Interview Question: Why TMT Investment Banking?

It's no secret that the most popular coverage group among investment banking candidates today is TMT. This isn't a new phenomenon. In fact, it has been true for almost a decade now.

However, one issue you'll run into when trying to break into TMT is that your interviewers will be highly suspicious of your motives. Because of this in most interviews your interviewer will spend a reasonable amount of time grilling you on why you really want to be in TMT.

This grilling of interviewees is done for two reasons:

  1. To see if you have a real reason for wanting to join TMT, or if you just want to join because it's the most popular coverage group;
  2. To see if you actually understand and appreciate the vast diversity of TMT, or if you just like the fact that it covers high-flying internet and software companies.

When giving your answer to the, "Why TMT banking?" question, what you need to do is persuade your interviewer that you don't just want to join TMT because it's the most popular coverage group. Further, you need to illustrate that you understand and appreciate the diversity of TMT, and that the diversity is a critical reason behind your interest in TMT.

If you can successfully do these two things in your answer, then it will really make you stand out from the rest of the candidates interviewing. Because when the vast majority of candidates are asked, "Why TMT?" they just give some generic answer around their interest in FANNG stocks, or their interest in startups, etc. which the interviewer has already heard dozens of times.

So, in this post we'll be detailing the four-step process you can use to craft an answer to, "Why TMT?" that truly impresses your interviewer and will set you apart from everyone else who's interviewing.

Personally, we've always found that interviewees overlook these kinds of broad qualitative questions and assume that all answers are more or less equivalent. This couldn't be further from the truth. This interview question is one you will unequivocally be asked at some point, and one that you should have a stellar answer for. 

Step 1: Acknowledge the Popularity of TMT

Your first step should involve making it clear to your interviewer that you understand that TMT is by far the most popular coverage group, and as a result there are lots of people who probably want to join TMT because of its popularity and not because of them truly having an interest. 

By immediately confronting the issue of many joining TMT just due to its popularity, you neutralize one of the interviewer's primary concerns (because you presumably wouldn't bring this up if you were just interested in TMT due to its popularity).

Step 2: Acknowledge the Diversity of TMT

Your second step should involve making it clear to your interviewer that you understand a lot of what drives the popularity of TMT among candidates is the fact that high-flying tech startup deals, etc. will be worked on.

You should then say that while you find those kinds of deals to generally be fascinating, what you really love about TMT is the ability it gives you to gain a wide berth of experience by working with companies across tech, media, and telecom.

This is an incredibly important point to bring up, because it's true. There is no area of banking that will give you the opportunity to work on as many fundamentally different types of companies than in TMT.

Even if throughout your banking years you only work on tech deals, that still may require you working on software buyouts, IT Services acquisitions, and semiconductor mergers (which are all wildly different kinds of deals). 

Step 3: Give Specific Sub-Sectors of TMT You're Interested In

If you've followed the first few steps, then you've managed to make your interviewer feel like you don't just want to join TMT because its popular and that you don't want to join TMT solely to work on high-flying tech deals.

Now, all you need to do is show off a little of your TMT knowledge. You should find one or two sub-sectors within TMT that you find really interesting, and then speak about those for just thirty to sixty seconds or so. 

For example, you could say that you've been reading a bit about telecom infrastructure recently and been following a few deals in the tower space. You can then say that you're fascinated by the business models at play and would love to potentially get exposure to those kinds of deals during your time in banking.

What giving an answer like this does is provide proof that you have some interests outside of the stereotypical TMT deals that get lots of press coverage (e.g., Facebook buying some tech company at a crazy valuation). Instead, it shows you have really taken the time to understand the full diversity of sub-sectors that comprises the TMT space. 

Remember that absolutely no one expects you to be an expert on anything in an interview. Just saying to your interviewer that the reason why you're most interested in TMT is due to some more obscure sub-sectors would automatically impress them almost regardless of what you say about those sub-sectors. 

Note: If you truly are primarily interested in internet / software deals, you can bring up those sub-sectors during your answer. However, you should provide some more granular details (e.g., you really like vertical software deals, and have closely followed some of the buyouts that sponsors like Vista have done). 

Note: In the TMT Interview Package, we go through all the major sub-sectors of TMT in the Tech Guide, Media Guide, and Telecom Guide. Through the Q&A in those three guides you'll be able to come up with a more than sufficient answer as to what sub-sector interests you most. 

Step 4: Acknowledge What You Don't Know

Finally, after showing off your knowledge of TMT a bit, you should then make it clear that you think that TMT will offer you an incredible opportunity to learn due to how much TMT deal flow there is and how diverse TMT is. 

You should make it clear that you've been studying up on TMT, and that the more you study the more you realize just how much you still have to learn. You should say that you find that to be incredibly exciting, as what you're hoping to get out of banking the most is the ability to learn about as many sub-sectors as possible and to hopefully find some sub-sector you'd really like to focus on over your career.

Sample Answer to "Why TMT Investment Banking?"

Now that we've covered the four steps, let's put it all together in an answer. Of course, your answer should be different than what's below. This is just an example that you can use to inform your own answer. 

Question: "So, why are you interested in TMT investment banking specifically?"

Answer: "Well, it's no secret that TMT is one of the most popular coverage groups. So, I can imagine that many candidates are probably looking to join TMT either simply because it's the most popular coverage group, or because they think working within TMT will mean that they'll be exclusively working on high-flying tech startups being acquired by tech giants.

Personally, I think what makes TMT quite special among all coverage groups is how many fundamentally different types of businesses fall under it. Not only are there huge differences between tech, media, and telecom companies. But even within an area like tech you have sub-sectors like IT services, software, and semiconductors that strike me as all being fundamentally different from each other. 

While I can't confess to have a sound understanding of every sub-sector of TMT, I've really enjoyed learning as much as I can. For example, I've spent quite a bit of time recently reading about telecom infrastructure, which I've found absolutely fascinating. In particular, i've been following some tower operator deals like American Tower acquisition of CoreSite and I've been reading about how enticing tower assets are to private equity funds (which I initially found surprising, but it does make sense). 

Ultimately, I know that a large chunk of what you'll be doing as an analyst will be working on internet and software deals. To be honest, like most people, that's what initially drew my interest to TMT. However, I've been amazed at how many interesting businesses exist in different sub-sectors of TMT and hope that - if I'm lucky enough to get an offer - I'll be able to work on some deals within these more niche sub-sectors like telecom infrastructure during my time in banking."


It really can't be emphasized enough how critically important it is to be able to properly explain why you want to join TMT. It's not enough just to sound passionate. You also need to indirectly show your interviewer that you really know what TMT involves and aren't just jumping on the TMT bandwagon because it's a popular coverage group.

Also, keep in mind that what you say in your answer could be a jumping off point for further questions if your interviewer is intrigued. For example, if you mention following a particular sub-sector closely then you should expect a follow-up where you'll need to delve a bit further into that.

Don't worry though. If you're being asked to explain why you found a certain niche sub-sector to be interesting, that's because your interviewer is genuinely curious to hear your views.

Anyway, hopefully this has helped elucidate how to structure your answer. If you're looking for even more interview prep material, be sure to take a look at the long list of TMT interview questions we've put together.

As always, best of luck!

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