What do managing a chain gang and running a multi-million-dollar private company have in common? Not much, it seems, except for the fact that Rob Slee has mastered both—in addition to authoring the six-pound seminal textbook Private Capital Markets and its companion semester-long course, publishing two other books on the same topic, and writing hundreds of articles for legal and business journals.
Plus, running a website full of information for mid-level business owners, creating webinars and e-mail blasts on a monthly and weekly basis, and matching mid-sized business owners with mentors who partner to make their companies globally successful.
And, speaking on that topic approximately 60 times a year in nations on at least three continents, running a successful middle market private investment bank, founding Midas Institutes around the world, and raising twin daughters who now bunk together at Chapel Hill. Whew!
On the day that we met, Slee was running a little ragged.
But apparently, rough days are the exception for this man, who still found time to parry my Outlier references (“Oh yeah, that’s Malcolm Gladwell, I know him”), feed off Ayn Rand comments, and include a few basketball, movie, and ancient Greek allusions of his own.
This is a man who doesn’t rest until each of his (many) multi-million-dollar endeavors are practically running themselves. And he teaches other people how to do the same. MidasNation, whose tag line is “Building America One Business at a Time,” partners extremely high-producing business veterans with middle-market private companies to completely re-design the way they do business and quickly multiply the company’s value while decreasing demands on the owner’s time. Specifically, Midas Mentors usually partner with companies valued between $2 and $3 million and expect to mentor them into the $10 to $100 million range in two to five years.
Working With the Chain Gang
Rob Slee’s father was a serial entrepreneur, so he comes by it honestly. Slee’s most vivid youthful memories involve the chain gangs that did the manual labor for his dad’s paving company. Slee says the state’s government had incentivized the hiring of recent releases from the penitentiaries, so all the company’s shovels were wielded by ex-convicts. The work was backbreaking, potentially dangerous, and relatively mindless, but the pay was good (roughly $15 an hour or more in the 1970s).
But managing the crews, Slee says, was the hardest thing he’s ever done. “They were unruly,” he recalls bluntly. “They understood the rules and protocols for behavior inside the prison better than they did outside. They were modern-day Vikings, raping and pillaging every night and going back to the penitentiary as soon as the law could catch up with them.”
But manage them he did, mostly by “making it fun.” And although he claims that there’s little comparison between what he did then and what he does now, he does believe that whatever a person is doing, if it’s not fun, it’s not worth it. Even paving roads.
Managing the modern-day Vikings paid Slee’s way through an undergraduate degree at Miami University. He then finished a master’s in economics at University of Chicago, followed by an MBA at Case Western. It was while working on his MBA that Slee met a man who would change his life and smooth his path through the corporate world.
The man was CEO of a Fortune 500 company, who every year interviewed hundreds of MBA students and hired the best one he could find. He would work the new hire to the bone for a year and then promote him into one of the company’s units. The training and the backing of the CEO freed the new hire from political pressures and allowed him to concentrate on performance. As a result, the MBAs hired in this manner nearly all ended up running the company.
Slee was no exception. By the late 1980s, he was running a division of the company with, among other things, a plant in Mooresville. On his frequent trips to the Carolinas, he fell in love with the state. Plus, he had begun to see that Detroit was no longer a land of opportunity. So he transferred himself South to oversee the Mooresville plant and operate out of Charlotte. The transition was a happy one for Slee, and he has never looked back.
In 1990, Slee made an even larger transition. He heeded the call to entrepreneurship he’d grown up with, and left the large corporation that had sheltered him since graduate school. The small investment company he bought into, Robertson & Foley, was one of the first private investment banks in the Charlotte area and still operates successfully.
In hindsight everything worked out, but at the time, says Slee, the transition “was horrible.”
“You starve,” he remembers with a shake of the head. “Because what happens is you start out every morning and have to figure out how to earn a living. There wasn’t much infrastructure to raise capital for private business, and business valuation for private business almost didn’t exist.”
What they had in place of infrastructure and capital, was “A smattering of opportunities, but not an obvious path through the woods.”
Luckily, making paths is something Slee has a knack for.
