“This sucks. I’m gonna quit.”

Sometimes it’s so bad that you just want out immediately.

Other times, you plan to wait and stealthily make an exit as soon as your bonus hits your bank account.

So here’s how you can break out of investment banking – without dying in the process.

Your Mission

It’s not as simple as announcing that you’re leaving and storming out of the building.

Yes, you could do that… but it will create some problems for you in the future.

To make your quitting successful, you need to:

1. Make sure no one else knows anything about it beforehand / prevent rumors from circulating.
2. Avoid burning bridges (if you can) because you might need recommendations in the future.
3. Line up another offer first or have a plan for what you’ll do after you quit and spend a week on a tropical island.

You probably understand the importance of point #3, but I’ve seen many quitting bankers forget #1 and #2.

How to Escape the Executioner

Here’s what you need to do once you’ve made the decision to jump ship:

Get Over Yourself

Repeat after me: no one cares about you… at all. You are a very small cog in a very large wheel.

In “normal” industries if you tell your boss you’re leaving, he might say, “We really need you right now! Can you stay for a few more weeks?”

Or who knows, maybe he’ll even offer up a promotion or try to bribe you into staying longer.

You don’t have to worry about any of that in finance: as soon as you say you’re quitting, they’ll say, “Good, here’s the door. Please leave now.”

A lot of junior bankers overestimate their own importance – “Trophy Kid” syndrome.

But most people won’t even remember you the next day.

Prepare for an Immediate Exit

Next, understand that once you announce your plan to quit your exit will be immediate.

You don’t get a “going away party” or presents or any of that nonsense – you get escorted to the building exit.

There’s a practical reason for this: you have access to a lot of confidential information about public companies.

If you continued to have access to that information, you could spread it around to other people, competitors, or make a quick million or so with insider trading.

It’s almost as fast as getting fired, but sometimes – depending on the bank and group – they will let you stick around for a few days to a week to hand off your tasks to other analysts.

Save anything important – both physical possessions and computer files – in advance of quitting, because you won’t have time later.

Make Sure Your Exit Strategy Is Lined Up

No matter how bad you have it, it’s a really, really, really bad idea to quit if you don’t already have another offer lined up or at least some idea of what you want to do next.

So if you’re quitting to start your own fashion company, obviously you won’t have an “offer” but you should have some idea of how much money you’ll need, what you’re going to do, and an understanding your market.

And if you are continuing on within finance, you should have an offer somewhere else.

In “normal” industries it’s much tougher to get hired when you’re unemployed, and it’s exponentially harder in finance.

So you should not go and “announce” anything to anyone until you have a signed, accepted offer with another bank, hedge fund or PE firm, or a concrete plan of what you’re going to do if you’re leaving finance.

Make a Clean Break

Once you’ve prepared yourself, you need to avoid screwing up the final step of quitting – actually telling people that you’re quitting.

Here’s what NOT to do:

• Announce it to everyone in a long and possibly angry email message and then just leave.
• Start telling other people and allow rumors to circulate before you leave.
• Tell someone other than your Managing Director first.
• Announce your plans before you’re 100% certain and have a signed, accepted offer in hand or you know exactly what you’re going to next, if it’s not another job.

So once you’re set, go directly to your MD, in-person, and explain the situation:

“I’ve enjoyed my time here, but I’ve just received an offer for [Name of New Job], and they want me to start immediately – so I’ll be leaving.”

At this point your MD will probably jump in and act professionally about it – or he’ll complain about how much work you’re leaving behind, especially if it’s at a smaller bank.

Do not get emotional or give into any demands or last-minute requests.

You’re quitting. If you say “no” to these demands, what will they do? Fire you?

Saying “yes” won’t put you on better terms, either – if they make last-minute demands of you, they wouldn’t write a good recommendation in the first place.

Once you’ve told your MD, go around and say the same thing to your other team members, keeping it brief and unemotional.

Then, depending on whether you have to leave immediately or you have a few days to a week, go and craft a brief farewell email with your new contact information.

Don’t send this out to the entire investment banking department or the entire bank – you’re not that important.

Just send it to your own group, or to anyone you’ve worked with in the past.

A Tale of 2 Analysts

Similar to a tale of 2 summer interns, a quick tale of 2 quitting analysts will illustrate just how important the above points are.

Bitter Quitter

Bitter Quitter was at a bulge bracket investment bank and received a hedge fund offer just before bonuses were announced – right around the 1-year mark.

He hated his life and desperately wanted to get out, but he made the mistake of telling all the other analysts in his office before anything was official.

“I’m really close to getting this hedge fund offer… then I’ll be out of here!”

Rule #1 of quitting your job: don’t tell anyone you’re quitting.

