How To Create Your Own Investment Banking Job

3/17/2018 How to Create Your Own Investment Banking Job
307,012+ Monthly Readers FREE BANKER BLUEPRINT
HOME CASE STUD… CASE STUD…
Get Notifications
by Brian DeChesare Comments (21)
How to Defy the Odds and Create Your Own

Investment Banking Job
If you’re interested in nance, you probably have
a Type A personality:
You’re highly competitive;
You care a lot about achievement and money;
You love multi-tasking, you’re a perfectionist, and you’re always rushing

around to nish work.
And normally the nance industry would be a good it for you – except for when
there are no jobs and few rms are hiring.
https://www.mergersandinquisitions.com/create-own-investment-banking-job/ 1/18
If you’re in that boat, there are always Plan B options to consider… maybe you
could just accept that Big 4 o er, go to a normal company, or go back for a
Master’s program…
Or you could just create your own job instead.
Today we’re speaking with a reader who did just that, hustling his way from a
Get Notifications
direct sales role to dental school to the investment banking industry.
And rather than jumping into it as an “employee,” he’s e ectively a Partner and
he works with other business partners to close deals and generate commissions –
straight out of an MBA program.
This might just be the most “out of the box” story I’ve published on here (be on
the lookout for that upcoming one on how to move from a male stripper role to a
hedge fund analyst, though), so let’s get started:
Background Assumptions
Q: So let’s go back to your “Origin Story,” because I think it’s a good one…
A: Sure. I’ve always been an entrepreneur at heart, and prior to attending

university I started my own direct sales company for satellite dishes. It was very
pro table and we did quite well, but I felt obligated to get that “professional
education,” so I ended up attending dental school.
6 months into my rst job with a dentist, I realized I hated it and it wasn’t for me
– I didn’t do well working for other people.
I ended up getting more involved with business brokering and used Internet
marketing (paid advertising, search engine optimization, etc.) to get leads.
I acquired the InvestmentBank.com site a few years ago and have been building it
ever since, focusing on selling baby boomer-owned businesses.
Over the next 10 years, around 7 million businesses owned by baby boomers will
be sold as they retire – and so there’s a big opportunity to advise on the sales of
those small and mid-sized companies.
Get Notifications
Oh yeah, and in between all that I also found the time to attend business school –
which I did mostly because I felt like I needed a more formal nance background
to do all this and become more actively involved with selling larger companies.
Q: OK, so let’s keep going in chronological order here before we get to what
you’re currently doing…
How exactly did you get into this type of “business brokering” role?
A: It was mostly through brute-force networking. I had the direct sales

experience from starting my own company before, so I was used to everything
that came with it: hours and hours on the phone all day, going door-to-door
selling products, and getting outright rejected or ignored by people all the time.
After I quit the dentistry path, I kept contacting people I had met via my old
company and networking with them to meet investment bankers and business
brokers, and I positioned myself as someone who could deliver leads –
companies looking to sell or buy.
Bulge bracket banks wouldn’t care about that, but these smaller places are always
looking for business because few of them have a consistent, repeatable strategy
for getting clients in the door.
Naturally, I churned through a lot of contacts on my way here; I went through at

least a few dozen people before nding one who proved very reliable and good to
work with.
The lack of technical skills also hindered me, which is why I did the MBA program
and also started working with current students and alumni from that program
from a very early stage.
What Do You Do, Exactly?
Q: Right… so, speaking of that, what do you do every day, exactly?
Get Notifications
A: My role is to generate leads and refer these potential buyers and sellers to
bankers, mostly at boutique rms, that will handle much of the process once they
have the information and the marketing materials.
Here’s how it works:
1 A potential buyer or seller comes to me and indicates that they’re interested

in doing a deal.
2 Then, I go through the network of senior bankers that I’ve developed and
gure out which one would be best-suited to handle the deal, based on
geography, industry expertise, and so on.
3 Next, we do the valuation work and create marketing materials such as the
CIM and management presentation; sometimes this is split up between the
banker we bring in and our team.
4 Once everything is nished, the banker gets to work selling the company (in
most cases) and occasionally doing a buy-side deal.
Finally, we get paid for referring these leads whenever deals close.
Q: So how is this di erent from becoming an industry group Managing Director,

