Founders: #425 The Merchant Bankers

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This episode discusses Joseph Wechsberg’s 1966 book, The Merchant Bankers. Rather than recounting the histories of families like the Rothschilds, Barings, Hambros, Warburgs, and Lehman Brothers, I wanted to extract the principles they shared. Merchant banking is fascinating. It's a very distinctive form of entrepreneurship. There is an old-school way of doing business that appeals to me. The merchant bankers’ profiled in this book have a combination of: personal honor speed of action clear thinking independent judgment seamless webs of deserved trust discretion and willingness to make unconventional decisions. The founder of every merchant banking dynasty was a merchant before he was merchant banker. Once they discovered financing transactions was more profitable than physically trading goods, their real products became credit, judgment, information, advice, access, and—above all—trust. Their greatest asset was not money. Their greatest asset was their reputation. Made possible by: Ramp: ⁠⁠https://ramp.com⁠⁠ Applovin: ⁠⁠https://www.applovin.com Vanta: ⁠⁠https://vanta.com/founders Add your email here and I will send you my top 10 quotes from every episode.

[00:00] A: In every merchant banking dynasty, there is one pioneer who began with nothing and died rich. The Rothschilds started out as coin changers in the ghetto. The Bearings and textiles, the Hambros and foodstuffs, the Warburgs and silver and the Weshbergs began in grains. Grandfather arrived in town in style, sitting on top of a hay cart loaded high with corn. So the author's grandfather was a merchant maker. He said people in town used to call him Albert the Benevolent because he would lend them money at 5%. I had no idea what that meant. Later I heard that when Albert the Benevolent…

Founders: #425 The Merchant Bankers

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