Top 5 Technical Interview MISTAKES - Investment Banking

As a non-target, bankers automatically assume you’re dumber than the target school kids.

That means there’s ZERO room for error when it comes to technicals.

If you miss a simple “check the box” or can’t lead an intelligent discussion about interest rates -

You’ll get exposed & crossed off their list right away.

I’ve mock interviewed hundreds of kids as the president of my school’s academy.

These are the five areas students most frequently underprepare for.

TABLE OF CONTENTS

• MISTAKE 1 - OVER-EXPLAINING

• MISTAKE 2 - UNDER-PREPARING FIRM-SPECIFIC DEALS

• MISTAKE 3 - POOR DELIVERY

• MISTAKE 4 - NOT FOLLOWING THE MARKETS

• MISTAKE 5 - OVERLOOKING THE BASICS

MISTAKE 1 - OVER-EXPLAINING

Your goal should be to make the technical portion of the interview as short as possible.

You only have 30min to stand out & win over your interviewer.

The quicker you can get through technicals, the better -

Because behaviorals & small talk are where you’ll get to show off your personality the most.

Most kids try to show off & dive into unnecessary detail with technical questions.

That’ll make bankers think you’re a “know-it-all” & grill you with way harder follow-ups.

Here’s an example of a commonly over-explained question.

MISTAKE 2 - UNDER-PREPARING FIRM-SPECIFIC DEALS

I got asked a version of this open-ended question in almost every single interview -

“Can you tell me about a deal our bank has worked on recently? What’s your opinion of the deal?”

It’s a bad look if you don’t have a clean, structured answer full of key metrics you memorized.

I used this framework to outline my answers in a logical order.

• 1. Brief Snapshot / Overview

• 2. Deal Rationale

• 3. Financial Implications

• 4. Process

• 5. Market Reaction

• 6. Personal Thoughts

You need three or four “general” deals ready to go for every interview.

Anything older than two months isn’t recent enough.

You ALSO need to prepare two or three “firm specific” deals.

These are ones the bank you’re interviewing at was the primary advisor for.

To find deals for a specific bank, go to the “closed transaction” page on their website.

That will show you a comprehensive list of their tombstones like the one below.

Here are links to a few examples of closed transaction pages.

• Centerview: https://www.centerviewpartners.com/transactions.aspx

• PWP: https://pwpartners.com/transactions/

• Guggenheim: https://www.guggenheimsecurities.com/capabilities/transactions

• William Blair: https://www.williamblair.com/Investment-Banking/Transaction-List?t=transall

• Lincoln International: https://www.lincolninternational.com/transactions/

After finding a deal, you need to track down the details needed for your answer.

Every deal will have a press release on the website PR NEWSWIRE.

The “Transaction Details” section of that press release will have what you need including

• Purchase Price: Dollar amount, Valuation multiple, Premium paid

• Financing: Percent mix cash / stock / debt, Names of lenders

• Advisors: Lead investment bank on buy side and sell side

• Dates: Both announcement and closing

• Rationale: Motivation for both buyer and seller

• Background: Recent performance of each company

• Deal Context: Anything unusual with the negotiations / agreement?

MISTAKE 3 - POOR DELIVERY

I had no clue that keeping your hands in your lap is a big no-no during an interview.

80% of the impression you make is non-verbal.

Making yourself small makes you appear less confident and will actually make you feel more nervous.

You need to capture their attention by taking up space.

This means your hands should be folded out on the table & you should use occasional hand gestures.

Most kids I’ve mock interviewed also get so nervous they forget to even smile.

The endless hours spent prepping technicals will be wasted if you don’t practice your delivery.

Here are the top three delivery mistakes I saw when mock interviewing kids in our academy.

• MISTAKE #1 - Talking Too Fast

  When I rehearsed looking at the wall in my bedroom, I never had this problem.

  But when the pressure’s on in a real interview setting, the nerves take control of your body & make you sound like a soundcloud rapper.

  To simulate the nervous environment, you should ask for mock interviews with people you respect. I asked the seniors in my academy that scared me the most to do mock interviews.

