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What do Investment Banking Interns exactly do?

As an Investment Banking Intern, you will support full-time Analysts and Associate with their day-to-day business. You support the deal machinery of the bank. You try to help win deals and execute deals. That’s why Investment Banking is often referred to as the sell-side. You are trying to make deals happen. You make money when deals are completed – just like a real estate broker.

You will work closely with Analysts and Associates. You will most likely be doing the things they don’t feel like doing, but that must be done. You will be given items that are labor-intensive and not time-critical. We also like to call it “grunt work”. These tasks include research, putting together PowerPoint slides or even some financial modeling and valuation work. If you prove yourself as a strong performer, you will slowly grow out of pure administrative tasks. By the end of your internship, you should become a meaningful contributor. With that said, on a high-level, there are three types of workstreams in an M&A Investment Banking shop:

  1. Pitching for deals and trying to win new mandates (marketing activities)

  2. Working on and executing live deals (deal execution)

  3. Random support tasks, basically everything else that does not fall under one or two

Marketing activities – If you don’t have a deal to work on, you have to find yourself a deal to work on. This is where Investment Bankers put together a pitch book to convince the shareholders to sell their company because valuation levels are hot at the moment. As an intern, you usually get to contribute a smaller part of a pitch book. This will usually involve a couple of slides. You will be busy with data gathering and synthesizing them into presentable marketing material. You will usually not build an entire deck all by yourself.

Deal execution – This is about executing the deals you have won with your pitching activities. Ideally, you want to slowly graduate to working on deals. Nobody wants to be stuck working on pitches the entire time. Live mandates usually have a higher priority. Customer fulfillment is above marketing. Deal execution includes tasks, such as researching potential buyers, drafting the information memorandum and teaser documents as well as financial modeling. Again, as an intern, you will be contributing smaller parts of the entire deal.

Random support tasks – These are tasks that fall under “everything else” besides the pitches and mandates you were assigned to. These are usually smaller items that don’t feed into a bigger picture and are ad hoc support tasks. We are talking about printing and binding presentations, ordering late-night food, slides on general market updates or random research tasks for MDs.

You want to slowly graduate from random support tasks and pure marketing activities to actual deal execution. To manage your expectations, you will be doing a lot of random tasks in the beginning. Most of your tasks will be random because you can’t grasp the context. But don’t worry, we all start at some point. Deals often take years to execute and close. The bank isn’t going to put a fresh intern, who will leave in 2-3 months, in charge. Many support tasks are ad hoc and that’s your first opportunity to add value to the team. Even though being an Investment Banking Intern is not very glamorous, treat it as a critical stepping stone to get into Investment Banking. You need Investment Banking internships to break into Investment Banking.

Beginner tasks vs. advanced tasks of Interns

Now that we have a high-level understanding of what you will be doing, let’s dig deeper into the specific task level. We’ll show you what a beginner Intern will be working on and what a more advanced Intern will be working on.

The tasks you will be given depend on the level of trust people have in you. Can I trust this person to deliver this item without a single formatting error and without a single typo on time without asking too many questions? That is the bar. Once you submit your final product, it better be error-free. Do everything you can to prevent any type of careless errors. If the numbers don’t match up, it means that the entire item requires a thorough check for other errors, which renders your work almost useless. This is not a college essay. This is serious business. No careless errors allowed. Take your internship seriously. This is serious business that could change your life.

Beginner intern tasks

With that said, if you are starting fresh at a new shop, you will most likely be doing a lot of grunt work and administrative work. You are the new kid on the block. Nobody knows how good and how reliable you are. The best way to test this is to give new interns smaller items that are not time-critical. That way, if you mess up, the full-timer can still fix it. You’ll be contributing smaller parts of the deal, which full-timers are willing to delegate to you.

In the beginning, most interns will start with drafting company profiles and stripes while doing research tasks. These are usually low-priority tasks to train and test the intern. If you keep messing up on these basic tasks, you don’t see a chance to progress to more advanced items and are constantly assigned the boring/low priority work.

Interns are also expected to take over support tasks, such as printing and binding documents, answering the phone when somebody is not at their desk or taking care of late-night food orders. None of these tasks are critical to your performance review. You just have to get them done. Everyone started there. Every Analyst and Associate had to do it at some point during their career. So, get it done, get it done right and move on.

