I never could understand how two men can write a book together; to me that’s like three people getting together to have a baby.
—Evelyn Waugh
A few years ago, Rolfe and I stood on the edge of what we thought was a desert. Across the desert we believed we saw a lush, green oasis. We hoped that the pleasures of that oasis would one day be ours. The more we thought about the oasis, the more convinced we were of the untold pleasures that lay within its luxuriant borders. There was only one problem. The desert.
When we first started out as investment banking associates, the oasis was represented by a coveted appointment as a managing director of the firm. We were willing to cross those hot burning sands, the interim years as investment banking associates and vice presidents, in order to one day bask in the shade of a palm frond. A few months after beginning our journey, though, we began to suspect that the original oasis that we had seen might be a mirage. For a time we became lost, delirious in the hot sun, but eventually we regained our bearings. It became clear to us that whatever oasis lay out there for us, to get there we were going to have to cross more sand than we could ever have imagined.
We reasoned that many careers have a painful rite of passage attached to them. The medical profession has med school and residencies. The legal occupation has clerkships and the years of initial grunt work. The investment banking business is no exception. Young investment bankers must pay their dues in order to be able one day to grab hold of the brass ring. Most, if not all, senior bankers paid these dues and took these lumps. Some of them are better off for having done so. If they had to do it, then so did we. Those were the rules.
Are we better off for having subjected ourselves to the associate ranks of investment banking? Yes. Was it all miserable? Absolutely not. We experienced lots of good and lots of bad while on the dues-paying highway, most of it without much sleep. But at one point along that highway we decided to pay the exit toll and get off. We both still work in the world of Wall Street, and we’d be lying if we told you that money doesn’t matter to us. When it came to investment banking, though, the costs and the benefits seemed way out of whack. So we don’t work as bankers anymore, and now we enjoy walking into work every day.
This is the story of our rite of passage. It’s the story of two investment banking associates and our long journey from eagerly competing to enter the world of investment banking to even more eagerly scrambling to get out of it. This book is our catharsis. Banking is what we did—investment banking associates were who we were. Like virgins defiled, we can’t possibly rid ourselves of the scourge to which we knowingly submitted. It strengthened us and it toughened our hides. That was good and that was bad. If there was a pumice stone for the soul, we would have scrubbed ourselves raw. There isn’t.
Investment banking is a profession characterized by extremes. Whether it’s money, booze, food, sex, or work hours, the typical banker believes that more is better. We experienced our fair share of these extremes, and have recounted some of our adventures within these pages. Excess and debaucherous pursuits are only half the story, though. The other side of the coin for us was our realization that being anointed investment bankers didn’t make us the big-shot advisers to corporate directors we thought we were going to be. Instead, it turned out that we spent most of our work time as mindless paper processors. And even though we were paid mighty well to push that paper around, the unwavering devotion to the job that was required of us just wasn’t worth it. We’ve tried to convey our path to these realizations within these pages as well. We don’t have a lot of regrets. There aren’t many jobs, after all, that could have given us the opportunity to live like hedonists and come to the realization that the emperor has no clothes, all before our thirtieth birthdays.
We worked at Donaldson, Lufkin & Jenrette (DLJ). This story isn’t just about DLJ, though. This story is about the dues that all junior investment bankers have to pay. We have lots of friends at other investment banks. Same shit. Investment bankers spend 50 percent of their time trying to convince potential clients that their bank is different than the other guy’s bank, but for a junior banker, at the end of the day, they’re all the same. Any young investment banker, regardless of the bank he works at, can tell the same stories about working for three days straight with no sleep, getting screamed at for messing up the page numbers in a pitch book, or aging before one’s time like a block of cheddar cheese left out of the refrigerator. The older bankers may have had better lives, they may have had more fun, but we wouldn’t know this because we were junior bankers. As junior guys, our lives sucked.
For some, hopefully, this story may provide a fresh window into the world of investment banking. Without being one, no one can really know what a banker does. Before we started, all we knew was that bankers, traders, and egregious salaries were always mentioned in the same breath. Understanding what a trader does is a little more intuitive than understanding what a banker does, because everybody’s traded for something in their life. It may have been something as simple as a rookie Ron Guidry baseball card for an All-Star Reggie Jackson card, but the concept of an exchange for relative value is as old as humankind itself. Investment banking has no such intuitive counterpart in real life. It took our mothers six months to realize that we weren’t stockbrokers, working the phones to sell crappy public offerings to unsuspecting investors. It took us another six months after that to realize that we were, in fact, selling crappy public offerings to investors. The only difference was that we weren’t selling them over the phone, we were doing it in person, and the investors weren’t unsuspecting individual investors, they were the Fidelitys, the Putnams, and the T. Rowe Prices of the world.
The closest most people have ever come to understanding what an investment banker does may have been on October 24, 1995, when they heard the outrageous special interest story of the day. The wire services released the story first. It was quickly picked up and parroted by almost every major media outlet in the country as a classic example of Wall Street excess. A fifty-eight-year-old frustrated managing director from Trust Company of the West, on an airplane trip from Buenos Aires to New York City, downed an excessive number of cocktails, got out of his seat in the first-class cabin of a United Airlines flight, dropped his pants, and took a crap on the service cart. There you have it. That’s what bankers do: consume, process, and disseminate.
In general, the only way for a young associate to survive the investment banking gauntlet is either to buy into it hook, line, and sinker or to maintain some sense of humor about what it is that he or she is doing. Keeping one foot grounded in reality, though, doesn’t necessarily dictate the maintenance of any mental equilibrium. After all, if you’ve got one foot on a block of dry ice and the other on a red-hot stove, the average temperature may be pretty comfortable but you’ll still end up with two blistered feet at the end of the day.
Our first full-year compensation after signing on full-time at DLJ following business school was about eight times what the average college graduate earns at his first job, and we could expect that compensation to double every two years. We traveled the country by private jet, stayed in the best hotels, and ate in the best restaurants. Eventually, though, we realized that the compensation levels and the perks weren’t in place because being an associate in investment banking was a great job. They were in place because the job sucked. The one immutable truism that exists for bankers is that any problem can be solved by throwing enough money and time at it. The implication? The banker’s greatest enemies are those people whose souls are not for sale, and those who realize that time is a nonrenewable commodity.
Our intent here is not to judge. Lots of our friends are still bankers. They’re still out there crossing that burning-hot sand with the sun beating down on their heads, and some of them really like what they’re doing—just like a throng of wandering Bedouins. As some malcontent once said, it’s a dirty job but someone’s got to do it.
When we talked about writing a book about our time as associates in investment banking we asked each other, “What will we say?” And then we immediately answered, “How we got there. What we did and how we got out. How we lost our balance. Everything, man.”
Well, as our favorite boxing referee, Mills Lane, always proclaims, “Let’s get it on!”