As we’ve established, there are over 3,000 colleges and universities in the United States alone, and only a select few of these schools fall into what investment banks call the “Core Recruiting Process.” These are typically the top Ivy League universities and business schools that are “Target Schools” for the top investment banks. If you do not fall into this category, your odds do become harder, but do not get discouraged: investment banks have established a process designed for top-talent candidates coming from other schools. This is called the “Non-Core Process.”
As you might expect, this process is extremely difficult as candidates are interviewing for only a few available positions and are competing against candidates from every other non-core college or university in the country (not to mention the fact that students who go through core recruiting can also participate in the non-core process).
Team members at Street of Walls have personally gone through this non-core recruiting process and have succeeded. The purpose of this section is to detail how we did it and how you can as well.
LANDING THE NON-CORE INTERVIEW
Landing the first-round interview is the first major goal in the “Non-Core Recruiting Process” and, given the volume of applicants, quite possibly the hardest goal to accomplish. Every year, Street of Walls sees non-core undergrads who possess the necessary talent but who will never get the chance to demonstrate it at an investment bank. It is possible to put in months of intense preparation for the interviewing process in banking, only to discover that you never even got the opportunity to show off your skills. This is why it is essential to be not only as prepared as possible, but also as connected as possible. Candidates who have connections in the field are far more likely to get a chance to interview with investment banks.
The first step in the process is to apply online for investment banking positions. This is a prerequisite for every potential candidate. After you apply online, you will have your own personal login, so that you can post your current resume and update information as it changes. Typically, investment bankers are very focused on resumes—they will check your resume for proper formatting and content. Investment bankers format Pitch Books on a daily basis, so even the slightest formatting error could raise a red flag to your attention to detail. Therefore, the need is clear: make sure your resume is excellent. If you haven’t already done so, please visit the Street of Walls article on building the perfect investment banking resume.
These days, with top job opportunities becoming intensely competitive, applying online with a great resume, stellar GPA, and good work experience is not enough to ensure an interview. You will often need some internal help. Generally, the best way for a non-core candidate to land a first round interview is by having an employee at the bank refer your resume to the Human Resources department. The higher up the employee, the better your chances of actually landing an interview. Now, you might be thinking to yourself: “But I don’t know anybody in investment banking.” If this is the case, the following concept is extremely important.
Networking is a key to success for non-core applicants. Typically, university alumni are great people to get in touch with for this. Work with your school’s alumni network to find contacts that currently work in investment banking. Don’t stop there though; get in touch with every family friend, relative, or friend-of-friend you know and see whether they know anybody that works in investment banking that you might speak with. As soon as you feel that you have a good base of contacts, send out emails to everyone asking if they wouldn’t mind speaking over the phone about their job, experience in investment banking, and how the recruiting process at their bank works. Most people are more than happy to speak over the phone with someone looking for assistance in the process, especially if they believe that person is serious about the industry and could be a good candidate for it.
Here is a good example/template for an email to help get you in a door with an associate at a bank:
My name is Jack and I am currently a Finance major at Penn State University. I am eager to learn about the investment banking industry. I received your information from our alumni directory and would love to speak with you regarding the Bank of America Merrill Lynch Summer Analyst Program. It would also be great if I could hear your perspective on the investment banking industry and your experience at the firm. Would you be available to either have coffee or speak over the phone for 15-20 minutes? As a fellow Nittany Lion, I would really appreciate your help. Thank you, and I look forward to hearing back from you.
Penn State University
Phone: (XXX) XXX-XXX
This next and final step is the most crucial to receiving an appropriate referral in the non-core recruiting process. During your calls with bankers, if you feel like the call is going well, you should politely ask whether they would mind referring your resume to Human Resources. This question is greatly dependent on how well the phone call is going. Most people will not refer just anybody for these positions—they have to feel that you are a strong candidate, and that you would fit well within the position and the firm as a whole. When an employee refers a potential candidate, it makes them look bad if the candidate gets an interview and ends up doing poorly. That being said, if your conversation is going well and you feel that the banker you are talking to truly wants to help you out, you should politely ask for a referral as demonstrated above.
I personally received 5 employee referrals at different investment banks during my recruiting process, and I ended up receiving first round interviews at 4 out of the 5 banks. Experience has confirmed that employee referrals are easily the best way to receive a first round interview, and if you can follow these steps I have no doubt that you will successfully land a first round interview, just as I did.
