Read on Twitter
Time for a quick #TalesFromInvestmentBanking
1/n as a relatively young associate, I was given a file to "manage". Essentially, a tech-oriented company was raising a large VC round, but for whatever reason (more on that later) was keen on exploring a "strategic sale" as a dual-track. Our firm was engaged to..
2/n approach large "strategic investors" as an adjunct to the VC round (that we were not managing and the company was doing directly), with a hope that a big tech player would get so excited it would just buy the company, and we would get paid a phat commission...
3/n This company had some real technology. Back in the early 2000s when everyone was cranking it to "bandwidth plays", this private co. had some nifty technology make last mile access more capex efficient...
4/n So I'm down in one of the sunbelt states with the Found CEO and his "EVP", meeting at the U.S. HQ of a big dumb German kinda-tech company that rhymes with Demons that was doing all kinds of crazy deals at the time. Perfect...
5/n Was really just an introductory meeting with several of their business units. All you had to mention to the Germans at the time was "this will really give you a leg up on Cisco" and they'd be all like:
6/n So I'm fly back on a few hour flight with the two execs. The CEO decides to get SHITFACED on the flight. I mean, like flight-attendant-looking-for-the-zipties kinda drunk. Starts going off about how "the government" is going to start "taxing the fatties" and such...
7/n The EVP is getting uncomfortable and tries to steer the CEO for a chat about the meeting we had with the Germans. The CEO then blurts out "wait until they learn that our stuff doesn't work with [the next generation of technology]"...
8/n The EVP (not nearly as in his cups as the CEO) turns purple and, in a loud voice, lambastes the CEO "[CEO], there's some things our financial advisor isn't supposed to know!!!"....
9/n So I report back to my colleagues the next day about what transpired, and we decided to just quietly put our pencils down on the file. But not kill it, you see, as the Germans might still buy it and we'd earn a 7-figure 100% gross margin fee which MDs tend to enjoy...
10/n Bad luck with the Germans who started a large downsizing and couldn't move forward. About 3 months later we chuckled when a large VC announced a large investment in this company. Under NDA, we couldn't share anything outside the firm, and the company wasn't explicitly
11/n telling people that its technology would work on future generations of access technology. Plus, that VC firm had screwed us over on another file, so up theirs, amirite? Company hit the wall about 24 months later. #TalesFromInvestmentBanking
