Famous Entrepreneurs Information

by John Tozzi, Stacy Perman, and Nick Leiber

Monday, October 12, 2009provided by

For our fifth annual roundup, BusinessWeek

Hi,

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- how to keep it, and

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That is the key to great wealth.

Discover this kind of income in:

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Cheers,

Board Games | Year 2012 End of the World

by John Tozzi, Stacy Perman, and Nick Leiber, BusinessWeek

Box.net

What It Does: Online collaboration tool

Founders: Aaron Levie, 24, and Dylan Smith, 24

Web Site: box.net

Based: Palo Alto, Calif.

Aaron Levie and Dylan Smith started Box.net in 2005, when they were both college sophomores, as a tool to collaborate on projects with fellow students. The pair -- childhood friends from Seattle -- soon saw business potential in an online platform to let companies share information securely. Nine months after launching, they both left school (they were at University of Southern California and Duke, respectively) and moved to the Bay Area to work on the company full time, with an initial $350,000 investment from Mark Cuban. (His stake has since been bought out.) The service, targeted toward companies with fewer than 100 employees, has 3 million users representing 50,000 businesses. Individuals can try a limited version for free, but businesses pay $15 per user per month for the premium version. The company, now based in Palo Alto, has 50 employees and has raised $14.5 million in venture capital from Draper Fisher Jurvetson and U.S. Venture Partners. The firm is not yet profitable, though Levie says revenue is in the "mid-to-high single millions," and he expects it to turn a profit soon.

by John Tozzi, Stacy Perman, and Nick Leiber, BusinessWeek

Ascension Aircraft

What It Does: Aircraft sales and leasing

Founder: Jamail Larkins, 25

Web Site: www.ascensionaircraft.com

Based: Augusta, Ga.

Jamail Larkins has been hooked on flying ever since he took his first flying lesson at age 12. The Augusta (Ga.) native completed his first solo flight at 14, performed in an aerobatic air show four years later, and earned a bachelor's degree in aviation business administration from Embry-Riddle Aeronautical University. But instead of following a traditional career path and going to work for Boeing (BA) or Lockheed Martin (LMT), Larkins decided to channel his passion into his own business. It came naturally. At 15, he had started Larkins Enterprises, selling flight training books and videos to local pilots, to pay for his flying lessons. "I promise you we started off selling a lot less than we do today," he says. Though he continues to run Larkins to do marketing and consulting for clients that include his alma mater, the National Business Aviation Assn., and Michelin Aircraft Tires, he says 90% of his revenue comes from his aircraft sales and leasing company, Ascension Aircraft, which he started in 2006. Larkins says four-employee Ascension is profitable and had a little over $7 million in revenue in 2008, despite the downturn. He expects revenue to increase slightly this year. He continues to fly for fun every chance he gets and is planning to get back into aerobatics in 2010.

by John Tozzi, Stacy Perman, and Nick Leiber, BusinessWeek

It turns out it's boomers, not twentysomethings, who start the most businesses in the U.S. Over the past decade or so, the highest rate of entrepreneurial activity belongs to the 55-64 age group. The 20-34 age bracket, by contrast, had the lowest rate. That's according to a recent report by Dane Stangler, a senior analyst with the Kauffman Foundation, based on data collected from 1996 to 2007. It echoes research by entrepreneur-turned-academic Vivek Wadhwa, who found that twice as many tech entrepreneurs create ventures in their 50s as do those in their early 20s.

So not only are these entrepreneurs navigating the toughest economy many of us have ever lived through, they're also vastly outnumbered by older, more experienced competitors, who usually have more contacts and capital. That's even more reason to continue to give young entrepreneurs the encouragement, respect, and awe that they've received since becoming cultural icons during the dot-com boom.

Stangler says he's not suggesting young people aren't entrepreneurial or won't be. "The cachet of large, established companies has taken a hit. Job tenure has been falling for a long time. Employment is not going to recover in the very near future. People across all age groups are going to take the future into their own hands."

Brian Ruby, 25, is just one entrepreneur who is following through on Stangler's prediction. He founded molecular imaging equipment maker Carbon Nanoprobes in 2003 in his Columbia University dorm room and has since raised about $4 million from institutional and private investors. After six years doing research, Carbon Nanoprobes is now transitioning to equipment sales, and Ruby expects about $1 million in revenue in 2010. The nine-person company based in Pike Malvern, Pa., sells its equipment to universities, semiconductor firms, and material sciences companies.

