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The Marathon Club

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A proposal to increase the availability and investment of private equity capital into enterprises that have significant minority ownership and management participation.

Published in: Government & Nonprofit
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The Marathon Club

  1. 1. The Marathon Club Background Presentation October 2003 Accessing Capital, Developing Talent and Creating Deals
  2. 2. 2 Presentation Contents  Disproportionate Funding Dilemma  Purpose of The Marathon Club  The Partnerships between NAIC & NAA  Background on Founding Partners  Role of The Marathon Club  Membership in The Marathon Club  Honorary Co-Chairpersons  Select List of Charter Members  Governance & the Board of Directors  The Blueprint  Primary Programs Overview  Sample Course  Key Milestones  Partnerships, Alliances and Sponsors  Initial Capitalization Strategy
  3. 3. 3 Disproportionate Funding Dilemma Less than 2% of all available private equity is invested in minority firms in any given year, despite minorities representing approximately 30% of the population. Major Contributing Factors:  The ever expanding pool of minority entrepreneurs, seasoned corporate managers, and IT professionals has largely been excluded from the deal making process.  Many promising deal concepts and a number of talented people are not coming together early enough in the process to make a deal reality.  Unfamiliarity or uneasiness with the deal making process causes individuals to avoid the process altogether.  Many minority businesses that progress to a point when venture financing is appropriate never get financed as a result of organizational and structuring impediments as well as an overall misunderstanding or distrust of the process.  Minority focused private equity firms receive a disproportionately low share of equity capital to invest in minority companies relative to the size of the market.
  4. 4. 4 Purpose of The Marathon Club To increase the availability and investment of private equity capital into enterprises that have significant minority ownership and management participation.
  5. 5. 5 The Partnerships between NAIC & NAA In order to address the disproportionate funding dilemma and other challenges faced by minorities in the enterprise development process both NAIC and NAA have agreed to make significant contributions and provide ongoing support for The Marathon Club. The following are the terms of their partnership:  Contribute fifty thousand dollars in seed capital to TMC  Identify and secure at least 15 charter members (@$7,500 each)  Name 3 highly accomplished candidates to serve as honorary co- chairpersons  Appoint three members to TMC’s board of directors
  6. 6. 6 National Association of Investment Companies (Founding Partner)  The National Association of Investment Companies (NAIC) is the industry association for private equity firms dedicated to investing in ethnically diverse businesses for the past 32 years.  Member companies have invested over two billion dollars in debt, equity-like and equity capital in nearly twenty thousand ethnically diverse businesses.  Member firms have created hundreds of thousands of jobs via their investments.    NAIC endeavors primarily to (1) increase the availability of capital targeting the minority entrepreneurial sector, (2) enhance quality deal generation opportunities for member firms, and (3) attract superior management talent to both member firms and their portfolio companies.  Member firms include Fairview Capital (Fund of funds), Opportunity Capital, ICV Partners, Pacesetter Capital, Provender Capital, SYNCOM, TSG Capital.
  7. 7. 7 New America Alliance (Founding Partner)  The New America Alliance is a 501 (C) 6 organization of American Latino business leaders united to promote the economic advancement of the American Latino community, with a focus on economic and political empowerment, and public advocacy to improve the quality of life in the United States.  Members include Tom Castro, CEO El Dorado Communications; Henry Cisneros, CEO American CityVista; Moctesuma Esparza, Executive Producer EK Productions; Manny Sanchez, Managing Partner Sanchez & Daniels; Andy Unanue, Goya Foods; Daniel Villanueva, Managing Partner Bastion Capital; Raul Yzaguirre, President National Council of La Raza. Economic Objectives of NAA include:  Increasing the number of Hispanic CEO’s leading Fortune 500 companies  Increasing the number of Hispanics serving on Fortune 500 boards of directors  Increasing the number of Hispanic led Private equity firms  Increasing the amount of capital available to Hispanic entrepreneurs