building relationships, and then referring clients onto product group MDs when
a deal is ready to take place?
A: In a sense, they’re very similar.
The di erence, though, is that traditional Managing Directors at banks, and even
other rms in our area, focus on “old school” methods of lead generation:
putting on expensive conferences, using fairly high-pressure sales tactics, and so
on.
The end result is that the cost per lead acquisition is very, very high.
Get Notifications
There’s one rm called Generational Equity in Houston that does just this and
puts on conferences and does other o ine marketing to generate leads, then
takes a retainer when a new client signs on, preps the business for sale, and farms
out the entire process to a banker, taking a small percentage of the deal when it
closes.
We’re approaching it from the opposite angle: we’re using content marketing to
generate leads online, so that potential sellers nd our site and all our content
and contact us based on that.
It’s the same thing you’re doing with this site and your nancial modeling
programs: you’re using all the free articles and videos here to generate interest in
your programs and sell them online, instead of relying on expensive phone or in-
person sales.
Q: Anyone paying attention would have already seen the same thing happening
in every other market online, but it’s fascinating to hear about the rise of
content marketing even in investment banking.
So what sort of companies do you focus on?
A: Generally, we sell companies with between $10 million and $100 million in
revenue – which you could call “the middle market” (roughly).
We also try to ensure that the companies have at least $1 million in EBITDA,
because with anything less than that it’s more “business brokering” rather than
investment banking.
We prefer sell-side deals because, as you’ve written about before, they’re much
easier to close than buy-side deals; sometimes we help with capital raising, but
that’s less common for these smaller companies.
Q: OK, thanks for clarifying that.
Get Notifications
What about the process of nding Partners and MDs to work with? I’m
assuming you have to narrow down that list somehow, right?
A: These days, we do that mostly via an extensive reference check. As our

business picks up momentum, we’ve been getting more and more inbound
inquiries from bankers who are interested in working with us.
In addition to the references, we also try to assess how quickly the banker can
move and where this ts into his/her priority list, as well as what sort of expertise
he/she has in the industry and geography.
Recruiting MBAs to help with the valuation, technical work, and marketing
materials has been easier because, as we both know, most people are more
comfortable running spreadsheets than they are marketing, selling, and working
the phones all day.
We pay them on a contractual basis and hire them “as needed.”
Small Business Valuation and Wheeling and Dealing
Q: So what are the major obstacles you encounter when selling these companies?
A: With small to mid-sized businesses like these, you need to strike a careful
balance between making the deal look good and also being as forthcoming as
possible.
All companies have risks and potential downsides, but with these smaller
businesses in particular you tend to see issues that you would rarely encounter
with huge corporations – everything from leadership to properly audited
nancial statements to “unorthodox” business processes.
Q: So what’s the biggest issue you encounter? Too much dependence on the
Get Notifications
Founder or CEO?
A: That can be an issue, but I don’t know if it’s the biggest one or not; many
times, our partners help nd managers and new executive teams to help make the
transition happen. And if it’s a strategic buyer, this is far less of an issue than it
would be with a nancial sponsor.
Sometimes, the owners will also agree to stay on for some time post-sale to
ensure that the business continues to thrive.
Q: In the beginning, you mentioned that 10,000 baby boomers per day are
retiring, and how that has implications for the M&A market and boutique banks
in particular.
Can you talk about that trend and what it means for deal activity?
A: Sure – being in the middle of the “baby boomers retiring boom” creates some
great opportunities, but also presents some threats.
First, a fairly high percentage of these retirees own their own businesses and are
looking to sell them now, rather than later, because they assume taxes will be
going up (even more) in the future – and also because they need the funds now.
On the surface, that seems like a great trend for us because there are so many
potential buyers – but it also means that prices and valuations are going down
since there’s a supply glut in some markets.
For example, if 5 major HVACs in the same region approach us and want to sell
their businesses, it would be tough to nd quali ed buyers for all of them.
They’re just too similar and the buyer pool is limited.
So far, this trend has favored us and resulted in more deal activity and fees – but
anything could happen in the future, especially if prices go down and over-supply
Get Notifications
continues.
Q: Speaking of prices, what can you tell us about valuation for these companies
(i.e. smaller private companies)?
A: It’s very “ad hoc” and we mostly base it on what our partners within the
industry say.
The exact metrics used di er from industry to industry – software valuation is

