How to get the buried treasure from your first 2 (grunt) years at an investment bank
Paul was psyched. He’d just joined a top-10 Boutique Investment Bank full-time. He had worked hard to earn this opportunity. As an intern, he’d even helped win a deal away from Goldman Sachs.
He was entering an exciting world, and he’d already tasted the fruits. But then, reality slapped him in the face.
Once he was hired, he found himself doing data entry and grunt-work day and night, 90 hours a week, for two years. It was miserable—and nothing like what he’d experienced as an intern!
He hated it so much that he quit.
And he’d never get that time—or first opportunity—back.
Here’s the thing: Paul’s story isn’t unique. Lots of entry-level investment bankers have exactly this experience.
What’s going on here? Can this fate be avoided?
Speaking from personal experience, here’s what I want to tell everyone like Paul who’s starting out in investment banking.
REALITY CHECK
A few factors contributed to Paul’s situation.
During the internship, you’re still being recruited. People will try to woo you if you’re a top candidate, and Paul was a top candidate.
When you enter any career path, you have to pay your dues—and in investment banking, it’s cut and dried. Grunt work that needs to get done, and the firm’s only rational option is to assign it to the least expensive team members.
Even if you already know some stuff, there’s a lot you need to learn on the job. During that time when you’re still learning, your short-term responsibilities need to be simple enough that you won’t mess them up. It takes about 2 years to learn what you need to learn. And those 2 years suck; there’s no denying it.
Paul’s involvement in that winning deal as an intern was a special situation. It was a tech IPO for a product aimed at Paul’s age group, and the senior bankers didn’t understand it. So he just happened to have the right knowledge at the right time—that didn’t mean he was ready to skip the line.
Paul didn’t have the whole picture. Going in, he didn’t realize that these first 2 years were going to be so difficult yet mundane. He didn’t know this was completely normal and inevitable, even for an all-star intern. He also didn’t know that after 2 years, things would start to change.
Paul left right before he was going to start reaping the rewards. And on top of all that, he didn’t know that there was hidden treasure in those 90-hour weeks.
Even before the hazing period was over, there were things he could have done to set himself up for success both near-term and long-term to get a strong chance at one of the highest-leverage, most interesting, most well-paying careers in the world (i.e. Venture Capital, Private Equity, Hedge Fund, C-Suite, and Board Director).
I wish I’d been able to give him the treasure map ahead of time.
There are 3 types of buried treasures in that 2-year ramp-up period. If you concentrate on them, you can turn the downsides into upside. Knowing this would have given Paul so much more optimism while he was working those long hours, and he would’ve gotten something from that time.
The 3 buried treasures are:
KNOWLEDGE
Be clear you are always available, learn the lingo, how you can punch above your weight and the insider perspective on the industry
ENDURANCE
Learn to keep your body going under intense conditions, how to be flexible, and how to iterate and learn from others.
NETWORK – you build your business network
Build and use your own personal CRM, force yourself to network daily, and learn how to pause, actively listen, and ask questions.
If you get all 3, you’ll set yourself up for above-and-beyond success.
(1) KNOWLEDGE
Too many students start their investment banking careers with high hopes of giving advice and building models—so they practice modeling statements, only to join and build powerpoints and do data entry.
Instead of being disappointed, get curious and soak up knowledge. You’re learning for your first 6-9 months on the job, and your speed of learning (vs just doing what you are told) will determine how fast you move up for the next 5 years.
You’ll learn the lingo and see many deals get done.
You’re learning how your bank does things (each bank has its own ways) and how industries and companies are financed. Not everything is as buttoned-up as people think. Yes, there are hard lines of laws, but dotting every “i” and crossing every “t” leaves you behind those who are moving forward fast. While accuracy, hard work, and professionalism are important, you will also see that balls get dropped, mistakes made, and learn how others recover and how to recover yourself.
“Insider” knowledge becomes part of you as you enter numbers in spreadsheets.
You may have come into investment banking with ideas of which company should merge with another. The cold, hard facts are that no company CEO is going to Goldman Sachs asking if they have a new college grad who can advise them on what company to buy (although that might be a smart move for cutting-edge social media companies!) Part of biding your time is they need people to do the grunt work, and the other piece is you need time to learn enough to be able to use your judgment.
How to be an exceptional learner:
Be clear that you are available on holidays and weekends.
No matter how tired you are, be curious and willing to learn.
Take courses and read books to get up to speed on what you missed.