Assume that anything you tell a single person at your bank will instantly spread to everyone else – office gossip happens 24/7.

Bitter Quitter eventually won the offer, but he made the critical mistake of not telling anyone higher-up directly – they found out through the grapevine instead.

So he didn’t even get to “quit” – instead, the staffer approached him and said, “We know what you’re doing. Please get out right now.”

Result: He never got to tell his MD himself, so he left on poor terms and would have trouble getting a good recommendation for business school or anything else in the future.

Clean Breaker

Clean Breaker was working at a middle-market investment bank, and received an offer to move to the corporate finance department of a Fortune 500 company, a few months after bonuses had been awarded.

He also hated his life (notice a common theme here?), mostly because one VP he worked for could best be described as “evil incarnate.” He was incredibly out-of-shape, had no life outside work, no friends, and spent all day making his analysts and associates miserable.

Even though Clean Breaker was miserable, he wasn’t foolish – so he didn’t tell a single soul that he was even interviewing until he had the signed offer in hand.

“Trips to the dentist” and “personal days” are plausible if you don’t use them every single week.

When the time came, he went directly to his MD first and told him the news, then informed Evil VP and the rest of his team.

Evil VP got visibly angry and spent 30 minutes trying to convince Clean Breaker to stay (this only happens at smaller banks), but Clean Breaker held firm and said, “Thanks, but I’m out.”

Result: Clean Breaker probably can’t get a recommendation from his VP, but there’s nothing he could have done to prevent that. But since he handled it professionally, he could easily go back to his MD and ask for help in the future.

How to Quit

Quitting your job is like removing a band-aid: make it quick and clean, and accept that it’s going to be painful in the short-term.

That’s way better than spending an eternity peeling it off and enduring the pain over weeks or month.

So make it quick, professional, and confidential and you might just escape with your head intact.

“So, how much food do traders eat?”

“Can you really make $10 million instantly if you’re a star trader?”

“Can I write about my gambling addiction and how much money I made with poker on my trading resume?”

You’re about to learn the answers to all of those and more, in this 2-part podcast series on Sales & Trading vs. Investment Banking.

Since I know close to nothing about trading personally, this one is an “interview” with Jerry, who does know a lot about trading – having done a trading internship, worked full-time at a bulge bracket bank and then started his own prop trading firm.

What You’ll Learn In This 40-Minute Interview

• What you need to succeed in sales vs. trading vs. investment banking, and why none of them require “rocket science”-level math
• What to do if you don’t have a pedigree, and why trading might be a good option for you
• Networking tactics for both fields and the best time to cold-call a trader
• The 3 most important points to highlight on your sales & trading resume, and how to write about your poker hobby (addiction?)
• Interviews, telling your “story,” and how pitching a stock differs in sales vs. trading interviews

Listen to the interview right here:

• Download the MP3 [40 Minutes | 19 MB]
• Download the Text Transcript [20 Pages | PDF]

Introduction

• 1:15: Intro to Jerry and his background
• 1:45: Skills required for trading, psychology, and why you still don’t need to be a rocket scientist to succeed
• 4:30: Who succeeds in banking vs. trading and the math required

Recruiting

• 5:30: Recruiting at a bank vs. prop trading firm
• 7:40: Recruiting for sales
• 8:09: What to do with no real finance experience – and why exams and certifications aren’t the answer
• 10:30: How to break in from unusual backgrounds and if you’re already out of school
• 12:10: From programmer to prop trader?

Asia vs. the US and Language Requirements

• 12:55: Recruiting in Asia vs. the US and elsewhere
• 14:00: Language requirements in banking vs. sales vs. trading and what to do if you don’t know the local language

Networking and the Best Time to Call a Trader

• 16:50: How to network like a ninja in both fields
• 18:00: The best time to cold-call a trader (hint: not when he’s trading, eating, or abusing interns)
• 19:23: How to approach traders differently from bankers, and why “business talk” might be a better strategy

Why the CFA Is Still Useless

• 21:05: Are there any useful exams for breaking in? Nope, sorry, please try again…

Sales & Trading Resumes

• 23:05: Sales & Trading resumes and which skills are not as important to highlight
• 24:53: The 3 most important skills to focus on in your trading resume, and what to do if you don’t have them
• 26:16: Should you write about your gambling addiction? What about knitting yarn or extreme sports?

All About Interviews

• 27:45: How banking interviews differ from trading interviews
• 30:22: How much corporate finance / valuation knowledge do you need for S&T interviews?
• 30:48: How “fit” questions are different
• 32:05: Why and how you need to tell your “story” differently and how to talk about your future plans in trading interviews
• 34:34: Can you prepare for S&T interviews?
• 35:50: How to pitch a stock and technical vs. fundamental analysis
• 37:15: How sales interviews differ from trading interviews, and how you should pitch a stock differently

Coming Up Next: In Part 2, we’ll cover the trading lifestyle – including what a day in the life is like, how you interact with your co-workers, what types of fast food traders prefer, and the all-important exit opportunities.

