Goldman Sachs pitching wealth clients on investing in Stripe shows how Wall Street drums up exclusive deals for its richest customers
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Dan DeFrancesco
Feb 27, 2023, 19:24 IST
Leon Neal/Getty Images
Welcome back!Dan DeFrancesco in NYC. Let's play a game. An American Airlines passenger rushed the cockpit after she couldn't get a drink. But before you read the story, can you guess what type of cocktail she was after? Hint: Go with your gut.
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1. Life on the other side.
Financial wealth can be defined lots of different ways. It could be the number of houses you own, the type of investments you make, or simply the amount of zeros in your bank account.
But perhaps the best way to measure true financial wealth is simple: access.
The more money you have, means the more doors are open to you that remain closed for others.
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To that point, Insider's Hayley Cuccinello has a story on how Goldman Sachs offered its richest clients the opportunity to invest in the buzzy fintech Stripe.
Let's set aside whether Stripe is actually a good investment* and instead focus on the idea of banks pitching their wealthiest clients an opportunity to invest in high-profile companies that haven't gone public yet.
As Hayley breaks down in her story, big banks love doing this type of stuff because it allows them to keep it in the family, so to speak.
If I can take the startup client my investment bankers are working with and leverage my wealth clients to help them fundraise, that's a win-win. Even better if the cofounders and employees of said startup turn around and come back to me as wealth clients once I help them get rich. And on the cycle goes.
More broadly, this is also just another example of how banks are always finding ways to cater to their rich clients.
*(OK, I couldn't help myself. There has been a lot written this year about Stripe, from its falling valuation to cutting staff to the amount of cash it burned in 2022. All these criticisms are valid and deserved considering its size, but I don't buy the notion that these are warning signs that Stripe is in trouble. When you consider the wider world of fintech — which is filled with companies with basic financial tools masquerading as disruptors because of their flashy user interfaces and large marketing budgets — there are plenty of startups to be more concerned about. But we build empires to break them down, and it seems it is time to topple some statues at Stripe.)
In other news:
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2. If you stick around, I'll make it worth your while. Wall Street investment bank Evercore has a new promotion program for junior bankers that includes an earlier bump to associate and $70,000 in bonuses. Read more here.
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8. Maybe NFTs aren't a complete waste of money after all? Two former Barclays junk bond traders (the jokes write themselves) nabbed a 700% profit by selling their collection of Bored Ape Yacht Club NFTs recently. More on how they did it and how much they made.
9. A little bit goes a long way! Forgot scrapping your entire diet. We've got manageable changes you can make that you're likely to stick with and, as a result, will lead to longer-lasting results. Check out all 10 here.
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