M&A explained | Investment banking on The Gateway

Investment Banking Explained

Banking Investment / July 16, 2014

kevin spacey margin callYou may know what investment bankers tend to look like, or what kind of qualifications they usually have — but how much do you know about what Wall Street bankers actually do?

"I like to compare it to a consulting firm because everyone understands what consulting firms do, " Li said. "A consulting firm has a project or an assignment from a client and they make an action or they make a plan and recommend it to their client."

He continued:

"An investment bank does something very similar. They do provide advice to their clients, but they usually do it through more of a financial lens. So using Excel a lot more, providing valuation advice — and they actually see the deal through to the very end. So if a company is going public, an investment bank is not going to recommend them to go public, and that's it; an investment bank is going to take them through every step of the way until the company is public, and even after they're public, they still maintain a relationship with the client and provide them with other services that they need."

In other words, investment banks provide advice to companies, usually on some sort of deal, like a stock offering or an acquisition of another company.

Li, who worked in tech, media, and telecom banking in Goldman Sachs' San Francisco office, launched the podcast to address a "lack of transparency" around finance.

The first few episodes include an introduction to Li and the podcast, an overview of investment banking, and a detailed look at the initial public offering process. Next up will be an episode debunking Wall Street jargon and explaining different types of financial statements.

Source: www.businessinsider.com