Thomas Weisel - CEO and Founder of Thomas Weisel Partners LLC
[Originally published on 10/11/99]
Investment banking startups are few and far between, but they do exist. People who have founded multiple successful investment banks are even more rare, but Thomas Weisel has done just that. In the early seventies, Weisel was a founding partner in the first technology-focused boutique investment bank, Robertson Coleman Siebel and Weisel. After a falling out with partner Sandy Robertson (which lead to the creation of Robertson Stephens), Weisel renamed his firm Montgomery Securities. Weisel led Montgomery Securities for twenty-seven successful years, but chose to leave the firm during its recent merger with NationsBank-BankAmerica. It didn't take Weisel long to start another bank. On January 1, 1999, Weisel started up San Francisco's newest merchant bank for growth companies, Thomas Weisel Partners LLC. Less than a year later, the firm has grown to include 66 partners and 385 professionals and now operates out of offices in San Francisco, New York, Boston, and London.
What challenges did you face while starting your new investment bank? What lessons have you taken away from those experiences?
While starting our investment bank, we faced two main challenges. First, we needed to quickly construct an investment bank with scale and quality to become a major player. We were helped by excellent market conditions and a significant and available talent pool created by the consolidation among Wall Street Firms that left many bankers and brokers unhappy with their current positions. But we still had to build the firm quickly so we could surprise competitors and prevent them from thwarting our efforts. Our second major challenge was the need to commit significant amounts of capital to build the business ahead of a revenue stream.
Based on those early experiences, we discovered that building a new investment bank in this era was not just about money. Attracting the best and brightest has more to do with having a vision, a strategy to execute that vision, and a culture that fosters an entrepreneurial spirit and allows people do what they do best. With this "pitch," we have been able to compete very effectively against the major Wall Street players offering multi-million dollar packages to bankers, brokers, and analysts.
How has your business school network come into play over the years? How should students think about leveraging their personal networks while starting a company?
My business school network [from the Harvard Business School] was very important early in my career. When I was trying to build a business out on the west coast where no investment banking franchises existed in the early seventies, it was very important to leverage Wall Street relationships I had from business school with people such as Michael Bloomberg. You must also understand that these relationships in some ways compensated for the lack of formal education provided at that time at business schools in investment banking and entrepreneurship. Students should think of networks in terms of advice, potential customers, vendors and outsourcing.
You have helped many different companies go public over the years. Are there certain attributes that all of those entrepreneurs had in common?
Yes and no. There are a lot of differences, but there are also some similarities. What stands out as the common denominators of successful entrepreneurs are leadership, passion, great work ethic, and the ability to think out of the box and develop unique ideas.
Investment banks and startups are competing for business schools' best and brightest recruits. What advice do you have for students deciding between investment banking and a startup?
Follow your passion, not the money. Startups present more risk but greater return and the opportunity to make a mark. Arguably, investment banking offers a more diverse career and a skill set that is applicable throughout a lifetime, but you must have a passion for the markets, finance, and serving others. (Sometimes it is easy to forget that investment banking is a service business.)
Investment banking startups are few and far between, but they do exist. People who have founded multiple successful investment banks are even more rare, but Thomas Weisel has done just that. In the early seventies, Weisel was a founding partner in the first technology-focused boutique investment bank, Robertson Coleman Siebel and Weisel. After a falling out with partner Sandy Robertson (which lead to the creation of Robertson Stephens), Weisel renamed his firm Montgomery Securities. Weisel led Montgomery Securities for twenty-seven successful years, but chose to leave the firm during its recent merger with NationsBank-BankAmerica. It didn't take Weisel long to start another bank. On January 1, 1999, Weisel started up San Francisco's newest merchant bank for growth companies, Thomas Weisel Partners LLC. Less than a year later, the firm has grown to include 66 partners and 385 professionals and now operates out of offices in San Francisco, New York, Boston, and London.
What challenges did you face while starting your new investment bank? What lessons have you taken away from those experiences?
While starting our investment bank, we faced two main challenges. First, we needed to quickly construct an investment bank with scale and quality to become a major player. We were helped by excellent market conditions and a significant and available talent pool created by the consolidation among Wall Street Firms that left many bankers and brokers unhappy with their current positions. But we still had to build the firm quickly so we could surprise competitors and prevent them from thwarting our efforts. Our second major challenge was the need to commit significant amounts of capital to build the business ahead of a revenue stream.
Based on those early experiences, we discovered that building a new investment bank in this era was not just about money. Attracting the best and brightest has more to do with having a vision, a strategy to execute that vision, and a culture that fosters an entrepreneurial spirit and allows people do what they do best. With this "pitch," we have been able to compete very effectively against the major Wall Street players offering multi-million dollar packages to bankers, brokers, and analysts.
How has your business school network come into play over the years? How should students think about leveraging their personal networks while starting a company?
My business school network [from the Harvard Business School] was very important early in my career. When I was trying to build a business out on the west coast where no investment banking franchises existed in the early seventies, it was very important to leverage Wall Street relationships I had from business school with people such as Michael Bloomberg. You must also understand that these relationships in some ways compensated for the lack of formal education provided at that time at business schools in investment banking and entrepreneurship. Students should think of networks in terms of advice, potential customers, vendors and outsourcing.
You have helped many different companies go public over the years. Are there certain attributes that all of those entrepreneurs had in common?
Yes and no. There are a lot of differences, but there are also some similarities. What stands out as the common denominators of successful entrepreneurs are leadership, passion, great work ethic, and the ability to think out of the box and develop unique ideas.
Investment banks and startups are competing for business schools' best and brightest recruits. What advice do you have for students deciding between investment banking and a startup?
Follow your passion, not the money. Startups present more risk but greater return and the opportunity to make a mark. Arguably, investment banking offers a more diverse career and a skill set that is applicable throughout a lifetime, but you must have a passion for the markets, finance, and serving others. (Sometimes it is easy to forget that investment banking is a service business.)
posted by gnp at 8:56 PM
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