IB Interview Questions

Tell me something interesting about you that's not listed on your resume.

Again, don't say anything illegal/inappropriate - use common sense. Talking about that trip to Easter Island or your Brazilian Jiu Jitsu championship both work well.

Where did your interest in finance begin?

Almost anything could work for this one - just make sure it's not too recent. Otherwise it looks like you became interested on a whim. Also be sure to explain how your initial interest led you into the internships, activities or jobs you pursued and how those have led you to where you are today.

Looking into the future 10 years, do you think you'll still be an investment banker?

Analysts can, and arguably should, be more uncertain, while business school graduates need to be confident about their career choice.

What is your leadership style?

A "moderate" answer works best here. You're responsible and can make sure things get done, but at the same time you don't annoy your teammates by micro managing. If you're interviewing for an Analyst or Associate position, you do want to be a bit more "hands on" and point out that you often go in and correct mistakes to make sure everything's perfect - since you'll be spending around 50% of your time doing this. Again, a specific example is needed once you've stated in general terms what your style is.

Walk me through the process of a typical sell side M&A deal.

A typical sell side M&A deal with many potential buyers would look like this: 1. Meet with company, create initial marketing materials like the Executive Summary and Offering Memorandum (OM), and decide on potential buyers. 2. Send out Executive Summary to potential buyers to gauge interest. 3. Send NDAs (Non Disclosure Agreements) to interested buyers along with more detailed information like the Offering Memorandum, and respond to any follow up due diligence requests from the buyers. 4. Set a "bid deadline" and solicit written Indications of Interest (IOIs) from buyers. 5. Select which buyers advance to the next round. 6. Continue responding to information requests and setting up due diligence meetings between the company and potential buyers. 7. Set another bid deadline and pick the "winner." 8. Negotiate terms of the Purchase Agreement with the winner and announce the deal.

Walk me through the process of a typical sell side M&A deal.

A typical sell side M&A deal with many potential buyers would look like this: 1. Meet with company, create initial marketing materials like the Executive Summary and Offering Memorandum (OM), and decide on potential buyers. 2. Send out Executive Summary to potential buyers to gauge interest. 3. Send NDAs (Non Disclosure Agreements) to interested buyers along with more detailed information like the Offering Memorandum, and respond to any follow up due diligence requests from the buyers. 4. Set a "bid deadline" and solicit written Indications of Interest (IOIs) from buyers. 5. Select which buyers advance to the next round. 6. Continue responding to information requests and setting up due diligence meetings between the company and potential buyers. 7. Set another bid deadline and pick the "winner." 8. Negotiate terms of the Purchase Agreement with the winner and announce the deal.

Let's say you had $10 million to invest in anything. What would you do with it?

Always ask for the investor's goals first. Are they looking to have big capital gains over 30 40 years? Are they looking for tax free retirement income? What types of assets interest them? Based on the response, you can give an appropriate answer. So if they're investing over 30 40 years and going for high capital gains, a well diversified portfolio is probably best; if they are more concerned with tax free income, maybe you should tell them about municipal bonds.

What was your greatest failure?

As with any "weaknesses" question, you need to use a specific story - such as an exam where you did not do well, a project that did not go as planned, or a work situation that did not turn out well - and show what you learned from it and how you've improved since then. Don't say something fake like, "My greatest failure was getting into Yale and Princeton but not Harvard" - that makes you look silly. It's better to give something real and then show how you've used the failure to develop.

Let's say you're hired as the financial advisor for a company. What value could you add for them if they ask you about their suggested growth / M&A strategy?

At a high level, first you'd want to see what their expansion goals are and how they can best achieve them - whether it's by partnering with another company, expanding with a merger or acquisition, or expanding organically with new products. As the investment banker, you could provide value by making introductions to potential M&A targets and partners, and then advising on the best negotiation strategy, what companies would be most receptive, what type of price to expect, and how to manage the entire process.

What are the 2 different "sides" of a Restructuring deal? Do you know which one we usually advise?

Bankers can advise either the debtor (the company itself) or the creditors (anyone that has lent the company) money. It's similar to sell side vs. buy side M&A - in one you're advising the company trying to sell or get out of the mess it's in, and in the other you're advising buyers and lenders that are trying to take what they can from the company. Note that the "creditors" are often multiple parties since it's anyone who loaned the company money. There are also "operational advisors" that help with the actual turnaround. You need to research which bank does what, but typically Blackstone and Lazard advise the debtor and Houlihan Lokey advises the creditors (these 3 are commonly as the top groups in the field).

What's your greatest fear about investment banking?

Do not give an actual, legitimate fear (losing your friends/significant other, gaining weight, working too much, hating your life, getting laid off, etc.). Instead, it's best to go with something more innocuous like, "Doing a lot of work on deals and not always getting to see them through to the conclusion because anything could cause a large transaction to collapse" or having concerns about the deal flow if the market is poor.

Can you talk about a company you admire and what makes them attractive to you?

Do not say something commonly known. Saying Google or Apple, for example, would be bad. Instead, go more obscure and pick a company no one knows so that they can tell you've done your research and so that they're less likely to ask probing questions. You don't necessarily need to give financial details, but if the company is public and you can easily find the information, it definitely helps. When you talk about what makes the firm attractive, emphasize qualities that investors would find appealing, such as a great and well diversified customer base, a unique competitive advantage in the market or a high margin business model. Don't say that you like them because your new iPhone is awesome.

You graduated last year and don't have anything listed on your resume since then - what have you been doing, and did you participate in recruiting last year?

For this one, if it's a bank you have NOT interviewed with before it's best to say you haven't participated in recruiting so they don't see you as "damaged goods." But if you're on the record as having interviewed there before, you need to admit the truth. You probably want to say something like, "I did some interviewing last year, but I was not focused 100% due to a family situation. I had to spend a few months after graduation attending to that, so I missed out on recruiting, but I did some independent study / additional research / [something else that sounds productive] and am now more focused than ever on banking." Remember, almost anything could be a "family situation" and no one will call you on it if you say something like this. You also want to convey that your time since graduating has not been unproductive and that you're now better prepared / more focused.

Let's say I'm working on an IPO for a client. Can you describe briefly what I would do?

