Saturday, March 28, 2009

Matt McCall on Wall Street

Great editorial on Wall Street by Matt Mccall of Draper Portage on his blog, VC Confidential. It's titled "Enough Wall Street, Enough," and he captures my thoughts perfectly. Click through for the whole thing, but here is a nice little quote:

"Some of the Wall Street crowd claim that their divisions were highly profitable and, therefore, their groups deserve bonuses. Sounds good to me. You just need to have the groups that hemorrhaged all the losses pay back that capital to the firm. If you can't get this money back, guess bonuses. If you feel that this isn't fair, join the crowd. You are part of a single firm. You rise and fall together as a single firm. You can't keep the positives and ignore the negatives. With hedge funds, buyout funds, real estate funds, venture capital funds and commodity funds, if one partner's deal is a huge hit but another partner's deal tanks and wipes out the profit, no one gets a bonus (carry). This is because the fund's management team rises and falls together. Is it a bummer for the partner who delivered the big win? Yes. Does this mean he/she is owed a bonus? No."