Investment Banking Interview Prep: Your Pre-Flight Checklist

Investment Banking Interview Pre-Flight Checklist Your Essential Guide For IB Interview Prep v1.3 Copyright © 2025 by Finance|able. All rights reserved. This publication may not be reproduced, stored, or transmitted in any form or by any means, electronic, mechanical, photocopying, scanning, or otherwise, without Finance|able's prior written permission. Finance|able makes no representations or warranties regarding the accuracy or completeness of the contents of this guide and specifically disclaims any implied warranties of merchantability or fitness for a particular purpose. The advice and recommendations contained herein may not be suitable for your specific situation. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, and consequential damages. Table of Contents Finance|able: Democratizing Access to Top-Tier Finance Careers.......................................5 Meet Finance|able....................................................................................................................................6 How We’re Different...............................................................................................................................7 Our Investment Banking Roadmap.................................................................................................9 How The Finance World Works..............................................................................................................10 Buy-Side vs Sell-Side...........................................................................................................................11 Buy-Side vs Sell-Side Resources...................................................................................................13 What the ?!?!?! is a…..............................................................................................................................14 What Is An Investment Bank? Resources..................................................................................15 Private Equity vs Venture Capital...................................................................................................16 Investment Banking Career Path....................................................................................................19 Speak The Language...........................................................................................................................24 Industry + Technicals + Scary Stuff + Behaviorals.........................................................................26 Ramp Up On The Industry.................................................................................................................28 Crush The Technicals............................................................................................................................31 First The Foundation….Then The Wallpaper.............................................................................34 Accounting Fundamentals.................................................................................................................36 Valuation Fundamentals......................................................................................................................38 Great…so, how do I get better?......................................................................................................40 Additional Layers of Core IB Interview Topics........................................................................41 Nail Your Behaviorals.....................................................................................................................................52 Step 1.... Be Human...............................................................................................................................54 Tell Me About Yourself (TMAY)......................................................................................................57 Why Investment Banking?.................................................................................................................60 Why This Investment Bank?..............................................................................................................61 Finally The Core Behavioral Questions.......................................................................................63 Build Relationships (i.e. 'Networking')...........................................................................................65 Investment Banking Interview Pre-Flight Checklist Table of Contents Continued IB Networking + Interview Cheat Codes............................................................................................68 Your Student Email is a Superpower…Use It!...........................................................................70 Connection Request Limits on LinkedIn.....................................................................................74 Building The Network...........................................................................................................................75 Free LinkedIn InMails............................................................................................................................78 Find Any Email Address......................................................................................................................79 Craft the Perfect Email with AIDA.................................................................................................82 Master Interview Nervousness.........................................................................................................94 IB Interview Prep Checklist.......................................................................................................................106 Common Interview Questions.................................................................................................................110 Speak The Language: Full Glossary......................................................................................................113 Investment Banking Interview Pre-Flight Checklist Finance|able: Democratizing Access to Top-Tier Finance Careers Investment Banking Interview Pre-Flight Checklist Meet Financeable Hi there! I'm Mike Kimpel, Founder and CEO of Finance|able. Through guides like this, we aim to open show how to break into the lucrative and rewarding world of Finance. In short, we have one mission: Democratizing Access to Top-Tier Finance Careers Finance changed my life….full stop. For many though, achieving a position at a top-tier firm can seem completely unattainable. Especially when the concepts can seem wildly confusing and it can appear as if everyone in top-tier roles comes from a ‘perfect’ background. Growing up as the eldest of five in central PA, our family faced challenges when we moved to West Virginia for its affordability. My father's grueling 3-hour daily commute and my mother's debilitating illness, which thrust me into a caretaker role. I had to self-educate and guide my siblings, making our educational journey anything but typical. A pivotal moment came in high school when the company my father worked for went public. Despite its stock's drastic drop, it provided enough funding for in-state college tuition. This sparked my interest in finance. Recognizing that top finance firms favored elite institutions, I took on debt to transfer to the University of Virginia, a decision that paved the way to my dream job. My upbringing instilled resilience and a passion for mentorship. While I navigated initial challenges, I acknowledged my privileges as a white male in Investment Banking. This awareness, combined with my journey, inspired me to co-found Access Distributed (AD) in 2019. AD aims to help students from ‘non-target’ institutions / underrepresented backgrounds to secure top-tier finance roles. Through AD and Finance|able, I strive to level the playing field and empower others to achieve their aspirations. Investment Banking Interview Pre-Flight Checklist Meet Financeable Finance|able takes difficult and complex finance concepts, and makes them easy to understand. Our intuitive training courses are designed with you in mind, to maximize your concept retention while minimizing your study time. High-caliber students from around the world apply for roles at top-tier firms which typically only accept 1-5% of their applicants (at most). Our platform was created to help you more easily go from the ‘ground floor’ with zero knowledge to pro-level abilities with simple, intuitive materials. How We’re Different We’re different. And we’re OK with that. Most other firms are focused on mechanical Financial Modeling training which is the old-school way of training oriented to the Investment Banking role in the late 1990's and early 2000's. Having spent nearly two decades across a variety of roles, I’ve built our content around a more upto-date view of what’s required to succeed on the job. Investment Banking Other Firms Mutual Fund Private Equity Hedge Fund Investment Banking Interview Pre-Flight Checklist Meet Financeable Legacy Training Firms Training That Reflects The Job Stale carryover from the early 2000s Easy-To-Follow, Visual Approach Information Overload Backed by Empirical Research Personalized Learning Journey Finance Training Re-Imagined Investment Banking Interview Pre-Flight Checklist Interview Ready Bundle Get our Step-by-Step Blueprint to Confidently Nail Your Technicals in your Investment Banking Interviews. Everything you need to master Technicals in one Bundle! Investment Banking Interview Ready This all-encompassing package is designed to equip you with the essential skills, knowledge, and insights needed to excel in the competitive world of IB interviews. Break Into IB Now Investment Banking Interview Pre-Flight Checklist Our Investment Banking Roadmap Our Investment Banking Roadmap Here is the general flow of the major phases for landing a role in Investment Banking: Industry Ramp-up Interview Prep Networking Now to dig in a little deeper, below is the high-level map for the guide which will help you navigate the steps listed above. How does Finance Work? Technical Interview Prep Behavioral Interview Prep Networking Cheat Codes To make your Interview Prep process more manageable, we’ve created a full checklist to ensure you have all the things you need to succeed. If you want to jump straight to the checklist, let’s go. Be sure to connect with us: @survivefinance @survivefinance @FinanceableTraining @Finance-able Ready? Let's get started! Investment Banking Interview Ready This all-encompassing package is designed to equip you with the essential skills, knowledge, and insights needed to excel in the competitive world of IB interviews. Break Into IB Now Investment Banking Interview Pre-Flight Checklist How The Finance World Works Investment Banking Interview Pre-Flight Checklist How The Finance World Works To begin our journey here, let’s first define the two types of Finance firms: Buy-Side Firms and Sell-Side firms. Buy-Side vs Sell-Side Broadly speaking, the Buy-Side consists of firms that take in capital from investors who aim to generate a return on the money they have invested. In exchange, the investors pay a fee to these Buy-Side firms. Buy-Side Firms Buy-Side vs Sell-Side The fee is usually based on a percentage of the money the firm manages and/or the profit generated. These firms ‘buy’ on behalf of their investors and are thus called the ‘Buy’-Side. Investment Banking Interview Pre-Flight Checklist How The Finance World Works In contrast, the Sell-Side consists of Investment Banking firms that sell Advisory and Capital Raising services to Buy-Side firms as well as to large Corporate clients (e.g. Microsoft, General Mills, etc.). The core division that offers the Advisory and Capital Raising services to Corporate clients is simply called ‘Investment Banking.’ This division organizes large, complex financial transactions such as mergers or initial public offering (IPO) underwriting, Mergers & Acquisitions. Throughout these processes, the bankers help their clients navigate the complex world of high finance, working with corporations, governments, and other groups involved in large corporate transactions. Separately, most banks also have a Sales & Trading division that executes the purchase and sale of securities for their clients (typically Hedge Funds and Mutual Funds) in the Equity (aka Stock) market as well as the Debt (aka Credit) market. There’s also a division that straddles ‘Core Investment Banking’ and Sales & Trading is a group called Capital Markets. The Capital Markets group interfaces with potential Investors and Lenders directly when a client is seeking to raise capital. Finally, Investment Banks offer advice to Buyside investors through their Research divisions to help Buy-side investors in their investment decision-making process. As a whole, Investment Banks ‘sell’ all of these services and as a result are called the ‘Sell’-side. Below are some of the major firms across the Investment Banking Industry: Investment Banking Interview Pre-Flight Checklist How The Finance World Works Buy-Side vs Sell-Side Resources Check out this quick animated explainer video for a brief overview of all the players in the Finance Industry, or dig deeper with our Buy-Side vs Sell-Side Ultimate Guide! Quick Animated Explainer Video Read The Article Investment Banking Interview Pre-Flight Checklist How The Finance World Works What the ?!?!?! is a… Investment Banks have numerous (and often overlapping!) internal divisions whose functions vary across different banks. Understandably, this is a major source of confusion to people trying to figure out how all of the puzzle pieces of this part of the Finance world fit together. Let’s keep it simple to start. Investment Bankers are very similar to Real Estate Agents, but instead of helping clients buy (or sell) houses, they help with the buying and selling of entire Businesses. In addition to advice, Investment Bankers also help their clients raise money to fund the transactions. Capital Raising Advisory Role M&A Purchase or sale of a business Restructuring Business in financial distress Equity Raise investor capital Debt Raise lender capital At a high level, the Investment Banking Division offers four core services: Advisory: M&A – advise clients on the sale (‘Sell-Side M&A’) and purchase (‘Buy-Side M&A’) of companies. Restructuring – help clients work through periods of financial distress. Capital Raising: Equity – raise Investor capital for clients. Read The Article Debt – raise Lender capital for clients. Investment Banking Interview Pre-Flight Checklist How The Finance World Works ‘What Is An Investment Bank?’ Resources Check out this quick animated explainer video showing how the Investment Banking dots connect, or dig deeper with our What Is An Investment Bank Ultimate Guide! Quick Animated Explainer Video Read The Article Investment Banking Interview Pre-Flight Checklist How The Finance World Works Private Equity vs Venture Capital In terms of their structure and objectives, these firms are more similar than they are different. Venture Capital Growth Equity Leveraged Buyout Stage Young Mature Investment Part Owner Whole Business Owner They all take in money from investors and then buy partial ownership stakes in a business (‘Minority’ stakes) or, sometimes, the entire business (‘Majority’ or ‘Controlling’ stakes). The end goal is to sell their stakes in the future to generate a return for their investors. Private Equity vs Venture Capital (and Growth Equity) Read The Article Investment Banking Interview Pre-Flight Checklist How The Finance World Works High Growth Low Growth Early-Stage Mid-Stage Late-Stage ‘Venture Capital’ ‘Growth Equity’ ‘Private Equity’ Revenue Time Negative Cash Flow Positive Cash Flow Private Equity or Leveraged Buyout (LBO) Private Equity or Leveraged Buyout (or ‘PE’ or ‘Buyout’ for short) firms use investor money (or ‘Equity’) to purchase entire businesses . It’s important to note that somewhere along the way, Late-Stage (Leveraged Buyout) investors grabbed the name ‘Private Equity’. So, when people in the industry refer to ‘Private Equity‘ or ‘PE’, they assume the term refers to Leveraged Buyout firms rather than Venture Capital or Growth Equity. Venture Capitalists Venture Capitalists (‘VC’ firms) provide funding to founders of young businesses who often present ideas written down on the back of a paper napkin. Venture Capital firms provide money to these companies. The money allows the founder to hire a team to test (and hopefully to prove out!) the founder’s business idea. The goal is for this idea to ultimately become a major business like Google, Amazon, or Facebook. In return for their investment, the Venture Capital firm receives an ownership Read stake inThe the business. Article Investment Banking Interview Pre-Flight Checklist How The Finance World Works Growth Equity Growth Equity investors step in once a business gains further traction with paying customers and attractive economics. Growth Equity investors provide the critical funding needed to drive growth. Typical areas of investment are Marketing, the Executive team, Overhead support, Research & Development (R&D), and the Sales team. Whether a Growth Equity fund is buying all or part of a business, the end goal is the same as with VC funds. Growth Equity investors aim to either sell the business or to take it public down the road. Now that we’ve covered the major players in the Finance world, let’s switch gears and dig into the career path(s) in Investment Banking. Private Equity vs Venture Capital – The Ultimate Guide Read The Article Investment Banking Interview Pre-Flight Checklist How The Finance World Works Post-MBA Recruiting Paths Beyond undergrad, there are three ways to get into the upper ranks of the business: Direct Promote – top-performing Analysts promoted to Associate. Top-Tier MBA Graduate – students at high-caliber MBA programs. Lateral Hire – individuals who work at other Investment Banks or sometimes Corporate Finance or Corporate Development roles. While people get into IB through all three of the routes discussed above, MBA graduates make up the lion’s share of post-MBA Investment Bankers. ‘Target’ vs ‘Non-Target’ Schools Investment Banks recruit on-campus for a select group of schools (or ‘Target Schools‘). Target schools are composed of top private and public Universities (Harvard, Yale, Stanford, Michigan, UVA, etc.). Schools outside of this group are referred to as ‘Non-Target‘ schools. Historically, a typical Analyst class would only have a few ‘Non-Target’ Analysts. In recent years, however, Banks have realized they are missing out on a LARGE pool of highly talented students and are much more open to ‘Non-Target’ Students. There are also organizations dedicated to helping ‘Non-Target’ students land roles in IB like Access Distributed (our CEO co-founded this organization to expand access to students at nontarget schools). So, the good news is that you can get in if you are at a ‘Non-Target’ School, but it just requires a bit more legwork, largely in the form of extensive networking. Read The Article Investment Banking Interview Pre-Flight Checklist How The Finance World Works Banking Roles Banking roles can be divided into Senior Bankers, MD’s and SVP’s who focus on clients. Mid-Level Bankers, or VP’s, who lead execution. Finally, Junior Bankers called Analysts and Associates, who create analysis and materials for the Senior Bankers to present to clients. Title Focus Pay “Senior” MD’s & SVP’s Clients $1M - $10M+/year “Mid-Level” VP’s Deal Execution $400k - $1M/year “Junior” Analysts/Associates Material Creation $120k - $500k/year Investment Banking Career Path Latest IB Comp Numbers Analysts are typically post-university graduates with high GPA’s and stellar test scores who can make it past the rigorous hiring process in which only 2-3% of candidates are accepted. On the job, Analysts create the nuts and bolts of virtually every part of the deal. They create financial projection models, client presentations, and also help coordinate deal execution logistics often for multi-million dollar transactions. This role typically lasts 2-3 years. Investment Banking Interview Pre-Flight Checklist How The Finance World Works Investment Banking Career Path While there isn’t a typical path, there are two primary entry points for a job in investment banking: Pre-MBA and Post-MBA. Managing Director Post-MBA Roles (...or Direct Promote) Senior Vice President Vice President Associates Pre-MBA Analysts Whether pre-MBA or post-MBA, incoming Investment Bankers are typically high achievers with high GPAs, high test scores, and a track record of repeated success (in and out of school). The Pre-MBA Recruiting Cycle Investment Banks fill most of their Analyst classes with former Summer Interns. While it is possible to land a full-time job at an Investment Bank without a Summer Internship at that Bank, there are far fewer spots. So, the best bet for most candidates is to land an internship. The ‘big’ internship to get in IB is the Junior Summer Internship. While it might sound a bit crazy, the recruiting for Junior Summer internships occurs 12-18 months before the internship begins. As a result, aspiring Analysts should begin preparing to recruit in their Sophomore (and sometimes Read The Article Freshman) year of College. Investment Banking Interview Pre-Flight Checklist How The Finance World Works After the Analyst role, top performing analysts can be directly promoted to the role of Associate, but many leave for Buy-Side roles in Private Equity, Hedge Funds, and Venture Capital. Or, they go the Corporate route and work at everything from early stage start-ups to large companies. Some even start their own companies, and a few may choose to enroll in an MBA program. Investment banking opens the door to many attractive opportunities as a result of the selectivity of top-tier programs and the rigor of the job and responsibilities placed on analysts. While some Investment Banking Associates are direct promotes or lateral hires from other banks, most are hired out of top-tier MBA or other Master degree programs. On the job, Associates take guidance from Mid and Senior level bankers and oversee analysts as they create models and presentations for clients. While analysts typically create the materials, Associates are ultimately responsible for the accuracy and quality of the work. After 3-4 years, an Associate can be promoted to Vice President (or ‘VP’), also called Director at some banks. VP’s typically act as a buffer between Senior and Junior Bankers, but ultimately ensure that Senior Banker demands are met. They also manage day-to-day client requests. VP’s are often called ‘Deal Quarterbacks’ because they coordinate deal team execution. VP’s aim to become a Senior Vice President, or SVP, also called Executive Director which is the last role before the top position of Managing Director (or ‘MD’). SVP’s are MD’s in training. They’re responsible for prospecting for new business, building relationships with client CEO’s, and proving themselves as deal makers. If they are promoted to MD, it typically happens in 2-3 years. Unfortunately, not all SVP’s become MD’s. Investment Banking Interview Pre-Flight Checklist How The Finance World Works Managing Directors are the most Senior Bankers. Their responsibilities are to grow the client base, to execute transactions, and to bring in fees by becoming a trusted advisor to company CEOs. In addition to being good with numbers, they need top-notch people skills and a deep understanding of Corporate Strategy. In return for their skills and hard work, they often earn well over $1M per year. Investment Banking Career Path Investment Banking Career Path – Ultimate Guide Investment Banking Interview Pre-Flight Checklist How The Finance World Works Speak the Language As is the case in many other domains, Finance has its own language. Step one is learning how to speak the language. To speak the language of Finance and Investment Banking, you need to learn the key terms and concepts used in the industry. We put together the videos and articles below to help make this process as easy as possible. World of Finance Playlist How Does Finance Work? Articles Beyond the basics, you should fine-tune your vocabulary of key terms. Investment banking has a unique vocabulary and in many cases, there are multiple terms that can be used for the same underlying concept. You should make sure you understand what these terms mean and how they are used in the context of finance. Below are some key terms to master: Term Bonds (‘Fixed Income’) Buy-Side Acronym Definition FI Bonds are fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental. They pay periodic interest payments and return the principal amount at maturity. - The Buy-Side refers to firms that purchase securities and other investment products and includes investment managers, pension funds, and hedge funds. They make investments for the benefit of their clients. Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Acronym Definition Earnings Before Interest, Taxes, Depreciation and Amortization EBITDA EBITDA is a measure of a company's operational performance, excluding interest, taxes, depreciation, and amortization. Enterprise Value EV EV is a measure of a company's total value, including market capitalization, debt, and cash, providing a comprehensive valuation metric. Equity Value - Equity Value is the value of a company's equity, calculated by subtracting total liabilities from total assets. HF Hedge Funds are investment funds that employ various strategies to earn active returns for their investors. They can invest in a diverse range of assets, often using leverage. PE Private Equity refers to investment funds organized as limited partnerships that invest in private companies or conduct buyouts of public companies. The goal is to improve and sell them for a profit. - The Sell-Side refers to firms that issue, sell, or trade securities and includes investment banks, advisory services, and brokers. They serve as intermediaries between buyers and sellers. - Stocks represent ownership in a company and constitute a claim on part of the company’s assets and earnings. There are two main types of stock: common and preferred. VC Venture Capital is a form of private equity financing provided by investors to startups and early-stage companies with high growth potential in exchange for equity or ownership stake. Hedge Funds Private Equity Sell-Side Stocks Venture Capital Full Glossary Full Glossary Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals To break into Investment Banking, you will need to be able to knock out your interview, which will take some practice. There are three major components to an Investment Banking interview: 1) Industry - test knowledge of how the industry works and as well as your understanding of current events in the industry. 2) Technicals - test understanding concepts that will be used on the job (e.g. Accounting, Valuation, etc.). 3) Scary Stuff: Puzzle Questions, Brainteasers & Mental Math - while not as common as the items above, you may be asked tricky questions to test your problem solving skills 4) Behaviorals - helps the interviewer understand you as a person, your ability to operate under pressure, and finally your ability to communicate ideas effectively. A common question we receive is, ‘Which of these are most important in preparing?’. The answer…items #1, 2, and 4 are ALL important. Puzzle Questions, Brainteasers and Case Math are relatively less common so they should be left until after you feel confident with items #1, 2 and 4. Let’s begin with your Industry ramp-up. