When I was coming out of undergrad, I didn’t have the recruiting opportunities that would lead to banking, but I did coming out of graduate school. I joined Goldman Sachs after getting my MBA from [a prestigious non-Ivy-League private university in the Northeast U.S.] through the campus recruiting process, and I’ve been there more than five years. Here's what I wish I knew on my first day working at the bank.
Is a two-year analyst program mandatory for aspiring bankers?
It is a huge stepping stone for your career to have that banking experience on your resume. If you do the two-year investment banking analyst program and get that experience, you can continue down the banking path or use that fungible experience that is a core resume-builder.
That said, the industry is changing a bit. Now the two-year banking or consulting analyst program is not as necessary, as it’s become more SME-based. The idea of the two-year analyst program is either to build on it or go do something else, like jump to the buy side. If you’re looking to be a banker, then that’s the way to go. If you’re looking to go into finance, then working at an SME rather than a general banking program is more valuable.
People who’ve been spending time doing coding or some type of technical training are becoming more valuable. To me what you learn in a banking analyst program is an easier skill set to master than technology skills, and the latter are becoming more valued here at Goldman and other big banks. I’m not saying that you’re going to be able to get hired by a bank after working just two years as a technologist, but the two-year analyst program is not as essential as it used to be.
I’ve had conversations with folks at Goldman who are willing to serve in a mentorship capacity, and they say if you’re looking for a very traditional investment banking career path, then you have to put in the requisite two years – the two-year analyst program is vital. But if you’re going into business development, technology, operations or another non-traditional career path working in more nuanced roles like I’ve done, it’s not as necessary. That said, whenever you take a less-traveled path, there are likely to be more bumps in the road. You have to be prepared for ups and downs.
Seek out mentors and build a professional network
Mentorship becomes more impactful the farther you go in your career. Finding sponsorship from senior executives and having a key network of peers and higher-ups is obviously important, so you should know to start building it out as soon as you can. You need to find a sponsor, not the day you walk into a job, but it needs to be top of mind.
It’s something Goldman focuses on – be the best whatever. Find someone who can help you become the best in the area you focus on. In the financial services industry, most people are interchangeable. For example, there are a lot of people who can build a really good model. Starting in your first job, find sponsors at various levels, and make sure you develop those relationships and make that a key part of your job as much as doing your day-to-day job. Taking 30 minutes to have coffee with whomever at the bank or networking in general isn’t taking time away from your job to meet with people, it is part of your job. As an analyst or associate, it’s tough to see, but it is part of your job to network.
You’re not going to get 30 minutes on the calendar with a senior partner, but some MDs would be happy to chat with you. The way to make that happen is through your network. Build your network through to their network, and talk to someone who knows them. They’ll be happy to fit you in if you’re being referred by someone, say a VP who has a relationship with an MD. If that person refers you to them it’ll get you in the door to have that conversation. For senior executives, it’s not a matter of them not wanting to meet with juniors necessarily, but you have to network your way into your conversation with them – a referral makes it more visible for them, “Hm, maybe I should block out 30 minutes for so-and-so.”
Build the network at your level, the level just above you and the level above that. By building a relationship with a VP, as you progress through your career, maybe by the time you’re a VP that person with be a senior VP or MD. Network with peers and people above you.
Banking versus a fintech startup
To be honest, I have considered leaving banking for a startup, potentially a fintech company. There are pros and cons on both sides.
One factor to consider is funding. If you’re working at a firm like Goldman, you don’t have to worry about keeping the lights on. We have a budget, but we were able to build a new platform with few constraints. What I mean is that we had an opportunity to build it in a controlled manner without having to show revenue or a profit right away. We have to focus on delivering a product that’s going to make money, but over more of a long-tail period, so we can focus on things that others at a startup might not.
Firms like Lending Club and SoFi are now having regulatory issues, and they have to worry about making money and returning value to shareholders immediately.
At Goldman, an individual project or initiative is not going to make or break the firm, so rather than rushing and building a platform out in a quicker period of time, we have the luxury of taking our time to build it properly and make sure the necessary infrastructure is all there.
Also, there are conveniences that you might not think about. If you go to a smaller place, might not have a help desk, so if there’s an issue you’d have to figure it out yourself. If you go to a smaller or medium-sized company, it may have a tech team that you know personally, and they could help you, but my point is that a takes a certain type of person to go to a smaller place and not have the infrastructure in place that they’ve become accustomed to at a big bank. A fintech startup employee is prepared for bootstrapping and wearing many hats versus someone who prefers to have that infrastructure and support in place and focus on just delivering.
From a compensation perspective, it’s a risk-reward calculation. It’s less risky to come to a big firm, but it will take longer to get that big reward. At most financial services companies, when you get to a senior level, you’re making a lot of money. A big bank’s corporate organization is kind of like a pyramid scheme. If you bring in 100 analysts, how many will become an MD or a partner eventually? At Goldman, maybe two or three, but you’re still going to do pretty well as a VP. It’s a less risky but more competitive path compared to joining a startup.
This is an anonymous blog post by a Goldman Sachs employee. James Chapman is a pseudonym.
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