When a company issues shares in the public markets for the first time, an investment banker takes the lead on the underwriting process of the initial public offering (IPO). To become an IPO underwriter, you need to complete a college education and continue to attend graduate school. Certain financial certifications will likely be required. Getting in the door at an investment bank in some capacity can lead to becoming an IPO underwriter.
An underwriting manager, or investment banker, on an IPO deal leads the process for equity trading in the stock market. A banker who specializes in IPO deals is responsible not only for pricing and timing the new issue but also for bearing the financial burden to sell those shares to the public. In addition to the tactical skills that are required to become an IPO underwriter, a successful candidate must have sales capabilities.
An IPO underwriter should be able to read the market and economic environment and have the communication skills to successfully market a new stock to potential investors. You must demonstrate an aptitude to work long and hard hours because demands in the financial markets exceed more conventional career pursuits. In choosing an IPO underwriter, clients frequently turn to a previously established relationship with an IPO underwriter, and this is why networking skills are so important.
The first step to become an IPO underwriter is to earn a college degree. Successful candidates should major in mathematics, accounting, economics, or another financial segment. The largest investment banks often recruit candidates from the best universities around the world, and so attending an Ivy League college helps your chances if at all possible. Earning a high grade point average also helps a candidate to get in the door at a firm. Hiring investment banks expect a candidate to also earn a postgraduate degree such as a master's of business administration.
Large investment banks frequently recruit employee candidates from the most successful schools. It is also helpful for prospective employees to proactively seek out a recruiting firm in order to become an IPO underwriter. Networking and relationship building is vital in the financial services arena, and obtaining an internship could be the first step to become an IPO underwriter. It may be necessary to accept another position in a financial services firm, such as a junior banker or associate, before advancing to become an investment banker who underwrites new issues. If that is the case, you may still be able to work with senior investment bankers on IPO deals and can learn invaluable skills for the future.