First, you meet with the client and gather basic information - such as their financial details, an industry overview, and who their customers are. Next, you meet with other bankers and the lawyers to draft the S 1 registration statement - which describes the company's business and markets it to investors. You receive some comments from the SEC and keep revising the document until it's acceptable. Then, you spend a few weeks going on a "road show" where you present the company to institutional investors and convince them to invest. Afterwards, the company begins trading on an exchange once you've raised the capital from investors.

Tell me about the market your client was in.

Focus on the major trends and how the company you represented compared to the competition. Don't go into every single detail - just pick the 1 2 major points and focus on how it affected the deal and/or valuation. "Our client was in the mainframe software market, which had existed for over 20 years and had consolidated significantly in recent years, with IBM acquiring many of the smaller independent vendors. It was a slow growing market and most of the sales came from existing customers upgrading - as a result, we couldn't find many interested strategic buyers, and most of the interest came from financial sponsors that were attracted to our company's high margins and recurring revenue."

How did you narrow down potential targets (or potential investors)?

For potential targets, focus on financial, industry, and geographical criteria; for potential investors, talk about what they've invested in before, how much synergy or "fit" there is, and whether or not they have complementary portfolio companies (for PE firms). "We picked potential investors mostly based on size and acquisition activity in our market in the past. There were a lot of healthcare acquisitions recently, but we wanted to focus on firms that were active in the North American market specifically, and ones that had acquired firms worth over $500 million. We looked at some financial sponsors as well, but focused on ones that had sizable healthcare companies in their portfolios."

Why did you NOT receive a return offer from your internship?

For this one it sounds like you're making an excuse if you say something like, "The market was bad" or "They didn't give out any offers" - even if both of those are true. It's a better bet to say something like, "I did well in my internship and got positive reviews, but I didn't fit in with the group's culture. From those I've spoken with so far at your firm, I think this is a much better fit for me." It's hard to argue with doing the work well but just not fitting in with the group.

What kind of standalone operating model did you create for your client?

For this one, you don't need to explain how to link the 3 statements together - focus on how you created the revenue model and the expense model. Usually you do this by looking at revenue in terms of units sold, factories, or production, and you analyze expenses by fixed costs and employees. "On the revenue side, we looked at our client's existing, proven oil reserves and used their historical exploration & production figures to project how much they would be adding each year vs. what would be depleted. Then we combined that with projections for oil prices to estimate their yearly revenue. On the expense side, the majority of costs were tied to how many oil fields were operational, so we linked numbers for transportation, technology, and drilling costs to those."

Can you talk about a team project or some kind of group activity you've worked on before?

Ideally, you will talk about something that was a success rather than a failure. You should use the following 3 point structure for these questions: 1. State upfront what the problem was - Maximizing returns? Attracting more donors for your nonprofit? Winning more customers? 2. Talk about the team you worked in, who did what, and what your role was. Did you manage people or delegate tasks? Those are best, but if you were a "foot soldier" that can also work as long as you worked long hours, were attentive to detail and/or came through in the end to save the team in some way. 3. State the results - Did your brand awareness go up? Did you get more funding? More members for your organization? This is one of the fundamental questions that you need to be prepared for, because it will almost always come up in some form in interviews.

Why did you major in finance?

If it was something related to business/economics, you can discuss your interest in those fields; for other majors, you can emphasize how you liked the challenge and/or had a personal interest in the field, but also took the time to learn the basics of business/finance on your own.

Did you get an offer to return to where you worked last summer?

If you did get an offer, this is an easy question: "yes." If you did not receive an offer, I would strongly recommend against lying about it - state that you did not receive an offer, and it was due to the economy, because your group was not hiring or due to other forces beyond your control. The danger with lying is that finance is a very small world and it's quite easy to ask a friend or a friend of a friend what really happened.

Can you discuss an ethical challenge you were confronted with and how you responded?

If you've already worked full time, any ethical challenges you faced at work or any whistle blowing you've done are best to discuss; otherwise, you could talk about how you stopped funds in a student group from being used illegally or how you caught someone cheating. Just make sure you don't over dramatize it - your life is not a soap opera and you shouldn't go on for 10 minutes about your internal conflict deciding whether to turn someone in for their wrongdoing.

What's in a pitch book?

It depends on the type of deal the bank is pitching for, but the most common structure is: 1. Bank "credentials" (similar deals they've done to "prove" their expertise). 2. Summary of a company's options ("strategic alternatives" in banker speak). 3. Valuation and appropriate financial models (for example, if you're pitching for an IPO you might show where the IPO proceeds would go). 4. Potential acquisition targets (buy side M&A deal) or potential buyers (sell side M&A deal). This is not applicable for equity/debt deals. 5. Summary and key recommendations.

Can you explain to me, in simple terms, the subprime crisis?

In simple terms, banks made mortgage loans to people who were in no position to pay them off - or even meet monthly payments. Since interest rates were at historical lows, borrowing was easy. At the same time, mortgages were no longer just loans made to individuals - they were sliced up, combined and "packaged" into securities that banks traded, acquired and sold to investors. A typical "package" might contain mortgages given to both "credible" borrowers as well as mortgages granted to more risky borrowers - the more risky ones were labeled "subprime." Banks acquired these "packaged" assets on the argument that even if one "piece" of the asset was risky or likely to default, the rest still had value. As it turns out, this was false and no one knew what any of these mortgage related assets were worth - but as unqualified homeowners began defaulting, buyers disappeared overnight and the value of these assets plummeted to $0. As a result, the value of many banks also approached $0 and quite a few failed or went bankrupt in the process - all because the securities were so complex that no one understood their value or the true risks involved.

Walk me through a debt issuance deal.

It's similar to the IPO process: 1. Meet with the client and gather basic financial, industry, and customer information. 2. Work closely with DCM / Leveraged Finance to develop a debt financing or LBO model for the company and figure out what kind of leverage, coverage ratios, and covenants might be appropriate. 3. Create an investor memorandum describing all of this. 4. Go out to potential debt investors and win commitments from them to finance the deal. The main differences vs. an IPO: there are fewer banks involved, and you don't need SEC approval to do any of this because debt is not sold to the "general public" but rather to sophisticated institutional investors and funds.

