During my vacation, I read a great book from Andy Kessler entitled, “Wall Street Meat”. The author started his career as an engineer at AT&T and then spent years working as an Analyst at Wall Street investment banking firms (Paine Webber and Morgan Stanley). The book is filled with self-deprecating humor and it provides a very honest appraisal of the folks that sold their souls to make the big bucks during the dot-bomb era. Kessler provides practical insights into how the financial community is really playing a game of drunken darts when it comes to pricing the cost of capital for emerging companies.
If you are similar to me and you worked in a technology company in the late 1990s to early 2000, you’ll really enjoy reading this book. Since I was running a high-tech company backed by Venture Capital, it gave me a behind the scenes view of what I suspected. In my case, I would have some of the VC people sitting on my board provide me with advice such as: “hey, you can really make the company successful if you can get Mary Meeker to cover us in her research” (for those of you not aware, Meeker was an Analyst at Morgan Stanley considered the goddess of software). During my tenure as CEO of the VC-backed company, I actually visited many of the firms and people described in the book (Goldman Sachs, Robertson Stephens, etc.). I was rarely impressed with their industry insights and I used to just write it off to the fact that they were covering so many companies. Kessler’s book confirms that many of these analysts were incapable of selecting the best coffee at the grocery store… much less, select the best enterprise software companies.