Sharing Wisdom’s Wealth

Seasoned entrepreneurs provide mentor capital to help ventures get off the ground.

by Elise Oberliesen

Entrepreneurs like Brandt Page, CEO of Launch Sales and Marketing, are tapping into mentor capital and watching their gains explode. Page reports nearly 600 percent revenue growth in 2009. He largely credits his success to Greg Warnock and Alan Hall, both managing directors at Mercato Partners, a growth equity investment firm. With the help of such mentors, Page says he avoided pitfalls. “I was able to talk with Greg and Alan about their experience as investors and how to retain more ownership of my business,” he says. “I can give them a call and ask a specific question about my business.”

Well-informed entrepreneurs know the secret of mentor capital. With it, they are learning how to grow their businesses steadily while avoiding the sting of bad decisions. How does mentor capital do that? Rather than receiving capital in the form of cash, entrepreneurs receive tips, advice and expertise from those who have gone before: mentors who show their apprentices how to cash in on smart business practices.

Class experiment

Page learned about successful entrepreneurship through Junto Partners, co-founded by Warnock and Hall. “It’s a philanthropic, experimental exercise that’s turned out to be a lot of fun,” Warnock says. About 150 people have completed the program that targets primarily recent college graduates but also accepts people in mid-career.

Warnock teaches entrepreneurs about independent problem solving. “Junto is all about the tools; how you should think about risk or what’s a good idea versus a bad idea,” he says.

Gaining acceptance into the Junto Program isn’t easy. About 100 people apply annually, competing for just 20 seats (though program director Joe Grover says Junto’s doors are open to outsiders who want to hear the lectures.) During courses that run for six to eight weeks, participants test their skills and abilities to run a business and compete for “Top 5” status. The selection process boils down to a weekly vote comprised of peers and instructors. Each week, voters list five people who have demonstrated exceptional abilities for the week. “It’s cumulative, we tally how many votes each person gets,” Grover says. Tasked with anything from raising more seed money to meeting a sales challenge, top performers usually land on the “Top 5” list. These final winners typically end up launching a business, says Grover. They also receive the coveted “Junto Partner” invitation that affords them ongoing support from Warnock and Hall.

Students quickly learn to expect the unexpected. Warnock sends students outside the class to begin networking with strangers and raising money. Because some are uncomfortable with the approach, he says it is this stage where some people decide that entrepreneurship isn’t for them. Though Warnock offers some guidance, he says students decide how to raise money by networking with outsiders. “Because that’s the reward of entrepreneurship: making your own decisions,” he says.

Homework assignments — such as a challenge to raise $5,000 in seven days — often take students aback, Warnock says, because at first they cannot fathom how they will achieve such a task. But then creativity flows. Warnock recalls one student who dressed in a hotdog vendor uniform, a stunt that gained attention and a few bucks. Another headed into the downtown Wells Fargo building, explained to business professionals his mission to raise money and simply asked them to support his cause. He came out with “written commitments” to the tune of $40,000, Warnock says.

Not just for beginners

Entrepreneurs aren’t the only ones who benefit from mentor capital. SageCreek Partners works with startups and new CEOs, but also the c-level executives seeking an assist with topics ranging from mergers and acquisitions to marketing and strategy.

When SageCreek Managing Partner Greg Butterfield formerly ran Altiris, he recalls how taking a company public was no easy task. Having never done it before, he spent long nights at the office. “It would have been nice to have a mentor, somebody who had taken a company public before,” Butterfield says. SageCreek Partners was born out of the idea that executives would benefit from a mentored approach to problem solving.

When a mentor shares his or her smarts with the “student,” trust bonds the two together. The mentor becomes a confidant, says SageCreek Partner Mark Bonham. “Many of us have been in their shoes, we admit that we could have done better if we had had help,” he says.

Bonham recalls a time when one CEO admitted he could not march into the investor’s office with a burning question. Such a move could mar an investor’s confidence in that CEO’s abilities. “It’s safe for CEOs or CFOs to work closely with mentors. They don’t have to feel reluctant, they can put all their cards on the table,” Bonham says. Because of their diverse backgrounds and extensive experience, SageCreek Partners can fill in gaps where their client potentially falls short on skills or experience. With expertise in legal structures, banker negotiations and pricing negotiations, SageCreek offers a wide range of core competencies, says Butterfield.

Community benefits

Whether entrepreneurs share strategic tactics that bring in new donors or spruce up a tired business plan, Fraser Nelson, executive director of the Community Foundation of Utah, says nonprofits gladly welcome mentored learning. “Particularly marketing and new media marketing,” Nelson says, referring to Web 2.0. “Nonprofits don’t have the time to learn it, they don’t have the money to buy expertise,” she adds.

Utah Symphony/Utah Opera (USUO) President and CEO Melia Tourangeau says banks are their biggest corporate sponsors. But the giving goes beyond dollars spent or attractive PR campaigns. Mentor capital works its way into the mix. With well-appointed executives like Qwest President Jerry Fenn, or Ray Dardano, president and CEO of UBS Bank, who serve on the USUO board, their combined years of expertise work seamlessly to help engage the public and draw in new symphony and opera patrons, says Tourangeau. “Our clientele matches their clientele and there is a co-relation that is meaningful,” Tourangeau says.

Learning from entrepreneurs willing to share valuable advice can help offset the “school of hard knocks” approach so many budding professionals find themselves in. Page says that mentor capital has helped him prosper through better decision-making. Working with mentors Warnock and Hall helped him avoid mistakes and successfully grow his business. “I trust in their [mentors] judgment and advice because they want to see me succeed.”