by John Rolfe
Executive Summary
Cellular-net, Inc. (the “Company”) is a leeding provdier of cellulare periherals company with over $150 million in revenues and a strong backlo.
The Copany is planning to raise $1000 million to purchas companies in the cellul telecommunicationss industry that will be. Don aldson, Luskin & Jenrette is able to effectively raise equity or debt for Company and believes that the roll-up strategie.
DLJ is one of the premier investment banking houses on Wall Street and the Copany will have the full support of Mr. Howerd Isensteen, the number one telecommunications analyst on Wall Street.
DLH is the premier investment bank in selling “Story Companies.”.
I was pissed off. I made the corrections and submitted the marked-up document. I spoke to Fausto very nicely and told him that I appreciated all his hard work throughout the year and that I really didn’t know how he did it. This made him happy. An hour later a perfect document came out.
The following day I gave this “first crack” at the executive summary to the vice president and he scrapped it. He marked it up like this:
After he was done hacking at the executive summary it was about 9:00 P.M. I submitted it to word processing. Inevitably what came out of word processing was not perfect, so I had to resubmit it.
I waited for it to come out of word processing and got it back around 11:30 P.M. The vice president asked me to fax the finished product to him after it went through word processing. So I faxed it. Of course, he was awake because he only had left the office a half hour ago. When he answered the phone I heard his TV in the background. There was a familiar theme song playing and I was pretty sure that it was the Robin Byrd Show’s “Baby, Let Me Bang Your Box.” I vowed to myself that if I ever made it to vice president I’d go ahead and spring for either Spice or the Playboy Channel, so that I could at least watch some quality hoochie while my associates faxed me pitch books.
The vice president made more changes and faxed them back to me and asked me to have it to him by the morning. I could have either submitted his changes to word processing, waited for them to be done, checked them, and left the finished product on his desk, or I could have submitted the changes, gone home for some shut-eye, and then come to work early the next morning and checked the job that word processing had done. Either way I wouldn’t have gotten more than five hours of sleep.
The next day the draft clawed its way up one level in the hierarchy to the senior vice president. The senior vice president took a look at the executive summary and made his changes as such:
Executive Summary
The senior vice president I was working for loved graphs and charts. He had already mastered the art of written bullshit in the pitch books and was pursuing a loftier goal of impressing companies with color graphs and charts. It was truly amazing.
I got the marked-up document back around 6:00 P.M. and the word processing marathon began again. I put the changes through word processing and when I was done the vice president wanted to see the finished product to make sure that it was OK to send to the senior vice president. This checking and double checking is a staple of investment banking. I then faxed the document to the senior vice president at his house. He made all these changes to the other changes and faxed them back to me. I sent it through word processing and proofed it. It inevitably wasn’t right, so I had to send it through word processing again. Then the vice president wanted it faxed back to his apartment, and he made even more changes. By this time it was midnight and the ridiculousness seemed like it would never end.
The next day the managing director looked at the executive summary and changed it again. His edits looked like this:
Executive Summary
This managing director loved presentation. Colors had to be right, fonts easy to read, bolding clear, and underlining thick. I sent these changes through word processing, showed it to the senior vice president who touched it up a bit, sent it through word processing again, showed it to the vice president, who changed a couple of nits like commas and fonts, and sent it through word processing yet again. Then I faxed the document to the home of the managing director. It was about 6:00 P.M. He made some changes and faxed the document back to me. I sent it through word processing and faxed it to the senior vice president. He put his stamp of acceptance on it and then I sent it to the vice president and he also stamped it OK. Changes had gone back and forth and forty-eight hours of my life were consumed, and the document hadn’t changed substantially from its original form except for the addition of a couple of graphs and charts.
Executive Summary
Cellularnet, Inc. (the “Company”) is the leading provider of cellular peripherals with over $150 million in revenues and a strong backlog.
The Company is planning to raise $100 million to purchase companies in the cellular telecommunications industry that will be synergistic. Donaldson, Lufkin and Jenrette (“DLJ”) will be able to effectively raise equity or debt for the Company and believes that the Company’s roll-up strategy is an exciting story that DLJ will be able to sell to investors.
DLJ is one of the premier investment banking houses on Wall Street and the Company will have the full support of Howard Isenstein, the number one telecommunications analyst on Wall Street.
DLJ is the premier investment bank in selling “Story Companies.”
So, when is the word processing of a document really done? The answer is twelve hours before the time of the meeting with the company. If a pitch to a company was in a week, then the vice president, senior vice president, and managing director would come up with more charts, graphs, and drivel to put into the pitch until there were just twelve hours till showtime. When it’s just twelve hours till showtime the associate has to put the pitch books into production.
Next stop: copy center.
The Bottleneck
The trouble with being punctual is that there’s nobody there to appreciate it.
—Harold Rome
This is a chapter about the copy center. It’s not about big, fat investment banking salaries. It’s not about stocks or bonds. It’s not about leveraged buyouts or parties where overpaid old men look for love from their secretaries. It’s about the copy center. It’s not intuitive, but it’s what matters. Before Troob and I ever became bankers, if somebody had asked us what the most important areas in the investment bank were we would have said “the trading floor” or “the institutional sales department.” Maybe we would have said “the golf course.” Under no circumstances, though, would we ever have said “the copy center.” It wouldn’t have made sense. We were bankers. We did deals. We didn’t make copies.
We learned quickly.
Our success, or lack thereof, in banking would be dependent on a long row of Xerox copiers operated by a platoon of patriotic Puerto Ricans. They were the revolutionaries, capable of being either our greatest allies or our most heinous enemies. To get on their bad side was to commit hari-kari. A banker with no copy-making abilities is impotent, so the militants in the copy center became our best friends. There were times when we would have given a round of blowjobs to the entire copy center staff if they’d requested it. We would have done it with a big smile on our faces, and we would have swallowed. Anything for the copy center guys.
The word processing department is the brains of the operation. The brains are no good, though, without a pair of hands. A genius can think up brilliant ideas all day, but if he can’t make them happen, then the ideas aren’t any better than a clock with no key to wind it up. The copy center is that key. The copy center takes the ideas put on paper by the word processing department and makes copies of these ideas. The copy center disseminates the ideas so as to make them come alive. The copy center is the pair of hands that turns the brain’s ideas into something real. It’s where the ideas become actual, tangible things—big fat stacks of paper and pitch books that say “Donaldson, Lufkin & Jenrette” on the spine.
Some investment bankers measure their success by the am
ount of paper that they generate. They’re known as the Paper Bankers. For the Paper Bankers, more is better. Paper Bankers make copies of financial statements, models, and research reports and pass them out to everybody, even people who aren’t connected with their deal. That helps them cover their ass, and keeps people from screaming, “Why the fuck didn’t you tell me about this!” later on. Sometimes the Paper Bankers don’t even need a reason to make copies. They’ll just send a stack of miscellaneous stuff to the copy center and get fifty copies made because they haven’t gotten many copies done lately. It soothes their savage beast within.
At DLJ, the copy center wasn’t actually run by DLJ employees. It was inside of DLJ, though, and anybody who wasn’t paying attention probably thought that it was actually a part of DLJ, but it wasn’t. The copy center function was outsourced to a service company that ran copy centers at a bunch of big companies in New York. Many bankers are rude to anybody who they think is making less money than them, and that includes all of the service people who help them get their jobs done. A lot of the DLJ bankers, though, figured that they could be extra rude to the copy center people since they weren’t actually company employees. It was like they thought that they could be as rude as they wanted to, and if the copy center people lodged complaints, then the banker would threaten their big boss—“Those goddamned copy center employees of yours, if they don’t get a better fucking attitude we’ll take the service contract away.” The good bankers didn’t usually make that mistake more than once.
The copy center is where the bottlenecks always pop up in the pitch book–making process. Bottlenecks occur in word processing, but not to the magnitude of copy center bottlenecks. In word processing the fonts inevitably get screwed up or underlines are botched. Although annoying and time-consuming, all of these problems are easily fixed. Also, during the word processing stage the associate feels time pressure, but nothing like what the associate feels during the copy center stage. By the time the copy center stage is reached, the associate knows that the pitch is going to occur the next morning. We believe that we’re accurate when we say that never in the history of investment banking has a pitch book been sent to the copy center twenty-four hours in advance. If a banker has the time to dicker around with a document, then he will. So a banker will never allow a pitch book to be complete before it absolutely, positively has to be complete. And that is exactly twelve hours before the presentation of the pitch book to the prospective client.
Like clockwork, a junior banker with the most important pitch of his life will walk into the copy center at 2 A.M. with a pitch book ready and tell the guy behind the counter, “I need twenty copies by seven A.M.” and the copy center guy behind the counter will say, “Join the crowd, my brother. Join the crowd.” The copy center guy will then point to a huge stack of other pitch books that have to be made by 7 A.M. and tell the banker, “You’ll be lucky if we get it done by noon tomorrow. Sorry.”
Now, understand that it’s not like the banker can run out to Kinkos to get the job done. This is a major production process—colors, bindings, inserts, acetates—the copy center guys, for all their shortcomings, are the only ones capable of cranking out these pitch book behemoths. Taking a job like this to Kinkos would be like trying to clean up an offshore oil spill with a dish sponge.
So at this point, the interaction can take one of two potential paths.
Path#1: The associate flies into an immediate rage. “You fucking idiot! This has to be done by SEVEN FUCKING A.M.! Do you read me? Comprende? My job, this here job, takes priority! This is the biggest goddamned deal this fucking bank has pitched in the past decade. Do you understand what that means? Do you have any understanding outside of that miserable little existence that you call a life what I’m telling you here? Of course you don’t. Who the fuck am I fooling? Look, get this through your thick head—THIS JOB TAKES PRIORITY! Now goddamn it, get it done by seven A.M.!”
