Breaking into investment banking requires more than networking and charisma. In fact, banks worldwide demand that incoming analysts demonstrate mastery of core technical competencies. Understanding which investment banking skills matter most can give you a decisive edge in interviews and internships. Below are the five technical skills you must master to land and excel in an IB role.
1. M&A Deal Process and Key Documents
Beyond numbers, you must understand how deals get done from start to finish. First, consider two critical documents: the Teaser and the Confidential Information Memorandum (CIM). The Teaser is a 1-2 page anonymous overview sent to potential buyers to generate initial interest. Subsequently, once an NDA is signed, the comprehensive CIM—typically 50+ pages—provides detailed company information, financials, and investment thesis.
As a junior banker, you’ll spend considerable time creating and editing these documents. Therefore, demonstrating familiarity with the M&A process shows recruiters you’ve done your homework beyond textbook finance. On the job, you’ll draft CIM sections, coordinate data rooms, and manage deal logistics. Additionally, understanding the difference between pitch books (presentations to win mandates) and CIMs (documents to sell the company) signals you grasp the sales process in M&A.
2. Financial Accounting and Statement Analysis
Financial accounting forms the foundation of all banking analysis. Specifically, you need a deep understanding of the three financial statements—Income Statement, Balance Sheet, and Cash Flow Statement—and how they link together. Moreover, concepts like accrual vs. cash accounting, depreciation, working capital, and GAAP/IFRS standards are essential.
In interviews, expect detailed questions testing your ability to reason through accounting changes. On the job, you’ll analyze historical statements, normalize earnings, and calculate critical metrics like EBITDA and enterprise value. Furthermore, understanding the difference between enterprise value (total company value including debt) and equity value (value to shareholders) is a frequent technical test. Without this foundation, it’s impossible to analyze companies credibly.
3. Essential Investment Banking Skills: Valuation Methods
Investment banking is fundamentally about valuing companies and deals. Consequently, you must master core valuation methodologies: Discounted Cash Flow (DCF) analysis, comparable companies multiples, and precedent transaction multiples. DCF involves projecting free cash flows and discounting them to present value at the appropriate cost of capital. Meanwhile, comparables use market data to infer value.
Interviewers love asking candidates to walk through a DCF or explain multiple valuation approaches. Ideally, you should outline DCF steps from memory and discuss pros and cons of each method. On the job, you’ll use these techniques in pitch books and client presentations. Whether valuing an M&A target or determining an IPO price range, strong corporate finance knowledge is critical. This includes understanding WACC, capital structures, and accretion/dilution analysis.
4. Financial Modeling and Advanced Excel
Financial modeling is the life-blood skill for investment bankers. You’ll build detailed spreadsheet models for valuations, mergers, LBOs, and other transactions. This requires expert-level Excel proficiency. Specifically, you need mastery of advanced functions, pivot tables, and the ability to model three statements that tie correctly together.
Top banks assume new hires can hit the ground running in Excel. You’ll build and audit models under time pressure. During long hours, you’ll update models with new data, perform sensitivity analyses, and produce outputs for PowerPoint pitch books. Efficiency matters—keyboard shortcuts and structured templates are essential to meet tight deadlines. Importantly, the best candidates can explain the logic behind their models and the business insights they reveal, not just produce complex spreadsheets.
5. Capital Markets and Financing Knowledge
Investment banks raise capital through debt, equity, and hybrid instruments. Strong candidates understand equity markets (IPOs, secondary offerings), debt markets (bonds, loans, interest rates), and how macroeconomic conditions affect financing. You should know how an IPO process works, what bond issuances entail, and key concepts like yield, credit ratings, and leverage.
Recruiters may ask questions like “Why might a company choose debt over equity?” or “How could current market conditions impact our clients?” You need to connect financial theory to real-world market dynamics. Even in M&A deals, financing knowledge is crucial. For instance, understanding how LBOs are structured or how different deal considerations (cash vs. stock) work is essential. Ultimately, investment banking skills in capital markets make you more effective at advising clients because you can analyze transaction feasibility under current market conditions.
Take Your Investment Banking Skills Further
Mastering these five technical areas—M&A deal process, accounting, valuation, modeling, and capital markets—will dramatically enhance your chances of securing an investment banking position. Banks globally expect strong analytical fundamentals, polished modeling abilities, and market awareness.
To strengthen your chances of landing an IB job, consider joining the InfoGate Financial Investment Bank Academy. This program allows you to prove to recruiters that you can pitch a deal—demonstrating practical expertise that sets you apart from other candidates. By developing these investment banking skills early and gaining hands-on experience, you’ll separate yourself from the competition in this fiercely competitive field.