  After those sessions, I made sure to specifically ask for feedback on the pace of my answers.

  Another trick is to purposefully go half speed when practicing alone so that you then sound normal when the nerves kick in.

• MISTAKE #2 - Eye Contact

  Eye contact is how you keep their attention.

  If you aren’t looking directly into their eyes, they’ll stop listening & lose interest.

  I personally struggled a ton with this.

  The best trick is to stare at bridge of the nose between their eyes.

  It makes them think you’re looking directly at them but won’t make you freeze up.

• MISTAKE #3 - Verbal Fillers

  The best way to cut these is to record yourself with front facing camera.

  Our academy made us self-record & submit a dozen of the most common questions.

  Found the exact folder in my drive that we uploaded them to shown in the screenshot below.

  I can’t tell you how embarrassed I was watching myself for the first time.

  The number of times I said “So like, ya know” to fill silence was absurd.

  You have to get comfortable with pausing. It feels so weird at first but you’ll get used to it.

  

MISTAKE 4 - NOT FOLLOWING THE MARKETS

I took an investment banking class in college led by a former partner from a top bank in CHI.

He gave us WSJ quizzes every week to make sure we were up to date on current events in m&a.

Here are some example questions from those quizzes - all of which are fair game for interviews.

• “Which car rental company has recently been taken public again, after its business had collapsed and delisted at the beginning of the pandemic last year?”

• “What are two reasons that equity markets have seen indices setting all-time highs?”

• “What conglomerate has recently split into three public companies? What three industries will these businesses be classified under?”

• “What major food and snack corporation recently acquired both Dot’s Homestyle Pretzels and Pretzels Inc.? What was the total transaction value?

To prepare for these, I skimmed WSJ headlines under the business & finance section every morning.

I’d only do full reads of a couple per week - strategically selecting articles most relevant to m&a.

You should have free access to the WSJ through your university (check here).

Current event questions are the easy “market questions”.

If you’re interviewing at elite boutiques like I was, you’ll get harder ones like

• “Can you tell me where the 10-Year Treasury is trading right now?”

• “Where did the S&P 500 (or Dow / Nasdaq) close at yesterday?”

• “What’s your view on interest rates right now?"

• "How do you think the recent movements will impact the markets and M&A?”

They expect you to be more in-tune with the markets at those banks since they have leaner deal teams.

For every boutique interview, I prepped talking points for

• (A) Stock Market Trends &

• (B) Interest Rate Movements

I’d sit down and make an outline with six or seven bullets for each - organizing my thoughts on

• (1) What the main drivers have been

• (2) How they’ve impacted the m&a environment &

• (3) Forming a well-educated opinion on where I think they’ll end up moving forward

The Morning Brew daily newsletter is the easiest way to follow these high-level macro trends.

The only section I paid attention to was the one titled “Markets” that looks like this

MISTAKE 5 - OVERLOOKING THE BASICS

There are 581 pages of guides you need memorized to succeed in a technical interview.

Most kids don’t understand that 90% of questions they ask come from the first 344 pages.

Plus - interviews follow a progression in terms of difficulty.

They’ll start out with easier questions from the early guides and only move on if you pass those.

If you’re smart, you should adjust your study strategy to focus on mastering the basics first.

These are the six BIWS guides everyone uses to study.

• GUIDE #1 - CORE FINANCE CONCEPTS (32pg)

• GUIDE #2 - ACCOUNTING & 3 FINANCIAL STATEMENTS (99pg)

• GUIDE #3 - EQUITY VALUE & ENTERPRISE VALUE (95pg)

• GUIDE #4 - VALUATION & DCF (118pg)

• GUIDE #5 - LEVERAGED BUYOUTS (118pg)

• GUIDE #6 - MERGER MODELS (119pg)

I purposefully drilled the first four over & over & over before even touching LBO’s & merger models.

I was able to recite every example answer in the back of the first four to perfection before moving on.

Practicing for paper LBO’s will do you no good if you can’t pass basic accounting questions first.

Cheers 🥂

- Jack

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