Husband-and-wife team Eric Koger, 25, and Susan Koger, 24, launched indie clothing e-tailer ModCloth in 2002, near the end of their freshman year at Carnegie Mellon University. They've managed to raise a little over $3 million from angels such as StubHub co-founder Jeff Fluhr and venture capital firms First Round Capital and Maples Investments. Eric says the 104-employee, Pittsburgh-based company is profitable, with around $1 million in monthly sales, and forecasts more than $15 million total in 2009.

Logan Green, 25, and John Zimmer, 25, started Zimride in 2007 to allow carpoolers to connect online. Its 35 clients are mostly colleges but include corporate customers such as Cigna (CI) and Wal-Mart (WMT). Universities pay about $10,000 per year to use the platform, although pricing varies. Zimmer says the Palo Alto (Calif.) firm, with six employees, expects revenue of $400,000 this year and is now profitable.

These are just a few of our finalists defying the odds. To assemble the group, as in previous years, we asked BusinessWeek readers to nominate candidates aged 25 and under who were running their own companies that showed potential for growth. Given the severity of the recession, we were pleased to receive a record number of nominations this year -- more than 600. After the call for nominations ended in mid-August, our staff sifted through the nominees looking for the most impressive.

Not surprisingly, the majority were Web-based businesses, where barriers to entry continue to fall. There were a smattering of more traditional companies, including an aircraft seller, a specialty mushroom grower, and a machinery lubricant vendor. Compared with last year, more women were nominated, more businesses were profitable, and more had secured equity capital.

by John Tozzi, Stacy Perman, and Nick Leiber, BusinessWeek

Every town has a richest person. Do you know who the richest person in your town is?

Have you ever wondered who the richest man in town is? W. Randall Jones has. The former magazine executive found himself in a country club near his hometown of Carrollton, Ga., one day when someone he was with pointed out a man at another table and said: "See him? He's the richest man in town."

That got Jones thinking. What his friend did is what people have been doing for millennia: pointing out the richest man in town. Sometimes people just want to know out of curiosity; other times it's because they think such proximity to wealth might present an opportunity. And, of course, the scale of the wealth in question might vary widely. What might pass for rich in a small town in Georgia may seem like a rounding error when compared with the net worth of billionaires such as Microsoft founder Bill Gates or Berkshire Hathaway's Warren Buffett.

So Jones got out a map and began identifying the largest metro areas in the U.S., then set out on a two-year search to find out who the richest men were. He spent more than two years interviewing local business editors, and business and community leaders in 100 towns across America in an effort to uncover their wealthiest citizens. In addition, he and a team of researchers combed through all available public data, including SEC filings, LexisNexis, EDGAR, and newspaper and magazine accounts. He even "Zillowed" their homes to determine their valuations.

Some of these individuals, like Gates, were well-known. His $40 billion fortune has established him as the richest man in Seattle, if not the world, for more than a decade. But what about the richest man in Spokane, Washington State's second-biggest city? According to Jones, it is Harlan D. Douglass, the largest real estate developer in town, who also sits on the board of Northwest Bank and invests in local companies such as Eagle Hardware & Garden. Bet you didn't know that.

In his new book The Richest Man in Town (Business Plus, 2009), Jones has come up with a list of the 100 richest people by town in the largest cities in almost every state in the U.S. "The media in general and the business press in particular is guilty of focusing too much on New York or San Francisco," says Jones. "There are success stories everywhere. I wanted to paint a true portrait of American wealth."

It is important to point out that these are not the richest people in the U.S. Jones only picked the wealthiest individual in the biggest towns. If you were the second-richest person in town, you didn't make the cut.

Despite the title, there are women on Jones' list, too. Women such as Boulder, Colo.'s Judi Paul, the co-founder of Renaissance Learning, and Indianapolis' "time-share queen" Christell DeHaan, the founder of Resort Condominiums International, the largest vacation exchange company in the world. (Jones explains that his editor thought the title The Richest Person in Town, while more accurate, wouldn't have the same punch.)

According to Jones, the average Richest Man in Town (RMITs, as he calls them) has a net worth of more than $3.5 billion, and 50 of the 100 people he identified were billionaires when his book went to the printers.

