Why Filling a Knowledge Gap is Ideal for Entrepreneurship
Why filling a knowledge gap is ideal for entrepreneurship ? Josh Pearl is the Founder and Chief Investment Officer of Hickory Lane Capital Management LP, a fundamentals-based equity long/short asset manager. He is also the co-author of several books and courses on investing and investment banking. Prior to founding Hickory Lane, he worked as a Managing Director and Partner at Brahman Capital, an equity long/short fund focused on investing with best-in-class management teams. Prior to his investing career, he was an investment banker at UBS Investment Bank, Moelis & Company, and Deutsche Bank focusing on high yield financings, leveraged buyouts, restructurings, mergers & acquisitions, activism, and board advisory.
Why Filling a Knowledge Gap is Ideal for Entrepreneurship
Josh and his co-author identified a gap in financial education early in their careers and sought to address it. Correspondingly, they co-authored several books and courses on investing and investment banking, including: 1) The Little Book of Investing Like the Pros; 2) Investment Banking: Valuation, LBOs, M&A, and IPOs (3 editions); 3) Investment Banking Workbook; 4) Investment Banking Focus Notes; and the 5) Wiley Efficient Learning Investment Banking Prep Course. His work has been featured in media outlets including CNBC, Institutional Investor, AlphaWeek, Bloomberg Markets, Newsmax, The UK Telegraph, The Charles Mizrahi Show, The Princeton Financier, and Harvard College Investment Magazine.
What prompted you to write your first book?
Josh Pearl: In 2009, my co-author and I searched in earnest for a nuts-and-bolts corporate finance guide when we were trying to break into Wall Street. While there were some remarkable classics out there, they tended to focus on war stories or hijinks as opposed to the skills necessary to be successful on the job. Those that did focus on fundamentals tended to focus on theory as opposed to practical application.
What we needed was a current and accessible guide that taught the pillars of valuation, leveraged buyouts, mergers & acquisitions, and IPOs. There was truly nothing out there like that on the market. We were forced to cobble together our own guides mostly made up of loose leaf note paper to prep for investment banking interviews.
We couldn’t figure out why no one had already written such a book. Of course, once on the job, we soon realized that the first few years on Wall Street were an education in a myriad of ways. It was a hard lesson on time investment, including an abundance of physical hours required to master the job due to the incredible learning curves of the industry. There was little time for anything beyond work. However, we buckled down and made the personal sacrifices to finish the book. We simply codified our prior interview guides and work experience into a book. It wasn’t really that easy though…it took 5 years to complete the first edition and involved hundreds of people. Now over a dozen years and three editions later, our books have sold over 250,000 copies and are used by 200 universities.
What about your next book? How did that come about?
Josh Pearl: It was a few years after the first edition of Investment Banking that we realized the same paradigm existed for stock investing. Despite countless books on investing, none addressed the educational gap between “Pros” and “Joes” and provided a framework to make the process of investing accessible to the unindoctrinated. For The Little Book of Investing Like the Pros, we used real-world examples to demystify the investing process thanks to the help of some of the world’s top investors.
So, the ultimate goal of one book was to use your expertise to help students who are trying to break into Wall Street? The second book was to make investing less intimidating for those who have not had formal training? It seems like you are really focused on helping people in general…
Josh Pearl: Well, I personally went through an uphill battle to launch a Wall Street career and felt the obligation to make it easier for others. At the core, it has always been the primary goal with each book to assist a broad audience in fulfilling their career or investing ambitions. Filling knowledge gaps helps both the institutions that are hiring and the people who are seeking positions. It is about cultivating a win-win scenario. It’s rare to be able to create something so positive in life and that point is something in which we take great pride. My co-author and I have countless stories of receiving emails or meeting individuals at conferences who told us how they landed their dream jobs in part because of the learnings from our books.
What is a major takeaway from your early efforts on Wall Street and your earned expertise over the years?
Josh Pearl: Candidates need to understand that there is immense competition for the roles they are pursuing. They need to find a way to stand out from the herd. Granted, some of the standard pillars of a resume such as strong grades are essential, but beyond that candidates must demonstrate leadership, high achievement, strong attitude, and commitment. They are stepping into the arena with highly accomplished individuals and need to showcase unique attributes in order to have a fighting chance. When I started my career in Deutsche Bank’s Leveraged Finance group, my colleagues included an Olympic wrestler, a Navy F-18 fighter pilot, a Big-10 college quarterback, and people from nearly every Ivy League school in the nation. Suffice to say, competition was fierce, and it still is…
I wasn’t a veteran or elite athlete, and I didn’t go to an Ivy League school. However, I did have strong grades, leadership experience, summer internships with relevant experience, and the ability to network. I scrubbed the alumni database of my alma mater at Indiana University and was able to connect with dozens of investment bankers. I ended up working for Tom Cole, who ran Leveraged Finance at Deutsche Bank and who remains a close friend and mentor to this day.
It is important to show that you can fill the gaps that exist within companies. You must demonstrate that you would be a natural choice for the position, as well as your willingness to learn. Beyond that, as your career takes off, be vigilant in your pursuit of additional knowledge and take notice of the ways and places that you can make a contribution.
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