Explain what a divestiture is.

It's when a company (public or private) decides to sell off a specific division rather than sell the entire company. The process is very similar to the sell side M&A process above, but it tends to be "messier" because you're dealing with a part of one company rather than the whole thing. Creating a "standalone operating model" for the particular division they're selling is extremely important, and the transaction structure and valuation are more complex than they would be for a "plain vanilla" M&A deal.

Where else are you interviewing? Is it just banking? Consulting? Other companies?

Just banking. You're not interested in consulting / other options and don't want to waste recruiters' time. You need to say this even if you're so uncertain that you're deciding between opening a zebra ranch, going on a spiritual journey to Nepal, going back to McKinsey or starting a laundromat with your roommate's uncle.

Does the leader make the team?

No, the team makes the team. The leader can provide direction and unify everyone, but 1 person alone is not a "team." A leader can make things better and turn around a dysfunctional team, but it's equally important for everyone to pull their own weight. You can often re use some of your other "leadership" or "team" stories you've used and spin them differently.

Why did the company you were representing want to sell?

Maybe they received an unsolicited offer, maybe there were a string of recent acquisitions in their market, maybe the founder wanted to exit the business, or maybe the PE firm that owned the company wanted to exit its investment. You might say something like the following: "They wanted to sell because larger companies in the market had recently acquired their closest competitors, and they felt that they could no longer thrive as a standalone entity. Additionally, they had received informal offers from a few of the larger companies before, and felt that the timing was right to explore a sale once again."

Are you mostly interviewing at larger banks like us? What kinds of options within banking are you considering?

Mostly larger banks, but you have received some interest from other places so you're looking at a couple options. If you can mention specific names, that makes your answer even better. If you're interviewing in a group like M&A or Healthcare, talk about how you're mostly speaking with similar groups to show you're serious about that one area.

Let's say your MD is meeting with a client and you have been invited. As he's presenting, you notice a mistake in the materials - do you point it out?

No - unless it happens to come up in the meeting, in which case you speak only if the MD asks you about it. In that case you should just briefly acknowledge it and then move to a different topic. It's bad if you make a mistake like that, but it's even worse if you embarrass your MD by pointing it out in broad daylight - chances are that no one will notice anyway since they barely read pitch books in meetings.

What was the most difficult situation you faced as a leader and how did you respond?

Point out how you stayed calm and collected in the face of a challenging situation, and how your cool decision making process led to a positive outcome. Maybe 2 of your subordinates couldn't get along and you had to arbitrate; maybe you were 3 months behind on a project and had to get a team together to finish it in 2 weeks; maybe you were an RA in a dorm and you had to prevent 2 residents from harassing each other. Just make sure that it's a real problem, as opposed to only getting an A when you should have gotten an A.

Tell me a joke.

Q: What was the best part of Playboy's IPO? A: The pitch book." If you have a female interviewer or someone else who might get offended, then try the following corny but impossible to offend joke instead: "A dog goes into an investment banking job interview, and the banker says to him, 'You ve got the job, but only if you can do three things. First, you have to be able complete an LBO model in 30 minutes.' So the dog runs to a computer and astoundingly creates a full model in 30 minutes. That s very nice! Next, you must be able to spread 10 comps manually in under an hour. Immediately, the dog sits down at the computer and completes everything in only 30 minutes. 'That s perfect! Lastly, you must be bilingual.' So then the dog says, 'Meow!' "

Do you work better as a leader or a follower?

Resist the urge to say "leader" and instead talk about how you can function as both a leader and another member of the team, depending on what the situation calls for. You don't want to hog the spotlight or do everything, but if leadership is required, you can step up and handle it. Specific examples to back up the above points are also required.

Why did you attend Georgia State University? I'm sure you had many options.

Say that you looked at a lot of places, but settled on wherever you went due to its excellent academic reputation, its strong business/finance/economics program, or something of that nature. If you were interested in something specific it offered (e.g. you were an athlete and went to Stanford on scholarship, or you went to UChicago because of its excellent liberal arts program) you can mention that as well. Try to sound like you made a thoughtful decision rather than deciding randomly. If you transferred elsewhere, a similar strategy applies but make sure to emphasize it was for academic reasons. For example, don't say you wanted to get out of Massachusetts and move to southern California for an "improved lifestyle!"

Why are you interested in our Lev Fin division rather than our industry groups? Our Tech, Healthcare and Energy teams have been really successful this year.

Say that you want to gain solid technical and modeling skills and be exposed to a wide variety of industries and different markets. Depending on the interviewer, it may also be appropriate to mention your interest in private equity (if you're planning to go that route) and how M&A will get you there. M&A bankers love to think they're superior to others because of their "in depth technical knowledge and negotiation skills," so you should play off that and use it to your advantage.

How much do you know about the lifestyle in this industry? Do you know how many hours you're going to work each week?

Say that you've done your homework and you understand it's going to be an 80 100 hour per week job. It helps if you can reference specific times when you worked that much and how you dealt with it, whether it was in a summer internship or a previous job you've held.

How are you going to use your experience in Restructuring for your future career goals?

See above. In addition to the legal and "better technical skills" angles, you can also use the experience to work at a Distressed Investments or Special Situations Fund, which most people outside Restructuring don't have access to. Or you could just go back to M&A or normal investing too, and still have superior technical knowledge to other bankers. There's no "wrong" answer as long as you don't say you have no interest in it in the future.

Let's say that we were to give you an offer - how long would you need to decide whether or not to accept it?

Show it to me and I'll sign and accept it right now." Some people think this is "unethical" if you're really not certain, but keep in mind that until you've signed something in writing you can do whatever you want. No, they won't like you if you verbally accept and then renege, but it's not the end of the world - just the end of your relationship with that bank.

What type of animal / vegetable would you be?

Some interviewees take this as a cue to tie your choice back to being a team player, hard worker, or such but that's not the best approach. For "creativity" type questions, interviewers want you to be... creative. So think about your real personality and say something that matches that. Example: Maybe you'd be a "hedgehog" because it looks like you have "spikes" on the outside to an observer, but you're actually warm and fuzzy on the inside.