As you are starting out, trust is the number one thing you want to focus on. You want to establish yourself as a strong performer. Once you have proven yourself to be reliable, you’ll slowly get more interesting tasks.

Advanced intern tasks

Once you have proven yourself as a happy and reliable intern, you will slowly progress into more interesting tasks that are more complex and time-critical. This is where you will be gradually moving from pitching activities to actual live mandates and deal execution.

Regarding Excel work, classic examples are to research comparable companies or comparable transactions with a rationale that is given to you. This will be your first exposure to actual valuation work. You are expected to cleanly execute and document your work so that your Analyst can trace and check every step you’ve made. If you are reliable, more advanced tasks include the preparation of financial models, such as compiling historical financials or even integrating an operating model. Yes, you may also use the company template and fill out a DCF analysis. Getting exposure to financial modeling is already advanced. Don’t start your internship expecting that you will be doing financial modeling from day one. You should, however, aim to complete a couple of comparable companies and comparable transaction valuations throughout your internship.

On the PowerPoint side, you’ll be slowly progressing from contributing only the research to entire slides to entire chapters. Producing client-ready slides usually involves data gathering, synthesizing and drafting. As you progress, you will receive fewer markups. You will slowly become the “owner” of those slides. You may also be tasked with researching potential investors using databases.

As you progress and your tasks become more complex, task ownership becomes critical. You are responsible for an entire item and are expected to autonomously ask questions. If you have touched it, it better be correct. As your tasks become more complex, they also become more time-critical. If you are slowly building trust, you will also slowly progress from pure marketing activities to contributing to a live transaction.

If you constantly mess up the smaller and easier items, you will never be assigned the more interesting items you can talk about during your next interview. If you only did company profiles and did not gain exposure to valuation and basic financial modeling, we would question whether you were a good intern. So, do everything you can to get exposure to real live deals, valuation and basic financial modeling.

How to build trust?

1) Avoid the biggest rookie mistakes

Ok, now you might ask yourself, how do I progress from a beginner Intern to an advanced Intern? How do I even build trust? Let’s first start with the most obvious and biggest pitfalls. The fastest way to kill your standing and any chance of a return offer is to be lazy, unreliable and entitled. Here is a checklist of the worst behavioral mistakes to avoid:

  • Don’t come in late. You are in the office by sharp 9:00 AM at the latest. Preferably you are the first in the office. You will not win any bonus points, but you will 100% not mess up and draw negative attention to yourself. Full-timers who already have an established reputation can afford to come in late at around 9:30 AM if they don’t have any meetings. As an intern, you don’t have that luxury yet

  • Don’t leave early. You leave once the work is done. You leave when your Analyst tells you to leave. If you have nothing to do, then educate yourself. Read through old documents and practice your Excel skills. Always offer your help if you are available. If you leave early, while full-timers are getting killed by work, you will come off as lazy and not being a team player

  • Don’t dress too well and don’t dress sloppy. Yes, you need some representable business attire and business casual clothing. However, don’t wear expensive stuff. You cannot wear things that are more expensive than what the full-timers are wearing. It will draw negative attention to you. On the other hand, make your clothes fit properly, especially your pants. Make sure your belt matches the color of your shoes. You want to appear professional and neither flashy nor sloppy

  • Don’t get too drunk at events. Yes, on Thursday or Friday people may drink. But it’s your job not to do anything stupid. You will be made fun of. If you are drinking on a weekday, you are still expected to come in at 9:00 AM the next day. You are still an Intern. And please do not get romantically involved with another full-timer or intern. You will get fired and you will have burned your name at that firm

  • Don’t argue with your Analyst about accounting and valuation concepts. Yes, you know something based on your accounting and finance classes from college. But don’t try and challenge your full-time Analyst on technical knowledge. You know way less than you think. You only know the theory. Your average Analyst has multiple deals under his belt. Be humble and be willing to learn. That way, you will not lose your face when you make a mistake

  • Don’t be entitled. Don’t act like something is beneath you. Yes, we all had to do a lot of grunt work during our careers. Don’t come into the shop with no real work experience expecting to work on a high-profile financial model from day one. You will be doing a lot of supporting tasks until you have proven yourself reliable enough to handle more critical items

