Careers: Investment Banking

When veterans or MBA students talk about breaking into high finance, they're usually talking about one thing:

Investment Banking (IB) - the fast-paced, high-paying, prestige-heavy path to Wall Street.

At Sitreps2Steercos, we give it to you straight. IB isn't for everyone - it's demanding, hierarchical, and intensely competitive. But for those who can make the leap, it's a lucrative launchpad to Private Equity, Hedge Funds, or C-suite roles down the road.

Here's what you need to know.

What is Investment Banking? - A Plain-English Explanation

Before we get into lifestyle, recruiting, and compensation, let's make sure you actually understand what investment banking is. Most people - including many veterans and MBA students - have a vague sense that it involves "Wall Street" and "deals," but cannot explain what an investment banker does on a Tuesday afternoon. Here is the full picture.

What Are Investment Banks?

Investment banks are financial institutions that help companies, governments, and institutions execute large financial transactions. The major names you should know:

• Bulge Bracket Banks: The largest, most global investment banks. JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America (BofA Securities), Citigroup, Barclays, UBS, Deutsche Bank. These banks do everything - M&A, capital markets, sales and trading, research, wealth management. They operate worldwide and handle the biggest deals.
• Elite Boutiques: Smaller firms that focus specifically on advisory (M&A and restructuring) and compete with bulge brackets on the most prestigious deals. Evercore, Lazard, Centerview Partners, PJT Partners, Moelis. They tend to pay as well or better than bulge brackets, with smaller teams and more deal exposure per banker.
• Middle Market Banks: Focus on deals involving mid-sized companies (typically $100M-$2B in enterprise value). Houlihan Lokey, William Blair, Piper Sandler, Baird, Harris Williams. Still excellent training, often with better work-life balance than bulge brackets. Strong exit opportunities.

What Do Investment Banks Actually Do?

Investment banks make money by advising on and facilitating large financial transactions. The three core functions are:

1. M&A Advisory (Mergers and Acquisitions)

When a company wants to buy another company, or when a company wants to sell itself, they hire an investment bank to advise on the deal. The bank helps determine what the target company is worth (valuation), structures the transaction, negotiates terms, and manages the process from start to finish. Banks earn advisory fees - typically a percentage of the deal value - which can be tens of millions of dollars on a large transaction.

Example: If Company A wants to acquire Company B for $5 billion, both companies will likely hire investment banks. Company A's bank (the "buy-side advisor") helps them figure out if $5B is a fair price and structures the offer. Company B's bank (the "sell-side advisor") helps them get the highest possible price and runs a competitive auction process.

2. Capital Raising (Equity and Debt)

Companies need money to grow, and investment banks help them raise it. This takes two main forms:

• Equity Issuance (IPOs and Follow-Ons): When a private company goes public (IPO), investment banks underwrite the offering - meaning they help price the shares, find buyers, and guarantee the company will receive a certain amount of capital. Banks also help public companies issue additional shares (follow-on offerings). The bank earns underwriting fees, usually 2-7% of the total capital raised.
• Debt Issuance (Bonds and Loans): Companies also raise money by borrowing. Investment banks help structure, price, and sell corporate bonds and arrange syndicated loans. The bank earns fees for arranging the financing.

3. Restructuring

When companies are in financial distress - unable to pay their debts, facing bankruptcy, or needing to reorganize - investment banks advise on restructuring. This can involve renegotiating debt, selling off divisions, or guiding a company through Chapter 11 bankruptcy proceedings. Restructuring is countercyclical, meaning it gets busy when the economy is bad, making it a natural hedge within the banking industry.

Sell-Side vs. Buy-Side - What's the Difference?

You will hear "sell-side" and "buy-side" constantly in finance. Here is the distinction:

• Sell-Side: Investment banks, brokerages, and research firms that provide services to clients. When people say "investment banking," they are talking about sell-side advisory. You are selling your expertise and execution to companies that need financial advice.
• Buy-Side: Firms that invest money - private equity funds, hedge funds, mutual funds, pension funds. They are "buying" securities and companies with investor capital. Many investment bankers exit to buy-side roles after 2-3 years.

Investment banking (sell-side) is the training ground. Private equity and hedge funds (buy-side) are where many bankers go next.

