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Women-owned
and operated companies are growing twice as fast
as the nation's business community in general, but
they are the least served in terms of investment
banking.
In
fact, women-owned businesses with 100 or more employees
are growing 68 percent faster than all businesses
of the same size, and those with $10 million or
more in revenues are growing three times faster
than all businesses of equal size, according to
the Center for Women's Business Research.
Now,
two powerful advocates for women have joined forces
to start an investment banking firm catering to
women business owners, presidents, CEOs and CFOs.
Hugh L. McColl Jr., former chairman and CEO of Bank
of America, and Julie A. Garella, co-founder of
Carnegie Capital Advisors, the only woman-owned,
SEC- registered investment advisory firm in the
Carolinas, announced the formation of McColl Garella
in late April.
The
firm will help women focus on using mergers and
acquisitions to fuel business growth. "We not only
want to provide women with investment banking services
and strategic advice, but also help create exit
strategies-depending on their overall goals,"
McColl said.
"Buying
or selling a business can be overwhelming," Garella
says. "It's extremely important to seek guidance
from the right people who fully understand how to
steer the process and deliver results. Hugh McColl,
with over 100 acquisitions under his belt, brings
exceptional experience to the company. We're both
excited to share our experience with women in business."
The
firm will assist clients, when appropriate, in raising
private equity or structuring debt to help finance
transactions and grow their businesses. The co-founders
say they have established an environment that educates
women on the investment banking process, as well
as successfully completing transactions.
Enterprising
Women Editor and Publisher Monica Smiley had an
opportunity to interview Hugh McColl and Julie Garella
in early May, shortly after the firm had officially
announced it was open for business.
EW:
Julie, you've spent the last 15 years in the financial
services industry, beginning with 10 years on Wall
Street with Smith Barney and over the last five
years with your own company. You've also worked
hard for the Charlotte (NC) chapter of NAWBO. So
it seems like you have had a strong focus on the
needs of women-owned businesses. Was there something
that came out of your early experience at Smith
Barney that helped shaped your perspective on the
financial needs of your women clients?
JG:
When I started at Smith Barney, that was back during
the days when you would sit in bull pens and make
cold calls. When women would answer the phone, I
would simply talk to the woman. When my male associates
would make calls and a woman would answer the phone,
they would ask for Mr. So and So. My hit ratio was
extremely high. I became their number one new account
opener for the first two years. I think it was because
I was a woman, talking to another woman, and they
had money and enjoyed doing business with another
woman. When the guys would ask me how I was doing
it, I would tell them to pitch to the woman. I would
listen to their very next call and when Mrs. Jones
answered, they would still ask for Mr. Jones. So,
I simply did exactly what we're doing at McColl
Garella. I paid attention to women.
EW:
All the research shows that women, in fact,
having been making those buying decisions for years.
You were simply acknowledging that fact and it paid
off.
JG:
On
the whole, Wall Street and the banking community
have largely ignored women. Part of that is because
men and women tend to travel in different circles.
At the end of the day, a woman who owns her own
business is at home, and in many cases, is now functioning
as a wife and mother. Men have been more likely
to be off playing golf, going to a club, and often
doing things with other men in business. So, it
comes down to access.
EW:
Hugh, under your leadership at Bank of America,
you developed a reputation for expanding the companies'
relationships with minority and women-owned suppliers.
You pioneered Bank of America's supplier diversity
program. Why was that so important to you?
HM:
The first thing that was important to me was my
own associates, and 70 percent of them were women.
When 70 percent of your team are women, you tend
to pay attention to their issues. We didn't just
make up issues. We asked people what they cared
about and that's how our focus turned to family
issues. We talked to them and asked them what was
it the bank wasn't doing…what would they like us
to do? One of my early executive assistants was
a single mother, and I saw how she struggled to
make a living and look
after her young children. She had no social life.
And I saw the reality in the work place, and it
made me interested in doing something about it.
I
became interested in working with more women-owned
and minority businesses in the classic way. I just
thought why not? It was an opportunity to support
their businesses and build our business. It was
good for both of us. It was enlightened self-interest.
I have a competitive streak. Once I start something,
I want to win. So the bank adopted that attitude
with supplier diversity, and we became a dominant
player. There were a lot of women who played a part
in making that happen for the bank.
EW:
Some companies are still really dragging their feet
on the supplier diversity issue. With the downturn
in the economy, we've seen some companies cut their
supplier diversity budgets way back. What words
of advice can you offer to those companies who may,
in fact, have taken a step back, rather than forward,
this year?
HM:
I think it's the same advice I've always given.
You should help your suppliers figure out how to
be low-cost providers. It's not charity. It's about
helping people provide you the service you want
at a price you want. Part of that requires commitment.
It requires coaching. But, it's not something that
can't be done. One thing that works is to ask your
large suppliers to furnish you with a component
of women and minority-owned businesses. So, if somebody
has a contract with you that is worth $50 million,
you can require that they have a 10 or 15 percent
component from women or minority-owned businesses.
If they want your $50 million, they'll do it. But,
you have to be firm about it.
EW:
Women-owned businesses are still the least served
by the investment banking community. What have been
the stumbling blocks in the past, and what role
will your new company play in helping women overcome
those roadblocks?