The first question is actually trickier to answer, and you can read all about the trade-offs right here.

But I have an easy answer for you on the second one: read this interview with a reader who broke into private equity right out of undergraduate, without any prior investment banking or private equity internships.

Background

Q: Why don’t you start by walking us through your background and what you were up against when it came time for full-time recruiting?

A: Sure. I was from a “target school,” so I certainly had an advantage in that banks actually recruited there. However, I was also at a big disadvantage because:

• My GPA was not spectacular and as a result most banks didn’t even look at me.
• I had no investment banking or private equity summer internships.
• My school had no Economics or Finance concentration, so on paper I didn’t look qualified.

I only got 1 summer internship first-round interview, and when it came time for full-time recruiting I applied to over 100 jobs and only got 2 first-round interviews – neither of which led anywhere.

Q: Wow. So what did you do during your junior year summer if you couldn’t find an investment banking internship?

A: I found an internship at a small VC firm, outside the US in another region of the world – I had some family and friends there, so effectively I got it through my own connections.

Q: Ok, that sounds pretty good. I mean, a VC internship is certainly better than nothing… did bankers just not care about it?

A: Pretty much. I couldn’t write “Investment Banking Summer Analyst” on my resume, so bankers didn’t take me seriously – and to make things even worse, it wasn’t even a brand-name firm.

I tried to spin it as best I could, but banks wanted people who had done banking before.

Q: So no internships and then no full-time offers… what was your next move?

A: Studying abroad in Europe for the next semester, of course!

I was out of the country for the next few months on a study-abroad program, after full-time recruiting was over – so I was set to graduate and come back to the US with nothing at all lined up.

Networking: Top-Down, Business Cards and… Business Cards?

Q: Ok, so I’m guessing that you had to do a lot of networking in this situation. Had you done much before you left for the study-abroad program?

A: I had been going to some informational interviews, and I went to a bunch of recruiting events at my school. I knew that I had to be aggressive with getting business cards and following up with people, so I collected around 40 cards and always wrote about the people I met in my cover letters.

But that didn’t work too well, since I only got 2 full-time interviews.

M&I Note: See, no one reads cover letters… for the last time.

Q: Ok. So you went off to Europe and indulged in some models and bottles while taking a break from recruiting.

How did you get back into the swing of things, and did you do any networking before you arrived back in the US?

A: I took some time off at the start of the year, and then in the winter I started ramping up my networking efforts once again.

I created an Excel file of anyone even remotely related to investment banking and started emailing them asking for advice. I also continued applying for jobs, but overall it was hard to get anyone on the phone when I was on the other side of the world.

Q: So you have your list of names in Excel, and you’re doing some networking while in Europe… or at least trying to. Where did you get these names from?

A: At first it was just friends and family – I started with those I knew best, and took it from there.

The response rate from friends and family was not spectacular, so when I came back to the US in the summer I started moving toward my alumni networking instead.

A lot of alumni were “nice,” but many of those contacts didn’t go anywhere either, so I continued using both sources throughout the process.

Q: Let’s talk about that transition back to the US. What did you do after you arrived back from your trip to Europe?

A: I woke up every day and just sat on the computer and called people all day long. It was a mix of cold-calling, reaching out via email and going through referrals.

I was constantly going downtown (M&I Note: This was not downtown Manhattan – it was another, smaller financial center) and talking to people in equity research, investment banking, private wealth management, and institutional asset management – I was at the point where I didn’t care what I got in finance, as long as I could find something relevant.

Networking Tactics: Nuts & Bolts

Q: So you used a combination of informational interviews and cold-calls and to spread your net wide when reaching out to your contacts.

Now let’s talk about your tactics – what did you actually say to alumni when emailing them?

A: Most of the time I just asked for advice – “I’m so-and-so and graduated from ________ recently, I’m looking for a job in __________ now and wanted to get your advice on what I should be doing.”

When we met in-person, some people were very direct – they would just say, “Ok, so what do you want me to do exactly?” whereas with others it was more of a relationship and they seemed interested in getting to know me.

Q: Ok, so you asked them for advice and met with many of them in-person… what about follow-up? I get a lot of questions about how to follow-up and how often to do it. What was your approach?

A: I just emailed everyone after meeting or speaking with them the first time – but I didn’t stay in touch with every single person I met on an ongoing basis.

My approach was simple: if I needed to stay in touch with people, I did – otherwise I didn’t feel obligated to send anything.

