What's this forum's stance on unpaid internships?

Pro, it's a good way to get your foot in the door and can be a good way to get experience

"Valuing yourself next to nothing"

Let's face it. Most people after their freshman year of college have literally zero skills or major-related coursework under their belts.

Sometimes the desperation to break into a certain industry is so strong that people agree to work for a fake-ish Investment Bank for free as full-time analysts :) How "Tobin & Co" is able to recruit free full-time analysts is beyond me.

think of it this way...does your school pay your tuition...or do you pay your school?

an internship is a learning experience...the company most often gets zero value from you being there.

Anti

Have a little self worth

Granted the intern does get some modest educational value, however unpaid internships in general are so rampantly open to abuse given the power balance skew in favour of the employer. I don't think there's any excuse for not paying an intern. Have some respect.. in this industry you can at least spare some crumbs for next generation.

I can't think of any reputable firm that would offer an unpaid internship.

So let's say you work for free at Joe Loser's Middle Market IB. The first statement out of any reputable firm will be, "I've never heard of them."

Since you're working for free, don't expect to be a part of anything material or important; you'll handle the grunt details that they don't want to do.

I respect people who are that committed to breaking into whatever industry that they would take an unpaid internship. I would happily give someone an unpaid internship for a week maybe 2 if they had a very different background but I felt they had real potential. If after that 2 weeks I felt they do have a lot of potentials I would offer a paid internship else I would let them go.

I saw that comment about Torbin and co and thought it was a joke so I checked the website. Giving people a full time analyst position and not paying them is disgusting. It creates an industry where its pay to play and only wealthy people can enter. I have seen this happen a lot in London where small cap PE firms pay "interns" like £200 a week and roll new interns every 3 months or so.

I'm strongly against unpaid internships and think they're a scourge of the cult of unbridled capitalism. It's very telling that this website full of broke college kids is arguing in favor of billionaires not paying a hard-working intern a few pennies, just because they don't have to due to supply and demand. If you're working, you should get paid for it. Period.

Double post

most of us work/want to work in investment, so we should understand the concept of "investment". Also, many of us took economics so we should understand the concept of "supply and demand".

Each of those alone answer the free internship confusion, together there should not be a question. I had many free internships freshman/sophomore year, the free ones helped me get the solid ones from significant players, etc. etc. etc.

Unpaid internships allow for kids with financial support from their parents to gain great experience but screw over the kids who couldn't possibly afford to live in NYC without pay

common, you all are joking! so you would rather go work at 7-11 making minimum wage during your off time than get relevant experience? the $2,000 is worth the opportunity cost and education? Wow! yes you need money, work during school... if you can get paid internships with better experience than the unpaid , I recommend taking them .... I graduated with no debt, no one paid for school, and I had solid internships .... soooo....????

Insitituionally I think it's a problem cuz it gives people with means an advantage over those who cant afford it, but I would take the opportunity if I could because its dumb to not use every advantage you have. I think school year or remote unpaid internships are great though.

I am currently in search of an unpaid intern. Your duties will be working as my driver, picking up my dry-cleaning, buying lunch daily, cutting my lawn, and other odds and ends. Once those items are done, I'll show you how to make inflated models and lie convincingly on a Powerpoint deck and CIM. I work at a no-name firm where my intern alum have gone onto reputable middle market firms such as P!per, Molies, or Jokefries.

It won't be all work and no play, there may be an occasional beer in it for me while I watch you work.

Pay your dues kiddo.

I did one unpaid internship my spring sophomore year in undergrad for UBS PWM. I did receive several units of college credit for it, though, and when I continued on the internship through the summer, it switched to a paid internship. It got my foot in the door in finance/business so I don't regret it and those credits probably were worth more than the $.

It's ludicrous that there are unpaid internships where you are not getting college credit, or unpaid JOBS after graduating.

Unpaid internships should be a last resort if even considered. They're ripe for abuse by the employer, usually for crappy underhanded firms giving non worthwhile experience. If a company values and respects you they will pay you, like with actual money, period.

I would take an unpaid internship over something else not related (if I could afford to).

That said, any bank worth it’s salt should be able to pay you to do your job. Ones that cannot I would be suspicious of.

My major qualm with them is that it creates a cleavage between those who can afford them and those who can't.

I think very little of any employer who offers these.

That said, I can remember being in rough economic straights, working a dead-end job, and wishing I had access to an unpaid internship on the weekends.

I made it work without having to do that, but I wouldn’t want to restrict another young kid’s access to that same opportunity.

Large and well known companies are all going away from unpaid internships nowadays. In the grand scheme of things, these companies allow their managers and directors to expense few grands per dinner with clients. Doesn't make sense for them not to pay a few grands to a summer intern who works for them day and night.

Did an unpaid full-time fall internship recently at a small VC firm.

