Best way to become an investment Banker
I actually left my investment banking job last August after an 18 month stint as an analyst. Although I felt that my learning plateaued after the 1-year mark, I'm still incredibly grateful that I gained the experience. Here's a bit of background:
I double-majored in finance and film during undergrad. During my freshman summer, I took two internships. One was a boring internship in a lousy wholesale company. The other was a film internship. I learned that summer that I absolutely despised film-making, and I spent the rest of college trying to gain experience in investing. My first internship was with a commodities trading firm. Although I didn't like working for a broker, I was extremely excited about the markets. I enrolled in all portfolio management and corporate finance classes at school. During the spring of that year I took an internship in wealth management. Similar to my first internship, I enjoyed being around the markets, but I still didn't feel that I was learning any applicable skills. Like you, my goal was to become an investor in businesses. Finally, my junior summer I headed to NY to work as an investment banking analyst intern. The guys I worked with were all very bright, and I felt that I had learned more about finance in that summer than all of my previous internships/coursework. When I got back to school, I took an internship in alternative asset management but ultimately decided to head back to NY to work as a generalist analyst across each product group.
I believe you should consider investment banking for the following reasons:
1. There are few other careers out of undergrad that will teach you as much about valuing a business as investment banking. You should note, though, that you learn very little about the markets. In fact, I stopped paying attention to the markets altogether after I started working. Instead, you learn about the relative value of a business, signs that a company could be headed toward distress (especially if you choose restructuring), how private equity / investment firms would analyze the purchase price of an asset, etc... It's common for analysts to refer to their first three months on the job as 'trying to drink through a fire hose'
2. You learn how to create a high-quality work product. Whether you think it's a good use of time or not, investment bankers demand an exceptionally accurate, well-formatted final product. You understand the time and effort necessary to complete an analysis that will be shown to managers of businesses. You interact with executives, and you see your work used directly by C-level employees. You realize that even a small rounding mistake can discredit your analysis, and you appreciate that every piece of work you show someone should be perfect (to the best of your ability).
3. There are certain exit opportunities only available to investment banking analysts. Banks spend tens of thousands of dollars and plenty of resources training analysts. They spend the next few years working the analysts like crazy to get the most out of their investment. Because of this, private equity, hedge fund, and a few VC firms gravitate toward hiring former bankers. One of the main reasons is that you're getting a pre-screened, well-trained analyst who you know can produce worthwhile analysis. Banking analysts spend most of their time focusing on financial valuation. Investment firms who invest directly in businesses prefer to hire people that already know the standard valuation methods.
4. If you don't want to do finance after your analyst stint, banking puts you in a competitive position to do sometching else. I'm an example of this. I transitioned from banking to a start-up. People understand that banking is a demanding job and that analysts work hard and take on a high-level of responsibility. There aren't many careers that have the same reputation.
Although I think banking is a great way to start a career, it's not for everyone. If you want to spend your days researching equities, do NOT do banking - you'd be miserable. Instead, look into equity research or a hedge fund. If you've taken some corp finance classes and decide you want to learn more about M&A, IPOs, Reestructuring, or debt financings, I think a bank would be a good fit. Good Luck!