Some people were more open than others, had more contacts to share, or had more advice for me… so I gravitated toward them and sent follow-up questions and requests when I had them.

When I finally landed my offer, I also emailed everyone responsible and thanked them for everything.

Q: You also mentioned cold-calling. Can you walk us through what you did there?

A: It was a devastating process, and I hit rock-bottom multiple times.

I focused my cold-calling efforts on Equity Research Analysts – since they don’t get as much cold contact as investment bankers do, cold-calling was more effective.

I created a list of around 50 research analysts in my city by looking online and searching for the appropriate industries, and just started calling the firms and asking to speak directly to the analysts.

If I called 50, I found that 45 would not pick up at all, 5 would agree to speak with me and then 1 would agree to meet in-person. One of them actually asked me to create a sample research report for him and deliver it for our meeting!

The odds are definitely against you when you’re cold-calling, and there’s not much you can do about it – aside from getting the basics right, it’s all about brute force.

M&I Note: While this is true, keep in mind the corollary as well: all it takes is one. Much like becoming a celebrity or starting a business, networking is very, very random but all you need is 1 grand slam to propel you to success.

Q: You mentioned speaking with the analysts themselves, but how did you actually get in touch with them? Most people have trouble getting past the gatekeepers when cold-calling.

A: If I didn’t have their direct contact information, I would call HR and ask to be put in touch with someone in equity research close to my age, or from my school.

This would probably not work as well in investment banking since more people apply each year – but it was effective for equity research, asset management, and private wealth management.

Whither Private Equity?

Q: So you were doing a ton of networking, thinking about all these different industries – and ultimately you won that offer in private equity.

But you haven’t mentioned private equity at all yet – how did it happen? Did you just wake up one morning with an offer letter under your pillow?

A: I wish. I had truly hit rock-bottom 2.5 months before getting the offer, and no longer felt like talking to anyone or doing any networking. But then I got lucky and suddenly all my efforts paid off.

The 200th person I contacted while networking – a commercial banker – had given me some advice and put me in touch with a few other people.

Then one night he went to dinner with another friend of his, a Director in the Private Equity group of an investment bank – and he mentioned my name to the Director and said I was a good guy.

I got the intro because I had done so much networking and met so many people that my contacts started doing the work for me.

Q: Wow. So you just got referred to a private equity interview like that – what was the process like? Were you competing against “normal” people as well?

A: Yup. The interview process took about 2 months, and the whole time I was competing against experienced bankers and equity research guys who wanted to move into PE as well.

Most of the interviews were behavioral, and by this point I had gotten really good at those. For a lot of questions I didn’t even have to think before responding – I had been through so many interviews and informational interviews that the process was just mechanical.

Q: Right, that’s definitely another advantage of networking. But I’m sure they had some concerns about you since you had no full-time work experience – what were the biggest obstacles you faced?

A: The whole time, they liked my personality but doubted whether or not I could do the work.

I was up against investment bankers and equity research associates, so they had a lot less to prove than I did.

But I continued to perform well, and eventually we got to a point where they had to make a decision and give an offer to one of the remaining candidates.

Q: So what did this final challenge consist of? Moving boulders uphill? Catching fish with your bare hands? Opening a gateway to a parallel universe?

A: It was much simpler: they wanted me to spend 3 hours writing a 1-page memo recommending either Coke or Pepsi for investment.

I didn’t get a “formal” case study with an LBO model and valuation, or anything like that – I did use some numbers in my analysis, but it was qualitative and more about coherently presenting the merits and risks of an investment.

I submitted it over the weekend, and found out about my offer on Monday.

Q: That’s amazing. So how did you beat all these experienced bankers for the job?

A: I found that enthusiasm and excitement were the most underrated factors.

A lot of the guys I was competing against were clearly burned out and not enthusiastic at all about getting another job in finance – and that’s where I beat them.

People like to obsess over technical skills and trivia about obscure tax laws, but when you start working you’ll forget all that and you’ll have to look it up anyway… and financial modeling is not rocket science, you can pick it up as you go along.

Q: So you went from sub-par grades, no summer internships, no full-time offers, and no longer even being a student to a full-time private equity offer. Anything you would have done differently?

A: I wasted time applying online early on. While it “feels” productive since you’re sending documents and clicking buttons, you’re being active rather than productive.

I should have done all the in-person networking I did in later months much sooner.

Having good grades and solid internships certainly helps, and if mine had been better I would have had an easier time – but networking is actually more important than either of those, because hardly anyone does it.

Students especially like to sit in their comfort zones, sit around applying online, and trying to get perfect grades when they should be out there pounding the pavement from day 1.

Q: Awesome, thanks for your time and good luck with your PE offer.

A: Sure thing, anytime.