Use this time to build knowledge and an understanding of how capital gets allocated. Knowing this from an early age will set you up for a high-leverage career in wealth.
(2) ENDURANCE
Yes, long hours are what you signed up for, but not all long hours are the same.
I worked for 25 years on Wall Street without ever drinking coffee or taking a stimulant, often working 90-100 hour weeks. For both Wall Street and ultramarathons, I studied how nutrition affected my endurance. For me, intermittent fasting, staying hydrated, and avoiding sugar are my top strategies.
[Insider Tip: When I worked 20 hours listening to 20+ earnings calls till 2:30am, I ate dry popcorn because it’s low calorie, high fiber, and the chewing kept me awake.]
Why do the hours have to be so long?
You’re at the mercy of clients. A CEO is at a dinner party and an idea comes to him. He wonders if a merger he hadn’t thought of before might make sense. He calls 1-3 bankers and asks them to look into the possibility.
This sets off a waterfall of work.
Why can’t you take your time? Because the CEO called 2 other bankers as well, and all teams are racing to get him the info ASAP and win the deal. Since no one knows when a CEO will call, it means that the entire investment bank is on call, always.
Not all endurance is created the same.
You may think that being there is enough. But if everyone on your team is putting in the same hours, how are you standing apart? You learn about the business and about yourself, to build your endurance and efficiency.
My first 100-hour week was way less efficient than later in my career.
I remember it like it was yesterday. I slept under my desk over the weekend at Farmers Insurance. I was dragging and not working quickly. Later, when I learned to leverage nutrition, short breaks, and sprints, 100 hours started feeling like much more time.
These long hours being “on-call” or doing data entry can feel pointless. You can offset this when you’re interviewing. Pick a bank that values your opinion, even if they won’t listen to it right away. Do they want to hear your stock ideas? What questions do they ask you? Are they interested in how you think?
Choose to work in a collaborative group, especially since you’re basically living there!
Building endurance within the right team will pay dividends for years to come. You’ll know you can do what needs to get done. Others can count on you.
You’ll learn flexibility no matter your personality.
You’ll get spun up on a team and have to fly out. You have a suitcase at work. At first, this is annoying. But imagine—later in life, you’ll never miss an opportunity because you’re always able to change plans and be ready at a moment’s notice.
Investment banking doesn’t have the same huge rewards as past decades, but it is a great launching pad for some of the highest leverage career paths, all of which require endurance.
How to build exceptional endurance:
Learn about nutrition to power your energy
Iterate for your health, energy, travel, and efficiency
Watch and ask for tips from those who seem healthy and senior
(3) NETWORK
Your network is your net worth.
This has been said so many times that it feels meaningless. The reality is that many of you who are interested in economics, math, and banking may not be “naturals” at networking.
One of my mentees was super introverted and “unnatural”—but he became a master networker. How?
He asked people out to coffee. He had a list of questions. He remained curious. His awkwardness became his calling card. You knew he was trying, and this made his contacts want to help him more.
In the investing industry, you’re exposed to CEOs and CFOs decades earlier than you would be if you worked in normal companies.
For years, I collected business cards, as did my close friend. I kept in touch with some. She entered them all into her spreadsheet, her CRM (customer relationship management system) and made plans to email these contacts quarterly or yearly, depending on her strategy.
She made a fortune in the “Dot Com” boom and thought that would be the height of her earnings, but networking took the second half of her career even higher.
Since you are there, learning and meeting people, all day and all night, every chance you get, add to your CRM. Your peers will be tomorrow’s leaders. Working side by side, you’re building bonds that will last a lifetime.
Feed those budding relationships with a bit of systematic outreach, especially once you leave for different firms.
Yes, a CEO may not “lunch” with a first-year associate right out of the gate. But as you advance and impress, he/she may remember you for sending a nice email, helping his/her kid with college advice, and (later) giving a particularly insightful model or suggestion.
Down the road, this CEO may sell his company to a private equity firm, raise with a VC firm, or be dealing with a hedge fund, and you may get recommended or introduced.
Successful CEOs and CFOs often team up to take multiple companies public over time.
As you help them IPO or fundraise in private markets, you may be recruited for their investor relations or to support the CFO, marking your jump to an industry unicorn, a high leverage career move.
Aside from being nervous, networking can feel like a chore sometimes.
You may get over being nervous to realize you can’t really be “yourself.” You have to be always “on”, aware of what people think of you, everyone only talks about money, and everyone feels fake like they want something. Not only that, but you can’t really talk.
