Robertson Stephens & Co.: The Rise and Fall of a Legendary Investment Bank

A History of Innovation and Excess

Robertson Stephens & Co. (RSC) was an innovative and influential investment bank that played a significant role in the financial industry during the 1980s and 1990s. Founded in 1978 by Sanford Robertson and George Stephens, RSC quickly established a reputation for its expertise in technology and healthcare investments.

Founding and Early Growth

Robertson Stephens was born out of the insights of its founders. Robertson, a former academic, had a keen understanding of the emerging technology sector, while Stephens, an experienced banker, had a proven track record in raising capital. Together, they saw an opportunity to capitalize on the growing demand for investment banking services in the technology industry.

In its early years, RSC focused on providing financial advisory and underwriting services to technology companies. One of its first major successes was the initial public offering (IPO) of Apple Computer in 1980. RSC also played a key role in the IPOs of other technology giants such as Intel, Microsoft, and Cisco Systems.

The Rise of Investment Banking

By the mid-1980s, Robertson Stephens had become one of the leading investment banks in the United States. The firm's reputation for innovation and its ability to attract top talent contributed to its success. RSC was known for its aggressive underwriting tactics and its willingness to take risks on emerging companies.

In 1987, RSC was acquired by Fleet Financial Group for $1.2 billion. The acquisition gave RSC access to Fleet's extensive distribution network and customer base. However, the merger also led to a clash of cultures between the two firms.

The Rise of Tech Giants

The 1990s marked a period of rapid growth for the technology industry. Robertson Stephens continued to ride the wave of innovation, providing financial advisory and underwriting services to some of the most successful technology companies of the era. The firm played a key role in the IPOs of Netscape, Amazon, and eBay.

By the end of the 1990s, Robertson Stephens had become one of the largest investment banks in the United States. The firm had offices in major financial centers around the world and employed over 2,000 people.

The Dot-Com Bust

However, the rise of the technology industry also sowed the seeds of RSC's eventual downfall. In the late 1990s, the stock market bubble in technology stocks began to burst. As investors began to lose faith in technology companies, RSC's business model came under pressure.

In 2001, Fleet Financial Group announced that it would be closing down Robertson Stephens. The firm's demise was a major shock to the financial industry and marked the end of an era.

Legacy and Impact

Robertson Stephens & Co. left a lasting legacy on the financial industry. The firm's innovative approach to investment banking helped to finance the growth of some of the most successful companies in the world.

Despite its eventual downfall, Robertson Stephens is remembered for its pioneering spirit and its ability to identify and invest in emerging trends. The firm's alumni have gone on to found and lead successful companies in the technology, healthcare, and financial services industries.

Robertson Stephens & Co. by the Numbers

• Founded in 1978
• Acquired by Fleet Financial Group in 1987 for $1.2 billion
• Closed down in 2001
• Provided financial advisory and underwriting services to some of the most successful technology companies of the 1980s and 1990s
• Played a key role in the IPOs of Apple Computer, Intel, Microsoft, Cisco Systems, Netscape, Amazon, and eBay

The Rise of Investment Banking: Robertson Stephens & Co.'s Impact

Growth of the Technology Industry

Robertson Stephens played a significant role in the growth of the technology industry by providing financial advisory and underwriting services to emerging technology companies. The firm's expertise in the sector and its willingness to take risks on new companies helped to fuel the growth of the industry.

Rise of Venture Capital

Robertson Stephens was a pioneer in the venture capital industry. The firm's early investments in technology companies helped to create a new asset class and paved the way for the growth of the venture capital industry.

Global Expansion

Robertson Stephens expanded globally in the 1990s, with offices in major financial centers around the world. The firm's global presence allowed it to provide financial services to technology companies on a global scale.

Robertson Stephens & Co.: The Rise and Fall of a Legendary Investment Bank (Timeline)

The Dot-Com Bust: What Went Wrong?

Overreliance on the Technology Sector

Robertson Stephens was heavily reliant on the technology sector for its revenues. When the technology stock bubble burst in the late 1990s, the firm's business model came under pressure.

Aggressive Underwriting Tactics

Robertson Stephens was known for its aggressive underwriting tactics. The firm often took on large underwriting positions in risky technology companies. This strategy proved to be unsustainable when the technology stock bubble burst.

Lack of Diversification

Robertson Stephens did not diversify its revenue base. The firm was heavily reliant on investment banking fees, and it did not have a significant presence in other business lines.

Cultural Clash

The merger of Robertson Stephens and Fleet Financial Group led to a clash of cultures. The two firms had different approaches to business, and the merger created tensions that ultimately led to RSC's demise.

Lessons Learned from Robertson Stephens & Co.'s Demise

The Importance of Diversification

Companies should not rely too heavily on a single sector or business line. Diversification can help to mitigate risk and ensure long-term success.

The Risks of Aggressive Growth

Aggressive growth can be rewarding, but it also comes with risks. Companies need to carefully manage their risk exposure and avoid overextending themselves.

The Importance of a Strong Culture

A strong culture is essential for the long-term success of any company. Companies need to create a culture that is based on shared values and principles.

FAQs about Robertson Stephens & Co.

Q: When was Robertson Stephens & Co. founded?
A: Robertson Stephens & Co. was founded in 1978.

Q: Who were the founders of Robertson Stephens & Co.?
A: The founders of Robertson Stephens & Co. were Sanford Robertson and George Stephens.

Q: When was Robertson Stephens & Co. acquired by Fleet Financial Group?
A: Robertson Stephens & Co. was acquired by Fleet Financial Group in 1987.

Q: When was Robertson Stephens & Co. closed down?
A: Robertson Stephens & Co. was closed down in 2001.

Q: What were some of the most successful companies that Robertson Stephens & Co. provided financial advisory and underwriting services to?
A: Some of the most successful companies that Robertson Stephens & Co. provided financial advisory and underwriting services to include Apple Computer, Intel, Microsoft, Cisco Systems, Netscape, Amazon, and eBay.

Q: What were some of the factors that contributed to Robertson Stephens & Co.'s demise?
A: Some of the factors that contributed to Robertson Stephens & Co.'s demise include overreliance on the technology sector, aggressive underwriting tactics, lack of diversification, and cultural clash.