How does Chessiecap differ from traditional investment banks?
Traditional investment banks have employed a banker-analyst model. The banker executes transactions, and the analyst tracks market segments and follows companies that trade in the public markets. The banker uses the analyst to show how smart the firm is about an industry and competing companies. The problem is, most analysts know how to look at the financials of public companies, but they’ve never held an operating job. They’ve never sold software, developed a product, or run a data center. Their world is made up of trends and statistics, as it should be. As tenuous and hands-off as it was, the analyst driven model was the primary differentiator for investment bankers. However, the SEC has now weighed in pretty heavily on analyst practices and the banker-analyst relationship. That model, which was used to excess in 1990s, is now dead.
