When investment banker Rob Louv, MBA’97, met with a Texas entrepreneur in 2008 about selling a company, neither was aware that they shared an important common link: Both had graduated from the Owen School. The entrepreneur, Jack Long, MBA’83, had contacted Louv’s San Francisco firm, Montgomery & Co., on reputation alone, but the coincidence helped him make up his mind about using Louv to shop his company to potential buyers.
After Montgomery & Co. successfully sold 70 percent of the equity in Long’s company, Louv and Long sealed a second deal soon thereafter—one that was arguably more significant than the one they had just finished. Together with Long’s wife (and fellow Owen graduate) Carolyn, MBA’83, they established the Long and Louv Summer Enterprise Entrepreneurial Fund, which aims to help aspiring entrepreneurs at the Owen School. The fund provides a $15,000 stipend to students who want to pursue an entrepreneurial idea rather than a traditional corporate internship during the summer between first and second year.
With the help of the fund, Thomas Bernstein and Miguel Coles, BS’02, both MBA candidates for 2010, have established their own marketing company, Great Glass Media LLC (www.greatglassmedia.com), to launch an iPhone application aimed at young people looking for the perfect nightspot. A third student, Andrew Bouldin, also an MBA candidate for 2010, used the fund over the summer to continue work on his own company, My College Road Trip (www.mycollegeroadtrip.com), a travel Web site designed for students.
These are just the sort of big ideas that Jack and Carolyn hoped to encourage by establishing the fund. Giving a leg up to budding Vanderbilt entrepreneurs made perfect sense to the couple, since they themselves had used the skills they learned at Owen to launch two successful companies. Their decision to honor Louv in naming the fund was an easy one as well. After all, he brokered the deal to sell their company. He also was the one who encouraged the Longs to give back to Vanderbilt in the first place.
Lone Star Overnight success
Vanderbilt holds a special place in the Longs’ hearts. Both of them come from a long Commodore tradition. Carolyn’s father, grandfather and great-grandfather all graduated from Vanderbilt, as did Jack’s mother and uncles. Jack and Carolyn also owe their marriage to the Owen School. They met as first-year MBA students in 1981 and married four years later.
After graduating from Owen, Jack and Carolyn went to work for Texas Commerce Bank (now part of J.P. Morgan Chase) in Houston, but Jack knew all along that he wanted to own his own company someday. In 1989 First American Bank recruited Carolyn, and the couple returned to Nashville, living off one salary until Jack came up with a business idea.
“Jack got a little office, his own desk and a nameplate and he sat there like Pooh Bear so he could think, think, think,” Carolyn says. “He thought about carpet fiber. He thought about rural post office development. He thought about cattle futures trading. Those were just some of the ideas that didn’t work.”
In the process of searching for undervalued businesses to acquire, Jack looked at an air-freight company that was for sale in Houston. He realized, though, it was more of a freight courier, hiring independent contractors to pick up and deliver. “It was a big business, but it wasn’t attractive to us because it was basically a brokerage,” he says.
That experience started the wheels turning for Long and his business partner Gary Gunter. They were fans of the Southwest Airlines concept of keeping things smaller and cheaper. Long and Gunter decided to start their own business, a package express company serving only the state of Texas. They set up headquarters in Austin, and Lone Star Overnight was launched in 1990. That same year, the Longs’ first child, Adam, was born. Within a span of five months, Jack and Carolyn had started a family, started a business, moved to Austin and purchased their first house.
The years that followed were equally busy and exciting for the Longs. Their daughter, Carlen, was born in 1993, and three years later Lone Star Overnight made the Inc. 500 list of the fastest-growing privately held companies at No. 331. Carolyn, meanwhile, began fundraising and serving in leadership roles for various Austin nonprofits.
In 1997 the Longs and Gunter sold Lone Star Overnight for a nice sum. Jack, ever the entrepreneur, began looking for ways to invest that money in the next big opportunity. In 2000 he settled on the idea of starting a new company once again. Partnering with Jeff Carpenter, he launched PeopleAdmin, a software technology company aimed at creating tools for human resources at colleges and universities. The company grew quickly. In 2007, with total revenues of $10 million, it made the Inc. 500 list at No. 419.
PeopleAdmin had tapped into a very hot area: software as a service. Long began to field dozens of phone calls a week from companies interested in investing or buying. That’s when the decision was made to hire a small- to mid-size investment bank focused on emerging-growth technology. After vetting numerous candidates, the Longs went with Rob Louv and Montgomery & Co.
