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Charting Your Own Course: Insights from Financial Entrepreneurs

Reported by:
Leo Harmon

On April 6 at the Chicago Mercantile Exchange, several distinguished entrepreneurs explained for CFASC members their founding of financial service companies. Presenters were: Gautam Dhingra of High Pointe Capital (institutional/high net worth money management); Albert Grace of Loop Capital Markets (large Chicago Broker/Dealer); Sean Sebold of Sebold Capital Management (wealth management for business leaders/owners) and Merrick Hatcher of Bell, Boyd & Lloyd (corporate law firm advising entrepreneurs and start-ups).

Blood, Sweat, and Wives? (Not Necessarily in Order)

"I find that the harder I work the more luck I seem to have." - Thomas Jefferson

All stressed a strong sense of purpose, buttressed by external support. Each benefited from loyal commitments from family, friends, and significant others, often the innocent victims of the entrepreneurs' "get poor quick" schemes!

Mr. Dhingra counseled to: 1) Concentrate on one key to success, not several small things, 2) Differentiate yourself and your business, 3) Think cheap and control costs, 4) Be humble yet 5) Audacious, 6) Work, work, and work.

Mr. Grace cautioned on the absence of corporate infrastructure. Personal resourcefulness is crucial. Indeed, doing things yourself can yield essential cash flow. Entrepreneurs master multi-tasking, be it fixing copiers, changing print cartridges or answering phones.

Your skill set must also expand, especially regarding salesmanship of your ideas, vision, and products. Expect cold calls and client presentations aplenty. To accelerate progress, partnering to recruit complementary talents is an option. Mr. Hatcher warned, however, that lasting partnerships require careful preparation. Effective matches share a common vision/goal and balanced teamwork.

In Absence of Sugar Daddies or Rich Aunts

"Not everything that can be counted counts, and not everything that counts can be counted." - Albert Einstein

Panelists stressed flexible financing and meticulous cost management. Capital reserves can cover an extended incubation period. But they were leery about relinquishing extensive control to financiers. The best financial backers function like partners, furthering your vision instead of impeding goals.

Do not neglect personal capital via networks of confidants. Mr. Sebold spoke passionately about informal mentors who provided a sounding board for ideas and strategy, offering both criticism and praise while opening doors to new sales.

Nice Office, Is it New?

"I hear and I forget. I see and I remember. I do and I understand." - Confucius

Even achievers experience struggles. These typically relate to time and money, but there can be other twists. Mr. Grace noted his business contrasts sharply with his original plan. Think flexible plans but steadfast vision. Mr. Sebold related his early worries of making payroll and paying creditors. The panel also pointed to regulatory compliance as particularly burdensome for small companies. Finally, don't ignore exit/succession strategies. Non-operational issues can have a major impact on business success.

Bottom line, combine good product, loving spouse, generous backers, monkish humility, daring salesmanship, with rhino-tough skin and you’re a cinch to be the next.... You’ll fill in the blank, but anything worth having is worth the effort.