Business book blurb: “The Masters of Private Equity and Venture Capital”
Ever wanted to dive into the minds of a different kind of so-called “Master of the Universe” than those portrayed in Tom Wolfe novels or Francis Ford Coppola films? Then “The Masters of Private Equity and Venture Capital” will make for an illuminating read. The book by private equity investor Robert Finkel and co-authored by journalist David Greising, compiles the unique voices of 10 pioneers of the PE and VC industries, as well as synopses from two leading academics in the respective fields. Departing from standard business characters drenched in arrogance and blinded by greed, the perspectives are often nuanced and principled.
Though all highly successful – we’re talking the engineers of deals that made the current companies of T-Mobile, Jet Blue and Office Depot, to name a few – several “Masters” share the details of some of their worst failures and what they learned from such experiences. What’s more, each contributor offers personal details that give that human element so often missing from business reporting – especially the M&A world – because the decision-makers are more often than not inaccessible.
For example, did you know F. Warren Hellman, former president of Lehman Brothers and co-founder of the $25 billion PE firm Hellman & Friedman LLC, is an ultra-marathon runner? And that his grandfather built up Wells Fargo Bank? And that an early failure included investing in the soon-to-be obsolete pagers, but that helped shape later successes?
The book includes all sorts of turnarounds, private details and pithy lessons that helped them get high returns for so long (the least experienced among the money managers has 23 years in the VC industry.) Many emphasize that successful philosophies usually include apprenticeship and humility.
“The minute I am seen as unfair by the people I work with, I can no longer lead them. I am out of a job,” John Canning of Chicago-based Madison Dearborn Partners says in the book.
Backgrounds vary from modest beginnings growing up to – and more commonly – coming from wealth and influence. Consequently, all have different styles and passions. Jeffrey Walker, for example, once the managing partner and co-founder of what became the PE arm of JPMorgan Chase, is one of the foremost philanthropists in Africa. Angelina Jolie, for one, is a board member of Walker’s non-profit Millenium Promise.
Additionally, the language in the book – ostensibly those of the “Masters” – is accessible, and makes an effective effort of combining a conversational tone with specific strategy, deal and business details. For instance, Carl D. Thoma describes how his Chicago-based firm Thoma Partners developed the now-common “platform investing” or “leveraged buildups,” essentially buying small, multi-unit companies within an industry and turning them into huge players in that industry.
The book is split into the two obvious sections: private equity and venture capital. The major distinction, though the two industries share many traits, is that private equity invests in early- or middle-stage companies that might need to grow or can be made better through investment or merger, while venture capitalists invest in risky startups and new ideas. There are also details that show how these industries have created so many companies: VC-backed companies account for 18 percent of the U.S. GDP today, Dean Garth Saloner of Stanford Graduate School of Business points out in the book.
Details: “The Masters of Private Equity and Venture Capital, Management Lessons from the Pioneers of Private Investing” USD $34.95 Robert A. Finkel (Prism Capital) with David Greising (Chicago News Cooperative, formerly of the Chicago Tribune), published by McGraw Hill. 308 pages, including appendices and index.
