"Investment Banking is 10% Financial Analysis and 90% Psycho-analysis" – André Meyer  This blog is about the "other 90%"…

Swingers and Singers

08/26/2013  | Tags: , ,

2011_Berlin-KudammMust admit a weakness for jazz.  The artist who introduced me to it was Louis Armstrong.  I picked up a green boxed vinyl collection of his 1930′s recordings for 10 deutschmarks in West Berlin’s Kurfürstendamm in the late 1980′s.  I became instantly mesmerized by the energy and vivacity of the man:  He was swinging at 200 miles an hour and threw off virtuoso solos.  My favorite song became ‘Swing that Music’, which exhumed such joy, that I listened to it every grey winter morning in my car to get pumped up for the day.

Over time, I tried to collect his later recordings too.  My favorite of these is Oscar and Louis, a collection of ballads recorded in the early 1960′s with the great Oscar Peterson on piano accompanying Satchmo.  These songs could not have been more different. Louis focused on singing rather than blowing; treating the latter as the extension of his voice rather than a separate instrument.  He blew 1/20 th of the notes or fewer than during his hot Five days, but infused his songs with emotional depth.  Oscar Peterson is totally in tune and the combination of Louis’ voice and trumpet, and Oscar’s tinkling piano can conjure up the heartbreaks of youth.  But, I digress…

The transformation from technical to emotional virtuosity can be observed with some investment bankers too.  For the entrepreneur selling his company built over half a lifetime – is an emotionally charged event.  He will want to get a good price, but also leave behind a sound legacy. To have more than the money to show for his endeavors.

Negotiations take place between people and the better the advisor relates to and reads the personalities of the buyer’s team, the likelier he will get a good deal for his client.  The young banker may be compelled to be aggressive to demonstrate his guts and drive to bag a deal; while the mature advisor, rather than talking, will spend more time listening and drawing out the other side. Knowing the constraints of both seller and buyer will show the golden path to structuring a deal that works for both.

The most effective investment banking team includes both a swinger and a singer.  It’s good to appoint a young gun to drive the deal, but equally, to have a mature advisor on hand, who can analyze and strategize… step in to sooth nerves… and brainstorm a solution when the deal gets stuck in the mud of mistrust.

Istvan (Steve) Preda

Istvan (Steve) Preda

ispreda

Strategic Advisor and Investment Banker who helps companies grow, groom and get great investors.
Comments (1) - We would like hear your opinion too!
  1. As a “mature advisor” I highly recommend ESOPs for consideration, as they leave a legacy. Let’s discuss.

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