This is exactly what the copy center guy wants to hear. This is precisely the kind of respect that a guy making seven bucks an hour figures he deserves. An apoplectic born-with-a-silver-spoon-in-his-mouth asshole from Westchester County is telling the Pride of the Barrio that he’s a fucking idiot. And, moreover, he’s telling him that he’s an idiot while concurrently begging for his help. The rich honkey banker has just made it clear through his very rage that he’s in a pickle. Nobody gets that mad about something unless their ass is in a sling.
The world is an unjust place, and the inequities inherent in Wall Street’s money game push the outer limits of that injustice. The copy center, though, is the one place on Wall Street where the little man has his day. When confronted with a livid banker demanding service, the copy center guy gets to give the rich pricks their comeuppance. It’s a kangaroo court for assholes, and the copy center guy is judge, jury, and executioner. The copy center guy can turn to the raging banker and tell him, “So sorry, but your job doesn’t have priority here. This is my shop, this is my decision. Your job’ll get done when I get to it.” The banker has no choice. He has no idea how to make copies, especially color copies, and he has no idea how to bind a document. He has no idea where the dividers are, the blue sheets, the covers, the acetates, the back covers, or anything else. Unlike word processing, which any half decent associate could do himself if push came to shove, the associate is unable to do the copy center guy’s job. No way. The associate is screwed. He’s up shit’s creek without a paddle. The associate has no choice but to surrender to his destiny. The associate has to suck up his pride and develop a new approach. He must head down path number two.
Path #2: Money talks. The associate relies on his skills of negotiation and bribery to move the job to the head of the priority list. This isn’t as easy as it sounds, because the sort of cold cash payments to the copy center guys that would provide incentive enough for them to push all other jobs aside are only allowed at holiday time. At all other times of the year, the bribery has to be more subtle and the associate has to be more crafty in the approach. The senior bankers don’t understand this part of the game. A managing director has no idea how to build a relationship with the copy center guys. The managing director may be at home in the corporate boardroom talking turkey with eager CEOs with deal fever, but when it comes time to get a priority rush on some pitch books from Julio in the copy center they’re useless. They have to rely on their lieutenants—the associates.
The good associate recognizes from day one the value of good copy center relationships. The good associate greases the wheels of progress, even when there isn’t an imminent need for express service in the copy center. The good associate orders up five or six pizza pies for dinner every couple of weeks and sends two of the pies up to the copy center. The good associate runs around the corner to the deli once a month, picks up a case of beer, and delivers it to the copy center guys. The good associate stuffs a twenty-dollar bill into the pockets of the key copy center guys at Christmas time and engenders some goodwill, or he stuffs a fifty into those same pockets and engenders twice as much goodwill. And then, when the need for express copy service actually arises, the good associate finds his job pushed to the head of the line while the badly mannered bitter associate spews forth futile vitriol, and gets the job returned three hours after his deadline. One hand washes the other.
The copy center is a factory. It’s full of big industrial-size copy equipment, the kind of heavy machinery that’s not supposed to be operated by anybody under the influence of NyQuil. The copiers in the copy center are living, breathing creatures capable of tearing off a thousand copies in the time it takes to light a cigarette, and stapling those copies before the first soothing fix of nicotine hits the bloodstream. These aren’t copiers where you punch in the number of copies you want and hit a big green “COPY” button. These are copiers with a command console that looks like something out of a nuclear submarine. They’re scary, and the only people who know how to make them work are the copy center guys.
Copiers aren’t t
he only equipment in the copy center. There are also big industrial hole punches, heavy-duty paper cutters, monster scissors, gigantic stapling machines, and huge, intricate binding machines. The binding machines have a big steel handle on the side. When you pull the handle, two rows of metal jaws pull the plastic binding apart so that the copy center guy can slip the pages into the binding. Like birth stirrups for a newborn book. The copy center’s not the kind of place that you want to be caught naked in. There’s too much opportunity for something to get caught, twisted, pulled, or cut off.
There are a million variations on the basic black-and-white copy available in the copy center. There are standard copies and there are color copies. There’s white paper, beige paper, and blue paper. There’s velo binding, staple binding, and spiral binding. There are horizontal covers and vertical covers, with and without little windows. There are acetates and back covers that are green or black, with the DLJ logo printed horizontally or vertically. The permutations are limitless. Copies can be grouped, collated, stapled, or hole-punched. The copies can be delivered to somebody’s office or picked up. A banker can give the copy center a single sheet of paper and get back a copy of that sheet on laminated bond paper, bound into a booklet with an expensive-looking green cover with “Donaldson, Lufkin & Jenrette” embossed in gold letters. It makes that one sheet of paper look very impressive. That’s what making the pitch books is all about—making mundane information look impressive.