Creating Value and Wealth for Private Companies
Hunger is a strong motivator. Every week, Slee and his partners would send out between 50 and 100 letters to business owners, saturating a city such as Salisbury, inviting them to sit down and talk about capital options for their companies. Usually eight or ten owners were interested in meeting. The partners would then do the same in neighboring areas, creating appointments in High Point, then maybe Greensboro.
“That’s how I got to know so many business owners in the area,” says Slee. “I did that for two or three years.” Most of the owners they met with would not have a need at that time, but enough did that gradually the book of business filled out, and slowly Slee stopped starving. But he never stopped hungering—for new learning and new opportunities.
His introduction to the world of private business was harsh, and Slee absorbed an important lesson: “What goes on on Wall Street and what goes on on Main Street are two totally different things.”
That fact may seem obvious now, but at the time that Slee was getting his introduction, all of the current thought and leadership was treating Wall Street markets and valuation the same as private markets and valuation. There was no body of thought, no body of knowledge, and no coursework to explain the behavior of private companies.
In short, there was no path through the woods for private companies who wanted to create value and wealth, and to move into global markets. So Slee set about creating one.
He began by writing a series of articles on topics he knew nothing about. That was how he’d learn. “I’d draft an article on transferring a business to a charitable trust,” he explains, “and send it out to people I knew who did know about the topic. They’d clean it up and send it back. That way I’d limit looking like an idiot to a small group of people.”
He wrote regularly for Charlotte’s business journal for many years in addition to other publishing venues. Gradually, his topics began to develop into a cohesive body of knowledge and before long he realized he had created the material to write a textbook. So he did.
That textbook, Private Capital Markets, became the seminal work for understanding private business behavior, and is now undergoing revisions for a second edition.
Understanding private capital markets opened new fields of thought and opportunity for Slee. He saw that 95 percent of private owners had never been trained in how to create true value in their businesses. Most were still tradespeople, and most were still “one phone call away from oblivion.” It seemed amazing to him that people would be willing to take on all the risk of business ownership, without demanding a correspondingly high return.
“It violates a basic rule,” he says. “About 10 years ago, I picked up on it and began seeing all these opportunities in front of mid-sized businesses, and they weren’t engaging in them even when the capital was available. Why not?”
It turns out, he says, that the book on that topic had already been written (whew, one less thing for Slee to worry about). Michael Gerber, author of E-Myth Revisited and founder of E-Myth Business Coaching, described most business owners as “lifestyle owners.” They view growth as a risk to lifestyle, rather than an opportunity to increase business and wealth.
“What I’ve learned,” adds Slee, “is that there are about five percent of us that do want to compete globally and create dramatic value in their business. We’ve felt funny being around so many people who aren’t like that, and we’ve never had a place to go.”
But, as he points out, now they do. It’s a global community, and they meet at a place called MidasNation which exists in part at www.MidasNation.com. He encourages around-the-world “Midas Parties,” where up to a hundred people at a time gather in locations in Europe, North America, and Asia to listen to monthly webinars and afterward to discuss designated questions.
According to Slee, they often gather for two hours or more, and he checks in frequently to answer questions and engage.
The MidasNation community helps business owners implement a Conceptual Business Model, which involves exploiting niches, leveraging intellectual capital, and outsourcing nearly everything else. The Midas Institutes, such as the Carolina’s Midas Institute, provide intensive, aggressive mentoring for a select few owners to generally raise their company’s value by a multiple of ten or more in just a few years.
Each mentoring relationship begins with a deliverable called the Company Wealth Map. The wealth map describes the subject’s current market value, the owner’s market value goals, and the strategies, tactics, and business model that will enable the owner to meet their goals quickly. It generally costs between $7,000 and $20,000.
If the company and the Midas Institute choose to move forward, the company receives aggressive mentoring by a Midas team in exchange for a warrant for between 15 to 20 percent of the value created over the life of the agreement (usually three to four years).
Then, the Midas mentors create a revolution inside the subject’s company. “Everything changes,” Slee says. “We’re in the business of behavior modification. You have to be willing to change the way you do everything, and that takes time.”
But Slee’s thought leadership and the mentoring relationships his company offers make the journey faster than has ever been conceivable before.
It may be easier than managing a group of ex-convicts, but decades later, Slee is still paving roads—and still having fun doing it.