Solving investment banking problems the Startup Way


Easily the most common question I get from former colleagues and other DCM bankers is about the change from a large investment bank to a small tech startup. How does it compare and what are the real cultural differences?


There’s a lot of talk about how startups are more entrepreneurial and how there’s more scope for individuals to have an impact.


For me that never rang true. For sure there are many boring, paper pushing jobs in banks, but DCM and Syndicate aren’t typically part of them. The individual responsibility and flexibility within DCM is really quite substantial and in many ways you can think of senior bankers as the CEO’s of their respective coverage areas.


They decide which markets and clients to focus on, pull together the relevant internal team of experts for a differentiated proposition, identify opportunities based on their expertise and relationships, help issuers navigate the deal execution and collect a fee at the end. I always thought of it as a rather entrepreneurial role.


What then is the big difference between working at an investment bank vs. a tech startup?


To me, it’s all about a fundamentally different approach to the job. Which is also the reason a small tech startup can add value to a bank with 50,000+ engineers of their own.


A startup begins from the premise that they don’t know anything until its validated. The way to get ahead is to come up with good ideas, build a quick solution, measure the impact and iterate on the result. Ever since Eric Ries published the “The Lean Startup” in 2011, most self-respecting tech startups have implemented their own version of this build-measure-learn loop.


Any banker with an understanding of compound interest will appreciate that this is an extremely powerful concept that leads to astounding results over time.


But it’s not the way most DCM teams operate today. The processes within DCM teams have been defined long ago and the modus operandi has stayed the same for many years. Just think about the weekly grid pricing process or the way teams generate and distribute client updates.


There is very little of the build-measure-learn cycle going on, because the focus is entirely elsewhere: on adding value to clients, winning mandates and executing deals, all within the framework of existing (largely manual) processes.


Bots is all about bringing the Startup Way of solving problems to DCM


This is where banks who partner with Bots suddenly see the magic happen: from one day to the next, processes do change and together we start iterating on incremental improvements.


First, we take care of the manual processing aspects and consolidate user-generated data in a central platform. Then we combine this with relevant market data from specialist sources. That then allows us to surface relationships and relative value opportunities. And obtain a holistic view of new issue pricing, trends and relationships across an entire bank’s client base. Which then leads bankers to adapt the way they cover their clients and onto a new, better way of doing things.


It’s exciting stuff and we’ve only been at it for two years.


With the ongoing input from our hundreds of users across Europe, North America, Middle East, Asia and Australia and another year or two of iteration and development, we’re confident that the competitive advantage for our clients will compound with overwhelming results.


Change takes time and effort though, so if you think ahead a few years and see a digital future for your DCM and Syndicate team, you should know that you need to start iterating today.


Bots can be your partner on that journey.


Stephan Gimpel

CEO & Co-founder

Bots - Bond Origination Technologies