How IB Differs from Other Finance Careers

Veterans and career changers often confuse investment banking with other areas of finance. Here is how they are different:

• Commercial Banking: Chase, Wells Fargo, and other retail banks that take deposits and make loans to consumers and businesses. Completely different from investment banking. Lower pay, more stable hours, different skill set.
• Wealth Management / Financial Advisory: Managing investments for wealthy individuals. Merrill Lynch, Morgan Stanley Wealth Management, UBS Private Wealth. Relationship-driven, sales-oriented. Not the same as investment banking despite sometimes being at the same parent company.
• Private Equity (PE): Firms that buy companies using a combination of investor money and debt, improve them, and sell them for a profit. PE is a common exit from IB and is considered more prestigious and higher-paying long-term. Major firms: Blackstone, KKR, Apollo, Carlyle, Bain Capital.
• Hedge Funds: Firms that trade public securities (stocks, bonds, derivatives) using various strategies. More market-focused than IB. Top hedge funds: Citadel, Point72, Bridgewater, DE Shaw, Two Sigma.
• Corporate Finance / FP&A: Working in the finance department of a non-financial company (e.g., finance at Google or Nike). Budgeting, forecasting, and internal financial analysis. Lower comp than IB but far better hours.

Why Do Companies Pay Banks Millions in Fees?

This is the question everyone asks. If a company's CEO already knows they want to buy another company, why pay Goldman Sachs $30 million to help?

Several reasons:

• Valuation Expertise: Banks build detailed financial models to determine what a company is worth. Getting the price wrong on a $5B deal is catastrophic.
• Process Management: M&A deals are enormously complex - legal, regulatory, tax, accounting, and operational issues all need to be coordinated. Banks run the process.
• Negotiation Leverage: Having a top-tier bank on your side signals seriousness and provides negotiating credibility.
• Market Access: For capital raising, banks have relationships with thousands of institutional investors. A company cannot sell $2B in bonds without a distribution network.
• Liability Protection: Boards of directors have a fiduciary duty to shareholders. Hiring a bank provides a "fairness opinion" that protects the board from lawsuits alleging they sold the company too cheaply.

The Deal Process in Simple Terms

Here is how a typical M&A deal unfolds from the banker's perspective:

1. Pitch: The bank creates a "pitch book" - a presentation arguing why the client should hire them for the deal. This includes market analysis, valuation work, comparable transactions, and the bank's credentials. Pitching is constant and competitive.
2. Mandate: The client selects a bank (or multiple banks) to advise on the transaction. Getting the mandate is a win - now the real work begins.
3. Due Diligence: The bank and its client dig deep into the target company's financials, operations, legal situation, and risks. This is where financial models get built and refined.
4. Execution: Structuring the deal, negotiating terms, coordinating with lawyers, preparing regulatory filings, and managing the timeline. This is the most intense phase - late nights, weekend work, and constant revisions.
5. Close: The deal is signed, money changes hands, and the transaction is announced. The bank collects its fee.

A single deal can take 3-12 months from pitch to close. Bankers typically work on multiple deals and pitches simultaneously.

Day-to-Day Work and Core Activities

Now that you understand what investment banking is, here is what the work actually looks like on a daily basis.

Investment banks advise companies on mergers, acquisitions, IPOs, and other major financial transactions. They also underwrite securities and help companies raise capital.

Common types of work:

• M&A (Mergers & Acquisitions)
• Capital Markets (Debt & Equity)
• Restructuring
• Industry Coverage Groups (Tech, Energy, Healthcare, etc.)

You'll live in PowerPoint and Excel, building models, writing pitch decks, and supporting multi-billion-dollar deals - often on tight deadlines and little sleep.

What Do You Actually Do?

The day-to-day in IB is simple to describe and brutal to execute. As a junior banker (Analyst or Associate), your week looks something like this:

• Monday-Thursday: Arrive by 9-10AM. Financial modeling, building pitch books, updating comps and precedent transactions, sitting in on client calls. Work until midnight or later. Dinner at your desk courtesy of Seamless.
• Friday: Same as Monday-Thursday, but you might get out by 10PM on a good week.
• Weekend: Expect to work at least one day. During a live deal, both days. Your phone is always on.

