This episode discusses Joseph Wechsberg’s 1966 book, The Merchant Bankers. Rather than recounting the histories of families like the Rothschilds, Barings, Hambros, Warburgs, and Lehman Brothers, I wanted to extract the principles they shared.

Merchant banking is fascinating. It's a very distinctive form of entrepreneurship. There is an old-school way of doing business that appeals to me.

The merchant bankers’ profiled in this book have a combination of:

The founder of every merchant banking dynasty was a merchant before he was merchant banker. Once they discovered financing transactions was more profitable than physically trading goods, their real products became credit, judgment, information, advice, access, and—above all—trust.

Their greatest asset was not money. Their greatest asset was their reputation.

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