quite di erent from manufacturing, which, in turn, is also much di erent from
healthcare.
As a quick example: recently we helped sell a day care center, and there the
valuation was based on a revenue multiple and a “clientele multiple”, almost like
what you see in telecom & media banking with multiples such as Enterprise Value
/ Subscribers.
I hesitate to give an exact gure, but valuations in the 2-5x “discretionary cash
ow” range are quite common with these companies.
You are de nitely NOT going to see (the equivalent of) 10-15x EBITDA multiples
or anything like that here.
Another di culty with valuation is that sometimes these companies lack audited
nancial statements – or at least, properly audited statements. If you don’t even
have a set of quality nancial statements, valuation will be nearly impossible.
Sometimes, we actually partner with an accounting rm that can “reverse

engineer” nancial statements and detect any suspicious activity from the past 3
years.
Q: Before we move on, I wanted to circle back to one of the interesting points
you brought up: how you may also advise on nancing deals sometimes instead
Get Notifications
of just sell-side and buy-side M&A.
How does that work for companies in this size range? And are these debt or
equity deals?
A: Most of the focus is on the equity side; debt deals are pretty rare. There are two
main methods we use to raise equity for these companies:
Method #1: We have a few di erent partners who work with high net worth
clients in private banking – many of these clients simply aren’t getting the
returns they want in the stock market anymore, so quite often they’ll be referred
to us and we’ll arrange a deal where the client can invest and receive, say, a 10%
dividend in a company.
Method #2: We also have lists of people who have frequently invested in $20-50K
tranches. If we get enough of them together, an equity nancing could also take
place like that. The key is to show them good deals that actually result in positive
returns, and to keep doing that over a long time period so that they come to trust
us.
The institutional side is almost non-existent for companies of this size – it’s all
“angel investors” and high net worth individuals.
A Day in the Life… and a Day in the Future?
Q: Thanks for explaining that. It’s so interesting because you see the same thing
happening with private banking at large banks – especially in Asia, where high
net worth clients are often brought into the investment bank’s IPOs and other
deals.
So what’s an average day in your life like at the moment?
A: Right now, the rough breakdown is something like:
Get Notifications
50%: Writing content and doing online marketing work to generate leads.
30%: On the phone speaking with partners, clients, and potential clients.
20%: “Running the numbers” and doing technical work.
Right now, we’re trying to get that “critical mass” of content needed for the site
to start generating high search engine tra c on its own – but you know how that
one goes!
In the long-term, I expect to spend more and more time and e ort on the phone
and less on content creation.
It’s tough to pin down an exact “schedule,” but I tend to place my calls in the
morning and early afternoon, and I do other work earlier or later in the day when
it’s harder to reach people.
The most notable thing about my environment / schedule is that it’s somewhat
isolated – occasionally I’ll see a few others who are helping with models, but
almost everything else is done remotely.
Q: Quite di erent from a typical bank, but I think you’d see that whenever you
start something on your own, whether it’s an o ine business or online
business.
A: Yeah, and it’s something you really need to consider carefully before doing this
– if you need to be around people 24/7, this is NOT the right path for you.
Everyone should read or re-read your article on why nance doesn’t guarantee
you $10 million and your own beach in Thailand for more on that.
Sometimes I do have face-to-face client meetings and I’ll go visit regional
Get Notifications
o ces, but almost all work can be done remotely these days.
Q: Now for the topic everyone’s really wondering about: how and how much do
you get paid?
A: Generally we get paid a percentage for each lead that results in a closed deal,
and sometimes we may charge a retainer depending on the client and potential
deal.
As with larger M&A deals, the percentage scales down as you move up to bigger
deals.
To give ballpark gures, I would say that a 7% fee is common for deals below $10
million, and that scales down to around 4-5% at the $50 million level. That goes
down even more as you move up past that range.
I can’t comment directly on how much I get paid for obvious reasons – also
remember that those fees are split between many di erent parties, so it’s not as
easy as you might think to gure out the direct relationship between fees and
your own take-home pay.
Q: It sounds like everything’s going well – so I’m assuming you’re planning to

