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The Complete Guide to Cold Calling Your Way Into Investment Banking ........................................................................................................ 2 Does Cold Calling Really Work? .................................................................. 2 But Why Im Still Not a Fan ........................................................................ 3 What Exactly is a Cold Call? ....................................................................... 4 How to Cold Call Like a Champ .................................................................... 5 Getting Names .............................................................................................................. 6 Planning Your Pitch .................................................................................................... 7 Placing the Calls ........................................................................................................... 7 Following Up .............................................................................................................. 11 How to Ace Your Private Equity Interviews ................................... 13 The Format of Private Equity Interviews .............................................. 14 Private Equity Interview Questions ........................................................ 15 Fit Questions ........................................................................................................... 15 Technical Questions ................................................................................................ 16 Deal Experience Questions .................................................................................. 16 Private Equity Case Studies ........................................................................ 19 LBO Modeling .................................................................................................. 20 Selling vs. Buying ........................................................................................... 22 Timeframe for Interview Decisions ........................................................ 23 Final Words: Last-Minute Private Equity Prep .................................... 23

The Complete Guide to Cold Calling Your Way Into Investment Banking
Internship recruiting is over. And you made a valiant effort, securing 10 interviews with everyone from boutiques to bulge bracket banks but you didnt land the offer. And now you only have a few months before your non-existent summer internship begins. With recruiting finished, your last, best chance of breaking in is to cold call your way into Wall Street. But will that even work? Should you bother going all-out and calling hundreds of firms? And if you do take the leap, how do you cold call your way in successfully without getting slapped with a restraining order for being too aggressive?

Does Cold Calling Really Work?

This is the most common question about cold calling: Ive tried calling 10 different banks and no one is hiring! I sent my resume to all of them, but I havent gotten any responses! What is going on, does cold calling even work? Why are you lying to me?!!!! The answer is yes, cold calling does work but it does not work instantly. If you dont believe me, take a look at all these stories from readers who cold called and cold emailed until they got in. Cold calling and cold emailing work better:

In developed markets like the US and UK. If youre an undergraduate or recent graduate. At tiny boutique banks/PE firms/hedge funds.

Its questionable in regions like Asia, parts of continental Europe, and Australia Ive seen mixed results there, whereas there are dozens of success stories from the US/UK. Thats because recruiting is more traditional in those places and randomly contacting people is not as accepted socially. So give it a shot, but make sure you pursue other options if youre in a region where its not as effective. It also wont work as well if youre at the MBA level or you have fulltime experience because you should be leveraging your network to break in instead. Im sure some people have cold called their way into bulge bracket banks and mega-funds, but its rare and I dont recommend spending much time on it those firms never have trouble finding qualified, bright-eyed, and bushy-tailed interns. And finally, once again: do not expect instant results. Cold calling is an extended and ego-bruising process where youll get bankers yelling at you, writing nasty emails, and acting like Gordon Gekko when he first met Bud Fox. And unlike Bud, you cant use insider information to work your way in.

But Why Im Still Not a Fan

So cold calling works but I am still not a huge fan because: It can easily turn into a repetitive grind where you spend hours each day calling random banks.

Networking is much more effective if you do it via referrals and informational interviews. Cold approaches are more effective in-person at events like information sessions where you can get the other person to remember you more easily. The odds are stacked against you because you have little to offer to banks as a student.

But, you could easily find yourself cold calling anyway if: You go to a non-target school where no banks recruit and you have no connections. Youve exhausted all your connections and still havent found an internship. You cant make it to in-person events and you live far away from major financial centers.

And remember: all it takes is one.

What Exactly is a Cold Call?

What is a cold call and how is it different from other types of networking? The main difference is that you dont know the other person unlike contacting alumni for informational interviews, you are randomly calling them and have no previous interactions or connections with them. You are also much more direct rather than chit-chatting about their background and asking about what they do for fun outside of work, you ask about internships and recruiting right away. And if you dont get a positive response, you persist until you do, you try again later, or you move on to other banks on your list. On a standard cold call, you might introduce yourself in 1-2 sentences, ask how you can position yourself for an interview at the firm, and then

respond to the other persons objections (were not hiring anyone, we dont have the money, etc.) until you get a real answer. Its the difference between dating and randomly hitting on people at a bar in search of a one-night stand.