How'd he get so rich? The first man to bring Nascar to Wall Street, the auto-racing billionaire owns Speedway Motorsports, which includes the Charlotte Motor Speedway, Las Vegas Motor Speedway, and Texas Motor Speedway. He is also chairman and CEO of Sonic Automotive, a company with more than 180 car dealerships.

How'd he get so rich? Ergen is co-founder, chairman, and CEO of EchoStar Communications and satellite company DISH Network. A keen poker player, Ergen's biggest bet came in 1995 when he launched the first direct-broadcast satellite into orbit on a Chinese rocket. Today, he has an estimated net worth of $3.9 billion.

How'd he get so rich? Not everyone in Detroit is struggling. Davidson is the chairman of privately held Guardian Industries, the world's largest maker of automotive glass. He is also the owner of the Detroit Pistons basketball team, as well as the Detroit Shock of the WNBA and the Tampa Bay Lightning of the NHL. He reputedly is worth $2.1 billion.

How'd he get so rich? Leveraged buyout king Bonderman runs Texas Pacific Group, the private equity powerhouse that has made major investments in J. Crew, Neiman Marcus, Burger King, Bally's, Continental Airlines, and TXU. A graduate of Harvard Law School, Bonderman apprenticed under two legendary investors: Robert Bass and Richard Rainwater. TPG today has more than $50 billion under management, and Bonderman has a net worth estimated to be about $1 billion.

How'd he get so rich? After being fired from investment bank Salomon Brothers in 1981, Bloomberg used his $10 million severance package to set up his own financial software services company, eventually making him the richest man in New York—as well as one of the richest men in the world. Today closely held Bloomberg has more than 150,000 global subscribers for its eponymous terminals, which rent for $1,500 a month and up, as well as a cable network, radio station, Web site, and magazine. Bloomberg stepped down as CEO of his company when he was elected mayor of New York in 2001, and he is now making a bid for a third four-year term in office. In addition to his mayoral duties, Bloomberg, often cited as a potential presidential candidate, is an active though frequently anonymous philanthropist and has given away hundreds of millions.

How'd he get so rich? Founder and chairman of Irvine, a massive real estate development firm, Bren almost single-handedly made Orange Country, Calif., into the pristine, wealthy retail and technology mecca it has become. Bren built his first house in 1958 with a loan of $10,000. Today he owns 25,000 undeveloped acres in Orange County, 400 office buildings, 40 retail centers, as well as numerous apartment communities, hotels, marinas, and golf courses. His net worth is estimated to be $12 billion. In 2004, BusinessWeek magazine ranked him 15th on its annual list of the 50 Most Generous Philanthropists in the country.

How'd he get so rich? Ever heard of Google? This former Stanford student co-founded the Internet search powerhouse with Larry Page in 1998. Today it is considered to be one of the greatest business success stories of all time. The son of Russian Jewish immigrants—both of whom are professors—he is worth around $12 billion. Google has a market cap of $123.1 billion.

How'd he get so rich? Starting in 1965, Fred DeLuca turned a $1,000 investment from his friend and partner, Dr. Peter Buck, into Subway, one of the biggest sandwich chains in the world. With more than 31,000 franchisees, DeLuca now has a fortune estimated at $1.6 billion.

How'd he get so rich? Rubenstein is the co-founder of the Carlyle Group, one of the largest private equity investment companies in the world, with more than $80 billion under management. In 2007, Rubinstein, who has a net worth estimated at $1.4 billion, purchased the last privately owned copy of the Magna Carta for $21.3 million, ostensibly as a gift for his daughter's 20th birthday. He then lent it back to the National Archives.

How'd he get so rich? The billionaire best friend of Donald Trump made his fortune in casinos, greyhound racing tracks, convenience stories, real estate, and hand trucks. He is the owner of New Frontier Casino in Las Vegas, as well as the Trump International Hotel & Tower. On Jan 6, 2008, he married the 26-year-old supermodel and Miss Ukraine 2001 title holder Oleksandra Nikolayenko. Ruffin reportedly has a net worth of $2 billion.

The average American can be excused for thinking that CEOs raid companies rather than running them.

What was once the most august job title in working America has become a synonym for greed and chutzpah. In recent years, the chief executives of Bear Stearns, Lehman Brothers, AIG, Citigroup, Fannie Mae, and Freddie Mac ran their companies into the ground while collecting pay packages that totaled eight and sometimes even nine figures. Some CEO perks sound like the trappings of royalty: car and driver, family use of private jets, personal security, lavish death benefits for family members, free tax and retirement-planning services. While CEO pay has drifted down on account of the recession, it still averages about $1.7 million, and the gap between the pay of CEOs and average workers has been widening for years.

