Matt Levine, Columnist

Investment Bankers Don’t Work for Free

Also the American Dream mall is open, coal companies as climate solutions and round-number stock prices.

March 12, 2025 at 5:37 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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The way investment banking works is that you do a lot of free work for companies, meeting with them frequently to pitch ideas and give them advice and listen to their troubles and analyze their finances, in the hope that one day they will hire you to advise them on a merger or a bond deal and pay you a lot of money. Your fee for doing the merger is, generally, very generous, measured against the number of hours that you spend working on the merger. Measured against the number of hours that you spent pitching that company, and the 20 other companies that didn’t mandate you on mergers, it looks more reasonable.

Occasionally this process leads to disappointment. There are two slightly different forms of disappointment: