By the time the firm finally goes public, the original entrepreneur’s stake is down to almost nothing. The ownership of the firm is almost entirely in the hands of the old established order. Like the Chinese, they’ve absorbed the barbarians and made them Chinese. Not that the original entrepreneur’s small stake doesn’t make him rich. It does, feeding the notion that anyone can get rich and persuading more people to try.

The original entrepreneur is now one more new member of the establishment. He can use his experience to select the right young companies to finance and control. The story has now come full circle. The entrepreneur has become one of the gatekeepers. What a racket!

The ultimate and final gatekeepers in this process, though, are the big investment banking firms. They’re the ones who determine who’s really going to cash in big. Not get seed money, but get real money and become a cornerstone firm in the economy. Part of the real establishment.

Investment bankers are basically little more than gatekeepers at the country club or the bouncers at the club. All they do is check your credentials and make sure mutual funds and other investors will find you an attractive prospect. But they’re worshiped because the gate they control is the one the money’s behind, and that’s what the whole thing is really about.

The power all gatekeepers have to determine individuals’ or firms’ places in society inevitably goes to their heads. They are not only worshiped but well-paid to boot, in a class above mere mortals. So they’ve come up with a new moniker. They call themselves Masters of the Universe. I kid you not: Masters of the Universe. No earthly limit to the powers of these guys. They control the really big money. The whole universe, they believe deep down, needs to answer to them.

But in spite of all this planning, in spite of all these gatekeepers, in spite of everything the establishment does to see they control the game, what happens if a firm actually slips through and gets to the IPO stage and nobody in the establishment owns even the least little piece of that firm? What if the founder still owns the vast majority of the stock and he doesn’t want to give any to the old establishment club?

What if not only that, but he’s put himself on a collision course with AT&T and the whole telecommunications industry? How’s the investment banker going to behave while this is going on? They’re the gatekeepers, after all. They’re supposed to keep this from happening. How are they going to act when all the venture capitalists, financing guys, and establishment managers they’re used to dealing with aren’t around? Is due diligence on this firm going to just be a routine matter? Are any small problems that come up just going to be routinely glossed over? Is handling an underwriting like this a low-risk job for which there are no possible consequences for the firm?

The answers of course are no, no, and no. The amazing thing, therefore, to me was not that Cowen might have dropped out, especially when it became clear that no other establishment underwriter was willing to share the risk (even for a couple million dollars’ fee for which no work was required), but that Cowen had come as far as they had with us.