The work itself is intellectually demanding but repetitive at the junior level - building DCF models, updating spreads, formatting pitch decks, and turning comments from VPs and MDs at 2AM. The learning curve is steep in the first 6 months, then the hours become the main challenge.

At the VP and MD level, the job shifts to relationship management, deal origination, and client coverage. Less modeling, more selling.

Roles Within Investment Banking

Qualifications by Level

Analyst (Post-Undergrad)

• Bachelor's from a target or semi-target school
• Strong GPA (3.5+)
• Internship experience (ideally in finance or banking)
• Pass technical interviews (accounting, valuation, DCF, LBO)

Associate (Post-MBA)

• MBA from a target program (Wharton, Booth, Columbia, Stern, etc.)
• Pre-MBA work experience demonstrating leadership and analytical ability
• Financial modeling proficiency (Wall Street Prep or BIWS)
• Strong networking track record with the firm

VP and Above

• Promoted from within after proving deal execution and client management
• Lateral hires happen but are rare and require significant deal experience
• At the MD level, your value is your relationships and ability to bring in revenue

Do Veterans Fit?

Veterans bring discipline, poise under pressure, and leadership - but they often lack the traditional finance background. That's okay - banks will train you on the technical side. What they really care about:

• Can you learn fast?
• Can you grind for 80-100 hours a week?
• Can you be client-facing without blowing it?

If yes, you've got a shot.

Where veterans have an edge:

• Work ethic - 80-hour weeks are bad, but you've survived worse
• Composure under pressure - deal deadlines are stressful, but nobody is shooting at you
• Leadership narrative - banks love a strong "walk me through your resume" story, and military leadership provides that
• Maturity - you won't crumble when an MD yells about a formatting error at midnight

Where veterans need to close the gap:

• Technical skills - you must learn accounting, valuation, and financial modeling before recruiting starts. No exceptions.
• Finance vocabulary - "Mission planning" means nothing to an MD. Talk in terms of deliverables, teams, outcomes, and timeframes.
• Networking style - IB recruiting is a social game. Coffee chats, firm events, and follow-ups are not optional.
• Speed of execution - banking requires fast, precise output in Excel and PowerPoint. Practice until it's muscle memory.

Bottom line: IB is achievable for veterans, but it requires significant prep before your MBA even starts. The ones who break in are the ones who start studying modeling and networking 6+ months before school.

Do You Need an MBA?

Almost always, yes.

Especially if you didn't come from finance pre-military. Investment banking is one of the most MBA-dependent career paths out there.

Target MBA programs (the "core schools") include:

• Wharton
• Booth
• Columbia
• Stern
• Darden
• Ross
• Fuqua
• CBS
• Haas

You can break in from outside, but the process is significantly harder without on-campus recruiting.

The Recruiting Timeline

IB recruiting is fast, structured, and unforgiving. Most firms recruit in the first semester of Year 1 of your MBA.

Miss early recruiting = miss the whole cycle.

Compensation

Yes, you'll earn a ton - but you'll work for every dollar of it.

What They Look For

• Technical ability (financial modeling, accounting, valuation)
• Polish and presence (client-ready communication)
• Drive and grit (this job is a marathon at sprint pace)

If you're a veteran, learn the language of finance. "Mission planning" means nothing to an MD - talk in terms of deliverables, teams, outcomes, and timeframes.

How to Break In

• Attend a target MBA program with strong IB recruiting
• Start networking early - before school starts if possible
• Learn valuation, accounting, DCFs, LBOs before recruiting kicks off
• Do coffee chats with alumni, attend firm presentations, and be visible
• Nail technicals and walk through your story confidently in interviews

Recommended Prep Resources

• Wall Street Prep or Breaking Into Wall Street (BIWS)
• Mergers & Inquisitions (blog + guides)
• WSP Bootcamps at your MBA program
• Peers with pre-MBA finance backgrounds - your best classroom

Exit Opportunities

Veterans who crush IB often do well in Private Equity Operations or C-suite roles later. The skills compound.

Final Word from Sitreps2Steercos

If you want to work the hardest, get paid the most, and be in rooms where multi-billion-dollar deals are decided - Investment Banking delivers. It's not for the faint of heart, but veterans who prep early, network smart, and grind hard can and do break in.

Post in the community forums if you want help figuring out if IB is right for you, which MBA programs place best, or how to tell your military story in Wall Street terms.