The entrepreneurial side of banking
Like the Longs, Louv’s connection to Vanderbilt began before he was born. His father, Art Louv, JD’72, graduated from Vanderbilt Law School, and his mother, Barbara, had Rob while she was a student at Peabody College. Although Rob grew up in Florida and attended the University of Florida, his Vanderbilt roots drew him back to Nashville for graduate school.
“When I went to Vanderbilt, my career objective was to go into investment banking. I thought I would end up in the South, but through the alumni network I was able to set up some interviews in New York,” Louv says. Director of Corporate Relations Peter Veruki, then working in the career center, encouraged him to get some internship experience in New York, even though his original plan was to live elsewhere.
When I went into finance, I was always thinking about building a practice. I never thought of myself as a kind of large cap banker on a large platform. I saw myself on the entrepreneurial side.
“My Citicorp internship was directly linked to an Owen alum going to bat for me,” says Louv, who before that summer had never been farther north than Washington, D.C. The internship opened doors for him and led to a career opportunity in investment banking with Chase Securities, later J.P. Morgan. But Louv, with no signing bonus and no paycheck until he passed the company training course, was cash-strapped.
That was when a favorite professor from Owen, Ron Masulis, stepped in. Masulis, Frank K. Houston Professor of Finance, was starting a mergers and acquisitions course and needed background material—case studies, detailed articles and trend pieces. “It was perfect for me,” Louv says. “I got paid a fair hourly wage to do interesting work and used what I learned to better prepare myself for my M&A career.”
Masulis says Louv was among his best students at Owen. “I was very pleased to have him help me research potential topics and cases for the new course I was developing,” he says. “His research was very solid and led me to use several very interesting cases in the course.”
Louv bootstrapped himself through the J.P. Morgan system and became Vice President of Global Mergers and Acquisitions in New York before moving to San Francisco to lead the firm’s West Coast merger and acquisition efforts for the information technology services and Internet sectors. With significant M&A deal experience representing $150 billion in transaction value, he then joined Montgomery & Co. in 2004 as the Co-head of the Technology Banking Group and a member of the firm’s Executive Committee.
Recently Louv and several senior partners at Montgomery & Co. split off from the firm to establish a new investment bank called ArchPoint Partners, also based in San Francisco. The separation was amicable, as ArchPoint continues to execute deals that were engaged under the Montgomery platform. Louv and fellow Managing Partner John Cooper are the owners of the new bank. “I am now like my clients—running a startup,” Louv says.
Louv sees M&A as the entrepreneurial side of banking—one that doesn’t depend on anyone else’s balance sheet. “When I went into finance, I was always thinking about building a practice. I never thought of myself as a kind of large cap banker on a large platform. I saw myself on the entrepreneurial side,” he says.
Culture of giving
The sale of PeopleAdmin “was a long, tedious process,” remembers Carolyn Long. Several deals got close and fell apart before an agreement was signed with Summit Partners of Boston in summer 2008. “Rob stuck with them and kept working on all the details,” she says. “Throughout this process, Jack and Jeff never got to the point of throwing their hands up because Rob never did either. He kept working on it.”
A member of the Owen Alumni Board, Louv saw an opportunity to leverage his hard work in a positive way. Prior to the close of the deal, while hashing out some final fee matters, he approached Jack with a proposition. Louv told him, “Since we know that neither one of us would be here if it weren’t for Owen, what if, in addition to compensating Montgomery & Co., you also compensate Owen for the value it added to our lives?”
Long was intrigued by the idea. Between the sale of Lone Star Overnight and the launch of PeopleAdmin, he had been involved in establishing an entrepreneurship program at the University of Texas, but the bureaucracy of the large state school had cramped his style. In 2002 he and a group of professors left the university and formed the Acton School of Business in Austin to teach an entrepreneurship-only program.
The thought of doing something to encourage entrepreneurship at his alma mater was an enticing prospect. He called Carolyn to get her opinion. “Carolyn and I had not been active alumni up to this point,” he explains. “But one of our motivations for selling the business was to pursue some philanthropic objectives while we were still young enough. After I talked to Carolyn, I called Rob back 10 minutes later and said, ‘Deal.’ ”
It’s been such a pleasure working with three alumni whose culture of giving is obvious, who know how blessed they are and want to give back. These are people whose personal successes and whose value systems are aligned.