keep doing this for the foreseeable future?
A: Yeah. I also have a few other ventures generating revenue, which helps, but
overall I’m super-excited about this and think there’s a lot of room for growth.
Q: Awesome! Thanks for the chat.
A: My pleasure.
And check out InvestmentBank.com – Mergers and Acquisitions when you have a

chance!
Get Notifications
Leave a Comment
Share
About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his
spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV
shows, traveling like a drug dealer, and defeating Sauron.
Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment
banking - how to tell your story, network, craft a winning resume, and dominate your interviews
Loading the player...
First Name
Email Address
SUBMIT
We respect your email privacy
Get Notifications
Comments
Read below or Add a comment
Bryce Jorgensen
April 5, 2016
When you have an interested seller and a bank with a buyer. Who pays your fee?
Also, I have a background in investment management, business brokerage and personal business
ownership.
I’m too old to be interviewing for banking jobs. Is this a legitimate path to in effect, create my own
investment banking position?
Is there a contact number to speak in more detail?
REPLY
M&I - Brian
April 6, 2016
I can’t speak to the rst question, but yes, if you’re too old for banking jobs this type of career
could be a good option for you. Feel free to contact the interviewee directly:
http://investmentbank.com/contact/
REPLY
Joseph
February 26, 2014
(SOS) Hi Brian,
I am a 3rd year Credit Risk Analyst in Middle O ce. My role neither involves in revenue generating, client
facing nore directly impacts the decision making of business units. I basically leverage data/stats skills
producing reports, analytics deliverables and I report to the board. I really want to explore a career in IB,
ECM or DCM. Before I am doing my MBA at a target school i want to get some related experience.
Recently I got an offer as nancial analyst from a small business brokerage rm. It has corporate umbrella
headquartered in U.S. but the local o ce here (I am in Canada) is a small team of 8 people. The
transactions are mainly for ‘Mainstreet’ Businesses. Which way i should pick to increase my possibility of
moving into big IB, ECM,DCM? Thanks for your adivce,
Joseph
REPLY
Get Notifications
Michele
January 13, 2014
After running my investment bank for 3 years out of my home. I have come to realize that the
nancial stress I am taking on is taking its toll and the deals are all falling through. At what point do I shut
it down and go back to working someone else. I am over $800,000 in the hole after re nancing my home
for this business. Please advise my family and I are all struggling to stay above water. I have put 3 years of
dedicated blood sweat and tears into this business. It is so di cult to make the choice to end it when
there are constantly potential clients and deals falling in my lap…but they just don’t seem to pan out for
one reason or another. I am scared if I work for another investment bank rm, it could easily shut its doors
based on the economy and the risk that they seem to take on these days.
Thanks,
M
REPLY
Asn
October 8, 2017
Hope you’re doing ok now.
REPLY
Austin
October 21, 2013
In regards to your story, what exactly does brute-force networking entail? Just emailing folks
about your service or cold calling?
REPLY
M&I - Nicole
October 22, 2013
Cold calling and emailing would help.
REPLY
Student
February 4, 2013
Hey,
I was wondering if you could publish a list of schools that are most heavily recruited from? As a high
school student trying to gure out where I want to go to college, that could do wonders.
In that same vein, I am currently trying to decide between the following schools:
Rutgers New Brunswick School of Business (full ride)
Get Notifications
Villanova University School of Business (full ride)
University of Michigan (Hopefully Ross) with a 10k scholarship
Duke University
Northwestern University
Tufts University
UVA (Hopefully McIntire)
Johns Hopkins
Emory University
Georgetown’s School of Foriegn Service (If I attended I would major in International Economics)
Which school of these do you think would give me the most edge in getting into investment banking?
REPLY
M&I - Nicole
February 4, 2013
Thank you for your insight. Good idea.
In terms of the schools, I’d choose Georgetown SFS given Georgetown’s presence on Wall Street, Duke
and Northwestern over the others. Tufts, UVA, JHU and Emory are good choices too though I would say
they’re semi-targets.
REPLY
LTCM
January 29, 2013
This is great! Really one of the most interesting articles I’ve read on this website. Good job Brian.
REPLY
M&I - Nicole
January 31, 2013
Thanks!
REPLY
Roman
January 24, 2013
Brian, thank you very much for the article. This really inspired me. I am currently trying to launch a
business brokerage kind-of business in Russia, and was looking for a nice interview with a person who
had done such a thing to pick-up on tips and stuff. Your interview really helped, thank you!
REPLY
Get Notifications
M&I - Brian
January 25, 2013
Thanks! Good luck with your new venture.
REPLY
A Weatherall
January 23, 2013
While the topic of the article is interesting, you need to avoid transcribing these conversations
where you sound like a sycophantic college freshman, it substantially reduces the quality of your writing.
REPLY
M&I - Brian
January 23, 2013
Thanks for your feedback. The ironic part is that this wasn’t a “transcribed conversation,” in
fact I never transcribe interviews – it’s all based on notes. I occasionally add in pop culture references
and so on to make it more interesting. That is the style of the site, if you don’t like it there are other
sources that only present the facts and nothing else.
REPLY
Ravi Prakriya
January 21, 2013
Great article and interview Brian. I love to see innovation in IB business models.
REPLY
M&I - Brian
January 22, 2013
Thanks! Yes, times are certainly changing
REPLY
Knight
January 21, 2013