HM:
Julie put it well. Men and women travel in different
circles, and men are more comfortable talking to
other men. There is just a certain lack of comfort
most men have when they are talking to women. That
seems odd, since we all have mothers, wives, daughters
and friends who are women. So, I don't know why
that's so, but it is so.
I
do think that women have been underestimated by
the banking community. Women don't boast about their
accomplishments the way most men do. Women don't
call attention to themselves in business the same
way that men do. So, there are a lot of great women-owned
companies out there that people don't know about.
Women-owned
businesses have grown at a normal pace, and they
didn't take huge bet-the-ranch risks. So today,
after all the trauma in the business world, women's
businesses are doing even better. They have been
conservatively financed, conservatively run, and
they offer a great opportunity. The real issue is
who are they? That's what we're about. We want to
meet them, talk to them about their plans, find
out what it is they want to do with their company,
and how we can be of help. It's not any more complicated
than that.
JG:
Access
to capital is definitely an issue. It used to be
about women struggling to get loans at the bank.
Then it was women struggling to get venture money.
And now, I am not sure that anybody is really focusing
on providing capital for later-stage businesses
to grow. So, that's one of the things that we're
going to focus on.
EW:
Do
you think that there has been a misconception by
Wall Street and the banking community that women
business owners don't think big? One of the things
that you are trying to do is to encourage women
to think big with their businesses.
HM:
Well, I would think that Carly Fiorina has changed
that view. She's gone for the big kill. Certainly,
I think that attitude exists. But, I also think
that Wall Street has just ignored the middle market
period. Women in the middle market are just a subset
of being ignored. That comes out of the big deal
theory. You do the same amount of work on a big
deal as you do on a little deal, and you get paid
more money, so why do little deals?
That's
why we've gone into the middle market. We think
it's a largely ignored market. I don't know if anyone
even realizes they are ignoring the middle market.
They are so unaware of it, they may not be consciously
ignoring it.
EW:
You've said that one of your goals for McColl Garella
is to educate women on the investment banking business.
How do you plan to do this?
JG:
One of the ways that women and men differ is that
women are really about the process. Before you can
move to a deal, you need to get people very, very
comfortable with what's about to happen. So, we
are willing to spend a lot of time on the front
end, getting them comfortable and creating an environment
where they know what is going to transpire over
the coming months so they can move forward with
their business or the sale of their company.
Women
and men seem to approach business differently. Women
are more risk adverse. They play it closer to the
vest. I don't want to stereotype, but I do think
there are differences. But at the end of the day,
men and women want the same thing. They want the
best execution they can get, they want the best
service, they want the best access to capital and
to resources, and the best price.
EW:
You've said that buying or selling a business can
be overwhelming. Are there some common traps that
women and men fall into?
HM:
I think there's a trap that small and medium-sized
businesses fall into. They've had advisors. Usuall,
their advisors are lawyers and accountants. And
then they get ready to do the most important thing
they've ever done with the company-let's say sell
it. They need a different kind of advisor and generally
speaking, they don't get it. The advisors who have
worked with them in the past may be wonderful, but
they may not know how to go out there and hold an
auction with 20 companies bidding on the company.
They don't know how to drive the price up and engineer
the process. And so, it becomes the blind leading
the blind.
I
acquired a huge number of companies, but I never
sold one. So my partners know more than I do about
selling. I know more than they do about buying companies.
The experience of buying companies does tell me
what sellers need and want, and I think that's a
knowledge that you can impart to people. We plan
to do that through seminars. We'll invite women
business owners in for a day of presentations and
ask other professionals to help us who can talk
about various aspects of this process. We plan to
be proactive about educating women on the alternatives
available to them.
EW:
What is the best advice you can offer to women business
owners who might consider working with you to buy
or sell a business?
HM:
I think the most important thing for anyone is to
have a clear understanding of your own goals. Be
able to articulate what it is you really want to
be able to do with your business. Do you want to
grow it? Do you want to grow it faster than you
are currently growing it, which might require more
capital? Do you want to grow it through acquiring
other companies and you need help with that? Or
have you reached that stage where you want to harvest
the crop that you've been raising for so long? Think
through what it is you want to do with your business,
and if you can't get there by yourself, we're prepared
to sit down with you and walk you through the decision
tree.
We
see ourselves as financial advisors. Where we lack
expertise, we will help our clients find what they
need from another group. We aren't going to pretend
to know everything. But, we can help in this whole
area of strategic thinking. If we can't furnish
the product they need, we'll introduce them to the
people who can.
JG:
Two things separate us from anybody who might follow
in our footsteps. One is Hugh's long track record
for promoting women in business and his record on
diversity issues. The other is that Hugh was one
of the top CEOs in the country, and he has what
I like to call the "golden Rolodex." He knows how
to get the right answers from the right people,
and that's extremely valuable in trying to get a
deal done.
EW:
Julie, what is the most important thing that you
bring to the table?
JG:
I understand how women think, and I understand how
they think about money in business. I can marry
that with our access.
HM:
She also has inexhaustible energy, ambition and
drive.
EW:
Thank you for sharing your plans for your new partnership
with our readers.
McColl
Garella can be reached at their Charlotte, NC offices
by calling 704-333-0138 or online at www.mccollgarella.com.
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