GUEST COMMENT: Have you got what it takes to make it in M&A?
One oft-overlooked fact about investment banking is that hardly anyone makes it to the top. Like most other high-stress, high-paying professions, most people burn out along the way, quit, or get fired.
So what's the difference between success and failure? Why do some people rise to the top, while others crash and burn mere months or years into their time?
Who makes the cut in M&A - and who just gets cut?
Do you want to "make it?"
The first question you need to ask yourself is whether you really want to "make it." Many students and professionals going into investment banking have no plans of staying in it for the long-term.
They are simply leveraging it to move into private equity, hedge funds, or other related fields in finance.
But even if you go into one of those fields, the requirements to "make it to the top" are very similar to what you need in banking.
Motivated by money?
Some of us are motivated by big paychecks: even if you work 100-hour weeks with competitive, cut-throat co-workers, the money makes it all worth it, right?
Especially for anyone who's not from a wealthy background, this sort of logic works... at first.
But if you're motivated solely by money, then you're not going to make it to the top - for 2 reasons:
1. Pay is wildly unpredictable, and bonuses can vary from $0 to millions - all within a few years. When times are bad, you won't be making much money.
2. After a certain point, you care more about your life than your bank account. What good is a $1 million bonus if you only have 2 days off per year?
While money can be enough to keep you motivated for a few years, pay alone is not enough to keep you in the industry for 20 years.
Got prestige?
More so than money, prestige is a powerful motivator for drawing in prospective bankers.
If all your friends and acquaintances are going into M&A, you'll want to do it as well.
Some bankers like being able to say, "I work in Mergers & Acquisitions" and think that it sets them apart from "normal people."
One small problem: in the real world, most people really don't care how "prestigious" your company is. In fact, investment bankers have a very negative reputation in certain circles - especially these days, with the media blaming them for ruining the economy.
Like money, prestige can motivate you in the short-term - but you need more motivation than that if you're going to last.
True motivations?
Those who rise to the top in M&A do so because they feel excited by what they do.
Like anything else in investment banking, M&A is just a sales job - you spend your time establishing relationships and convincing others to become clients, or to buy the company you're selling.
There's no magic to any of this: like any other sales job, it's a matter of effort rather than ingenuity.
But the difference is that in investment banking, the deals are much larger and the stakes are much higher, which means that even a "simple" sales process can be enough to give you a thrill.
The bankers who make it to the top still feel this kind of thrill, whenever a new client signs up, whenever a new buyer steps into the fold, or whenever some new development on their latest deal occurs.
This may seem crazy to you if you haven't worked in the industry before, but I've seen 40 and 50-year old bankers running around like kids on Christmas morning at news of new developments.
Required qualities
In short, you need to be the type of person who always has a lot going on in his/her life. If you're fine sitting on the beach and relaxing most of the day, M&A is not for you.
But if you can get excited about almost anything, would rather have too much to do than too little, and feel compelled to be the best you can be at everything, then you may just make it to the top - assuming you can get in, in the first place.
This is a guest post on eFinancialCareers, written by the author of Mergers and Inqusitions, a website dedicated to helping you break into investment banking, and to maintaining your sanity while doing so.
