You 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?
Alan Li, a recent Goldman Sachs analyst, provided the most straight-forward explanation we’ve ever heard on a recent episode of his new podcast, “The Vampire Squid.”
“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.”
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, they 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, recently 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.