How to Cold Call Like a Champ

Its a 5-step process: 1. Get a list of banks or bankers in your area with their names and contact information. 2. Plan your pitch and figure out what youre going to tell them. 3. Place the call and be prepared to respond to their objections. 4. Afterward, follow-up at least once a week until they tell you to stop calling. 5. Meanwhile, continue to contact and follow-up with other firms on your list. Timing is extremely important. You do not want to start cold calling places when its still the middle of recruiting season you should be using other means like weekend trips,informational interviews, and information sessions to contact bankers. It may seem counter-intuitive to postpone cold calling until the lastminute, but it makes sense for a number of reasons: 1. You can focus on your higher probability options first and only spend time cold calling if nothing else works out. 2. If you wait until the last-minute, you can find banks that really need interns.

You dont have to do this Im sure some have succeeded by cold calling during recruiting season, but most successful readers started late in the process.

Getting Names
There are a couple ways to do this; the best method is to get Capital IQ access from someone who has it and search for local boutiques in your area. Failing that, there are over 13,000 firms in the Investment Banking Networking Toolkit and other sources online with names and contact information for firms. You could also try random Google searches, LinkedIn and even using tools like Google Maps to get names it really depends on how much time you have left and what your deadline for finding an internship is. If you live in the middle of nowhere and there are no firms in your area, get your butt out of your chair and hit the road. Contact firms at the financial center closest to you and make it clear that youre willing to move there right away. Refining Your List One other quick note: no matter how good your source is, do not just blindly call numbers. Always search online first to verify that the place still exists, thats it what your list says it is, and spend a few minutes learning something about what they do, recent deals, and so on. No matter how comprehensive the data, things change every day and unless youre willing to pay tens of thousands of dollars, its impossible to get everything updated in real-time.

Planning Your Pitch

This is the easiest part of the entire process. The main mistakes to avoid: 1. Giving your life story rather than a 1-2 sentence introduction. 2. Not getting to the point and chit-chatting too much. So dont do either of those. Instead, plan a 1-2 sentence introduction where you say something like, I know youre busy so I wont take too much of your time Im a [Major] student at [University Name] and Ive worked at [Company Names] before. I wanted to see how I could best position myself for an internship at your firm. Thats it this is not rocket science.

Placing the Calls

You do not want to fumble around and say um or ah too much on the actual calls. You will get better with practice, so I recommend warming up with places you dont care about as much. Say the same thing to everyone to minimize screw-ups. Ideally, you will call the bankers directly (higher level is better if you can find them MDs have more power than VPs, VPs have more power than Associates/Analysts) and speak with someone who has a say in the hiring process. But more often than not, you will only have their main number you can still recite the same script, but you need to be prepared for the gatekeeper to respond with their objections and keep you locked out. Calling vs. Emailing Cold Emails For the Win? Right about now, you might be thinking:

If its so hard to successfully get through when cold calling, why not use email instead? Does cold emailing work and is it more effective than cold calling? Personally, I am biased against email but that might just be because I get hundreds of emails each day and cant even respond personally to 90% of them. Emails are easy for bankers to ignore or delete, whereas phone calls are harder to dodge. And catching them in-person, of course, is even harder for them to avoid. But you may still have better luck with cold emailing, especially if youre not good on the phone. Ive seen it go both ways, so you have to experiment and see what works for you. If you do cold email bankers, attach your resume/CV and ask directly in the email how to position yourself for an internship there. What to Expect on the Calls Ok, back to calling now what should you expect when you call and pitch the banker or the gatekeeper? 95% of the time you will get variants of the following response: Were not hiring. / We dont recruit interns. / We dont offer internships. Do not give up when they say this or you will never succeed. Respond by saying, So youre in charge of all recruiting for the firm? or something to that effect if its a gatekeeper they will say no, at which point you then ask to be put in touch with the person who is. Other strategies for getting past this initial rejection:

Ask for a banker by name and fib a little by saying you were scheduled to call him/her and ask how you could be put through to talk to him/her (and if you get voicemail, hang up, call back, say you were disconnected, and ask for the number). Avoid closed-ended questions (Do you have any internships? / Do you recruit interns?) with a few exceptions (such as the one about the person being in-charge of all hiring).

