if it came up and banged them on the head.”
Pete paused. “Now that I’ve put my cards on the table, how about showing a few of yours?”
“Dad was a wholesale butcher who made a bunch of money with his cousins on the black-market during World War II. He decided he wanted better for his only son. We moved to Park Avenue — far from the family, if you know what I mean. I graduated from Penn undergraduate and got my master's at Wharton. That pedigree, my marks, and a few connections landed me on Wall Street, first as a trader at Merrill Lynch, which eventually led me to deal-making at Goldman Sachs.
“Within five years, I gained an unjustified, over-publicized reputation as a ‘kingmaker.’ Someone who could spot undervalued companies, advise them on how to grow, and design exit strategies that made the management wealthy. I made a bunch of money in the process and decided to strike out on my own.
“I started two public companies from scratch by consolidating undervalued companies in the same business space. My first foray made me wealthy. Maybe a $150 million net worth on paper? The second venture not only destroyed my paper wealth, but also left me $10 million in the hole. I sucked it up, went back to work at Goldman, paid everybody off rather than declare bankruptcy. In the next few years, I accumulated a few million dollars on the plus side of the ledger and bought a couple of multimillion-dollar homes. And here we are.”
~
Pete found my candor refreshing; he leaned back in his chair. “Suppose you could get that hundred million, plus some, back in five years?”
“I’m listening,” I replied.
“Problem is, you’re already fifty-seven.” He sat forward again.
“So?”
“So, I’m not sure you’d be willing or able to work that hard.”
“And I’m not sure I believe your bullshit.”
Pete smiled and leaned back again. “The hell with it; let’s do it. You’re the perfect cultural fit. I can see you’ll charm the pants off my salespeople and the advisors, and intimidate the crap out of them at the same time.”
I was leery; he sounded like a snake oil salesman. “How about we both do some due diligence? I’d like to meet some of your people, get a better idea of what you do. Maybe talk to a few of your field reps. At the same time, they can size me up and report back to you.”
“Sounds good to me,” said Pete.
Over the next two days, I met his three partners — Dawson Craft, Eddie Carr, and Jeremy Costas — who had no clue why I was there. As Pete explained, “they are sorta partners,” which meant they received a share of the annual profits but made none of the big decisions, and they didn’t own a share of company stock (Pete and his family owned 100 percent of it).
~
Pete’s number two, the bald, cherubic Dawson Craft, considered himself a product-development expert who designed innovative securities offerings that fit the “just barely legal” bucket. He had never been married, was a high roller at Indian reservations, and usually fulfilled his sexual needs the “old fashioned way” – he paid for them. The only thing that didn’t seem to fit was a rumor that he’d had a fling with a sexy, dirty blonde business consultant named Alexandria Plummet.
Pete and Dawson had met in high school; they’d waited tables together during their disastrous attempts to obtain college degrees and both loved fast cars. That’s where the similarities ended. Craft, despite his rather homely appearance — 5′ 6″ tall, rotund, bald, with black-rimmed granny eyeglasses — loved to buy at least two women a week. The handsome, athletic Pete preferred one non-paid relationship at a time.
The two friends continually bantered about their approach to relationships. “Give me one reason why a beautiful woman would date a homely dude like you?” joked Pete.
“Pal, I’ll give you three: money, money, and money.”
Dawson fancied himself Pete’s alter-ego, even though he had absolutely no day-to-day operating experience. He had been fired eight times in his career, primarily for telling his superiors they didn’t get his latest product or strategic concept. “Dawson, I love you,” Pete used to laugh out loud publicly. “But God, it’s a good thing I’m here. Imagine if I let you run the company!”
When it came to money, the tables turned. Pete spent every cent he made; he thought money was for spending. Dawson was an oxymoron. He saved first; cold cash meant he’d never have to suck up to anyone. He spent the rest, after the cost of sex, at the blackjack and crap tables at the Foxwoods Casino on the Mashantucket Indian Reservation in Northern Connecticut.
~
Eddie Carr’s name couldn’t have been more prophetic. He was a former race car driver, built like a boxcar, and had a strong mechanical aptitude. His sumo-wrestler physique and happy-go-lucky attitude tended to offset the fact that he was, intellectually, the brightest of the three. “Dad was a neurosurgeon and believed my brother, sister, and I should all follow suit. Two years into medical school, I said, ‘This isn’t for me.’ Dad was pissed, but hey, you gotta lead your own life.”
Pete and Eddie shared an interest in extreme sports and souped-up, lightning-fast cars. They met at a NASCAR race in Old Lyme, Connecticut. Pete, needing a win to crack the top-twenty ranking, was having trouble getting the gearbox of his yellow Lamborghini to shift smoothly during the warm-ups, which could have led his car to stall at a critical juncture during the actual race. Carr, a friend of the event’s promoter, was hanging around the pit area before the race and noticed Pete cursing and struggling. After a quick examination, he volunteered an unconventional adjustment to the intake manifold. “Pal, if we change the ratio of gas to air, your problem goes away.”
Pete asked his pit manager what he thought of Carr’s suggestion. “Pete, you’ve gotta be crazy to make changes like that at the last minute.”
Pete instinctively felt Carr knew what he was talking about and overruled them. Pete won the race and the two became steadfast friends. With Pete, first impressions were usually lasting impressions, so Carr was now typecast as the guy who knew how to fix things. No more, no less. Pete knew his company needed one-of-those at the highest level.
Carr was AFA’s version of a good-old-boy. His primary function was building and monitoring business processes, and modifying infrastructure. His self-effacing, easy-going personality also gave Pete an unexpected bonus: he was a natural at recruiting top salespeople across the United States. They were confident he’d teach them how to sell AFA products using easily understandable terms.
Carr believed the best salespeople were motivated by greed. He lived by a simple selling proposition: “Let me help you make more faster.” In just five years, he had licensed more than four hundred top salespeople and grew AFA to $200 million annually, which was more than enough to support his increasingly grandiose lifestyle.
~
Jeremy Costas owned a state-of-the-art yacht repair shop in Norwalk, Connecticut, that catered to wealthy hobbyists. Unfortunately, he couldn’t make a living in that role and, after filing for bankruptcy, he became an administrator at a national rent-a-truck company. Pete met Costas at the National Entrepreneurs Association’s annual trade show in Orlando. He recognized that Jeremy was exceptionally good at day-to-day detail, something he knew was important but in which he had little interest.
Costas