If you owned a small business and were approached by a larger company about an acquisition, how would you think about the offer, and how would you make a decision on what to do?

The key terms to consider would be: 1. Price 2. Form of payment - cash, stock, or debt 3. Future plans for the company vis à vis your own plans. Of course, there is much more to an M&A deal than this - you could list literally hundreds of different terms. But those are the key ones. To make a decision you'd have to weigh each one - there's no "magical" way to decide. You might also point out that if something is particularly important to you - such as retaining a role in the company - then a difference of intentions there could be a "deal breaker."

Tell me about a time when you failed to honor a commitment.

The key with this type of question is to bring up a "failure" briefly and then to spend most of your time talking about what you've learned from it and how you've improved rather than dwelling on the failure itself.

The economy has been improving lately, and more people are "getting interested" in finance. How do I know you're serious and not just following everyone else?

The reverse of question #3, you can apply a similar strategy here but instead of discussing how it's an equally good time to start out in banking, just say that you hold a long term view and haven't just become interested overnight. Being able to point to specific evidence of your interest - your own portfolio, the finance/business club you're in, or even day trading - also helps.

What did you look at in the due diligence process?

The most important items here are the company's financial statements, contracts (with customers, employees, and suppliers), and then tax, legal, environmental, IP, and regulatory issues. Note that as an investment banker you don't really "look at" much in the due diligence process for any deal - you just process requests. For IPOs, this changes and you're responsible for conducting customer due diligence calls - so you need to talk about that and what customers told you directly. "We looked at all the standard items, including the company's audit reports and financial statements, and then brought in specialists to look at the contracts, legal, and intellectual property issues. I came up with lists of questions for the customer due diligence calls we conducted, which was important because investors at the time were reluctant to invest in IPOs in emerging markets like Brazil - and by speaking with customers we were able to assess the risk for ourselves."

What are your favorite movies / books?

There are 2 common mistakes: 1. Saying something like Wall Street, American Psycho, or Liar's Poker that indicates you're a boring person. 2. Saying something like Harry Potter that indicates you're borderline illiterate. Pick something in the middle - above pop literature/film but not something that has to do with finance specifically. That just sounds weird.

Since you worked at Citi this past year, you probably have the chance to go to a lot of different large banks - why are you interested in us specifically?

There's rarely a "great" way to answer this question, so I would recommend either referencing someone you've spoken with at the bank and what they've told you OR if you don't have any kind of experience like that, you can just give the usual generic reasons given for each bank. This question often reflects a lazy interviewer more than anything else - the real reason you're interviewing with any bank is because they've given you an interview!

What were the major obstacles to getting the deal done? What happened?

These could be anything from disagreements on price to legal issues to problems with retaining the management team. If you can point to any obstacles that you played a role in resolving, bring them up here. "We ran into issues because the private equity firm we were in discussions with wanted to make the deal contingent on the debt financing, which the CEO could not go along with. We also ran into problems with valuation, because the PE firm discounted our projections by about 20%. Eventually we compromised on both points, and on the second issue I helped create a more detailed revenue model for the company that validated some of our assumptions, so the PE firm agreed to meet us halfway."

Let's say that in the future your name turns up as the front page headline of a newspaper one day - what would the story be about?

With this type of question you can show more "banker like" traits such as ambition and hard work - but you shouldn't take it too seriously. So maybe the headline states that you climbed Mt. Everest, sold your company in an IPO, or became a best selling author - you want "ambition + creativity / coolness" for this type of question. Hopefully the headline wasn't about your indictment for insider trading.

Do you agree with the $700 billion bank bailout?

Your specific answer doesn't matter too much - just make sure you actually give an answer ("yes" or "no") and that you back it up with solid reasoning. These days, it's probably better to say "yes" because, as we witnessed with the bankruptcy of Lehman Brothers, if a financial institution that's large enough collapses, it can have ripple effects and bring down the rest of the economy and financial markets along with it.

How much do you know about what you actually do in Restructuring?

Restructuring bankers advised distressed companies - businesses going bankrupt, in the midst of bankruptcy, or getting out of bankruptcy - and help them change their capital structure to get out of bankruptcy, avoid it in the first place, or assist with a sale of the company depending on the scenario.

Where else did you apply for school? Did you get in anywhere else?

You applied to a number of top schools and got in at other places, but you went through a careful decision making process and settled on your school for a very good reason. Show that you're "in demand" by others and you always become more attractive - whether it's to the bank you're interviewing at or to the schools you're applying to.

What's your personal Beta?

"Beta" in the Capital Asset Pricing Model (CAPM) measures expected return and expected risk. Higher Beta means a higher potential return, but also more risk. You probably want to say above 1.0, but not too much above it - you're much more ambitious than the average person, which causes you to try lots of new things and achieve quite a bit, so that inevitably carries some risk. But you're not so reckless that you take careless risks - it's all about moderation. Don't go over 2.0. Bankers like to think of themselves as "entrepreneurial" even though banking is extremely different from entrepreneurship, so you should take advantage of this line of thinking and indulge them.

Why are you so old? (Stated more tactfully)

"I realize I don't fit the typical profile of someone applying to banking - but that also comes with some advantages. I've been around longer and explored different industries, so I have a better of what I want, and I'm going to be more committed than someone just out of school. I've also had a lot more leadership experience and understand how to get things done in a large company - and I've climbed up steep learning curves plenty of times over the years." One of the interviewer's key concerns for older candidates is how well you can learn new things and work long hours - so you should have specific examples on hand to address both of these "objections."

Imagine you want to draft a 1 slide company profile for an investor. What would you put there?

"Put the name of the company in the header, then divide the slide into 4 equal parts. The top left is for the business description, headquarters, and key executives. Put a stock chart and the key historical and projected financial metrics and multiples on the top right. The bottom left can have descriptions of products and services, and the bottom right should have key geographies with a color coded map to make it look pretty."

If I gave you an offer right now on the spot would you take it?

"Yes, show me the dotted line and I'd sign it right now." Even if this is a lie, you still have to say it in an interview or you won't get an offer.

Walk me through the process of a typical buy side M&A deal.

