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Private Equity CEO Steers Blacks to EntrepreneurshipIf African American MBAs want to work in investment banking, they should take the opposite approaches of most of their colleagues in both their professional and private lives, said Stuart Taylor II, CEO of The Taylor Group, LLC. “Throw yourself into the tough challenges, but be very conservative personally and financially,” Taylor said during a panel at the 23rd Annual DuSable Conference, presented by the student-led African American MBA Association at Palmer House Hilton November 9. “Most new MBAs don’t save or pay down their debt,” added Taylor, who spent 19 years on Wall Street before launching his firm in 2001. “If you do that and maintain a risk-seeking appetite professionally, you will be in a much better place that will provide a few more degrees of freedom if you decide, as most black MBAs do, to leave banking after two or three years. If you do not feel like you’ve hit that ceiling, then guess what? You have more money in the bank and you probably have a better job.” “Walk around Kenwood, the Chicago neighborhood where I live, and look at the mansions,” he said. “Who’s living in those mansions of color? They’re entrepreneurs, people who own their own businesses. People who are transitioning comfortably from their 30s to their 40s and from their 40s to their 50s are people who control their own means of production and their own means of wealth creation. If there is going to be a black president of the United States, it’s not surprising to me that person is going to bubble up from this community.” Taylor chooses the 200-odd projects he finances annually based, first and foremost, on the people or team behind them, he said. “I’m not an operator; I’m an investor and a coach,” Taylor said. “I’m extremely diligent in doing my due diligence and research on a team. It’s excruciating, painful, annoying, and irritating to the people. I tell them, ‘I’m going to call your wife and your girlfriend.’ We will spend 200 to 300 hours together before I decide whether or not to finance your deal.” Perhaps surprisingly, Taylor said a project that succeeds causes more problems than one that fails. “When we did the deal together, you had no money and were working at your day job,” he said. “I deposited $300,000 in your checking account, so you can show your wife you have two years of income without much risk to get you the courage to leave your job. Four years later the business is worth $25 million, of which my 40 percent is $10 million. Then your wife says, ‘What is he doing for this $10 million?’” African Americans need to take advantage of the wide range of opportunities and programs available for minority entrepreneurs, including the network offered by Steve Kaplan, Neubauer Family Professor of Entrepreneurship and Finance and moderator of the panel, at the Polsky Center for Entrepreneurship, where he is faculty director. “It’s almost as simple as the Yellow Pages,” Taylor said. “It’s a sophisticated community, but it’s a community that you won’t know if you’re doing billion-dollar deals at Morgan Stanley. Once you tap into it, there are resources everywhere. Entrepreneurs and want-to-be entrepreneurs, the good thing and the bad thing about you is your passion. You don’t listen, because you are so passionate. ‘I’m going to do this and it’s going to work, no matter what anyone’s saying to me.’ You have to listen to people with experience in this industry.” Taylor made first-year student Katie Shackelford consider more risky business tasks and open her eyes to Chicago as a hotbed for entrepreneurship, Shackelford said. “I’d never thought about it on a city-to-city basis,” she said. “I know private equity is very big in New York, but it was very interesting to hear about Chicago. Coming to the GSB is my first exposure to Chicago. It made sense that he said it’s a good atmosphere here and a good place to start.”
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