But some CEOs are worth the trouble. A new report by the Corporate Library, a corporate-governance research group, highlights 12 CEOs who get "paid for success." In response to recent corporate abuses, reformers in Congress and elsewhere are pushing hard for companies to link pay, bonuses, and other incentives to long-term performance rather than awarding bonuses based on inflated quarterly numbers or unproven pump-and-dump deals. Many companies claim that they strictly enforce pay-for-success rules, but studies by the Corporate Library and others show that it's mostly lip service; most boards of directors and compensation committees tend to be captive bodies that rubber-stamp the CEO's pay package with little scrutiny.

The 12 companies that do it differently, according to the Corporate Library, don't underpay their CEOs; median CEO pay for the group was about $5.5 million in 2008, far above the average for all chief executives. But the CEOs at these companies have a record of success that justifies their pay. All 12 companies have demonstrated consistent, long-term profitability that exceeds the average for their industries. And over the past five years, all have outperformed the S&P 500 stock index, which is down about 6 percent.

Many of these companies also have policies that reformers say should be widespread. Some restrict or prohibit special perks for executives, with bonuses triggered by hitting difficult profitability targets that exceed industry averages. Several of the companies have "claw-back" policies that allow them to reclaim CEO pay if financial numbers have to be restated or strategic moves backfire down the road. And many restrict bonuses, or eliminate them altogether when the company has a bad year--whether it's the CEOs fault or not.

Here are five CEOs whose pay and performance set an example for the rest of corporate America:

Total pay over the past two years: $14.6 million

Five-year stock performance (through Dec. 1, 2009): up 510 percent

The ever provocative Jobs drew shareholder ire a few years back for one bonus that came in the form of a $90 million Gulfstream jet and for a sweetheart deal that replaced unredeemable stock options with $75 million in Apple stock. Jobs made amends by working for $1 in 2008, and the trendsetting tech company has also redeemed itself with a "say on pay" shareholder vote set for next year and some other progressive rules. Jobs and other executives are entitled only to perks that all Apple employees get, for instance, and there's no special severance for big shots. And cash bonuses are awarded to executives only if Apple meets double-digit growth targets for both revenue and operating income--a practice that less than 10 percent of companies abide by.

Two-year pay: $8.5 million

Five-year stock performance: up 74 percent

Since there's no corporate jet at this auto-parts retailer, the CEO and other top managers fly commercial. A special medical plan for executives was discontinued in 2007, and the pay structure for executives is generally the same as for everybody else in the company, with no special severance for execs who leave the company. Unlike many corporations, AutoZone doesn't hire compensation consultants to help determine pay packages, a practice the Corporate Library and other research groups have linked to inflated pay packages.

Two-year pay: $7.5 million

Five-year stock performance: up 16 percent

When sales fell at many companies during the recession, CEOs came up with "discretionary income adjustments" to compensate for performance bonuses their executives were forced to forgo. Not Darden. The restaurant company, which runs several popular chains including Olive Garden, Red Lobster, and Bahama Breeze, froze salaries as its revenues declined, while severely curtailing cash and stock bonuses--even though it managed to perform better than most other restaurant companies. The company also instituted a claw-back provision and upped its performance horizon from one year to three when determining bonuses.

Two-year pay: $26.9 million

Five-year stock performance: up 76 percent

McCallister's pay plunged from $24.5 million in 2007 to $2.4 million in 2008 because this healthcare provider paid no bonuses last year. That's because the company's earnings per share--the single factor determining bonuses--failed to improve from the levels of 2007. The Corporate Library includes Humana on its list mainly because its simplified bonus mechanism is clearly structured to drive performance.

Two-year pay: $11.2 million

Five-year stock performance: up 60 percent

Bonuses at this stingy steelmaker are paid only after the company has met a stringent set of requirements that guarantee it is performing better than competitors. Baseline salaries are relatively low, and some executives end up earning less than their peers elsewhere in the steel industry. And there are no special perks for executives. The payoff comes in long-term performance: Nucor has been profitable every year since 1966, a remarkable record in an industry that usually feels the pain of every recession.