Switching Banks: What I Wish I Knew about the Lateral Process

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Coming from a non-target school, investment banking jobs were coveted roles that were few and far between. Fortunate enough to be one of the “lucky ones”, I landed my first banking role at a MM shop on the Restructuring team. Having spent time in technology growth equity and VC in college, I realized quickly that my passions and career goals didn’t really align with RX or the exit opps from MM banking to MM private equity. After speaking to folks on the buyside at firms I was interested in and looking at their career paths, it seemed like the best shot I had to get into that space was by being a tech banker at a top-tier firm. After about ~7 months into my first year in banking, I decided to start the lateral process.

The Lateral ProcessThe biggest piece of advice I have for current banking analysts looking to lateral is to actively build your network. I spoke to multiple friends at different banks, alumni, and mentors and let them know I was looking to make a shift. Oftentimes, the challenge with lateraling isn’t nailing technicals – you’re already doing the job in your day-to-day. It’s being aware of these roles as openings come up and actually getting in front of the teams that are hiring. Quite frequently, these roles don’t get broadly advertised and are filled from internal referrals; you have to know people, who know people…who know people. Create your own luck – be prepared and seize opportunities by being top of mind as roles open up at firms.

When I began my lateral process, I was very methodical about the firms and groups I was targeting. I wanted to be in a tech group and also work with larger clients, so I targeted EBs/BBs. Since I was focused on tech groups, this meant keeping current on market trends/companies/recent deals in the industry and forming opinions, as well as brushing up my banking technicals. During my process I ended up interviewing at 2 EBs – one through a headhunter and another after hearing about an opening through a friend of a friend (all about the network!). Lateral interviews typically run fast, as most banks are trying to fill the role quickly – both processes had about 2 phone screens, and a super day with ~6-10 interviews, and one also had a modeling test. The interviews at both firms skewed toward technical questions, with an emphasis on how things actually work in practice (can’t just memorize the Vault guides anymore), and the behavioral questions focused on why that particular bank/group. At the end of the process, I had gotten offers from 2 amazing EBs for their tech groups that I wouldn’t have thought possible when I was still in college.

Other Considerations 

The day-to-day was significantly different at the EB vs. the MM bank. Not only did the groups do completely different things (RX/bankruptcy vs. tech M&A), but even the deal processes ran differently. At the EB, we were a lot more thoughtful about the buyers we reached out to and tended to have tighter processes. At the MM, most deals were blasted out to over a hundred MM PE firms. Given that we were mainly doing sell-sides at the EB, a lot of the analysis work was valuation as well as positioning the company and helping the management team with the presentations. We also pitched for business a lot less and rather focused on developing long-term relationships with clients. Given the smaller deal teams at the EB, the expectations were higher and I had to initially put in more work to ramp and get up to speed with the learning curve. You basically have to start from the bottom again and build a solid reputation, even if you had been viewed as “top-bucket” at the prior firm, which can be challenging.

Exit Opportunities 

Now being on the buyside, I fully understand why I was given the advice to lateral to a tech group and am so glad I did. When it came to recruiting, my partners knew people at pretty much every VC or growth fund I was interested in and were more than happy to make introductions. This is firm-dependent, but if you’re at a brand name shop that’s working across the table from the same buyside firms you’re interested in, you’ll generally have a much better shot at getting interviews. Not only did I have recruiters reach out for roles I was interested in, I had a solid alumni network of folks to leverage during my process. The training I got at the EB prepared me to think critically about companies and deals, and opened up doors to opportunities I wouldn’t have had at my prior firm. I also got exposure to some of the most thoughtful senior people in the field and learned a ton about how strategics and sponsors viewed current valuations, market trends, and perspectives on subsectors – I felt like I actually had interesting things to add to my interviews, which allowed me to land multiple buyside offers.

Making the decision to lateral ended up changing my entire career trajectory. Especially having come from a non-target school, a lot of these roles weren’t easily accessible to me when I graduated college. Switching banks and groups allowed me to put my best foot forward and have a shot at multiple coveted positions. So if you’re thinking about lateraling…laser in on where you want to end up and why. Focus on building your network and asking for help where needed, while trying to add value in return. The process is opportunistic and unstructured, but if you put in the work and time, it can up-level your career in major ways.

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