Investment Banking

Work Your Investment Banking Network: 5 Strategies to Win

Last Updated:
October 12, 2023

Networking always has and probably always will play a vital role in the banking world.  

From finding the right deals to matching up the right providers of capital, you often rely on information flow through your connections to run a successful business. Who you know matters and the ability to build and tap into networks is a vital skill for investment bankers.

Networking is often one of the best ways to tip the odds of making a good deal happen. When it comes down to a choice, people (referral sources, management teams, and buyers) will often go with the person they know.

But that leaves a fundamental question – how do you really get your investment banking network working for you?  Here are some of our strategies for driving your investment banking networking efforts and tapping into it when needed:

#1. Know What Matters to Your Network

Matching up the right capital providers (e.g., private equity funds, corporate development teams) to the right deal isn’t just about knowing investors, but knowing how those investors think about opportunities. Finding the right match comes down to a number of factors –  the investment categories they focus on (e.g., industrials), the locations they invest in (e.g., New York), their preferred risk profile, and also how they relate to management teams on a human level.

One way to more efficiently manage your investment bank network is to have a good process for organizing your buyers, clients, and referral sources. For example, if a company is looking for investment to expand their medical device business, you need to be able to easily find investors who put their money into medical technology companies.

The right system will make it easy for you to quickly identify those investors. For example, in 4Degrees you can structure your contacts or companies to quickly understand their investment categories, key numerical thresholds (e.g., valuation) and interests. Those tags are searchable, so when an investment opportunity comes along, you can run a quick search and pull together any matches in your network. This could potentially save hours of scrolling through contacts, but more importantly help you run a more competitive process, leading to a better outcome for your clients (and you!).

#2. Maintain Your Connections

It’s common for investment bankers to have extensive lists of contacts on their LinkedIn profiles, in their Outlook accounts, or in stacks of business cards, but not to have been in touch with them for a long time. This comes to a head when you remember someone among your contacts who can put you in touch with someone you need, but you haven’t spoken to them in years. How do you reach out and make the approach? At that point, you may be indistinguishable from the BDR cold emailing every decision-maker they can find, or the spam cold calls they receive each day.

Keeping your contacts organized so that you’re able to engage the critical ones regularly is the foundation of any important networking effort.  Grouping and prioritizing connections can take a huge list of contact information from overwhelming to actionable.

Some simple categories might include: current clients, likely prospects, investors in X category, influential connections, friends who are connectors…and so on. From here, you can then use simple tools to stay in touch – the occasional email, phone call or coffee.

To make it even easier, use a system that can alert you and show you how long it’s been since you made contact with them. The image below shows a screen in 4Degrees, which tells you when the last contact was.

#3. Get Warm Introductions Through Your Team

While cold calling and cold emails can open doors where there are no other options, referrals are far more likely to convert to conversations.  The good news is your team is often a great source for mining networks and getting referrals to management teams and investors. Your colleagues may have gone to business school with potential clients, shared prior work experiences, or be in the same undergrad alumni networks.

When you’re talking about potentially thousands of different connections, it’s unlikely your team will remember every possible match off the top of their heads. Searching each other’s LinkedIn contacts, as well as asking people to look through their Outlook contacts individually can be a solid first step in this direction – but may risk non-compliance.

In practice, we’ve seen asking the team’s executive assistants to take point on this, using a technology system, or both can be a good way to ensure the full network of the firm is accessible to ensure that valuable connections aren’t missed.

#4. Focus on Quality Over Quantity

Handing out business cards left and right is rarely a strategy for building an investment banking network that you can manage well and have working for you. Besides that, when viewed from the perspective of the others in the room, quantity networkers can be off-putting. People like to feel that you actually care about them, not like you’re only talking to them because they happen to be in the same room.

There is a lot to be said for genuinely nurturing relationships. While it can take some time and effort to get to know people, it’s important to keep in mind that people always tend to remember how you made them feel. Taking an approach that shows you genuinely want to learn about them will help you stand out in a positive light – especially if others they know simply collect contacts without engaging them.

If you’re attending an event, it can help to have some background research on who else might be there, especially if there are people you specifically want to meet. Many conferences publish lists of attendees in advance. This gives you the opportunity to get some background information early on – and as you may have guessed, an intelligent relationship management solution like 4Degrees can help you get that information!

#5. Be of Service

If you position yourself as a useful resource for those in your network, it makes you a valuable part of their community. This is where the law of reciprocity kicks in. Basically, when someone does something nice for you, you feel an urge to reciprocate. It’s a concept coded deeply into human DNA, originating from early days when tribal humans had to exchange value simply to survive.

One of the keys to the law of reciprocity is that you have to be willing to give without any expectation of receiving in-turn. Sometimes people remember you months or years later when something comes up that they think will be good for you.

How can you be useful to people in your network? Here are a few ideas:

  1. Publish content (for example on your blog, LinkedIn or Medium) on key topics, problems or questions that will be useful to them.
  2. Find out about a pressing challenge they have in their business. It’s possible you might already know someone who can help.
  3. Simply ask them how you can help – you might be surprised!
  4. Share any valuable resources that you might have (e.g., relevant equity research reports they might find of use, or case studies of similar businesses).
  5. Offer to introduce people, or perhaps host an event where they can meet.
  6. Look for opportunities to invite people in your network to collaborate with you. To give one quick example, maybe you’ve decided you’d like to run an event, so you give someone the option of co-hosting with you.

Importantly – no matter which of these you choose, make sure to follow-up!  You can be at Goldman Sachs, Morgan Stanley, or any other well-known bulge bracket bank on Wall Street, but that won’t matter if you develop a reputation for not following through or living up to expectations.

In any investment banking job it can be relatively common for people to forget things unintentionally, so it’s important to have a good system. Made a promise? Document it and include automated reminders to ensure you follow through.

Final Thoughts

Despite financial modeling and the corporate finance toolkit being core focuses of the investment banking recruiting process, the truth is investment banking is a relationship business.  Your network plays a critical role in not only discovering new opportunities for your company, but in being able to connect other people with the right opportunities for them. While there is no one template for being successful in the business, one commonality that many successful investment bankers share is a focus on proactively maintaining and growing their network.

It can often seem like you have too many contacts to manage but this is where having a robust CRM will work in your favor. An investment banking CRM will help you to manage your contacts and keep an overview of the relationship.

4Degrees is a seamless solution for investment banking relationship management – request a demo here today.

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