Closed-ended questions lead to quick rejections because the person will always respond with No; how questions are better because you assumethat they already offer internships and its just a matter of how you will get what theyre offering. Handling Objections Even when you make it through and speak with a real banker, youll run into other objections:

We already have someone for the summer. What value could you add to our firm? We cant afford summer interns.

So you need to be prepared with a response for each of these:

Really? So when your deal flow picks up and your hiring needs change for the summer, how could I position myself for an interview so I could help you out? There are plenty of tasks that you need help with and your time is best spent winning clients let me handle everything else. I understand that money can be an issue, so Im willing to work at below-market rates and you get a great deal anyway since this is only a trial and Ill save you more money than Ill cost you.

You dont want to offer up too much at first (e.g. immediately offer to work for free) as that makes you seem desperate; reserve that for when they continue to object. Persistence vs. Stalking Ive gotten a lot of questions on how far is too far? and the difference between being persistent vs. turning into a stalker. You should feel uncomfortable cold calling if youre doing it correctly. Unless you have a lot of experience in sales or randomly approaching people, this entire process will be new and uncomfortable to you. If you think youre going too far, youre probably not the only tactics I would consider too extreme are:

Showing up at the banks offices in-person and demanding to be let in (even if youre not carrying an AK-47 this will result in bad things happening to you). Finding out where the bankers live, camping out in their bushes, and then jumping out to pitch them when they arrive at home. Calling every day even after they tell you No explicitly and warn you to stop calling them.

You know its time to move on when they say No without even giving a specific reason why that means they are really not interested and probably cant be persuaded otherwise. The first lesson in sales is that an objection is the first sign of a prospects interest, and its the same idea here: no specific objections, no interest. Im sure someone will now leave a comment saying that my advice is crazy and will get you in trouble or result in you getting blacklisted (even though nothing like that even exists).

But you are not doing anything unethical as long as you stick to simple calls and emails, so its not as if youre lying about your offer status and forging documents to win interviews/offers. Expect that some bankers will not like your tactics and will be extremely nasty to you. On the other hand, some bankers will admire you for having the guts to cold call them and hustle your way into Wall Street. Even though I satirize bankers here with the Stuff Investment Bankers Like series, they do not, in fact, all have the same personality and so their responses will vary. If you get a negative or sarcastic response, do not take it personally the banker might just be having a bad day or might be a tool to begin with. You need a thick skin or youll never make it in the cold calling game.

Following Up
So youve cold called several places and gotten lukewarm responses they already have people for the summer, they dont have formal internships, or they cant afford interns. Rather than giving up, follow-up at least once per week until they tell you, No definitively and tell you to stop calling. Many readers have been successful with extremely aggressive follow-up. You can also email to follow-up and mix up your approach a bit, but I still prefer calls since theyre harder to dodge. Your follow-up should not be much different use the same script and just say youre following up to reiterate your interest and see what has changed since the last time you spoke. How Long Before You Succeed?

I cant give you a definitive answer because its random some readers have succeeded in only a few weeks, whereas it has taken others months of networking to land offers. But you should not expect solid results until youve called upwards of 100 firms and followed up with all of them. That is a lot of cold calling, so you should still pursue Plan B options for the summer such as internships at normal companies, private wealth management, and so on. It took Sylvester Stallone 1500 rejections to star in the first Rocky movie so please do not complain until youve reached at least that number. This Sounds Really Hard! At first it is and you will be very intimidated when you cold call MDs at banks. But it gets easier with time and practice, and after a while you barely have to think about it sort of like interviews and walking through your resume. Ive lived in dozens of cities and have started over with 0 friends and 0 connections multiple times, so Im more aggressive than most when it comes to meeting people and showing up uninvited at events andrandomly approaching people is still hard for me. I still fail and get rejected a lot, plenty of what I do leads to failure, and Id say that less than 10% of my attempts actually result in good stories / good friends afterward. But it does get easier and less scary with practice and the good news for you is that the phone tends to be less intimidating than approaching random people in-person. Next Steps & Further Reading So, what now?