Louv was grateful but surprised when the Longs decided to share credit with him in naming the fund. “That was not expected or requested. I was taken aback,” he says. “I give Jack all the credit. It was his generosity as much as mine that really drove the gift to the school.”
Jack, though, is just as quick to compliment Louv. “Even though the donation is coming from us, we want it to be more about Rob,” he says. Carolyn agrees, adding, “Rob and his team did so much work. He had the idea (to create the fund). He asked for it. It makes perfect sense for us to view it as a joint gift.”
Tricia Carswell, Associate Dean of Development and Alumni Relations, acknowledges that the credit should go to all three. “It’s been such a pleasure working with three alumni whose culture of giving is obvious, who know how blessed they are and want to give back,” she says. “These are people whose personal successes and whose value systems are aligned. They are true philanthropists, and it was a privilege to be at the table with them.”
Louv and the Longs hope other alumni will be inspired to give to the new fund. They also hope the fund will help spark an entrepreneurial focus at Vanderbilt without eschewing the traditional business curriculum.
“Most important is it adds value for the students,” Louv says. “Over time an entrepreneurial bent could differentiate the Owen brand and improve the experience for all of the students.”
Most MBA programs are designed to train students going to work for a large Fortune 500 company, says Germain Böer, Professor of Accounting and Director of the Owen Entrepreneurship Center. “It’s not that the content of the courses doesn’t fit the needs of an entrepreneur,” he says. “You still need to know the same stuff. It’s just that the examples all tend to be from big companies. If I could dictate how we’d do it, I’d say every course would have to have a case or two about how to operate a startup company.”
The classroom learning experience is bound to be greatly enhanced for students able to kick-start a business with a boost from the Long and Louv Fund, Böer says.
“When you start a business, you have to learn about every piece of the business. It’s a really good educational experience to try to put a company together and learn how to motivate people,” Böer says. “It’s excellent training even if they work on a business idea and they get all the way to the point of launching and find some critical factor that keeps it from working.”
Andrew Bouldin, one of the beneficiaries of the summer stipend, has always seen himself as “an entrepreneur-type guy.” He grew up in Nashville, running a lawn-care business through high school and college. He also participated in the Accelerator program at Owen and spent another summer working for Silicon Valley-based Uloop.com, a craigslist-type site aimed solely at college students.
While planning a trip with friends a few years ago, he realized “sites like Travelocity or Trip Advisor are oriented toward businesspeople or moms,” he says. “I couldn’t find anything that would tell me the best restaurant and things to do in an area for a college student.”
Recognizing this market need, he developed a travel site that would appeal to college students and launched it in January 2009 using Vanderbilt as a test school. Immediately 2,000 students signed up. The Long and Louv Fund allowed him to spend the summer focused on the company, building relationships with others in the Web-based travel industry, doing some traveling himself and meeting other students to find out what their specific needs are.
Meanwhile Thomas Bernstein and Miguel Coles, the other recipients of the stipend, spent the summer launching a marketing platform to kick-off their mobile phone application, Nashville Pulse. Their original idea was to install low-cost digital media screens in residential elevators, but they ultimately redirected their energies toward consumer mobile phones.
Bernstein and Coles hired three Vanderbilt undergraduates—Will Green, Mike Slade and Riley Strong—to help shape an application that delivers event information, including descriptions and coupons, to smart phones using GPS-tagging capabilities. “A student down at Broadway and Fourth leaving a restaurant and looking for a music venue would find out there are 15 bars around playing great music. They could access our tool to see which three have deals. It’s a powerful tool because you’re delivering the message at the moment and location of the sales decision,” Bernstein explains.
Bernstein says more important than the grant money is the confidence boost they received from their idea being selected for the stipend. “When you’re sitting there with what you feel is a great idea and plan, but with no money to fund it, you can’t help but doubt your ability to make your vision a reality,” he says. Coles adds, “This experience has been much better than any internship I could imagine.”
Testaments like these remind the Longs and Louv why they decided to create the fund in the first place. Just as Owen has left a lasting impact on their own lives, their gift is now doing the same for others. Although it is only in its second year of existence, the stipend program is already putting students on a bridge to entrepreneurial success.
Or as Coles puts it: “It moves us into a different dimension of creating jobs rather than seeking them.”