Investment Banking

Kris Howard

Investment Banking

The intensely competitive, action-oriented, profit-hungry world of investment banking can seem like a bigger-than-life place where deals are done and fortunes are made. Investment bank includes but is not limited to bringing an established company to the market, by that I mean taking company with the capabilities but not capital of expanding, and raising money through other investors or the stock market (IPO) for a commission, I chose this field because of my personal experience with my father and his company, I've seen him go from starting off as a cold calling broker, to running a brokerage firm, to starting a brokerage firm, all the way to having his own investment firm. I feel like I would do better with jobs where you set your own hours and work at your own pace. A lot of the work is commission based so the more your work the more you make, this would also benefit me because it would drive me to work more, money is my motivation. To be hired you will need good people and communication skills, highly analytical skills, high ability to synthesize and high creative ability. You will also need experience in modeling, valuing companies, and financial accounting.

Accounting

If you don't have a deep background in accounting, but if you are strong in math, then don't worry, you'll be able to pick it up fast enough once you're on the job. If you do have a background in accounting, then it gives you a nice edge.

Corporate Finance

Corporate finance is different than accounting in that corporate finance relates to valuation and financing decisions. The purpose of accounting is to create statements that lay out the historical financial health of a company for management and investors. The purpose of corporate finance is to apply the results of these statements (along with intangibles such as the strength of the industry and the management team) to a valuation model in order to arrive at a value for the company.

Modeling

Every model has a purpose. Industrial engineers use production line models to show potential future bottlenecks in the production process based on the changes in certain variables. In finance, models are employed to show such things as the value of a company, the projected cash flow of a company, or the projected financing needs of a company. The creation of tight, solid models is what separates the good analysts from the stars. An acquaintance of mine was the first analyst ever to win Banker of the Year at DLJ and he did so by having a strong ability to create models and to clearly explain their results to senior bankers and clients...

Most Highly successful Investment bankers started as junior brokers for an established firm. Your job (particularly for the first 3-6 months) is all about details. You can't screw up the details. You're paid a huge amount of money to get all the details right. This is the single most important trait for an analyst to have. You've got to shoot for 100% perfection in all tasks. This is something you've got to get across to your interviewer durning that process. A junior banker develops into the trusted analyst of a senior banker by getting everything right. At this point in your career you can be making anywhere from $55-125,000 annually. Investment bankers need distribution to sell deals. They get distribution from their salesmen and their