The pros were that even if you're not doing the most relevant work, you still learn by asking questions and just being around the workflow (pitchbooks, portfolio companies, models, etc)

The cons were that, at least in my case, there was a diminishing returns in terms of learning after a month or so. While I kicked ass in my opinion, I could tell from the beginning that they were not going to use me for anything meaningful, and didn't really help with connections. I could still get a recommendation, but that's about it.

I'm sure there are people who had better experiences. I would still work unpaid for the right experience.

Pump and Dump:

I've read quite a bit of users on here saying that asking for an unpaid internship shows hustle, and the experience is going to help. But here's what I don't get.

If the work you're doing as an intern is meaningful, and adding value then how can the firm not find a way to pay you minimum wage for work that's "contributing" to their business?

That's where you're wrong - most interns do not add value, considering you need to teach them how to do certain things.

Pump and Dump:

This leads me to believe anything unpaid will just be secretary/admin work that an be lied (not "padded," lied) about on a resume since you have a name + title + a reference. Aside from that, don't employers do a background check for previous employment to verify your resume? If they found out xyz firm isn't on your w2 or w/e they check, you would have to be upfront that it was unpaid...wouldn't they get the jist that you pretty much did nothing for free and claimed it as relevant experience?

But I don't know, maybe I'm wrong here I just wanted to see what you all think. I just can't see how reaching out to people for an internship and being so joyful about doing it unpaid for "experience" makes you look good in anyway. It just seems like extreme desperation and valuing yourself next to nothing.

Most of that was just all...wrong. I've done unpaid IB and PE internships and did real work, not any admin work. For my paid internship, when they were running a background check, they either contacted the firm I had listed to ask if I worked there or I just sent the background check company my signed offer letter. It didn't matter that I didn't have a W2, and in most interviews I had, they either didn't know I even had unpaid internships in the first place and if in maybe one or two instances that it came out, they didn't care at all.

I definitely couldn't have been more thankful for those unpaid internships -- they opened up a ton of doors and opportunity.

Completely agree with some of the posters above about the benefits of an unpaid internship. If you really want to have relevant experience to talk about in interviews for future internship and full time roles and can’t get anything else in the industry, then an unpaid internship is absolutely better than doing nothing or taking a position that isn’t relevant. To be more specific, if you know you want to be in IB and you have an unpaid IB internship offer or a paid PWM offer, it’s feasible you would take the unpaid offer as it’s more relevant to the future roles you’re going to apply to. Of course, being able to afford this is a separate issue and for those that can’t that can kind of take the future planning out of the decision making process. But having done an unpaid internship at a regional boutique I definitely felt I added value to the firm’s deal process. Even if it was just doing administrative work, that’s still adding value to the team as they now don’t have to do that and can focus on other elements of a deal process that are more important to actually commanding fees and getting a deal closed. Also, unpaid internships give an intern the opportunity to go out and exceed expectations and earn responsibility. For example, I was given the assumptions for a model after sitting in on a call with a firm’s CFO and told that I could build a practice financial model to get experience, and eventually a few days later when the analyst staffed on the deal and I sent our models to the MD, he came and said they were going to send my model to the client for review simply because it looked better and he appreciated the time and effort I put into it. Of course, I’m sure he reviewed and probably modified it, but these are the kind of things that an intern can do to earn trust and whether you’re paid or not doesn’t impact your ability to do that and get something from your experience. Also, realistically, even at BB’s interns and sometimes even full time analysts have silly administrative tasks to do that don’t necessarily add any value to the deal process. Plenty of posters on this site talk about making pitchbooks that no one reads and that’s somehow different than administrative work that you may do in an unpaid position? Make the most of every opportunity you get and you can definitely get learning experience from pretty much anything.

One necessary distinction is between a firm offering an unpaid internship as a position they expect you to apply for/interview for/get hired for and the result of networking with a firm you want to join and asking "Is there the capacity for me to do some work for you and your team, unpaid, to gain relevant experience and try to add value to your process where I can?"

I think these are sought on such a situationally diverse case-by-case basis it would tough to apply one catch-all rule.

That said, I don't think either is that detrimental to society. Paid and unpaid apprenticeships and internships have been and will be around for a long time, as long as the understanding between applicant and employer is clear about the position, its expectations, and the employment agreement.

Yo

As usual, the correct answer is that it depends. Unpaid internships can be good for brief periods of time (say, 2-4 weeks) as a way of learning the business a little bit. It's a bad thing if it's used for real, actual work long-term (3+ months).

If you're an employer utilizing an unpaid internship program, it should really be for the purpose of reaching out to the community--mentoring young people, teaching them the ropes, giving them resources. An unpaid internship should not be abused for obtaining free labor.

No issue with unpaid anything - no one is forcing anyone to do anything at gunpoint. Minimum wage should be abolished, it really hurts young workers in high school/college trying to get experience. Before saying I'm full of shit, watch Peter's argument below, he makes a great case. Minimum wage just lowers the workforce participation rate, which has led to surging rates of drug addiction.

If you have no other options and you have the resources to support yourself with an unpaid internship, of course you're going to be glad you have something on paper. It's better than nothing.

That being said, I don't think major employers are dumb enough to go with unpaid internships anymore. From a recruitment standpoint, most companies use internships as a pipeline for future employment as well as using students as walking/talking billboards to promote their brands. Especially with productivity per person having the potential to be astronomically high due to the rise of technology, getting top tier talent has to be a priority. I've interviewed mostly with engineering companies due to my background, but missing a round or two of new recruits can be devastating to yearly business plans for mid-sized to small companies.

In addition to that too, with the ridiculous cost of living in most cities, being able to pay rent while in the city is a massive factor to internships. I know it doesn't make a difference to most people on this forum whose lives are subsidized by their parents, but getting paid 0 dollars while having to shell out a minimum of $1000 rent, $300 for food, and $200 a month for transportation isn't easy for your average Joe. Making a very general assumption that 30% of "talent" couldn't afford to live in a city, it doesn't bode well for an employer that has to select from 70% instead of 100% of a total pool of candidates.

I don't think anyone worth anything would take an unpaid internship these days, except very specific cases like government work.

If you have zero experience IN THE FIELD YOU WANT it can be beneficial. It doesn't matter what arbitrary education class you're in, that you are a life guard, unrelated retail experience, got your butt hole played with to join a frat, or some other ridiculous thing in school. Zero = zero.

Your goal should be to maximize connections, fluff your resume as related experience, and gain industry knowledge in that order. That time should be as short and strategic as possible to maximize your stay and appeal to recruiters for another ENTRY LEVEL job. If your knees are bruised enough by then, that firm might hire you.

Could it be beneficial - yes Is it worth it - depends on you, your experience, and the strategy you're employing

I think that

A) It creates a class divide between applicants.Some other fields (fashion, politics) are infamous at just that...

B) I think it's terrible optics for the firm not to pay. It screams cheapskate - I mean, how fucking cheap can you be, not to even cough up a small symbolic sum?

C) The only time I think it's even remotely acceptable, is if it's done through school - and you get credits for it.

I know most serious firms are against it, and they even get run down with applicants offering to work for free - hell, some even offer to pay the firm, just so that they can work there.

Unless it's for a big name, which is unlikely to provide unpaid internships, Stay clear. Lots of people talking about how it's an investment, don't believe the hype, from personal experience if someone won't pay you from the start they never will and they just need free labor most internships of any merit are at least somewhat paid or for academic credit. So no unless it's the only way you could get into a big name, or you are bottom of the barrel and need an internship desperately.

Personally, I have done an unpaid internship between my sophomore and junior year of college with the SEC in NYC. Since I commute into the city, they gave me a stipend (few weeks late) but despite the feeling of doing work for nothing, I met some great interns (still talk to) and it opened A LOT of doors for interviews with places all over the industry.

Yes. It absolutely sucks, but it did a lot of good for me despite not being a huge fan of it. Got a lot of experience and it got me some places since I went through with it. It all depends on the job and what you're trying to do. **I also was not living in the city so I was able to do this without a financial burden.

I'm first going to address "unpaid work" as a whole, looking at positions outside of banking.

I know someone that is requesting an unpaid summer position at a research lab that does work on a few topics he is interested in. This shows his interest and willingness to work, inherent interest in the field / subject, and is far more marketable than being paid minimum wage to work at the campus dining commons as a server.

From the finance perspective, most of the time a large bank / shop will not be able to offer an unpaid role because of laws / regulations along with the fact that the have well built paid intern programs that are well funded.

Smaller shops don't have those types of programs so finding talent might be a bit more cumbersome... furthermore a lot of smaller offices / teams are subject to budgeting, where perhaps they need the capacity another intern / analyst would bring but can't afford to hire anyone. This allows them to take unpaid interns. The interns don't value themselves "next to nothing"

You need to stop thinking the only value derived from doing a task is monetary. As an early career individual the most valuable thing you can get out of your job is relevant experience.

My firm offers unpaid internships. I am a firm believer in their value. A few points:

1) We pay for breakfast / lunch, + dinner if interns work late (which rarely ever happens). Interns have ordered $50 lunches and taken home leftovers, and that has been totally fine by us.

2) We pay for round trip transport to their local address - I've seen our firm pay for round trip tickets for a 2-hour high-speed train every day.

3) As mentioned elsewhere in this thread, our freshman / sophomore interns add +/- no value for at least 6 weeks, and usually longer. Pump and Dump is correct that a lot of the work can be admin work. Getting annoying admin done around the office = the cost of paying for round trip transit and 2 meals a day. This adds value for the firm.