  • Don’t complain about anything. You will never say anything negative about anything in an office setup. No “I’m too busy”. No complaining about work or the long hours. No gossiping or badmouthing about other firms or colleagues. Finance is a small industry and rumors spread quickly. Be professional and keep everything on a positive note

It’s all about perception. You need to appear professional, not lazy and unreliable. Yes, most full-timers have more wiggle room when coming in late or even being more opinionated. The difference is they worked for it. With time and good performance, they have demonstrated that they are stronger performers. As a result, they now have more wiggle room when it comes down to the little rules. On the other hand, you have to follow the smaller rules because you are going to mess up at least once during your internship. After all, you are a humble beginner and not an experienced professional.

2) Slowly position yourself as a strong performer

Now that you have avoided all the major pitfalls, it’s time to play offense. If you were to avoid all the mistakes above, this would put you on ground zero. You are starting from a blank piece of paper. Now it’s time to slowly position yourself as a strong performer. Here is a quick checklist to impress your higher-ups:

  • Keep a good attitude, always be happy to help and NEVER complain. Nobody wants to work with a grumpy and entitled junior who thinks he is too good for simple tasks. Respond immediately to emails with “Will Do”. That way, people will know you’ve read the email

  • Don’t ask dumb questions. Try to figure it out by yourself first. Google for at least 15 minutes before you consider asking someone

  • When you have questions, write them all down and ask them all in one go. One single email or one knock at the door to clarify all of your questions at once. The key is not to waste the time of your Senior Bankers

  • Triple-check your work before submitting it. Take a highlighter and mark down every item that needs to be completed. Never miss any item that is being handed down to you. Next, check whether the numbers and currencies match. This is very important. If your numbers don’t match up, everyone will think that you are careless. You are working at an Investment Bank. It’s your job to get the numbers right. Then you check for typos and formatting errors. Only copy/paste company names and names of CEOs

  • Write down your mistakes. You will mess up several times on the job. There is no way around it. We all start at some point. When your seniors point out a mistake, admit your fault. Don’t beat around the bush trying to cover things up. Say sorry and that it won’t happen again. Take note of that mistake and the person who pointed it out. The next time you submit an item to that person, make sure the same mistake does not happen again. This is how you slowly create trust and that you are willing to learn

Your job as an Intern is to save your team time. The fewer times you mess up and less guidance you need, the more time you save your team and the more trust you build. Don’t complain, submit error-free work, take diligent notes of your mistakes and you will slowly earn the trust of your team. This will get you closer to an offer to get you into Investment Banking.

Where does it leave us?

On a high-level, Interns support full-timers in the same workstream: trying to win deals, executing deals and random ad hoc support tasks. When you start as a fresh Intern, you are busy with random support tasks and marketing activities. Your goal is to slowly graduate from these activities into working on live mandates or deal execution.

More specifically, a beginner Intern will usually start with compiling company profiles and stripes as well as carrying out lots of research tasks. You will be mostly contributing with research work and a couple of slides here and there. You should take these simple tasks very seriously as they are an opportunity to build trust.

More advanced Interns will be entrusted with valuation work, such as comparable companies and comparable transaction analysis. You may also get the chance to run a DCF analysis or work on some basic financial modeling tasks, such as compiling historical financials. On the PowerPoint side, you’ll be slowly progressing from contributing only the research to entire slides to entire chapters.

To slowly progress from a beginner Intern to an advanced Intern, you must build trust. How to build trust? Your job as an Intern is to save your team time. The fewer you mess up and the less guidance you need, the more time you save the team and the more reliable you appear. The fastest way to kill your standing and any chance of a return offer is to be lazy, unreliable and entitled. Avoid all the major behavioral mistakes because perception is reality.

With the major pitfalls out of the way, you want to establish yourself as a strong performer. Keep a good attitude and don’t complain. Don’t ask dumb questions (try Google first). Don’t waste people’s time: collect your questions and ask them all at once. Triple-check your work before submitting it. No careless errors allowed. Write down your mistakes and never make the same mistake twice. That will put you on a good footing.

Additional resources

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