1. Spend a lot of time upfront doing research on dozens or hundreds of potential acquisition targets, and go through multiple cycles of selection and filtering with the company you're representing. 2. Narrow down the list based on their feedback and decide which ones to approach. 3. Conduct meetings and gauge the receptivity of each potential seller. 4. As discussions with the most likely seller become more serious, conduct more in depth due diligence and figure out your offer price. 5. Negotiate the price and key terms of the Purchase Agreement and then announce the transaction.

Before you entered business school, I see you switched jobs about once a year. How do I know that you're here to stay for the long term?

Although you switched jobs pre MBA, it's quite common to move when better opportunity arises. However, you've done a lot of research, spoken with friends, alumni and other connections and are certain banking is for you after doing your own due diligence. You've actually looked into other career options and nothing is as attractive to you as banking.

That guy over there has a 4.0 from Wharton/Harvard - why should I hire you over him, given that you're much less impressive?

Bankers hire people who 1) Are smart 2) Can do the work and 3) Are likeable. In addition to meeting all of those criteria, you've also done well in the real world and have stellar recommendations to back you up - plus, since you don't come from a "blue chip" background you're more motivated to succeed than the Harvard guy. "He does have impressive credentials. But at a bank, you want someone who's smart, can do the work, and is easy to get along with. I've done well in school and am working on an Honors Thesis right now, and I have great recommendations from my 2 previous bosses in my Sales & Trading internships. And I spend most of my free time sky diving and going on adventures in different countries. So while he may be qualified on paper, in banking it all comes down to real world experience and what kind of camaraderie you have with everyone. I'm confident that I excel in both of those areas - and since I'm not from a privileged background, I'm even more motivated to succeed than someone who is."

Why did you get a C in accounting? (Or other bad grade in highly relevant class) or D in FI 4000

Don't even try to make up an excuse unless it's a REALLY good one (e.g. your parents both passed away that semester) - just admit it and then point out what you've learned and how you've improved since then. Maybe you took it upon yourself to do additional self study - or you changed your approach to studying and did much better in subsequent Accounting classes.

What was the status of this deal when you left your bank?

Don't feel "pressured" to say that the deal closed or that the IPO priced before you left. It's fine to say that it was still up in the air - and even if the deal actually fell apart, you're better off pretending that it's still pending and that there hasn't been an announcement yet (unless it was a huge deal that very publicly fell apart). "When I left, both sides did not agree 100% on price. They were moving closer and had resolved management retention and had come to agreement on the reps and warranties, but they were still locking down the final details, so the deal is pending right now."

What's the riskiest thing you've ever done?

Don't say "cocaine" or any other drug / porn like / illegal activity (this should be common sense but you wouldn't believe the emails I get). But you also can't say, "I sat next to the unpopular kid one day..." because that's not risky at all. Try to discuss an internship or job experience you had that you never expected to get, or some type of extracurricular/leadership experience that was somewhat random and turned out to be great - and talk about how it was a calculated risk and that you got a lot out of the decision you made. If you can point to something you had to be proactive to get, this is a good time to bring it up.

Let's say that you have $1 million, but you are NOT allowed to invest it or otherwise use it to create more money. What would you spend the capital on instead?

Don't say, "I would start my own business..." or "I would invest it in..." - many people completely ignore the actual question here. It's best to tie this back to whatever your interests and passions are - so you might use the money to support volunteer work you've done, extended travel that you've always wanted to take, or maybe even to buy that race car you've always wanted. Just make sure your answer is believable - if you have never worked at a non profit or in a volunteer group in your life, don't suddenly try to be a saint. If you love cars, say you would think about buying a car you've always wanted... among other things.

How are Equity Capital Markets (ECM) and Debt Capital Markets (DCM) different from M&A or industry groups?

ECM and DCM are both more "markets based" than M&A. In M&A your job is to execute sell side and buy side transactions, whereas in ECM/DCM most of your tasks are related to staying on top of the market, following current trends, and making recommendations to industry and product groups for clients and pitch books. In ECM/DCM you go more in depth on certain parts of the deal process, but you don't get as broad a view as you might in other groups.

Why are we your first choice? Wouldn't you like London or New York more?

Even if you really do prefer New York or London, you can't say this in an interview with a regional office because your #1 goal has to be getting AN offer - not getting the perfect offer in the perfect location. It's best to say something like, "I realize it is unusual and that are other places are sometimes more popular, but I'm most interested in [Location] because it's the best place for [Industry You Like], I have a lot of friends and family here, and on top of all that the cost of living also beats New York." This way you acknowledge their "objection" upfront but also point out solid reasons for picking this location.

Why did the company you were representing want to buy another company?

For this one you need to talk about what specific type of other company they wanted to buy. Did they want to expand into new geographies? Get into a new industry? Pursue a "hot" start up that was receiving a lot of attention? Here's an example: "Our client was interested in expanding from midstream oil & gas production and wanted to get into the upstream market as well, especially in North America. They had tried to do so before, but lacked the expertise and industry contacts - so they wanted to acquire a sizable company that had already done it so they could grow their top line and also diversify their business."

What was your favorite class in college / business school?

I would not say anything economics/finance related - it sounds too artificial. Tell them about something you were actually interested in - even if it's not directly related to banking. They want to see who you are as a person, not whether or not you know all the Excel shortcuts in the book.

How did you value your client?

Just take the standard valuation methodologies and talk about how you applied them to the company you worked with. Note that for IPOs, you only care about public company comparables - for other types of deals you look at a wider range of methodologies. "We used public company comparables, precedent transactions, and a DCF. For public comps, we picked a set of software companies with over $1 billion revenue, for precedent transactions, we looked at software deals worth over $500 million, and we used the standard DCF but looked at a few different scenarios because our client's projections were aggressive. We didn't look at other methodologies because this was a standard M&A deal and they were almost certainly going to sell to a strategic buyer."

What do you do for fun?

Obviously, don't say anything illegal or questionable/controversial. If you have anything interesting or not very common (hang gliding, directing movies, bungee jumping) you should bring that up. Otherwise, just be honest and if you really like watching football (North American football for international readers) or other sports, just talk about your interest in those.