Hi Brian,
Thanks for the great article once again!
I’ve been hearing from several people in commercial banking about similar transactions where boomers
are trying to cash out of the businesses they’ve built, it would be nice to see other similar career stories on
the topic.
REPLY
Get Notifications
M&I - Brian
January 21, 2013
Thanks, hope to cover more on that one soon. I agree that lots of people (of all ages actually)
are running for the hills right now trying to cash out before taxes go up / armageddon arrives.
REPLY
RD10
January 21, 2013
Wow this is just awesome – congrats!
REPLY
M&I - Brian
January 21, 2013
Thanks for your feedback! I thought it was a great story as well.
REPLY
1/1
Leave a Reply
Your email address will not be published. Required elds are marked *
Comment
Name *
Email *
Website
POST COMMENT
Get Notifications
GET STARTED ARTICLES VIDEOS COACHING CASE STUDIES FAQ BEST OF
© 2018 Capital Capable Media LLC
Terms of Use Privacy Policy Disclaimer DMCA Policy Facebook Twitter LinkedIn

How To Create Your Own Investment Banking Job

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

How To Create Your Own Investment Banking Job

Uploaded by

Copyright:

Available Formats

3/17/2018 How to Create Your Own Investment Banking Job

307,012+ Monthly Readers FREE BANKER BLUEPRINT

HOME CASE STUD… CASE STUD…

How to Defy the Odds and Create Your Own

If you’re interested in nance, you probably have

You’re highly competitive;

You care a lot about achievement and money;

You love multi-tasking, you’re a perfectionist, and you’re always rushing

Or you could just create your own job instead.

A: Sure. I’ve always been an entrepreneur at heart, and prior to attending

A: It was mostly through brute-force networking. I had the direct sales

Naturally, I churned through a lot of contacts on my way here; I went through at

What Do You Do, Exactly?

Q: Right… so, speaking of that, what do you do every day, exactly?

Here’s how it works:

1 A potential buyer or seller comes to me and indicates that they’re interested

Q: So how is this di erent from becoming an industry group Managing Director,

A: In a sense, they’re very similar.

So what sort of companies do you focus on?

Q: OK, thanks for clarifying that.

A: These days, we do that mostly via an extensive reference check. As our

We pay them on a contractual basis and hire them “as needed.”

Small Business Valuation and Wheeling and Dealing

The exact metrics used di er from industry to industry – software valuation is

Sometimes, we actually partner with an accounting rm that can “reverse

A Day in the Life… and a Day in the Future?

So what’s an average day in your life like at the moment?

A: Right now, the rough breakdown is something like:

20%: “Running the numbers” and doing technical work.

Sometimes I do have face-to-face client meetings and I’ll go visit regional

Q: It sounds like everything’s going well – so I’m assuming you’re planning to

Q: Awesome! Thanks for the chat.

And check out InvestmentBank.com – Mergers and Acquisitions when you have a

About the Author

Break Into Investment Banking

Loading the player...

We respect your email privacy

Read below or Add a comment

January 21, 2013

© 2018 Capital Capable Media LLC

You might also like