Everything you do is confidential, so how can you network?
Networking is being curious about others and getting them to talk. Not being able to talk about what you do will strengthen your focus on being an exceptional active listener. You’re demonstrating your loyalty and trustworthiness by not sharing confidential info.
You might miss the ability to tell your BFF everything, but you’ll gain too!
How to build an exceptional network:
Build and use your own personal CRM.
Force yourself to network. Every. Single. Day.
Use skills of active listening, curiosity, and pausing.
WHY PUT YOURSELF THROUGH THIS?
After working with so many students to help them break into investment banking, I’ve seen them fall into two groups.
Group 1: The first group is full of people who struggle and often quit. If they do make it for two years, they’re completely burnt out. They’re reacting to inbounds all day, letting emails and requests run their schedule. They feel ragged, run-down, and like they can never finish one task before being pulled onto the next. You’ll see them everywhere at Investment Banks.
They’re blind to the truth, which is that they have absolute control over their destiny and their path—day to day, week to week.
Group 2: The second group is full of people who know they’re in control. They’re not reactive. They’re proactively building their personal CRM, collecting business cards at every meeting. They’re taking advantage of No-work Saturdays to really recharge and organize their personal life. They’re grabbing free moments to work out, meet with colleagues or just take a breath.
This all adds up to feeling in control of your present and your future.
You have a choice: leave the buried treasure where it is, or go get it. How do you ensure you’re in Group 2?
1. Be an exceptional learner:
Be clear that you are available on holidays and weekends.
No one will make you work 24/7, so you can balance your availability with sneaking in breaks during the day and during the week. Use those breaks to recharge so you can be full speed when someone calls Sunday morning needing to build a pitch for a potential client.
No matter how tired you are, be curious and willing to learn.
Take the initiative to learn new things before you start the job. When on the job, take initiative to look things up and learn on your own, in addition to asking questions. Don’t ask anything that could be Googled or researched. This shows you respect people’s time.
Take courses and read books to get up to speed on what you missed.
When I started out, I searched for books in my industry like Computer Wars about the early decades of IBM. Then, I walked into meetings with management teams, and seemed as if I’d been there for the last 7-10 years. You can do the same and be so far ahead of your coworkers. This will lead to you getting more interesting jobs sooner.
2. Build exceptional endurance:
Learn about nutrition to power your energy.
Nutrition is the foundation of your energy and performance each and every day. While you may be able to get by when you are young, you will vastly outperform your peers if you optimize your nutrition early. My mentees studied what worked for them and then made it a habit (Keto, Mediterranean, Pescatarian, etc). Making it a habit also removes one more choice from your day so you can free your brain to make work choices.
Iterate for your health, energy, travel, and efficiency.
Pay attention to what works. Working 100-hour weeks for years isn’t humanly possible unless you learn how to keep your body in top form. Iterate continually on your diet, workout practices, and schedule. Dress professionally and find shortcuts. What will people notice and what can you cut out? Can you leave a second set of toiletries in a half-packed carry-on bag (just add clothes and go)? How can you sneak in workouts and eat healthy?
Watch and ask for tips from those who seem healthy and senior.
Throughout my career, I noticed people who were overweight, couldn’t walk 100 feet up a gentle hill without stopping to catch their breath at age 40 and blamed the job. Others were CFOs of publicly traded companies while competing in Ironmans over the weekend. Build your network and your health knowledge all in one by asking the second group how they do it!
3. Build an exceptional network:
Build and use your own personal CRM.
It may seem like overkill to build a personal CRM. But it’s actually one of the most underrated, ridiculously valuable things you can do. My friend Kimberly did this with an excel spreadsheet with reminders to connect with people at certain intervals (monthly, quarterly, annually) and check-in. It has led to so many opportunities over her career. Overcome the inertia around this and organize your contacts. You’ll benefit a hundredfold.
Force yourself to network. Every. Single. Day.
My most introverted, awkward mentee was the best networker I have seen. He booked coffees, lunches, and calls. You could tell he was uncomfortable but trying. His sincerity won him so many fans. You can do it too!
Use skills of active listening, curiosity, and pausing.
Nervous people speak fast. Don’t wait till you are not nervous. Instead, proactively learn how to pause, be curious and actively listen. These skills will serve you in your professional and personal life.
So that’s how you end up in Group 2.
If you’d like to learn more about how to Break into Investment Banking from non-traditional backgrounds, see my interviews on YouTube