How did you personally contribute to this deal?

One of the most difficult and most important questions you can get. For this one, you have to be careful to not exaggerate too much and claim that you generated millions of dollars for your bank - but you should also try to say something more than, "I made these graphs look pretty in PowerPoint." Here's an example: "As the intern, I helped some of the Analysts track down hard to find numbers to use for assumptions in our models. This played an important role in the deal, because buyers analyzed our operating model of the company and found everything more believable since we had laid out such detailed assumptions behind all the numbers."

What were a few areas that your team said you should try to improve upon?

The 2 most important points to remember with the "weaknesses" / "failure" question: 1. Give a real weakness rather than saying you "work too hard." 2. Show how you improved on it, using specific examples. What are "real" weaknesses you could give? Maybe you weren't as communicative with the team as you should have been at the start; maybe you got lost in the details sometimes and failed to see the big picture; maybe you were too impatient with others or did not delegate tasks appropriately. The point is to say something that is a real weakness but which is also not a "deal breaker" - like saying you don't like to work hard or can't stand working in teams. After that, state how you're working to improve your weakness. Perhaps you gave more regular updates to your superiors; or maybe you started leveraging other peoples' knowledge or the administrative staff at your work more often.

Imagine that I'm speaking to someone with whom you have not gotten along in the past - what would he/she say about you?

This is just a disguised "weaknesses" question. However, since it involves someone else this time, it's better to give a weakness such as being stubborn and holding too rigidly to your own views rather than some of the other faults you could state. Weaknesses related to team/group settings are better here. And once again, you need to emphasize how you've worked to improve whatever it is that you did not do well at the time. Don't say something like, "I get along with everyone!" as that sounds unrealistic.

What's the difference between DCM and Leveraged Finance?

They're similar but Leveraged Finance is more "modeling intensive" and does more of the deal execution with industry and M&A groups on LBOs and debt financings. DCM, by contrast, is more closely tied to the markets and tracks trends and relevant data. But there's always overlap and some banks have just 1 of these groups, some have both, and some divide it differently altogether.

Did you do anything quantitative for this deal? It looks like it just involved research.

This is a common scenario for summer interns or if you worked at a small boutique where financial modeling was not as common. Don't say that you did nothing quantitative, but also don't make it seem like you know everything there is to know about valuation or modeling. If you didn't build the model yourself, just point out how you contributed to it. Here's how you might respond: "A lot of what I worked on was qualitative and involved researching potential buyers to see what the best fit might be. Our team did some valuation and financial modeling work as well, but since I was an intern I supported the other Analyst and Associate by finding relevant facts and figures and then going through their models, figuring out how they worked, and then making sure the information was correct."

What do you think our bank's greatest weaknesses are?

This is a silly question, but I can't say I've never heard it before. In a normal "weaknesses" question it's best to say something real and then indicate how you've improved on it, but in this case it's better to say something more innocuous and maybe point to a "weakness" like not being strong in Europe/Asia, or not having as much experience in one industry as another bank - but then indicate how it doesn't matter to you because you're more concerned with other aspects of the firm.

In your internship this past summer, what feedback did you receive?

This is a variant of the "strengths and weaknesses" question. The most common mistake is being vague and just saying you performed well and they liked you, and then failing to give weaknesses / areas for improvement. The right way to answer this question is to state specific qualities about you that they liked - such as ambition, drive, attention to detail, or willingness to go the extra mile for the team - and then give some specific examples of times when you demonstrated those qualities. Your all nighters, the times you stayed the weekend working on a presentation, or the time you caught mistakes someone else above you missed are all good to mention. The other critical part is mentioning weaknesses / areas for improvement as well - talk about real weaknesses and how you've worked to improve them (see more on this in #2 below).

Which of our competitors do you admire the most?

This is another silly question that is designed to test your knowledge of the industry more than anything else. The best way to answer: briefly point to a competitor and state a widely known trait about them that you admire and then explain how the bank you're interviewing with also has that quality and might even be better at it. For example, Goldman Sachs is known for its "one firm" culture and emphasis on teamwork, while the former Bear Stearns was known for its more "entrepreneurial" environment. You could reference these types of qualities and then state how they're also seen in the bank you're interviewing with.

Can you describe a situation where a team did not work as intended? Whose fault was it?

This is another variant of the "failure" question. I would recommend starting with a situation where your team did work as intended and talk about how it wasn't working at first and what you did to fix it. Never blame someone specific - instead, say that there were "personality conflicts" and that you worked to resolve them. To make things even easier, you could re use the story you told in question #1 but instead position it as a failed team situation that turned into a successful one.

Let's imagine that your best friend is describing you in 3 words - which words would he/she use and why?

This is just, "Tell me your strengths" in disguise, but you need to narrow it down to 3 words. Since it's your friend describing you, you don't want to say, "Driven, attentive to detail and a team player!" You do want to convey the same ideas - that you can work hard, play well in teams, and get things done no matter what obstacles you face - but you should pick your own language to get this across. For each word you list you should also give 1 2 sentences to back up what you say, using a specific example for each one.

Can you discuss a time where you had to sacrifice your time for the sake of a team project?

This is the classic "burn the midnight oil" question, and you should definitely have something prepared for this one. There are 2 key points: 1. Whatever you did had to involve long hours - 60 70 hours per week or more 2. It had to have been over an extended time period - so Final Exam week at school would be a poor example. Aim for something that took place over weeks or months instead. Maybe you were working full time and also leading your volunteer group to build shelters; maybe you were taking 6 classes, running a fraternity, and then got called upon to direct that huge Cinco de Mayo festival. It doesn't matter too much what it was as long as your story is detailed and convincing.

How do companies select the bankers they work with?

This is usually based on relationships - banks develop relationships with companies over the years before they need anything, and then when it comes time to do a deal, the company calls different banks it has spoken with and asks them to "pitch" for the business. This is called a "bake off" and the company selects the "winner" afterward.

We do most of our work with technology companies. Can you talk about a trend or company in the industry that has piqued your interest lately?