Get started making your list and placing those calls. Do not succumb to analysis paralysis and make a flow chart showing every possible response in your planned conversation and what youll say next get a handle on the basics but dont obsess. If you want further preparation, check out these case studies, podcasts and other resources:

How to Break in as an Engineer with No Finance Background Cold called120 banks From Non-Target and Unpaid Wealth Management Internship to Bulge Bracket Bank Email better than calling? How to Break Into Private Equity Straight Out of Undergraduate Cold called 50 equity research analysts How to Get Into Investment Banking from an Unknown State School Kept calling, calling, and calling until he got in How to Break Into Investment Banking If You Have a 3.0 GPA, Went to an Unknown School, and Only Recently Learned English How to Turn Cold Calls Warm Podcast The Investment Banking Networking Toolkit

And now get to work pounding the pavement until you break in.

How to Ace Your Private Equity Interviews

Dear Andrew, Thank you very much for your recent application to the Texas-Pacific Group. Your resume and glowing recommendation from your MD were

both somewhat impressive. We applaud your efforts to transition from Banking into Private Equity, it is definitely the right move right now. We were considering extending you an offer, actually, but upon review of the quiz you inadvertently submitted to for the New York Post, we regret to inform you that we will be unable to offer you a position at our firm. Please note that you did score an 87%, which is nothing to be ashamed of. It turns out to a B+ with our generous scaling, and you know what they sayat least you wont be lonely at the fat part of the bell curve. We only take As though. Have you considered a position at Hellman & Friedman? -Only 87% Tool, The Leveraged Sellout

Ah, private equity. The promised land. What you slave away for as a banker: the chance to become the next Steve Schwarzman. But unless you have an inside connection with Steve himself, youll have to go through a few interviews to get to paradise.

The Format of Private Equity Interviews

On the surface, theyre similar to investment banking interviews a phone screen or initial in-person screening interview, followed by a superday where you meet with most of the Associates, Principals, and Partners. But its more of an extended process and you often go through the interviews over several months rather than several weeks. Plus, youll get tested on private equity case studies, LBO modeling, and the deals youve worked on as a banker.

PE firms are much smaller than banks, so they can afford to be more selective; they dont really need you because there is less grunt work to begin with.

Private Equity Interview Questions

Private equity firms care about 3 points when they interview you: 1. Can you make money for us? 2. Can you save us money? 3. Can you improve a process? No one will hire you unless it results in more money for them this is finance after all, not some save-the-world nonsense. To assess these 3 points, PE firms will ask you 3 types of interview questions: 1. Fit Questions Similar to investment banking interviews. 2. Technical Questions Similar to banking interviews, but more advanced. 3. Deal Experience Questions These are the best way to prove the 3 points above so you better know your deals inside and out. Different firms emphasize different questions for example, the megafunds like KKR and Blackstone care more about obscure technical questions, while smaller PE firms (AUM < $1 Billion USD) spend more time on the fit side.

Fit Questions
You know the drill: know your story like the back of your hand, and have 2-3 mini-stories based on your work experience. You use these mini-stories to answer teamwork, attention to detail, strengths, weaknesses, and the other standard fit questions.

For PE, your story needs to show why you want to be an investor rather than an advisor especially if youre coming from the sell-side. So you need to add something about adding more value, learning about the operations of companies, or gaining more responsibility to the Why youre here today part of your story.

Technical Questions
The key differences from investment banking technical questions: 1. In PE interviews the questions are more advanced and require more than just rote memorization youre not going to get any Whats the formula for Enterprise Value?-type questions. 2. Often the technical questions are tied to your deal experience or case study, so you need to know those in-depth. If you want to prepare for these questions, the 2 best resources are theInvestment Banking Interview Guide and the Breaking Into Wall Street Financial Modeling Courses. Even though its labeled investment banking, the guide covers advanced technical questions, your story, and how to discuss deal experience (see below) so its perfect for PE. The financial modeling courses include 3 different levels of LBO models, from quick and dirty to super-advanced so you can sign up for those to brush up on your modeling skills.

Deal Experience Questions

Now we get to the fun part. These questions are among the most important in PE interviews, because theyre your chance to prove that you can make money for the firm. So you need to be careful about which deals you talk about as with private equity resumes, its best to pick:

1. Unusual Transactions Divestitures, distressed M&A, or anything other than the standard sell-side auction. 2. Transactions Where You Contributed A Lot Did your valuation raise the negotiating price? Did you uncover something that saved your client money? Leveraged Buyouts can be good to discuss since theyre directly relevant to PE, but with limited time you should favor deals where you made a significant contribution. You do not need to pick closed deals or even announced deals just make them anonymous (a pharmaceutical company) if the information is not yet public. How to Talk About Your Deals You should talk about your deals similar to how you write about them on your resume. You want a summary sentence giving the main deal parameters, and then an understanding of the 2-3 key issues / pieces of analysis you developed. Lets go back into ancient history the height of the LBO boom in 2007 and look at one of the biggest deals back then, the $45 billion LBO of TXU by KKR. Heres how you might introduce the deal: One deal I worked on was the $45 billion LBO of TXU by a KKR-led consortium of private equity firms. The Company had around $10 billion of revenue and $6 billion of EBITDA and delivered electricity to the Texas utility market. The deal itself was about the cyclical attractiveness of the utilities sector, and how far the LBO boom had come by then and we ran into a host of major issues, from regulatory to environmental, as the deal was in its final stages.

So now youve set the stage notice how youve mentioned the approximate deal size, revenue, and EBITDA as well as the crux of the deal. The interview would now respond: Interviewer: Of course, that was a huge deal. Lets talk about the financial metrics maybe you can walk me through the numbers there. At this point you would go into the EBITDA purchase multiple, the companys revenue growth and margins, and whether the deal overvalued or undervalued TXU. You could also mention the LBO analysis you completed and the IRR your model predicted. Interviewer: You mentioned the regulatory issues before I understand that as part of the deal, the company agreed not to build certain power plants. What was the impact of that? So now youd go into the financial analysis and how you set up multiple scenarios to show the impact of power plants being constructed. This is a great opportunity to show how you earned more money or saved money for your firm if your analysis resulted in a higher or lower price or even the possibility of a different price or different terms, point that out. You need to prove that you will make money for the PE firm without them asking you about it first. Interviewer: Great. Lets talk about the debt on the deal. Can you walk me through what kind of package your bank put together? Start with the total amount of debt and the number and type of tranches bank debt? High-yield? Mezzanine? PIK?

If they ask for more detail, you can go into the approximate interest rates and give an idea of the covenants. You do not need exact numbers on these approximations are fine. Other Types of Deals These are the points you need to know for LBO deals for regular M&A deals the discussion would be similar but youd talk about the accretion / dilution model rather than the LBO model. I recommend against discussing IPOs and capital markets-type deals, but if thats all you have the basic structure is similar: summary, analysis, key issues, and what you contributed. What If You Dont Have Any Deal Experience? If youre a management consultant or youre not coming from an investment banking background, you wont have deal experience. So you need to find close substitutes instead for consulting, those might be due diligence engagements or any type of operational improvement to a company. If youve done equity research or investment/asset management, discuss companies you initiated coverage on or recommended investing in. If youre coming from a corporate or business development background, talk about partnership deals, integration work, or any type of long-term project that required significant analysis. And if youre not in any of these categories, well, PE will be an uphill battle.

Private Equity Case Studies

Theres an entire article on private equity case studies on M&I, so I wont repeat everything here.

Instead, heres the 30-second version:

Usually you get an Offering Memorandum and financial documentson a company. Then you have to make an investment / no investment decisionand back it up with a presentation and Excel model.

The key points to keep in mind:

Make a decision one way or the other. Youd be surprised how many people complete case studies and never say, Yes, invest or No, dont invest. Provide a summary slide in the beginning with your investment decision and back it up with 3-5 key points. Summarize the risks, mitigating factors, and expected returns. Keep your presentation to 10 slides at the most, with an intro slide, conclusion slide, and a few slides on the quantitative and qualitative aspects of the deal. Dont obsess over formatting just make sure its readable.

At some firms, you will have to do this on the spot and youll have very limited time; other places will give you a few days to a week to craft this. Do not go crazy and spend 100 hours doing this think 80/20 and focus on the 20% that matters. And do not send this over to your presentations department rumors circulate rapidly in investment banking and you might get executed.

LBO Modeling
In addition to case studies, some PE firms give you modeling tests and expect you to build an LBO model in real-time during interviews. Keep your models as simple as possible.

