capital structures, the partner management and relationship side is much more complex. Constantly having to convince large groups of sellers the value of a transaction, what value we bring, etc. So I would say the complexity on finance is lower for smaller deals (some smaller deals are add-ons which are basically drops in a bucket to some of the PEs and large strategics we sell to) while the larger deals are more scrutinized financially. But deals of all size in MM being privately owned and founder run lead to higher complexity in certain ways.

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 3:06pm

I am also going to second this. I had offers at other banks but took an offer at an LMM shop because of the management. My base is low but my total comp is about on par with industry if not a little above on a really good year. There are a few things I hate not going to lie (I can go into more detail if you are interested) but overall it is a really good gig and I think highly overlooked.

  • Associate 1 in CorpDev
Aug 25, 2021 - 3:09pm

Would love to hear the downsides. Also curious if you can touch on comp. At least what is the discount on base you're taking? Is one of the difficulties not having teams to manage some of the more back office work (like where data lives for deck building)? What are the other drawbacks? Unstructured timelines for promotions? Sourcing? 

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 3:42pm

Cons:
WFH
no structure w/ promotions
hard to learn industry standards with no associates just MDs.
little base (60k-70k), no 401k / benefits

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 3:10pm

How many deals is your shop doing a year? My shop has an extremely lean deal team and we are doing a little over 30.. Wondering if that is normal. 

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 3:13pm

Doing about 15 - 20 deals per year. We frankly could take on more, but we are picky with our clients. We only take on deals if we can get a certain fee, if we feel comfortable that the clients are good, legit people, and if we have bandwidth. If we wanted to work our asses off and were less picky about fees, we could probably close 20 - 30 per year easily. For like 50% more work and 30% more money, but that's not the way we want to function as a company. Though I wouldn't mind it rn while the market is frothy as fuck.

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 3:16pm

Damn. I didn't know so many people work at these LMM shops. I would love to talk more. It's so interesting as a lot of the other guys in the LMM seem lazy.

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 6:31pm

100% agree with this post. I actually never intended to stay in banking coming in (was planning on going through the usual 2 years -> buy-side role), but working at a LMM shop changed my mind. I love the people I'm working with, and I'm starting to think about staying in banking long-term.

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 10:08pm

We are an industry focused boutique, we have multiple offices so not really "regional" as we are nationally known but only within our niche sector. And we are actually just shy of 50 right now, but will probably hit 50 within next 2 years.

  • Analyst 1 in IB-M&A
Aug 25, 2021 - 9:45pm

Just started this summer at a sector-focused LMM boutique. The base pay is just below street (with the recent raises; was on par before), bonuses depend on the year but have been about 40% of base. The deal flow is quite high, the weeks tend to cap off at around 60 hours, and there is no facetime culture at all. Being able to see my friends and significant other, and make time to see my parents regularly is worth far more than an extra $15k in salary in my opinion.

  • Analyst 1 in IB-M&A
Aug 26, 2021 - 12:46pm

exactly. granted the pay gap might expand while we progress in our careers, smaller boutiques will probably promote faster as well as not burn people out allowing a higher % to actually make MD. So the comp may be 800k - 1M for an MD in a boutique but you're more likely to hit that and at a younger age than at an EB / BB

Aug 25, 2021 - 11:57pm

Hi - very helpful post. I'm moving from Australia to New York next month and will be looking for Snr Associate / Jnr. VP roles at smaller M&A focused boutiques. Not interested in working for a big or elitist bank How does your firm (and its peers) typically recruit for mid-level roles? Any insight would be appreciated. I have a green card so don't require any form of sponsorship. Thanks in advance. 

  • Analyst 1 in IB-M&A
Aug 26, 2021 - 12:44pm

Mid-level roles are often through networking. This is the case at many banks in general as far as I've heard. I don't think many VPs are scrolling through linkedin or indeed to send their resumes into a blackhole lol

Aug 26, 2021 - 2:49pm

lol.... that was not the experience at my shitty little boutique. The head MD was a cheap bastard. Had client visit for a pitch. Took literally everyone worked on the pitch to lunch with client except me (was analyst at the time). Due to cost and space reasons. There was 3 of them and 2 of us. Yeah sure you cheap fuck. The other MD was a raging douche bag working oh his 4th divorce. He's the type who would blow up at you for overlapping one pixel on a 70 logo page. Needless to say I bounced as quickly as possible. When I did quit, he cancelled my onsite parking the day I gave notice. Parking was paid out of my paycheck on a monthly basis. So for my 2 weeks I basically had to pay $40 a day to park. Goes to show how vindictive that little fat shit was. 

Good news both of the miserable fuckers are all now divorced and I hope their wives took everything. 

  • Analyst 1 in IB-M&A
Aug 26, 2021 - 5:04pm

Sorry to hear your experience was so bad. Yeah, I should have made it more clear in my post that my situation might be the exception, not the rule when it comes to boutiques (and yours might be as well). I would def encourage everyone to be very selective when they are talking to small banks about culture. For example, I was interviewing with one and a VP walked in with an obnoxious Hermes belt. Sure, he might make a ton of money. But looked like a total tool. Only analyst I met was like 30 years old. I could tell it was a weird place when I had in-person interviews. Though now it might be harder to tell virtually, I would stress that much of the benefit to a boutique is centered around the culture and finding a good fit with a reasonable group is the best way to enjoy a long-term career in IB. but thank you for sharing the flip side.

Aug 27, 2021 - 4:54am

Honestly this is great to read as it's easy from a bigger bank perspective to view small boutiques as "shitty little firms" but honestly those who can keep rev/employee above a certain threshold depending on size can really kill it. It's always interesting to see this side as if I'm dealing with speaking with a founder or CEO of a boutique shop who wants to get bought, it's really easy to think they're just a JV operation trying to get a liquidity opportunity in exchange for a modest upfront structure coupled with a heavy earn-out payment. However, recognizing the work and effort which goes into getting a profitable shop off the ground and in the position to be sold has always made me see these boutiques in a different light. Some of them legit pay better than any bank I've ever seen on the street while of course some pay way below.

  • 4
  • Intern in PE - LBOs
Aug 30, 2021 - 6:50pm

I'm a current junior at Rutgers double majoring in finance and economics - 3.75 GPA. I have one searchfund internship under my belt. I am very interested in working at a boutique summer 2022 and after graduation. What are some tips you might have for me? I notice many boutiques don't really have a timeline

Aug 30, 2021 - 11:24pm

Honestly with boutiques (excluding EBs) won't really have a timeline and likely won't really do OCR. Thinking more LMM. As cliched as it sounds, networking and cold calling/email is sometimes your best bet. You never know when someone leaves mid-year and they need to have a replacement. If you're constantly on top of their mind, they might bring you in for an interview. If that happens the job is almost your's to lose because the bank will just want want a butt in the seat to do the work and to make sure you're not some crazy psycho. 

Obviously you have to know your technnicals down cold. The 400 questions book is very very helpful. I'm sure you seen it or have buddies that have it. I think my interviewer literally tossed a dart at the question book and used those, because the way he phrased it was almost word for word. 

  • Analyst 1 in IB-M&A
Aug 31, 2021 - 8:34am

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  • Prospect in IB - Cov
Nov 4, 2021 - 2:17pm

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