This is very common if you're interviewing for any industry group - I recommend doing some research beforehand and being able to speak about trends in that market. It's easy to find this information for Technology and anything that sells to consumers, but it's a bit harder for something like Chemicals. Most interviewees make 3 mistakes with this question: 1. They describe something that is not recent or relevant. Don't talk about the emergence of the Internet - talk about how companies are shifting their software to the Internet. 2. They don't explain the "why" - they're shifting to the web because it's cheaper and lower maintenance for them. 3. They don't explain the impact on the market as a whole - such companies are growing very quickly while more traditional companies are either struggling or shifting to that model.

Tell me why we should hire you in 3 sentences.

This is yet another variation of the "strengths" question. But rather than giving generic strengths, you should highlight any unique experiences you've had. So maybe you haven't had banking internships before - but you have had unique experience abroad, in an unusual setting, or doing something not many others have done, or you've overcome unusual hardship - and those make you particularly well qualified. Try to make your answer some variant of "I'm smart because of [School / Academics], I can do the work because of [Internships / Previous Jobs], and I'm an interesting person and fun to be around because of [Unique Experience]."

What is your career goal?

This might be my least favorite question of all time, but some lazy interviewers will ask you anyway. Again, at the undergraduate level you can afford to be more vague and just indicate you want to do something in business/finance and advance to a high level; MBA candidates should indicate that they're in banking for the long term.

What were the major selling points of your client? What was attractive about it?

This one applies for both sell side deals and equity/debt financings - good points to raise might include financial performance, market and industry trends, any competitive advantages it enjoyed, and anything positive about its customer base. Stay away from talking about the strength of the management team, because that is very difficult to "explain" in an interview. "The Swedish healthcare company we were representing had been growing at around 15% year over year, vs. 5% average growth for the industry as a whole. It also had higher margins than other companies in the industry because it focused on higher end and more profitable medical care. The market as a whole was also very favorable because the Swedish population was aging and demand for healthcare could only rise in years to come."

Why would we decide not to give you an offer today?

This one is a bit tricky because it's so direct. You could attempt to make a joke out of this one and say something like, "If you decided you weren't hiring at all!" but that may not go well if your interviewer doesn't appreciate humor. Otherwise, the best response may be to turn this around and say, "I see no reason why you wouldn't - I'm your best choice because...." and then give your strengths instead. If they really press you on this, you can admit a weakness and then say how you've been working to improve it.

Can you tell me about the different product and industry groups at our bank?

This one is bank dependent and will differ for boutiques, middle market firms and bulge brackets - so you need to research it before your interview. Typical product groups include Mergers & Acquisitions (M&A), Leveraged Finance (LevFin) and Restructuring; you could also consider Equity Capital Markets and Debt Capital Markets "product groups" but that one is debatable. Common industry groups include Healthcare, Retail, Industrials, Energy, Natural Resources, Financial Institutions, Gaming, Real Estate and Technology, Media & Telecom (TMT). Not all banks are structured this way - Goldman Sachs, for example, does not have product groups and instead handles all types of deals in its industry groups. Meanwhile, most bulge bracket banks do not have Restructuring groups at all - that is something that only middle market and boutique firms do. Finally, a lot of boutiques focus only on M&A and/or Restructuring and ones that are small enough are not even split into industry groups.

Describe the deal process.

This one is completely dependent on what type of deal you worked on - but no matter what you say, don't go into an excruciating level of detail here. Focus on whether it was a broad or targeted process for M&A deals, and what kinds of buyers/sellers you approached; for debt and equity financings just go through the key points in the registration statements or investor memos, and what the investor reaction was. "We ran a broad sell side auction process for our client. They had in mind around 10 20 strategic buyers that might have been interested, and we added around 30 financial sponsors to their list. We got serious interest from about 5 of the companies we approached, which led to 1 strategic buyer and 1 financial sponsor ultimately competing to win the deal."

Let's assume you are going to start a laundry machine business. How would you analyze whether it's viable?

To assess whether it's "viable," you have to determine whether you can make a profit with the business. For a laundry machine operation, you'd start by looking at the location (the most important part of any retail business), estimate how many customers you could get, how frequently they do laundry and how much they pay each time to do their laundry. Those variables give you an idea of monthly / annual revenue. On the expense side, the biggest cost would be the upfront construction and/or purchase of the building and the machines. You would probably need a loan for this unless you had a spare $500K in your bank account. You would also have to take into account the cost of maintaining and servicing the machines, building maintenance, and hiring someone to collect cash, clean, and open/close the building each day. Overall, location plays the biggest role in the success of this type of business - if you put your new company next to an apartment complex where everyone has laundry machines, you're doomed from the beginning. Incidentally, laundry machines happen to be very profitable businesses if run correctly - mostly because they are not labor intensive and do not require huge investments after you've gotten started. So you could even use this as an example for the "What kind of business would you start with $1 million?" question.

Walk me through one of the deals listed on your resume.

Try to pick an M&A deal rather than an equity/debt financing and aim for more "unique" deal types like divestitures or distressed M&A; also try to pick something that's either "high profile" or a deal where you contributed a lot. Don't go into too much detail for an "opening question" like this - just give a brief overview and then let them ask the questions. Describe the company, give approximate financial (revenue, EBITDA, market cap) figures, and say what they wanted to do. Here's how you might describe a sell side M&A deal you worked on: "One of the deals I worked on was the sale of a $1 billion market cap consumer retail company. They specialized in food and beverages and sold to the US and European markets. Their revenue was around $800 million with $200 million EBITDA, growing at around 5% per year. They were interested in selling because of a string of recent acquisitions in their market, and felt they could get a premium valuation. They engaged us to run a broad sell side process with financial and strategic buyers." Here's how you might describe an IPO: "One deal I worked on was the $200 million IPO of a Chinese Internet company on the Hong Kong stock exchange. They had revenue of around $50 million, EBITDA of $10 million, and were growing very quickly, around 50% per year. They were going public to raise funds so that they could expand beyond China and get into other markets, and we were the lead underwriter on the deal." After you finish your "introduction" the interviewer will start asking follow up questions based on what you said.

Pitch me a stock.