You are under extreme time pressure, so forget about 15 scenarios, 12 tranches of debt, and depreciation schedules. Instead, do the following: 1. Sources & Uses Go with a simple view that has the purchase price, transaction fees, and debt/equity used. Maybe assume 12 tranches of debt but dont go beyond that unless youre asked to do so. 2. Basic Income Statement Make revenue growth a simple % estimate, assume that SG&A and other expenses are a percent of revenue, and go down to EBITDA and Net Income. 3. Basic Balance Sheet Include the basic items like Cash, Accounts Receivable, Accounts Payable, PP&E and Debt, and use simple assumptions such as % Revenue and % OpEx for the projections.Sometimes you can skip the balance sheet altogether but it depends on what the PE firm is looking for. 4. Basic Cash Flow Statement Start with Net Income, add back D&A and the change in working capital and subtract CapEx to reach the cash flow available for debt repayment. 5. Debt Schedules Assume that any excess cash flow is used to make optional prepayments (except for high-yield debt); for bank debt you should make simple percentage estimates for mandatory principal repayments each year. 6. IRR Calculation Include this at the end and do 1-2 sensitivity tables on variables like purchase multiple, exit multiple, revenue growth, and EBITDA margins. If you want to learn all of this more in-depth and brush up on your financial modeling skills, sign up for the Excel & Modeling Fundamentals course we go through 2 examples of PE interviewready LBO models there.

And if you want more advanced material or you need a more complex LBO model, sign up for the Advanced Modeling course the LBO model there borders on excessive, just the way bankers like it.

Selling vs. Buying

In addition to understanding the format of interviews, interview questions, case studies, and LBO modeling, keep in mind the following: Do an equal amount of selling and buying. That was very solid advice given to me by a well-known PE headhunter. While you definitely want to sell yourself as much as possible, you also want to do some due diligence on the firm. If theres a big cultural misfit, bail out early on. If theres a lot of coldcalling involved and you hate that, forget about the firm. PE hiring is more long-term than banking so you need to be 100% confident of what youre getting yourself into. Differences in Hedge Fund and Venture Capital Interviews Hedge fund interviews are similar and also involve case studies and/or modeling tests. They will focus more on your interest in the markets and how much you enjoy investing and may not be quite as precise on the quantitative side. Venture capital interviews are even more focused on fit and less on finance/deal experience. VC firms want people who are genuinely interested in technology and startups rather than the get-rich-quick crowd. Corporate development job interviews are somewhere in between VC and PE interviews; they wont focus as much on modeling, but they are likely to ask about your deal experience.

Timeframe for Interview Decisions

The PE interview timeframe is generally much longer than what you see in banking. There are some exceptions for example, at KKR, Blackstone, and other mega-funds, they make decisions quickly and move in weeks rather than months. Those firms start interviewing in March / April and finish up before the summer. Middle-market and growth equity firms take much longer and often put you through multiple rounds, dinners and breakfasts and all sorts of hoopla to make a decision.

Final Words: Last-Minute Private Equity Prep

So how do you prepare for private equity interviews if youre an investment banking analyst with limited time? 1. Prepare Your Deal List Make a list of everything youve worked on and pick the 2-3 best to speak about in interviews think long and hard about your contributions to each one as well. 2. Review Your Deals Go over the background information, financial metrics, debt details, and most importantly how your work led to a higher or lower price / better terms. 3. LBO Practice Practice creating the simplest LBO model possible and do it so much that you can go from blank sheet to full model in 30-45 minutes. What, youre looking for more? Even More OK, fine start by reviewing these PE and VC-related articles:

Why You Cant Get an Investment Banking or Private Equity Job via Recruiters And What to Do About It Taming the Recruiter Beast: 5 Tips to Preserve Your Sanity and Land You a Job How to Break Into Venture Capital How to Get a Private Equity Job in 2,550 Words Private Equity Case Studies in 3,017 Words Private Equity Resumes Private Equity vs. Venture Capital What Do You Do as a Venture Capitalist?

Those should get you started on the way to PE interview domination. And if youre still looking for more or want to brush up on your technical interview questions or modeling skills, sign up for the 2 programs Ive been recommending throughout this article:

Breaking Into Wall Street Financial Modeling Courses Investment Banking / PE Interview Guide

We dont have a PE interview-specific product, but if you go through everything Ive listed here you will be more than prepared to vanquish the competition and land PE offers.