If all goes well, carefully executing these steps will lead to a First Round Phone Interview. Much of this process can be learned, and I will guide you through each component.
FIRST ROUND: PHONE INTERVIEW
The Investment Banking Phone Interview is the second phase of the Non-Core Recruiting Process. Congratulations if you have landed a first round interview as it is the most difficult part of the non-core interview process. You should now feel more confident, because your resume was selected from among thousands of other hopefuls.
The next step is being successful in your first-round phone interview. Phone interviews are done for both internship recruiting and full-time recruiting—all candidates will have to go through them, with the exception of core recruiting candidates who typically meet with the bankers on-campus for first rounds.
So how does one do well in them? It’s quite simple: preparation, preparation, and more preparation. If you are entirely ready for the questions that will be asked, you should do very well. We at Street of Walls know these questions well, and they will help you stand out in the process; they will be discussed in a moment.
Phone interviews are generally conducted by Associates and Vice Presidents within the bank. What usually happens is that the Human Resources department will give the banker 5 to 7 resumes and will tell him/her to rank the people he/she speaks with from best to worst. Typically, only the top 1-2 people on the list will go on to Final Round interviews (Superdays). Their primary goal is to reject candidates who are unlikely to fit the needs of the job, because they are unprepared, do not have the right personality, or aren’t serious about investment banking.
The First Round is generally less technical than the Final Round (Superdays), and is primarily used to gauge the personality and cultural fit of potential candidates. If the candidate can hold a casual conversation with the interviewer while simultaneously showing that he or she wants the job more than other candidates, he or she will do very well.
Here is a sample of questions that interviewers are very likely to ask in First Round (phone) interviews. A more detailed review of investment banking behavioral questions are described in Chapter 7.
TYPICAL PHONE INTERVIEW QUESTIONS:
>Tell me about yourself.
>Why do you want to be an Investment Banker?
>Why do you want to work at this Investment Bank?
>Tell me about the classes you are taking. What are your favorite and least favorite classes?
>What are your biggest strengths and weaknesses?
>Walk me through a Discounted Cash Flow analysis (DCF).
>What are the different valuation techniques?
>Walk me through the major sections or line items of an Income Statement, a Balance Sheet, and/or a Statement of Cash Flows.
One very successful technique for preparing for the First Round interview is to make use of mock interviews. Ask a friend or, if possible, an employee at your school’s Career Resource Center to help you answer the questions listed above. Your answers can sound very different in your head than when you actually verbalize them in front of someone else. Again, the process of improvement involves preparation, preparation, and more preparation. Go through these mock interview multiple times; identify where you are performing strongly and where you need to work on your responses; and do them again and again. Once you feel confident in your ability to verbalize these answers, you are close to being fully ready for your First Round phone interview.
The general rule of thumb in a first round investment banking phone interview is that you cannot stumble on any of the technical interview questions that arise. The technical questions in a first-round interview usually aren’t the most difficult, but you still should be prepared to answer anything. Bankers generally like to ask these questions to gauge that you have done your homework — if you stumble on these questions, the banker is very likely to assume that you haven’t prepared properly, and is likely to terminate your process with the bank right there. I went through dozens of phone interviews and kept finding myself making small cheat sheets for questions that might be asked. I have compiled my work into the Phone Interview Cheat Sheet found in this manual. I’ve handed this down to close friends and family who have landed full-time investment banking jobs, and all of them have said that it helped tremendously in their interviews—especially the phone interview.
Assuming that you succeed in the phone interview round and make it on to the next round, you will go on to the on-site Superday round of interviews, at the investment bank itself. These interviews will contain a much broader set of questions and topics; all of these will be covered later in this guide.
Also, after your phone interview be sure to follow-up with a thank-you letter to the recruiter. You will generally hear back regarding your phone interview within 2 weeks, and even sometimes within days. In this case it does pay to send the thank you letter as soon as possible, as they are likely to receive it before you hear back on the results of the phone interview round.
PHONE INTERVIEW CHEAT SHEET
First-round phone interviews are generally very predictable, and because they are conducted over the telephone, the interviewer will not be able to tell that you’re referring to reference materials while responding. Thus it makes sense to have this sheet available during the call (Look at picture attached).