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Thomas Weisel Partners

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Yale School of Management
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The West Coast investment bank Thomas Weisel Partners (TWP), founded by the legendary Silicon Valley entrepreneur Thomas Weisel, enjoyed one of the most successful start-ups of a financial services firm in history. Valued at $500 million when it opened for business in January 1999, TWP - which focused its efforts primarily on the technology industry – raked in $662 million in net revenues during its first two years and executed deals for high-profile clients like Yahoo! and MapQuest.com.

But in 2001, the private boutique firm was hit hard by the implosion of the dot-com, telecom and technology industries, which comprised the bulk of the TWP’s investment banking business. The downturn in the economy led Weisel to restructure his business; he diversified into healthcare and consumer, built out his PIPES and M&A practices, and reorganized his research department to lessen the focus on the telecom sector. But the firm continued to struggle financially, and its partners were seeing minimal profits from the time and money they had invested in TWP.

The terrorist attacks of Sept. 11, 2001 and the corporate scandals that dominated the early part of the decade further devastated the securities market, and TWP’s partners were left to wonder if, or when, the firm could ever make a comeback. At the end of 2004, some key partners began pondering the future of TWP, and considering the most drastic change of all – turning the private partnership into a publicly owned company. Certainly, an IPO would give the firm an infusion of capital, but going public meant making crucial decisions about the timing of the offering and the underwriter, among other things. It also raised questions about how the new ownership structure would affect TWP’s processes and its entrepreneurial culture. Finally and most importantly, the management had to consider how they would invest the proceeds from an IPO to best position the bank for the future.

Published Date: 07/09/2007

Suggested Citation: Allison Mitkowski, Mark Manson, and Jaan Elias, "Thomas Weisel Partners," Yale SOM Case 07-034, September 7, 2007    

Keywords: Investment Bank, Financial