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Ramp Up On The Industry In the first part of this guide, we walked through the free resources we offer to help you understand how the Finance world works. Once you have a basic understanding of the industry and a few key terms, you should start to learn about the latest developments in the finance industry. It’s important to start to follow the latest large Mergers, Acquisitions, Initial Public Offerings, and other industry events and happenings. This will help you understand the current trends and terminology used in the industry. One of the best sources we’ve found to learn is the ExecSum, a free daily newsletter by Litquidity who is the OG Instagram influencer in this space. While we’re on the topic of Instagram, we’d recommend following the accounts below: @survivefinance @litquidity @restructuring__ @rich_toad Interview questions and walkthroughs. We know, it’s a shameless plug. The OG of finance memes. For more advanced folks, specifically aiming for Restructuring (aka ‘RX’) roles in Investment Banking If you're aiming for public equities or equity research, this is your guy. We also recommend that you get a subscription to the Wall Street Journal (WSJ) and skim the following each day: What’s News Business & Tech Markets This is a paid subscription, but it is worth checking with your school to see if they have any special offers. If not, the WSJ offers student discounts which you can learn about here. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals The subscriptions above will help you answer questions on the industry and current events. Carrying on, below are a few additional industry knowledge questions to master. What do Investment Bankers do? How does that compare to S&T? What about Private Equity? Investment Bankers advise their clients on the sale or purchase of a business. They also help companies raise money by issuing stock, bonds, or other related securities. Sales and Trading buy and sell securities on behalf of their clients or bank. Private Equity buys companies in Leveraged Buyout (i.e. LBO) transactions with the aim of increasing the value and selling the companies in a few years for a profit or take the company public. For a simple explanation of all of the players above (and what each does), check out this animated explainer video on the Buy-Side vs Sell-Side. What is Bulge Bracket vs Boutique bank? How do they differ? Bulge bracket banks typically are larger, offer more products, and perform more deals throughout the year. Boutique banks are typically smaller, with more specific areas of expertise (often M&A and Restructuring). For more detail on the different types of banks and check out this simple explainer video. What are your thoughts on the market? Interviewers often ask for your view on the latest trends and events in the market. We recommend keeping up with the latest events by regularly reading the Wall Street Journal as well as the ExecSum daily. If you read these and absorb the content they offer you should be able to tackle most major current event / industry knowledge questions. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals What is the latest value for….? You should prepare to provide the latest trading values for: The S&P 500 The 10 US Treasury The Nasdaq S&P 500 Forward P/E The exchange rate for the British Pound (or Euro) vs the dollar Make a mental note of the trading values for each of these items before your interview. You can find the latest trading values for all of these things on Koyfin. Once you gain a basic understanding of the industry, it’s time to start digging into the technicals. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Crush The Technicals To knock out the technical part of the Investment Banking interview, you will need to master a few critical concepts (that you’ll also need on the job ). To start with, people will tell you that you need to master Financial Modeling for interviews. This is absolutely untrue. I’ve never worked with a candidate who has interviewed at a Bulge Bracket, Elite Boutique or Middle Market firm that required an Analyst or Associate candidate to build a model in an interview. Johnny, you know you need to start with Financial Modeling On a related note, beginning with modeling could make your journey unnecessarily challenging. With that said, once you’ve mastered the core concepts listed below, learning Financial Modeling is a great way to solidify your knowledge. Without further ado, the key areas to master are: Accounting Fundamentals (including 3 Statement Connections) Business Valuation (Discounted Cash Flow Analysis + Comparable Valuation) LBO Fundamentals (including the Paper LBO process) M&A Fundamentals (including Accretion/Dilution) View All Our Courses Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Technical interviews require candidates to demonstrate their knowledge and expertise in finance concepts along with their problem solving skills. Preparing for the interview can be a valuable learning experience, helping candidates deepen their understanding of the field and develop new skills. Before we dive into the major topics in detail, let’s talk tactics for a minute. I’ve seen thousands of candidates interview for IB roles, and below are the most common mistakes that I have witnessed. How to blow up your Technical Interview Here are some tips on how to blow up a finance technical interview: 1) Don't prepare…or procrastinate: The biggest problem I’ve witnessed is that people wait till just before their interviews to begin prepping technicals. This is a MASSIVE mistake. I can’t recall a time when someone tried this and it turned out well. In short, start early and practice consistently. 2) Memorization: If you simply memorize the answers to questions, you are in for a painful moment when right after confidently answering a question the interviewer twists it and you have no idea what to do. The interviewers know all the standard questions and like to re-wire them to see if you really ‘get it.’ This is why we emphasize concepts and dynamic mental maps throughout our courses. Here is a video clip of Naval Ravikant, the founder of the VC platform Angelist, expressing this point much more clearly than I can. 3) Seeming Long-Winded: If you give a long answer to the question it can seem like you don’t understand the concept and/or can’t give a succinct answer. Neither of those things reflects well on a prospective candidate. 4) Showing off Your Knowledge: Let’s face it, the person sitting on the other side of the table in an interview has a huge leg up on you in most cases. They have likely been on the job for years and can run circles around you. If you try to show off how much you know, they will just take it to the next level. It’s nearly impossible to win this game. The trick is to answer a question at a highlevel and let interviewers pull you into the details of the question. If you start in the ‘deep end’, they’ll just take you even deeper. There’s no upside to this strategy. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals 5) Getting lost in the Weeds: I’m often asked something to the effect of, “With so many steps and pieces, How do you answer, ’Walk me through an LBO?’.” The short story is that you need to create a few high-level anchors, see our frameworks for two of the most common interview questions below. Having a concrete set of steps as anchors give you something to hang onto, so you don’t get lost in the weeds. Walk Me Through A DCF Walk Me Through An LBO 6) Overconfidence: It's important to be confident in an interview, but being overconfident can come across as arrogant and turn off the interviewer. Make sure to strike a balance between confidence and humility. 7) Wrapping without Questions: Asking thoughtful questions at the end of an interview is an important way to show your interest in the job and to learn more about the company. If you don't ask any questions, it may suggest that you're not interested or haven't done your research. Overall, the key to succeeding in a finance technical interview is to be well-prepared, and to walk a fine line between confidence and humility, and to provide clear and concise answers to the interviewer's questions. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals First The Foundation….Then The Wallpaper Now, jumping into the topics to master…your sequence of study could be the difference between a shorter study-cycle + an offer VS repeated loops + no offer. You don’t have to listen to me here, but virtually everyone I have ever coached who has received an offer has come back to me afterward and said…now I get why you recommended following your sequence. I’d encourage you to skip the pain and trust me here. Prepping for IB interviews is like building a house. Build a strong foundation first…then add the additional decorative items once the foundation is in place. If you have a weak foundation your proverbial ‘house of knowledge’ will crumble quickly and you’ll find yourself repeatedly circling back to the basics. To begin here, the largest number of questions you'll receive in an Investment Banking Interview will be centered on core Valuation + Accounting fundamentals. These two topics should be the largest chunk of study time off the bat. These topics are the foundation for IB interviews. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Just to be sure, everyone is afraid of the most advanced questions. With that in mind, we’ve created a chart to show the breakdown of Investment Banking interview questions. Investment Banking Interviews - Perception vs Reality 100 Other Advanced Questions 80 Other Core LBO + M&A 60 40 20 0 Advanced Questions Core Accounting + Valuation Core LBO + M&A Core Accounting + Valuation Perception* Reality* *Our rough experience based on candidates who go through interviews with multiple banks. I recommend working on Accounting and Valuation concepts until you feel solid with intermediate level questions. And as mentioned above you should be able to fluidly walk through these questions…not just regurgitate answers verbatim. In short, rush through the foundational concepts…and you will pay a steep price later. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Accounting Fundamentals With Accounting, we are simply trying to answer a few questions: How much money did the Business make, both in terms of underlying substance and in actual cash? What is the current financial position of the Business? What can the Financial metrics of the business tell us about the Business’ operational performance? At a high-level, Accounting Fundamentals are the basic principles and frameworks used in Finance to measure the performance of a Business. These principles are used to record, classify, and report financial information about an organization, and are essential for effective financial management. Some of the key concepts in Accounting Fundamentals include: Accrual Accounting Concept: This is the concept that the economic substance of transactions are recorded when they occur, not when cash is received or paid out. The Accounting Equation: This equation states that Assets = Liabilities + Oweners’ Equity, which must always be in balance. Debits & Credits: This is the fundamental accounting concept that every transaction has two equal and opposite effects in the accounting system. Three Financial Statements: there are three core Financial Statements (Income Statement, Balance Sheet and Cash Flow Statement). You should be able to walk through the key items in each statement and explain what each item means. Three Statement Connections + Flows: you need to master the connections between the Three Financial Statements and be able to walk through how a transaction would flow through the Financial Statements. For example, a common question is, “How does $10 of Depreciation flow through the three Financial Statements?”. (YouTube Series on this Concept) Understanding these accounting fundamentals is essential for anyone who wants to effectively manage a business's finances If you want to dig into these concepts, check out our courses listed on the next page. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Accounting Fundamentals Course Course Highlights: Skip fluff and covers in 2.5 hours, what other course teach in 5-7 hours Interview questions to master at the end of each section See Debits & Credits and a Financial Statement build in live motion Simple three statement connections map For the overachiever, you can dig deeper in our Accounting Deep Dive Course! Accounting Deep Dive Course Course Highlights: Tackles advanced topics like leases and gains / losses Walkthrough of year-to-year changes in each account, with a simplified visual framework Interview questions to master at the end of each section Learn the intuition behind analyzing metrics like EBITDA margin and working capital ratios The Deep Dive course is not at all required, but it’s great for extra practice and refining your conceptual understanding. You can practice questions of these topics with our app. With the high-level map of Accounting covered, let’s move on the other major foundational concept to master, Valuation. Interview Question Bank Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Valuation Fundamentals With Valuation, we are simply trying to answer two questions: ‘What is this thing worth? What is its value?’ ‘Is that value attractive relative to the value of other similar ‘things’? The ‘thing’ that we are valuing could be any Asset ranging from a single security to an entire Business. In the case of an Investment Banking Interview, we are primarily focused on valuing a Business. Valuation is used by investors, analysts across the Buy-Side and Sell-Side to determine the fair market value of a variety of investments ranging from Stocks and Bonds to entire Businesses. Some of the key concepts in Valuation Fundamentals include: Time Value of Money: In order to assess the value of future cash flows, we use a process called ‘discounting’ which allows us to value future cash flows in terms of their value today. Discounted Cash Flow (DCF) analysis: This is a valuation method that estimates the total value / purchase price of a Business (aka ‘Enterprise Value’) based on the Business’ estimated future cash flows. Weighted average cost of capital (WACC): This is the average cost of the capital used by a company (i.e. the weighted average expected What is WACC? returns of the Company’s Lenders and Investors). WACC is used to ‘discount’ the estimated future cash flows to arrive at Enterprise Value. Trading Comparables Analysis: This is a valuation method that uses the valuation metrics of similar companies that are Publicly traded to determine the value of a Business. Transaction Comparables Analysis: This is a valuation method that uses the valuation metrics of similar companies that have been Acquired in the past to determine the value of a Business. Enterprise Value Mechanics: this is the concept of working from the value of the total Business to the Equity Value, which reflects the value attributable to the owners of the Business. Understanding these valuation fundamentals is essential for anyone who wants to break into Finance. Details on our Valuation Fundamentals course is provided on the next page. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Valuation Fundamentals Mastery Course Course Highlights: Skip fluff and covers in 4 hours, what other course teach in 6-8 hours Learn with animations and a variety of visuals that make concepts much more intuitive Common Interview questions to master at the end of each section You can practice questions of these topics with our app. Now that we’ve covered the most critical concepts to master, let’s move into the next layer of topics to master. Staying on Valuation for a second, one of the most common ‘lead-in’ questions for a discussion on Valuation in an interview is simply ‘Walk Me through a DCF’. Interview Question Bank We’re happy to share that our simple framework is the top-ranked YouTube video on this topic and has helped SO many students master this question. We highly recommend starting with the video first for the high-level view and then dig deeper with our top-ranked article on the same topic. Investment Banking Career Path Investment Banking Career Path – Ultimate Guide Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Great…so, how do I get better? Before we move ahead to additional topics, it’s important to talk about the improvement process. There two steps here: 1. Learn the concepts and practice on your own 2. Practice the concepts with people to get feedback Once you’re up the curve though, there’s no substitute for practice with a real human staring back at you. Most people find success by ‘mocking’ (i.e. doing mock interviews) with friends or upperclassmen. Pro Tip: If you can’t find any upperclassmen, you should chat with the career center in your school and/or look up alumni in the field who can help you. I'd recommend mastering all of the easiest questions across all the areas above, then practice with some folks who know what they are doing. Get their feedback and iterate until you feel comfortable. Once you’re feeling solid, then move onto the topics below. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Additional Layers of Core IB Interview Topics The other major areas of Technicals to master are largely centered around various acquisition analyses. In particular M&A Fundamentals and Leveraged Buyouts (or ‘LBOs’). M&A Fundamentals For interview, there are two things to master in the area of M&A: How does the M&A process work and why do companies pursue these transactions? Do a Company’s earnings increase or decrease after a Merger / Acquisition? Mergers and Acquisitions (‘M&A’) refer to the basic principles and concepts that are used to analyze and/or execute the combination (aka a ‘Merger’) of two companies or the acquisition of one company by another company . Some of the key M&A fundamentals include: M&A Deal Types: M&A transactions come in a variety of forms from an Acquihire to LBOs and it’s important to understand the major types of transactions.. M&A Process: The M&A process consists of a series of steps that can occur in a variety of sequences and it’s important to each of the steps and their relative significance in the deal process. M&A Rationale: it’s important to understand the handful of common reasons that companies and investment firms pursue M&A transactions. Accretion / Dilution Analysis: when public companies engage in an M&A transaction, a common question is, “Will earnings of the combined companies increase or decrease relative to their level before the transaction?”. Accretion / Dilution (or ‘Acc / Dil’) Analysis answers this question. (YouTube Video on This Topic) Understanding these facets M&A fundamentals is essential for anyone heading to an IB interview. M&A Fundamentals Course Course Highlights: Master the basic of the M&A process Get an edge with a more intuitive, yield-based approach to Accretion / Dilution that is not commonly taught Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals For the overachiever, you can dig deeper in our Sell-Side M&A Process in Real Life. Sell-Side M&A Process in Real Life Course Highlights: Dive deep into the ins and out of all facets of the M&A deal process as it occurs on the job Edge Gained: speak the full language of the M&A process as if you had already been on the job. The Sell-Side M&A In Real Life course is not required. With that said, we’ve had people who secured offers come back and say that their interviewers were flabbergasted because nobody has this knowledge without actually working in Investment Banking. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals You can practice questions on these topics with our app Interview Question Bank We also offer daily interview question on our instagram channel (@survivefinance). . Now, let’s switch gears to LBOs, which are a specific type of M&A transaction. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals LBO Fundamentals A Leveraged Buyout (or ‘ LBO’) is a transaction in which an entire Company is purchased in a transaction where a meaningful portion (usually ~50%) of the purchase price is funded with Debt (aka ‘Leverage’). In substance, this is very similar to the concept of buying a house with a Mortgage where 80% or more of the Purchase Price is funded with Debt. So, if you know anyone who has purchased a house, you know someone who has done an LBO. ¹ The goal of an LBO transaction is typically to improve financial performance and ultimately to sell the business in 3-5 years to generate an attractive return. Some of the key LBO fundamentals include: LBO Lifecycle: LBO funds (aka ‘Private Equity’ or ‘PE’) funds follow a fairly predictable lifecycle with investments and it’s important to understand how this process flows. LBO Strategies & Deal Criteria: LBO funds follow a few common strategies and look for very specific characteristics in the companies they acquire. It’s important to understand the ins and outs of both of these items. LBO Mechanics: It’s important to understand why investment firms pursue the LBO transaction structure as well as the relative pros and cons. LBO Debt Basics: There are multiple instruments that can be used to fund an LBO and it’s helpful to understand the relative pros and cons of each major type of Debt. LBO Exit + Return Analysis: When a PE firm exits an LBO investment, there are a few common exit paths and return metrics to assess the performance of the investment. LBO Fundamentals Course Course Highlights: Skip fluff and covers in 4.5 hours, what other course teach in 6-10 hours Our LBO Mental Map will ensure you can tackle any basic LBO problem with confidence Learn with animations and a variety of visuals that make concepts much more intuitive Common Interview questions to master at the end of each section Now, let’s switch gears to LBOs, which are a specific type of M&A transaction. Carrying on here, one of the most common ‘lead-in’ questions for a discussion on Valuation in an interview is simple ‘Walk Me through an LBO’. Our simple framework is the top-ranked YouTube video on this topic and has helped SO many students master this question. We also have a deep-dive article on the same topic. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Walk Me Through An LBO Walk Me Through An LBO Now that we’ve covered the bulk of the questions that will be asked, let’s move onto the topics that people usually spend most of their time fretting about. The Scary Questions Most people’s hearts start racing when they learn about the questions below. I’ve got good news for you…these questions are some of the least common questions you’ll see in an interview. 100 Scary Questions 80 Scary Questions Difficult Questions 60 40 20 0 Difficult Questions Medium Questions Easy Questions Perception* Medium Questions Easy Questions Reality* *Our rough experience based on candidates who go through interviews with multiple banks. As such you should not be focusing on these questions until you feel REALLY comfortable with the topics mentioned above. The first item to tackle here is the Paper LBO. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals The Paper LBO The Paper LBO, is a financial modeling exercise used in investment banking and private equity interviews to evaluate a company's potential for a leveraged buyout (LBO). In this exercise, candidates are given a hypothetical scenario of a company acquisition and asked to create a financial model to analyze the potential returns and risks of the LBO transaction. The paper LBO typically involves a case study where the candidate is given financial information about the target company, such as historical financial statements, projected cash flows, and industry data. The candidate is then asked to create a financial model with paper and pencil (i.e. no calculator or Excel) to determine the optimal purchase price for the target company, the financing structure of the transaction, and the potential returns for the private equity firm or acquiring company. The paper LBO exercise is designed to test the candidate's ability to work through an LBO transaction and evaluate the risks and rewards of an LBO transaction. As we discuss in our framework, the trick is to keep it simple throughout wherever possible. Successful candidates have to tie together their understanding of Accounting, Valuation and LBOs as well as the ability to communicate their process and findings clearly and concisely. We’ve created a deep-dive article on this process that covers everything you need to master Paper LBO including: A simplified step-by-step framework to master the analysis Tips to calm your nerves and maintain composure ‘Cheat codes’ to help you get to the answer ~60% faster than the standard approach Mental Math Shortcuts The Paper LBO Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Beyond the Paper LBO, we get to a few other tricky areas that are often a major concern of individuals aiming for Investment Banking: Puzzle Questions and Brainteasers. Similar to a previous point I made, the amount of time folks worry about these questions relative the proportion of questions they actually represent in a typical interview looks something like this: 100 Brainteasers Puzzle Questions Paper LBO 80 Brainteasers Core LBO + M&A 60 Puzzle Questions 40 Paper LBO Core Accounting + Valuation 20 Core LBO + M&A Core Accounting + Valuation 0 Perception* Reality* *Our rough experience based on candidates who go through interviews with multiple banks. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Puzzle Questions The next category of concern is ‘Puzzle Questions.’ These questions come in a variety of forms and they typically consist of an interviewee being given a series of facts around an Accounting, Valuation, LBO, or M&A scenario, but there are one or more missing pieces... A simple example might be: ‘Revenue is $100, EBIT Margin is 10%, CapEx is equal to D&A, and CapEx = $5. What’s EBITDA - CapEx?’ In this case the steps are: 1. Revenue of $100 * 10% EBIT margin = $10 of EBIT 2. CapEx = D&A = $5 3. So, EBITDA = $10 of EBIT + $5 of D&A = $15 4. $15 of EBITDA - $5 of CapEx = $10 These questions are meant to test whether a candidate fully understands topic areas front to back…rather than just memorizing them. The thing to understand is that these questions just take practice. We have quite a few examples of these questions here for you to check out: Weekly Finance Challenge Questions Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Brainteasers The other common areas of concern are brainteasers which can come in a variety of forms. Almost by definition, these are much more difficult to prepare for because there’s no single type of brainteaser. With that said, there are several books that are highly rated to help you prep for brainteasers. With enough practice, you can begin to get the hang of these questions. The thing to remember is that these questions are typically not about getting to a ‘right’ answer, but rather walking through the question in a structured manner to convey your thought process clearly. As a final note, I would strongly recommend that you don’t build any Financial Models until you feel very comfortable with all of the concepts through the Paper LBO section above. Once again, a common piece of advice is to start with Modeling…which is the worst possible advice you could. This usually just ends in confusion and headaches and you don’t have to build Financial Models for Investment Banking Interviews anyhow. The real trick is to master the concepts above and only then take a Modeling Course to solidify your understanding of the Fundamentals. Finally, there are a few other questions to quickly cover before we jump into the next section. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Tell me about a Deal? Investment Banking Interviewers want to see if you really understand what a deal is and can speak to a recent deal. For these questions, I’d recommend digging up recent deals completed by the firm you are interviewing with. You don’t need to become an expert on the deal, but understanding a few key items like: Deal Context and Rationale Valuations (Absolute Dollars and Multiples) Form of Consideration (Debt vs Cash vs Stock) Not sure how to find this information? We walk through how to extract these details from company filings in our M&A modeling course if you would like to learn more about how this works. Tell me about a Stock? Finally, you may be asked to talk about a particular stock that you like. While some people will make a full stock pitch, this is not usually necessary for Investment Banking Interviews. The key here is to find a stock that you’re interested in and then to ramp up on a stock by reading their most recent filings: Annual Filing (10-K) Quarterly Filing (10-Q) Quarterly Earnings Transcript Company Investor Relations presentations and earnings call transcripts You can supplement the information above with Financial metrics from a platform like Koyfin. Want to do this efficiently and effectively? We cover the process of working through filings and building a conceptual framework around a Business in our Navigate the Filings course, which will massively accelerate your ramp-up process. Investment Banking Interview Pre-Flight Checklist Industry + Technicals + Scary Stuff + Behaviorals Additional Resources We also have several Youtube Videos & Playlists that can help you master these concepts! Accounting Fundamentals 3 Statement Connections Valuation Fundamentals LBO Fundamentals M&A Fundamentals Investment Banking Interview Pre-Flight Checklist Interview Ready Bundle Get our Step-by-Step Blueprint to Confidently Nail Your Technicals in your Investment Banking Interviews. Everything you need to master Technicals in one Bundle! Investment Banking Interview Ready This all-encompassing package is designed to equip you with the essential skills, knowledge, and insights needed to excel in the competitive world of IB interviews. Break Into IB Now Investment Banking Interview Pre-Flight Checklist Nail Your Behaviorals Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals In an Investment Banking Interview, a behavioral interview is a type of interview that focuses on the candidate's past experiences and behaviors, rather than their technical skills or knowledge. Behavioral interviews are designed to assess the candidate's fit for the organization and the role, as well as their ability to handle various situations and challenges that may arise in the workplace. In a behavioral interview, the interviewer will typically ask the candidate a series of open-ended questions about their past experiences, such as "Tell me about a time when you had to work on a team to solve a difficult problem" or "Describe a situation where you had to deal with a challenging client." The interviewer will then ask follow-up questions to probe further into the candidate's thought process, actions, and outcomes. The purpose of the behavioral interview is to assess the candidate's ability to demonstrate key competencies such as teamwork, leadership, problem-solving, communication, and adaptability. The interviewer is looking for specific examples of the candidate's past behaviors and experiences that demonstrate these competencies. Interviewees must be able to articulate their thought process, actions, and outcomes clearly and concisely. Practice answering behavioral interview questions with specific examples from past experiences, and be prepared to describe the key takeaways and lessons learned from each experience. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Step 1.... Be Human Many candidates prepare for behavioral interviews by reading guides and memorizing canned answers that they think the interviewer wants to hear. I’ve found that a much better approach is to do the opposite. The real trick is to offer credible and authentically human answers that the interviewer will relate to. So, without further ado here’s what we seen work best with behaviorals: BE AUTHENTIC Don't try to present a false version of yourself in the interview. Be true to who you are and allow your personality to shine through. There are limits though…don’t rave about the kegger you attended last weekend. Hopefully that’s clear. SHOW EMPATHY You need to show that you can relate to the perspectives and feelings of others. Investment Banking involves a LOT of human interaction, so EQ is just as important as IQ. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals USE STORYTELLING One of the best ways to demonstrate your personality and emotional intelligence is through storytelling. We humans love stories…we’ve been doing it since we sat around the campfire outside of caves… and it still works today. Your story should have an arc (think like a good movie or book), structure and rhythm. BE UPBEAT A positive attitude can go a long way in an interview. You work long hours with people in Investment Banking and nobody wants to work 80+ hours a week with someone who has a bad attitude. CONNECT ON A PERSONAL LEVEL Building a personal connection with the interviewer can help to demonstrate your social skills and emotional intelligence. Look for opportunities to find common interests or experiences, and use these to build rapport. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals KEEP IT TIGHT Most important of all, don’t let your answers drag on forever. It is important to practice with friends and family so you can learn to keep your answers tight. No story…no matter how compelling…is good if it drags on forever! By demonstrating your personality, emotional intelligence, and social skills in addition to your technical expertise, you can massively improve your ability to impress your interviewer. A typical interviewer might meet with 20 or more candidates at a time and it’s easy for people to blend together. By using the tactics above you have a much better chance of being remembered…in a good way. ¹ Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Tell Me About Yourself (TMAY) Now, onto the main show here. I’ve come to believe that the question ‘Tell Me About Yourself’ is the most important interview question to prepare for. This is the first question you’re likely to be asked in an interview and it sets the tone. If you nail this, the rest of the interview usually goes REALLY well. A common answer is something like: Hi, my name is John and I’m a finance major at XYZ school. I’m very excited to be here and i’m aiming to work in Investment Banking because I love finance. [insert 4 paragraphs about all the clubs you’ve joined]....in addition…[awkward pause because you’re lost in your own story]….[insert 4 paragraphs about every internship you’ve had with excruciating detail about your activities completed in the internship with an aim to impress the interviewer].....[another long pause]…and yeah Does this sound familiar? If so, don’t worry. This is basically everyone on their first try. The trick is to improve. Ready to find out how? Let’s go! Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Here are the major factors that lead to a killer TMAY: SHOW YOUR PERSONALITY Use this opportunity to showcase your personality and what makes you unique. This could include your hobbies, interests, or personal experiences that have shaped you. Many candidates are afraid to sprinkle in personal tidbits when ironically that’s probably the only thing the interviewer will remember. TELL STRUCTURED STORY WITH FLOW AND ARC I want to be up front here. This takes practice. But imagine you are telling a story to a disinterested 10 year old. How would you keep their attention? You certainly wouldn’t ramble on for 5 minutes about every last detail of the story. The same applies to an interviewer for Investment Banking. You’ve got to have a clearly structured story where the interviewer can’t help but pay attention. KEEP IT CONCISE Again, nobody likes a long story. Practice until this is tight. Focus on the key highlights of your background and experience. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals EMPHASIZE YOUR STRENGTHS Highlight your relevant skills and experiences, and explain how they have prepared you for a career in investment banking. In particular, all of your interests in the field should tie back to you as an individual. For example, if you played sports, you could convey that you love competing on a team and that Investment Banking is a lot like a professional sport. This answer is much better than simply stating, “I’m a team player.” Here is an example response: My name is Jennie and I'm a sophomore studying Computer Science at XYZ University. Just by way of background, I grew up in a small town called Townsvilleton. Growing up I always had an interest in robotics and computer science because I loved solving tricky problems. Coming into school I wasn’t familiar with Investment Banking, but stumbled on it during a career fair. As I learned more, I was immediately hooked. It required problem solving, but it also involves working with people which is something that I always found lacking in coding and robotics. Since discovering this field, I’ve joined several on campus clubs (and now have leadership roles in them), I’ve pursued internships in Corporate Finance and at a Search Fund and am doing everything possible to prepare myself to land a role in Investment Banking. I’m excited to be here, grateful for the opportunity and happy to answer any questions you have. Let’s go through the key items: Shows Personality Structure + Flow+ Arc Concise Emphasizes Strengths in a Personal Way ✅ ✅ ✅ ✅ Note that you should NOT use the above as a template. Your TMAY should be unique to you. Your personal touch is what will make you memorable to an interviewer. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Why Investment Banking? Carrying on here, another common question is “Why Investment Banking?” Before we jump ahead, just so you know, >90% of the folks interviewing will say one or more of the following: “I’m excited about the steep learning curve” “I’m excited to have lots of responsibility” “Banks have a major impact on the companies they work with” “Senior executive exposure” If you want to sound like everyone else, then go ahead and say the things above. The real trick is to show personal and credible evidence that who you are and what you’ve done leads you to think that this career field is right for you. To be fair, you want to address the root items in the bullets above, but you should do so without directly stating them as absolute / regurgitated factoids. Instead of: “Excited about the steep learning curve” Try: “I’ve always been very curious, going down the wikipedia rabbit-hole to find answers to all sorts of things. Finance offers the ability to learn at a rapid pace with smart people” Instead of: “I’m excited to have lots of responsibility” Try: “In high school and in college I’ve always pushed myself to pursue numerous activities (without breaking!) in terms of clubs, sports, etc. It’s been a challenge at times, but I now thrive under pressure and am excited about the challenge of doing the same in Investment Banking.” Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Why This Investment Bank? The last big question to cover here is “Why this Bank?” Again common answers contain: “Entrepreneurial environment/firm” “The Culture” (i’m looking at you Goldman!) “Lean deal teams” “Marquee deals” “Has a balance sheet” (Bulge Bracket / Middle Market) “Being a trusted advisor” (Boutique Banks) ¹ Again…. When an interviewer in an Investment Banking interview asks why you want to work at their firm specifically, they are looking for tangible evidence that you have done your research on the company and have a genuine interest in working there. Buzzwords do not help. Here’s what I’ve seen work well for this question: Research the Firm and Recent Deals: Start by doing thorough research on the company. Look at their website, read news articles and industry publications, and talk to current or former employees to learn more about the organization. For extra credit, read a book about the firm if it exists (not at all required). Talk with Current and Former Employees: this is the most critical thing. It takes work to get in touch with people at a Bank…and firms know this. So if you can speak to conversations with employees who explained what it’s like to be at the firm, then you’ll have far more credibility. Again Make it Personal. Finally, you should then tie the anecdotes from employees to your personal interests and experiences as we have discussed with the previous section. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Instead of: “the Culture” Try: “During my conversation with ABC analyst about how they were struggling with a complex operating model build and received guidance from a 2nd year analysts who stayed late to ensure it would all work. This illustrated how deeply engrained the company’s culture of mentorship is, which is something I really value.” Instead of: “Lean deal teams” Try: “When I spoke with XYZ analyst, they explained how they were assigned to build the model only a few months after joining. Getting that experience so early on due to the lean teams structure is something I find really exciting.” To wrap this up, I want to emphasize that this is one of those rare moments when ‘name dropping’ is not only fine, but encouraged. This shows that you’ve done the legwork. You’ve talked to people and that you’re really serious about the firm. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Finally The Core Behavioral Questions With the critical elements above covered, below are some of the most common other Behavioral Interview Questions you’re likely to encounter: What are your 3 greatest strengths / weaknesses? Talk about a time when you failed. Talk about a time you had to deal with a team conflict. Tell me about yourself. Describe a situation where you demonstrated leadership. Can you talk about a time when you had to deal with a difficult team member? Tell me about a time when you had to meet a tight deadline. Describe a situation where you had to solve a complex problem. How do you handle stress and pressure, especially when managing multiple tasks? Can you provide an example of a project that required attention to detail? Tell me about a time when you took initiative in a project or situation. Describe a situation where you had to persuade someone to see things your way. Have you ever received constructive criticism? How did you respond? Tell me about a time when you failed or made a mistake. How do you prioritize your tasks when everything seems to be a priority? Describe a situation where you had to adapt to a significant change at work. Can you provide an example of when you went above and beyond for a project or client? Tell me about a time when you worked on a team with conflicting personalities. How do you ensure accuracy and quality in your work? Describe a situation where you used data or analytics to make a decision. Tell me about a time when you had to communicate complex information to someone. How have you demonstrated ethical behavior and integrity in your previous roles? Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals I’m sorry if the list above is overwhelming! The trick with the questions above is to build a repository of situational examples that could apply to one more question. I’d recommend at least 5-10 examples to be safe. Thinking you don’t have that many? I don’t believe you. Ask your friends and family and you will find them really quickly. Once you have your examples in place, I would start practicing with friends and family who will give you candid feedback. The people who know you best will be best positioned to sniff out whether or not you are being authentic. Once you’ve done a few rounds with people close to you then practice with your classmates who have gone through the recruiting process. These folks can help you fine-tune your answers to an Investment Banking interview setting. WIth Behaviorals covered, we need to talk about Networking. Networking is a critical skill to master. Even at target schools, it’s often people on the other side of the fence (not your resume) that opens up those coveted interview slots. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Build Relationships (i.e. 'Networking') The first place you should go to start networking for Finance jobs is your school’s alumni database. Alumni are very likely to respond to your requests for a quick chat. But guess what? Everyone else is reaching out to Alumni too! This is where you need to be creative. The trick is to find people with literally ANY common ground. People love other people with shared experiences. Finding common ground makes you a real person to them. With common ground established, they see you as someone who is just like them. So, how do we define ‘common ground?’ That’s where students usually get a little bit stuck. Common Ground Particularly when working with students from non-target schools, I see them struggle because they primarily seek out alumni from their school. This is completely the wrong approach. It’s essential to be creative when defining who is in your Network. Let’s redefine common ground (beyond School Alumni). In doing so, we will redefine your ‘Network.’ Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals Here are some examples of common ground beyond the traditional definitions: 01 02 03 04 05 06 People in your school’s sports conference (Big 10, ACC, etc.). If you are from a non-target school, ANY person from another non-target school. If you attend a liberal arts school, ANY person who attended any liberal arts school. People who went to high school in your state (often stated on LinkedIn). People in special interest groups like Fishing, Chess, or anything else you are obsessed with. If your home state is one with few people in Investment Banking, then any person from your home state. The critical point here is not to limit your network to just your school, alumni, and close personal connections. All of the items in the list above offer sufficient common ground for you to reach out. Investment Banking Interview Pre-Flight Checklist Nail your Behaviorals If you’re thinking, but I don’t know these people! It’s worth understanding that there’s quite a bit of research showing that people are MORE willing to refer 2nd and 3rd-degree connections for jobs than 1st-degree connections. In short, broaden the definition of your ‘Network’ and you’ll massively expand your network. Investment Banking Interview Pre-Flight Checklist IB Networking + Interview Cheat Codes Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Over the course of my career, I’ve had the privilege of working with students who’ve landed jobs at nearly every top-tier Investment Bank, Private Equity Fund, Hedge Fund, and Mutual Fund. Through those experiences, I’ve picked up a handful of tactics (i.e. Cheat Codes) that have proven incredibly effective for the people with whom I’ve worked. In this guide, I’ll share some of the most effective Cheat Codes I’ve found. I should say upfront that this is not your typical ‘Investment Banking Interview Questions’ guide. There are plenty of those floating around the Internet. Here we focus on what’s NOT addressed in the other guides. L ET'S D IVE IN !! Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Your Student Email is a Superpower…Use It! What would be more effective in getting a job? Having a Banker at XYZ firm recommend you…or having a recommendation from the person who pays fees to the Senior Bankers at XYZ? Clearly, it’s the person who pays the fees. Connecting with senior-level executives in the corporate world and the buy-side (Private Equity, Hedge Funds, Mutual Funds, and Venture Capital) is more achievable than you might think. And it’s all because you are a student! One thing I’ve observed over time is that people in the Business world love helping eager students. And they know they are talking with a student when they get an email from a .edu domain. IF YOU CAN FORGE CONNECTIONS WITH SENIOR EXECUTIVES, THEY CAN SEND IN FAR MORE POWERFUL RECOMMENDATIONS THAN JUNIOR BANKERS. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Here’s the process: 01 02 03 04 05 06 Find professionals who used to work at the firms you’re targeting. Reach out to them with a message indicating you’re exploring Finance and are incredibly impressed with how they’ve transitioned from their previous firm (or firms) to their current role. Request a brief chat to learn more about their thought process as they progressed throughout their careers (using the guidelines provided later in this document). Have a call to learn about their backgrounds. Keep them posted on your progress as you continue prepping and recruiting. When it comes time to apply, reach out and ask if they could connect you with someone at the firm. Whatever you do on these calls, DON’T ask for a job! If your relationship grows organically and that option is presented, that’s OK. ABOVE ALL ELSE, YOU WANT THESE CONTACTS TO SEE YOU AS SOMEONE TO MENTOR. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Follow the guidance provided below on how to reach out. And you’ll be shocked at how many conversations you can have with top-level executives as an Undergraduate or MBA student. I should be clear that you should still do traditional networking with current professionals at the firms you are targeting. This is a supplement, not a substitute for the traditional process for networking with current Analysts and Associates at your target firms. WITH THAT SAID, THE ONE-TWO PUNCH OF HAVING EXISTING EMPLOYEES PLUS PAST EMPLOYEES AND/OR CLIENTS OF THE FIRM REACHING OUT ON YOUR BEHALF CAN BE A MASSIVELY POWERFUL COMBO. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Email Or LinkedIn? Is it best to reach out via Email or LinkedIn? I’ve heard mixed answers depending on the situation. For reaching out to current professionals in Investment Banking, email is the preferred approach. That said, you shouldn’t neglect LinkedIn. It’s an incredibly powerful platform. And people can still see that you’re a student when you reach out on LinkedIn. On that note, let’s begin with LinkedIn Cheat Codes. And then we’ll transition to Cheat Codes for Emails. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Connection Request Limits on LinkedIn As I said above, LinkedIn likely won’t be your primary outreach medium for Investment Bankers. However, LinkedIn is where everyone in the professional world meets. A little-known fact is that you can submit up to 100 connection requests per week before LinkedIn will cut you off. With such a high limit, you can build out a vast professional network in short order! The sooner you start building out your network, the better. If you don’t have a LinkedIn profile, create one ASAP. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Building The Network If you’re just starting out on LinkedIn, connect with as many personal contacts as possible. After that, the sky’s the limit. In our experience, people are far more likely to connect if they have mutual contacts with you. If you can find people with five or more mutual connections, then reach out and say something like: Hello [THEIR NAME], I’m a student at [SCHOOL], and I’m aiming for a career in Finance. I find your career path so interesting and impressive and am working on expanding my professional network. I would be incredibly grateful if we could connect on LinkedIn. Begin with low-stakes reach-outs to mid-level professionals who attended your school or have some common ground with you. After a few rounds, start reaching out to Senior folks as well. When they accept your request, DO NOT reach out to ask them for anything. Instead, let the message settle for a month or so. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Then send a follow-up message (email or LinkedIn) like this: Hi [NAME], I’m not sure if you remember me. We connected a while back on LinkedIn. I’m incredibly impressed that you’ve worked at/on [FIRM or MAJOR PROJECT]. I’d be incredibly grateful to hear how you [PAST ACHIEVEMENT]. I know you’re incredibly busy and promise to be respectful of your time. Would you possibly be able to chat for a few minutes sometime in the next few weeks? I’m happy to work around your schedule. Kind Regards, [Your Name] If/when they say yes, you should do everything to make their life easy including: 1) Working around their schedule. 2) Setting up the calendar invite and dial-in for your chat. 3) Confirming the day before (or day of) that the time still works. Before you get on the call, do some research on their background, and prepare a list of thoughtful questions. After the call, ALWAYS send a follow-up email thanking them for making time to speak with you. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Then every 3-6 months, send a follow-up message updating them on the progress you’ve made since you last spoke. Also, thank them again for making time to speak with you in the past. Then rinse and repeat to build a massive network. If you start this early enough, you’ll exit college (or an MBA program) with a network rivaling that of someone with 5-10 years of experience (or more). You’ll also build a list of advocates who can help you land a job at a wide variety of firms. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Free LinkedIn InMails Beyond Connection Requests on LinkedIn, you can send InMail messages to people to whom you aren’t connected. Don’t I have to pay to message people I don’t know on LinkedIn? No! Most people don’t realize this, but Premium Members on LinkedIn can set their profile to ‘Open’ which allows you to send them InMail without paying for LinkedIn InMail. Here’s an article on how to see if someone has an open profile. With all of the above said, if you can swing the cost of LinkedIn Sales Navigator, it can be a high-return investment. Sales Navigator allows you to perform more detailed searches. Plus and you get 20 paid InMails per month. I get it. $80 a month is not cheap! But it can be a step-function improvement in your ability to massively expand your network. Here’s an article with a few additional LinkedIn Tricks to check out if you’d like to dig deeper. Now’s lets switch over to emails! Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Find Any Email Address Let’s say you want to reach out to someone via email. How do you find the email address of someone you don’t know? We have good news! There are several databases with emails for nearly every organization in the world. Here are the most popular: ZoomInfo RocketReach Getemail.io While the first two services required a paid subscription, you can sign up for Getemail.io for free and get up to 10 searches a month. But I don’t want to pay anything! No problem. Read on. The good news is that you only need to find one email format per company in most cases. YOU ONLY NEED ONE EMAIL FORMAT BECAUSE MOST COMPANIES USE THE SAME FORMAT FOR THEIR EMAILS ACROSS THE BOARD. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes And RocketReach offers emails formats (with success rates) for most large companies for free. Here’s how it works: 01 Search Rocket Reach + Company Name 02 Click the Top Link with ‘Email Format’ Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes 03 Get Common Formats with Success Rates To get you started, here are a few of the top bank’s formats from RocketReach: Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Craft the Perfect Email with AIDA Before we get into the AIDA framework, you should put any networking email (or LinkedIn message) through the following filter: ‘Would I read this message and want to respond?’ If the answer is an emphatic NO, you need to start over. To begin with, here are a few things to avoid when sending emails: 1) Vague Subject Lines 2) Large Blocks of Text 3) Generic or impersonal messages Let’s look at the two sample emails on the following page. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Email #1: : Post-Investment Banking Careers Hello [Name], I’m hoping to one day pursue a career in Investment Banking. Investment Banking seems like a very exciting career to me. I’m aiming to work in the field after school. I’d love to learn why you chose to begin your career in Investment Banking and how you approached the major pivot points in your career thus far. I would love to chat. Warm Regards, Mike Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Email #2: : Fellow Wahoo Aiming for Investment Banking – Brief Chat Hello [Name], I’m reaching out to you as a current student at UVA, hoping to one day pursue a similar path to yours. I’m incredibly impressed with how you’ve parlayed your initial experience in Investment Banking into an Operating role at such an exciting company. I’d love to understand how you approached the major pivot points in your career thus far. I realize you are incredibly busy, but I would greatly appreciate a quick call. Could you please let me know when you have a chance? Warm Regards, Mike Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes The first email above is mainly about the sender, has blocks of hard-to-read text, and doesn’t feel personalized. In contrast, the second email immediately draws on common ground between the Sender and Recipient. It also shows that that the sender has researched the Recipient. The email is broken up (vs a large block of text) to make it easier to read. And critical points are bolded so a busy executive can quickly skim it. Finally, the email has a specific request to chat. Which of the two emails would you want to read? Hopefully, the answer is pretty clear. The issues addressed above boil down to a marketing framework called A.I.D.A.: A – Attention I – Interest D – Desire A – Action A t t e n t i o n I n t e r e s t D e s i r e A c t i o n L ET’ S H O P I N TO TH E A ID A F RAM EWO R K! Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes 01 AIDA Framework – Attention With AIDA, you begin by attracting the attention of your Audience. As a first step, you can attract attention with a punchy / crisp subject line. Let’s take a look at a few not-so-great email subject lines. Let’s take a look at a few not-sogreat email subject lines. Now let’s look at a few effective subject lines. Networking Call Aspiring [SCHOOL] Student - Brief Chat Request Hello Chat Student Aiming for Finance Investment Banking Career All of the subject lines above are generic and don’t specify the email’s intent. They also exhibit zero effort to find common ground. Fellow [SCHOOL MASCOT] Aiming for Investment Banking – Brief Chat [COMMON CONNECTION] Recommended I Reach Out for a Chat As you can see above, a good subject line is Punchy and Personalized and makes the reader want to read more. Investment Banking Interview Pre-Flight Checklist A IB Interview Cheat Codes Even with a good subject line, you can lose the Recipient’s attention by writing a book instead of an email. In short, you need to make it easy for your Recipient to see the key points quickly. ZERO EFFORT TO CLARIFY KEY POINTS CLARIFIED You can make an email easy to read by: 01 02 03 Keeping the message brief. Having no more than one or two sentences per paragraph. Bolding key points to make them stand out. Investment Banking Interview Pre-Flight Checklist A IB Interview Cheat Codes Below are two examples of the text from the email in the previous section. Which would you prefer to read? Email Body #1: : Post-Investment Banking Careers Hello [Name], I’m reaching out to you as a current student at UVA, hoping to one day pursue a similar path to yours. I’m incredibly impressed with how you’ve parlayed your initial experience in Investment Banking into an Operating role at such an exciting company. I’d love to understand how you approached the major pivot points in your career thus far. I realize you are incredibly busy, but I would greatly appreciate a quick call. Could you please let me know when you have a chance? Warm Regards, Mike Email Body #2: : Post-Investment Banking Careers Hello [Name], I’m reaching out to you as a current student at UVA, hoping to one day pursue a similar path to yours. I’m incredibly impressed with how you’ve parlayed your initial experience in Investment Banking into an Operating role at such an exciting company. I’d love to understand how you approached the major pivot points in your career thus far. I realize you are incredibly busy, but I would greatly appreciate a quick call. Could you please let me know when you have a chance? Warm Regards, Mike Investment Banking Interview Pre-Flight Checklist Do you prefer email #2? A IB Interview Cheat Codes But both emails have the same content?!?!?! The first email is hard to read and shows that the writer didn’t think about the Recipient (or their time). On the other hand, the second email makes it clear that the sender put thought into the message. It also shows that the sender values the Recipient’s time…and won’t waste it. STEP 2 : I N TER EST Investment Banking Interview Pre-Flight Checklist 02 IB Interview Cheat Codes AIDA Framework – Interest Next, is the ‘I’ in AIDA, which stands for Interest. To be more specific, we’re talking about the self-interest of your Recipient here. In my experience, most people LOVE to talk about themselves. And you’re reaching out to this person because you think they’re stellar…so tell them how awesome they are…without seeming too over the top. Here are some example lines to include in an email: I read about you on LinkedIn and find it so impressive that you went from x to y I’m so fascinated by x industry. It’s clear that you’ve been able to carve a path into this world which is not an easy feat. In short, a little bit of ego-stroking can go a long way. Just don’t be too over the top. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes 03 AIDA Framework – Desire Next, we aim to create Desire. For networking emails, you should aim to make the reader see a benefit in helping you. One of the best ways to do this is to emphasize common ground. If you dig deep enough, nearly any person has some level of common ground with you. And if you can show that common ground, people will often see you in a different light than if you’re just another job candidate. CAN’T FIND ANY COMMON GROUND? ARE YOU (OR WERE YOU) ONCE A STUDENT? Every professional has been a student at one point in their life. So help them remember when they were a student by saying something like: ‘As you probably remember as a student, it’s quite difficult to learn how the real day-today works in [Industry]. Learning first-hand about your experiences would be invaluable to me. I would be incredibly grateful if you could spare even a little time for a brief chat.’ However you do it, you should aim to make sure the Recipient finishes the email feeling like they need to help you out. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes 04 AIDA Framework – Action Finally, you need to specify an Action. Make a specific request to the Recipient. In most cases, you’ll ask for a phone call (or Zoom Chat). Be sure to preface by saying that you understand that they are incredibly busy and that you’ll be very respectful of their time. On the note of the above, make sure you read about the person before speaking with them. Do a quick Google Search to see what you find. Then check out any recent posts they’ve made on LinkedIn, Twitter, etc. JUST A LITTLE BIT OF RESEARCH WILL GIVE YOU SOME VALUABLE MATERIAL FOR YOUR INPERSON CHAT. O NE LA ST TH IN G Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes ONE LAST THING... Before we close out our discussion on AIDA, there’s one more thing to cover. If you haven’t already read ‘How to Win Friends and Influence People,’ you should stop right now and order it. This book is the ‘Bible’ on how to interact with people in any situation. We cannot recommend it more highly to help you level-up your networking efforts. M A S TER I N T ER VI EW N ER VO U S N E S S Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes Master Interview Nervousness Let’s assume you’ve networked like crazy. You’ve landed that coveted first round (or maybe even Superday) interview. There are plenty of guides to help you with technical and behavioral question preparation. But how do you deal with the inevitable nervousness that will rear its ugly head when you interview? Behavioral Prep Technical Prep Nervousness Prep This is the opportunity of a lifetime. You don’t want to blow it…right? Below we’ll walk through a 5-Step Process that we’ve used time and again to help folks land at top-tier firms like Goldman, Morgan Stanley, JP Morgan, etc. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #1: SMILE To kick this off, I want you to imagine someone who’s nervous and lacking confidence. Then answer these three questions: 01 02 03 What facial expressions are they making? How is their posture? Are they smiling? They’re probably slumped over. Look a little scared. And it’s probably a safe bet that they aren’t smiling. And let’s be honest, interviews are nerve-racking! It is natural to be a little bit nervous! But being nervous inside doesn’t mean you have to look nervous on the outside! Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #1: SMILE And there’s a trick to make sure you don’t look like the sad stick figure above. Get ready for it... YOU CAN COUNTERACT YOUR NERVES SIMPLY BY SMILING. BY SIMPLY SMILING, YOU’LL APPEAR MORE CONFIDENT. I see your eye rolls there. Stop it! Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #1: SMILE There’s quite a bit of research on how this changes your biochemistry. Forget research reports for a second though. Even when your heart is pounding inside…if you can simply keep a big smile on your face…they’ll never know. Feel free to dismiss this, but I PROMISE you….it works like magic! THIS IS ESPECIALLY TRUE FOR ANY VIRTUAL INTERVIEW. If your interview is virtual, do the following right now: 01 Get a Post-It Note. 02 Draw a smiley face on it. 03 Write ‘SMILE!!!!!’ below the smiley face. 04 Put it up on the screen for the entire interview. SMILE !!!!! I encourage the people I work with to do this, even for a phone interview. People can still hear your smile in the tone of your voice. Now let’s move on to your energy in an Interview. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #2: THE ENERGY WALL If you’re interviewing for Finance roles, you’re inevitably going to have a tough interviewer at some point. This can range from someone who’s having a bad day to someone who’s just completely uninterested in meeting you. Or maybe they just aren’t a very nice person. In these interviews, most candidates will attempt to read the other person’s emotions and reactions to gauge the interviewer’s state of mind. But you shouldn’t! Your hit rate on reading the sentiment of someone you’ve just met who’s grilling you is going to be very low. That’s been my own experience….and that has been the case for anyone I’ve ever worked with. THE INTERVIEWER’S ENERGY AND MOOD ARE IRRELEVANT TO YOU. IT’S OUT OF YOUR CONTROL. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #2: THE ENERGY WALL Instead, imagine there’s a big wall between you and the interviewer. Your energy is on one side. Theirs is on the other. And the two NEVER mix. Your energy is positive, eager, and ready for the next challenge…no matter how difficult a question they throw at you. No matter how grumpy they seem. THIS APPROACH TAKES A LITTLE PRACTICE, BUT I PROMISE YOU IT WORKS WONDERS FOR INTERVIEW NERVES. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #3: SEEM INTERESTED Let’s say you’re smiling. You’ve got your Energy Wall up…and then you get this question: How many jars of hot sauce can fit inside a Military Submarine? Then, how many of those submarines can fit inside the state of Iowa? Divide that number by two and give me an answer to the third decimal place. First, let’s just hope you never get this question. But you’ll likely encounter at least a few hard questions…somewhere along the way. On the next page, we’ll show you how to handle this type of brain-bender. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #3: SEEM INTERESTED There are two ways to react to the question on the previous page. OPTION 1: DEER IN HEADLIGHTS Or alternatively... OPTION 2: VERY, VERY INTERESTED Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #3: SEEM INTERESTED When interviewers see a ‘Deer in Headlights,’ they often go for the kill. They’ll push and prod until you break down or give up. Option #2 gives just the opposite impression. It says that not only are you not afraid…but that you will try to solve the problem. So, when you get a tough question: 01 02 03 Pause. Then give a pondering look. And make it clear that you’re ready to tackle the question. When in doubt, seem interested! I’ve personally used this tactic with significant success. So have the people I’ve worked with. Give it a try and see how it works for you! With that said, being interested may prevent an implosion, but it doesn’t help you answer the question. In the next section, we’ll show you tactics to work through challenging interview questions. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #4: BUY YOURSELF TIME Let’s face it. With the question in the previous section, you may have zero clue as to where you even start. This leads to the next Interview Cheat Code… Buy Yourself Time. Here’s the process: 01 02 03 04 Pause (1 - 2 Seconds). Re-State the Question (10 - 15 Seconds). Ask Questions about the Question (30 seconds –> many minutes). Ask for a Hint (timing varies). LET’S WALK THROUGH THESE STEPS ONE-BYONE. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #4: BUY YOURSELF TIME FIRST, YOU PAUSE. You should always pause for a second before answering any interview question. It will make you seem more poised. But particularly for a tricky question, you want to give the appearance of calm. SECOND, RE-STATE THE QUESTION TO THE INTERVIEWER. To do this, you would say something like: ‘Just to be sure I understand all the bits and pieces, you’re asking….[Insert Question Asked]. Is that right?’ This will buy you some time to think about the question to figure out where to start. THIRD, IF YOU’RE STILL STUCK, ASK QUESTIONS ABOUT CERTAIN PARTS OF THE QUESTION. For example you might ask: ‘When we say, a ‘jar of hot sauce,’ is that a standard tabasco jar that’s about 3 inches or so tall?’ or ‘I would assume the typical submarine is about 300 feet long. Is that about right?’ If you’re still stuck, you can ask for a hint. All of these things can buy you several minutes of valuable thinking time. Investment Banking Interview Pre-Flight Checklist IB Interview Cheat Codes #5: THE ‘EAGER BEAVER’ ANSWER Sometimes, despite your best efforts, you still can’t figure out the answer. At that point, we move to the final Interview Cheat Code. Whatever you do, you don’t want to show that you give up easily. Instead, you want to show that you’re eager to answer the question. Investment Banks are looking for a ‘can-do attitude’ in an Analyst. They want to know that you’ll ‘run through walls’ for them. So, if you can’t answer the question, tell them you’d love to give it more thought and get back to them with an answer. This is definitely a last resort, but it shows that you don’t give up easily. Investment Banking Interview Pre-Flight Checklist IB Interview: Prep Checklist Investment Banking Interview Pre-Flight Checklist IB Interview Prep Checklist FULL CHECKLIST How does Finance Work? Learn the how the Finance world works Understand the Investment Banking Career Path Learn what Investment Bankers actually do day-to-day Market Knowledge Subscribe to ExecSum Research the deals discussed in the newsletter to understand: Who advised on the deal? THESE SHOULD BE DONE IN PARALLEL What was the deal rationale? What price was paid (this one makes more sense after you learn about valuation) Follow Instagram accounts to get into the flow: @litquidity @survivefinance @restructuring__ The Technicals Build a strong foundation of Accounting and Valuation knowledge Master ‘Walk Me Through a DCF’ Practice Accounting & Valuation questions with friends until you are consistently answering Easy through Medium difficulty questions with ease Add to your foundational knowledge by learning about M&A Fundamentals and LBO Fundamentals Practice M&A and LBO fundamentals questions with friends until you are consistently answering Easy through Medium difficulty questions with ease Investment Banking Interview Pre-Flight Checklist IB Interview Prep Checklist Master ‘Walk Me Through an LBO’ Practice working through a few of each of these on your own: Paper LBO Puzzle Questions Brainteasers Practice the ‘Scary Questions’ with friends until you get the hang of them Only after you have completed the items above should you build a Financial model to THESE SHOULD BE DONE IN PARALLEL solidify your knowledge The Technicals Build a map for your: ‘Tell Me About Yourself’ ‘Why Investment Banking?’ ‘Why this firm‘ (for your top 5-10 firms) List of 5-10 significant stories for various behavioral questions Practice with friend and family to get candid feedback on whether the responses feel authentic Networking Create an Excel / Google sheet of your top 20 firms with a tab for each firm Crawl LinkedIn looking for current people at these firms with any ‘common threads’ Reach out 5-10 individuals per day (note: a 10% response rate is an amazing feat!...5% is pretty typical) Log all of your interactions in your Google Sheet so you can keep track of your success rates and key conversation points Follow-up every 2-3 months to update your contacts with your progress Once your applications are in (and especially when interview time is approaching), reach out to your contacts to express gratitude for their time and advice and express excitement about working at their firm Investment Banking Interview Pre-Flight Checklist IB Interview Prep Checklist Pre-Interview Brush up on the conversations you’ve had with people at the firm Mock interview with individuals who have experience with IB interviews…use our pointers for staying calm in an interview Post-Interview Follow-up right after your interview with emails to thank everyone who interviewed you as well as the HR/Recruiting team Most Common Question: I haven’t heard back after an interview….what do I do? Please don’t do any of the following: Harass people at the firm Beg Send love letters If you haven’t heard back, you should wait at least a couple of days and then reach out to your closest contacts to reiterate your interest and excitement to work at their firm. I wish there were a better answer, but that’s really it. Investment Banking Interview Pre-Flight Checklist Interview Ready Bundle Get our Step-by-Step Blueprint to Confidently Nail Your Technicals in your Investment Banking Interviews. Everything you need to master Technicals in one Bundle! Investment Banking Interview Ready This all-encompassing package is designed to equip you with the essential skills, knowledge, and insights needed to excel in the competitive world of IB interviews. 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Access All Courses Investment Banking Interview Pre-Flight Checklist Speak The Language: Full Glossary Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Acronym Definition - A 10-K is an annual report filed by U.S. public companies with the Securities and Exchange Commission (SEC), providing a comprehensive overview of a company's financial condition and operations. Accretion/Dilution Acc/Dil Accretion/Dilution analysis evaluates the impact of an acquisition on the acquirer's Earnings Per Share (EPS), indicating whether it enhances or diminishes shareholder value. Arbitrage - Arbitrage involves buying and selling the same asset in different markets to profit from price differences. Balance Sheet - The Balance Sheet is a financial statement that presents a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time. Beta - Beta measures the volatility of a security or portfolio relative to the market, indicating its riskiness. - Bonds are fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental. They pay periodic interest payments and return the principal amount at maturity. Buy-Side - The Buy-Side refers to firms that purchase securities and other investment products and includes investment managers, pension funds, and hedge funds. They make investments for the benefit of their clients. Calendarization - Calendarization involves adjusting financial statements of companies with different fiscal yearends to make them comparable. 10-K Bonds Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Acronym Definition Capital Asset Pricing Model CAPM CAPM is a model used to determine the expected return of an asset, based on its beta and expected market returns. - The Cash Flow Statement is a financial statement that summarizes a company's cash inflows and outflows from operating, investing, and financing activities over a specific period. Cost of Goods Sold COGS COGS represents the direct costs of producing the goods sold by a company, including raw materials, labor, and manufacturing overhead. Credit Rating - A Credit Rating is an assessment of the creditworthiness of a borrower, representing an evaluation of their ability to repay borrowed funds. Deferred Revenue - Deferred Revenue represents payments received by a company for goods or services that have not yet been delivered or performed. Depreciation Tax Shield - Depreciation Tax Shield refers to the tax saving that a company realizes from claiming depreciation expense on its taxable income. Discounted Cash Flow DCF DCF is a valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money. Dividend Yield - Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. ‘DD’ Due Diligence is the comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential. Cash Flow Statement Due Diligence Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Acronym Definition Earnings Before Interest, Taxes, Depreciation and Amortization EBITDA EBITDA is a measure of a company's operational performance, excluding interest, taxes, depreciation, and amortization. Earnings Per Share EPS EPS represents the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability. Enterprise Value EV EV is a measure of a company's total value, including market capitalization, debt, and cash, providing a comprehensive valuation metric. Equity Value - Equity Value is the value of a company's equity, calculated by subtracting total liabilities from total assets. Financial Leverage - Financial Leverage refers to the use of borrowed funds to acquire assets and increase the return on investment. Financial Modeling - Financial Modeling involves creating a representation of a company's financial situation to aid in decisionmaking, valuation, and investment analysis. Fixed Income FI Fixed Income refers to investment securities that pay fixed interest or dividend income until maturity, such as bonds and preferred stocks. Free Cash Flow FCF FCF is the cash generated by a company that is available for distribution to investors after paying for expenses, investments, and debt repayment. Generally Accepted Accounting Practices GAAP GAAP are the standardized guidelines and principles for financial accounting and reporting in a specific jurisdiction, ensuring consistency and comparability. Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Acronym Definition Hedge Funds HF Hedge Funds are investment funds that employ various strategies to earn active returns for their investors. They can invest in a diverse range of assets, often using leverage. Income Statement IS The Income Statement is a financial statement that summarizes a company's revenues, expenses, and profits or losses over a specific period. Initial Public Offering IPO An IPO is the process by which a private company offers its shares to the public for the first time, becoming a publicly traded company. Internal Rate of Return IRR IRR is the discount rate at which the NPV of an investment is zero, representing the expected annualized return of the investment. Last Twelve Months LTM LTM refers to the financial data for the most recent twelve-month period available. Leveraged Buyout LBO LBO is the acquisition of a company using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired usually serve as collateral for the loans. Liquidity - Liquidity refers to the ease with which an asset can be converted into cash without affecting its market price. - Market Capitalization is the total market value of a company's outstanding shares of stock, calculated by multiplying the share price by the number of outstanding shares. M&A M&A refers to the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, and purchases. Market Capitalization Mergers and Acquisitions Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Acronym Definition Mutual Funds MF Mutual Funds pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. They are managed by professional fund managers. Negative Working Capital - Negative Working Capital occurs when a company's current liabilities exceed its current assets, indicating potential liquidity problems. Net Present Value NPV NPV is a valuation method that calculates the present value of future cash flows less the initial investment cost, helping to determine the profitability of an investment. Net Working Capital NWC NWC is the difference between a company’s current assets and current liabilities, representing its operational liquidity. Next Twelve Months NTM NTM refers to the financial data projected for the upcoming twelve-month period. Operating Leverage - Operating Leverage measures how changes in sales affect operating income, indicating the level of fixed costs in a company's cost structure. Paid-In-Kind PIK PIK refers to interest or dividends paid by issuing additional securities instead of cash. Portfolio Management - Portfolio Management involves making investment decisions to achieve an investor's financial goals while managing risk. P/E Ratio The P/E Ratio is a valuation ratio calculated by dividing the market value per share by the earnings per share, indicating how much investors are willing to pay for each dollar of earnings. Price to Earnings Ratio Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Acronym Definition Private Equity PE Private Equity refers to investment funds organized as limited partnerships that invest in private companies or conduct buyouts of public companies. The goal is to improve and sell them for a profit. Property, Plant & Equipment PP&E PP&E are tangible assets that a company uses in its operations to produce goods and services. Purchase Price Allocation PPA PPA is the allocation of the purchase price paid in an acquisition to the assets, liabilities, and intangible assets acquired, for accounting and tax purposes. Research & Development R&D R&D refers to the activities undertaken by a company to innovate and introduce new products and services or to improve existing ones. Return on Investment ROI ROI measures the profitability of an investment, calculated as the net gain relative to the initial investment cost. Revenue Run Rate RR Revenue Run Rate is a projection of future revenues based on the current period's revenue, usually calculated on a monthly or quarterly basis. SGA SG&A includes all non-production costs incurred by a company, such as sales and marketing expenses, rent, and office supplies. Sell-Side - The Sell-Side refers to firms that issue, sell, or trade securities and includes investment banks, advisory services, and brokers. They serve as intermediaries between buyers and sellers. Short Selling - Short Selling is the practice of selling borrowed securities in anticipation of a price decline, with the intention of buying them back at a lower price. Selling, General & Admin Investment Banking Interview Pre-Flight Checklist How The Finance World Works Term Stocks Venture Capital Weighted Average Cost of Capital Acronym Definition - Stocks represent ownership in a company and constitute a claim on part of the company’s assets and earnings. There are two main types of stock: common and preferred. VC Venture Capital is a form of private equity financing provided by investors to startups and early-stage companies with high growth potential in exchange for equity or ownership stake. WACC WACC represents the average rate of return a company is expected to pay its security holders, weighted according to the proportion of debt and equity in the company’s capital structure. Investment Banking Interview Pre-Flight Checklist

Investment Banking Interview Prep: Your Pre-Flight Checklist

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