4) Because pre-junior interns add very little, if any value directly, there is very little pay competition for them in the market. The market rate is $0. Paying expenses makes us generous relative to other firms.

5) The work interns do can genuinely be good experience, or at the very least good exposure to the industry. Building up a contact sheet, industry overview, etc = learning the players in the industry. People come in not knowing who Blackstone / KKR are, or the difference between Blackstone and Blackrock. Having that level of understanding, however basic, is valuable. Add to that the (significant) time spent teaching them how financial statements work, how we think about analyzing the pitches that come our way, giving them exposure to an office environment, etc - it provides a good foundation for progressing in the industry. Taking this time to coach / teach is a soft cost to the firm / can be viewed as an indirect form of compensation (particularly when it counts for course credit for their school). We have also had unpaid interns prove themselves, operate as full-fledged 1st year analysts by the end of their internship, and stay on as paid FTEs. Not all firms do this, but at least some do.

6) The reason we are willing to pay expenses / mentor people / have an unpaid internship program despite these costs is three-fold:

a. the best people can be identified to come back in future years and/or after brief work experience at a larger firm.

b. the people who are not as good generally appreciate the mentorship and the references. since these people are generally well-off/well-connected to be able to afford an unpaid internship in the first place, and generally go on to work at other places we like to work with, it helps build our firm's network and reputation.

c. when we give internships to people's children, it can directly lead to improved dealflow.

Personally, my unpaid internship for a buy-side firm made my career. The mentoring I got was invaluable - and continued for years after my internship. The experience I got working with a portfolio company (directly with their CEO and CFO) part-time after proving myself my first month taught me an enormous amount about how companies are run. I got to build those contact lists, learn who the players in industry were, and how things worked - which has continued being valuable years later. The reputation of the firm + place in industry + experience I got led to my BB IB offer. That same experience gave me interview fodder for my exit - that I had experience advising C-levels of sponsor-owned companies and 'got' how they worked. I've also been through multiple background checks since my unpaid internship - I was always open that it was unpaid, and it was never viewed negatively, because people understand that good experience as an underclassman rarely pays.

Is it desperate to work without pay? Yes - most people in the position to consider those positions are, partly because paid options at that level are few and far between.

Does it value yourself next to nothing? No. Your skills are (rightly) valued at nothing. But a firm has to believe in you enough to think that you are worth their time to mentor. At a good unpaid internship, the interns are absolutely valued.

Is it morally right that the only people able to commit to an unpaid internship are those wealthy enough to live nearby / position themselves appropriately? Probably not, but, until there is a subsidy to pay interns, the economics simply can't make sense, and financial firms need to be focused on their economics.

Someone once said "If you don't value your time, why should others do?" and it stuck with me. Unpaid internships can be good if they're in a reputable environment but if they are in a reputable environment, they can probably pay you minimum wage at least.

I think unpaid internships signal one of two things, one is a legitimate hustle where they will do things like uber at night or work weekends to pay for a summer where you are interning for free. These people generally had to cold call/network to get the job. On the flipside you got people whose parents put them in touch with their friend who owns a company, and the internship was delivered on a platter. I think this is pretty common, since the kid is supported by their family throughout their time. I think these people only signal that they have well connected parents. I personally had an unpaid internship where I was told I would get a minimum bonus at the end for my work (so kinda unpaid). They ended up being pretty generous and gave me more than I expected, and the work I did there was leveraged for a much better internship. As far as work goes it is pretty variable, but since you are likely at a smaller firm I think interns have a good chance to impact the company, and can get their hands on some pretty cool projects. All in all, I think it depends on if the company is willing to give interesting work. If so, jump on it, and work during the school year which a lot of people do including myself. Otherwise.... just keep cold calling

Pro. My first IB internship was unpaid -- found a mentor, got txn experience, and learned how to do basic modeling.

Student here. Completed an unpaid internship for about a month during the break working (volunteering?) decent hours, maybe 55/week. Small corporate advisory shop here in Australia, mainly pre-IPO and IPO transactions, small emphasis on seed investing. Learnt a lot, first hand at actual modelling (which I had self taught in my free time) and got to meet with company management for two live deals.

Still a student, but have moved on to a niche shop which is privately held and is focused on both investments and corporate advisory. Perhaps the regulation is just too different here in Australia, but we personally co-invest our own capital into the seed funding for companies before we list them. Hours are incredibly decent, more or less 40 hours/week (for the full-time guys). I'm not in the office nor am I paid an hourly wage, but am assisting remotely with market research and financial analysis, coming in for a catch up once a month. I will be allocated an allotment of $0.01 priced shares (seed funding) and we intend to list the company at a standard $0.20 IPO raise.

Here's hoping volunteering myself yields some nice returns... (Yes, I have full-time prospects at this firm so it's not all for naught should this deal be scratched).