You can refer to #5 in this section - the company you admire - because both these questions are quite similar. One difference is that if the question is "pitch me a stock," you need to mention specific financial figures. Since the company is public, it shouldn't be too hard to find those. Even if you can't get Revenue or EBITDA multiples, looking up its P/E multiple and saying whether it's higher or lower than competitors is a step in the right direction. The 2 most common mistakes: 1. Failing to list specific financial figures. 2. Saying how the company stacks up relative to its competition, and why its prospects are more favorable. Structure your answer with the following 5 points in mind: 1. Give the name and summarize what the company does. 2. Give a brief overview of its financials to indicate its size and how profitable it is. 3. State how it's undervalued or more attractive than its rivals, due to any competitive advantages it has. 4. Say how there is a long term trend in its favor - it's not just looking good in the past month. 5. Talk about how the next 5 10 years will be really good for the company.

What about its weaknesses? Why might investors be hesitant?

You could talk about unfavorable market trends, increased competition, uncertain financial projections, or the threat of new regulation harming the company. "Although our client had performed well in the European healthcare market, its financial projections depended on expanding into the US and Asia, and it had no track record there. Also, massive healthcare reform in the US might make it significantly more difficult to enter that market in the future."

Why are you interested in Restructuring besides the fact that it's a "hot" area currently?

You gain a very specialized skill set (and therefore become more valuable / employable) and much of the work is actually more technical / interesting than M&A, for example. You also get broader exposure because you see both the bright sides and not so bright sides of companies. If you're coming in with any legal background or have aspirations of doing that in the future, there's a ton of overlap with Restructuring because you have to operate within a legal framework and attorneys are involved at every step of the process - so that can be one of your selling points as well.

Recently some Analysts and Associates have left "early" and jumped to hedge funds or private equity. If the opportunity comes up, why would you stay here instead?

You looked into investing but realized you don't like the nature of the work - there's too much due diligence and "looking at deals" rather than taking action and actually doing deals. As a result, after all your research speaking with alumni and other connections, you're set on banking.

You've never worked in finance before. How much do you know about what bankers actually do?

You should acknowledge that although you haven't worked in the field before, you've done a lot of research on your own and have spoken with many friends in the industry. Based on that, you know that bankers advise companies on transactions - buying and selling other companies, and raising capital. They are "agents" that connect a company with the appropriate buyer, seller, or investor. The day to day work involves creating presentations, financial analysis and marketing materials such as Executive Summaries.

Walk me through your resume.

You should really go through all the lessons on telling your "story" right here first: http://breakingintowallstreet.com/biws/category/01 tell your story/ Start at "the beginning" - if you're in college, that might be where you grew up or where you went to high school. For anyone in business school or beyond, it might be where you went to undergraduate, your first job, or even where you went to business school. Then, go through how you first became interested in finance/business, how your interest developed over the years via the specific internships / jobs / other experiences you had and conclude with a strong statement about why you're interviewing today. Aim for 2 3 minutes - if you go on longer than this, the interviewer may get bored or impatient. Also, do not look at your resume when going through your "story." The 4 most important points: 1. Be chronological. 2. Show how each experience along the way led you in the direction of finance. 3. State why you're here interviewing today. 4. Aim for 2 3 minutes. What are the most common mistakes with the "Walk me through your resume" question? 1. Going out of order chronologically. 2. Too much exposition - don't start off by saying, "I've had a lot of great experiences." 3. Being too short (under 1 minute) or too long (over 5 minutes). 4. Not sounding certain you want to do banking/finance. 5. Listing your experiences rather than giving a logical transition between each one. Again, I highly recommend going through all the video tutorials on this very question - because your "story" is the most important part of any interview: http://breakingintowallstreet.com/biws/category/01 tell your story/

Tell me about an M&A deal that interested you recently.

You want to say who the buyer and seller were - and include background information if they are not household names - as well as the price and the multiples (Purchase Price / Revenue, Purchase Price / EBITDA) if they are readily available. Read the relevant Wall Street Journal article on it, and discuss the dynamics of the deal - how it developed, if anyone else was interested, and what implications it has for the industry. You don't need to be an expert, but you do need to sound intelligent and know the basics. If they start asking for information you don't know, just admit upfront that you don't know whatever they've asked for.

What's your "Plan B" if you can't get into investment banking this year?

You'll do something finance related, in a field like corporate finance / strategy or maybe something else at a bank / financial firm. You also want to point any offers you have, especially if they're in finance or consulting. "If I have absolutely no way to get into banking at your firm this year, then I'd go work in the Valuations group at one of the Big 4 firms where I already have an offer - or to the 2 boutiques that keep inviting me in for interviews."

Let's say you could start any type of business you wanted, and you had $1 million in initial funds. What would you do?

You'll want to ask follow up questions to see if the interviewer is looking for something more specific, because this one is wide open. If no further direction is provided, you probably want to say that you'd think about some type of niche business with high margins that requires little startup capital ($1 million is not enough to build 10 factories) and ongoing maintenance - those make it harder to turn a profit and sell the business one day. (This is one reason why some private equity investors focus on software companies). It's better to focus on a niche market because most broad, horizontal markets are already dominated by major companies (Microsoft, Goldman Sachs, Exxon Mobil, etc.). You should also explain your reasoning on why this type of business would be attractive and how it could grow with minimal future investment.

If you enjoyed your last internship and got an offer to come back, why are you trying to switch into investment banking now?

You're looking for something faster paced where there's a better learning opportunity and more of a chance to make an impact. You've also been interested all along and realize you really do want to do it now, after having explored other alternatives and not liked them. If this is a small company to big company move (or vice versa) you can also say something about that, using the standard reasons we went through before - small means more responsibility and client interaction, and big means working on more major deals and learning more technical skills.

You spent this last summer working at Citi's investment banking division. It seems like you'd be crazy not to go back - why would you want to work for a smaller firm in our M&A group?

You're most likely to get this one if you didn't get a return offer - let's be honest, who really goes from Morgan Stanley to a boutique? It's a tough sell, but you'll have to emphasize how you like the smaller environment where you get more responsibility and work more closely with clients. The banker probably won't believe you, but it's better than outright admitting you didn't get an offer. If the topic does arise, just say your lack of offer was because they were not hiring, because the group did poorly or because of the general economic climate.