  8. 8. 8 Role of The Marathon Club  Organization for investors, lenders, owners, managers, technical/life sciences professionals and other participants involved with creating and developing significant minority enterprises  Increased private equity access and capital flow to minority entrepreneurs  Development of a premier national professional educational and training program to foster best practices deal formation, growth, and financing  Creation, implementation, and dissemination of key research on the economic impact on the growth and performance of minority owned companies.  Structured linkages with minority technical and business students and faculty  Continuous networking events at the national and regional levels to link deals, talent, and capital.
  9. 9. 9 Membership in The Marathon Club •The Marathon Club will be comprised of highly accomplished individual members from six categories (see diagram). •Members of the NAA and NAIC Principals are automatically general members of The Marathon Club (no dues). •General Members will pay annual dues, making them eligible for all benefits and services provided by The Marathon Club. •The Marathon Club is projected to reach 1,000 + members by its 5th year of operation. •100 individuals will be invited by the NAA and NAIC to become Charter Members of The Marathon Club. •Charter Members will pay a one time fee of $7,500 that will provide seed capital for The Marathon Club. Professional Services Firms Principals Private Equity Professionals Entrepreneurs Engineering, IT and Life Sciences Professionals Corporate Executives and Managers Financial and Plan Sponsor Executives
  10. 10. 10 Honorary Co-Chairpersons Six highly accomplished and noteworthy individuals have been selected to serve as the honorary co-Chairpersons for The Marathon Club. These individuals will lend their name and support to the formation and launch of this new organization. Cathy L. Hughes, Founder Radio One Hilda Ochoa-Brillembourg, CEO Strategic Investment Group JoAnn Price, Co-Founder and General Partner Fairview Capital Andy Unanue, Chief Operating Officer GOYA Foods, Inc. Daniel Villanueva, CEO Bastion Capital and Founder of Univision Herbert P. Wilkins, Managing General Partner SYNCOM Funds
  11. 11. 11 List of Select Charter Members Peter Bynoe, Piper Rudnick LLP Anand Iyer, PRTM Terry L. Jones, Syncom Derek Jones, Provender Capital Mohamed Kande, PRTM Ginger E. Lew, TD Fund Duane C. McKnight, Syncom O’Kelly McWilliams, Pepper Hamilton Carr Preston, Reliant Equity Investors Richard Roberts, Goldman Sachs Stephen Rogers, Kellogg School of Business Sidney R. Smith, Kirkpatrick & Lockhart LLP J. Peter Thompson, Opportunity Capital Stanley Tucker, MMG Ventures Herbert P. Wilkins, Syncom Clarence Wooten, Wooten Ventures
  12. 12. 12 •The Marathon Club will be governed initially by a 7 member board of directors (until such time that additional directors are added from the various member categories). •The strategic partners (NAA and NAIC) will each have 3 seats on the board, with the Executive Director filling the remaining seat. •All members of the initial board of directors will be selected from the charter membership of The Marathon Club. •Current members of The Marathon Club’s board include Ginger E. Lew, TDF; Duane C. McKnight, SYNCOM Funds and Richard T. Roberts, Goldman Sachs. Governance & the Board of Directors Corporate ManagersFinancial Executives Marathon Club Board (7-13 Members) Executive Director NAA Legend NAIC Financial Executives
  13. 13. 13 Better Prepared Deal Participants Blueprint for Increasing the Availability and Investment of Private Equity Increased Efficiency/ Output In Private Equity Ready Deals Increased Visibility In Impact Sectors Increased Capital Investment Process Result Mentoring / Training Connecting the Network Sharing Research and Successes Articulating the Case for more capital •Network Events •EGII Courses Alliance/ Tactic •Plan Sponsors •Political •Relevant Public •TMC Members •Corp Sponsors •Org. Alliances •Earned Media •Plan Report Cards •Direct Briefings In order to increase the amount of capital available for investment and deployment in minority owned companies, TMC must demonstrate that a unique and overlooked sub-sector of lucrative investment opportunities exists within the domestic private equity marketplace. Identification and organization of talented human resources, effective training, and focused networking will be essential elements in defining this sector and increasing its importance and visibility to the pension fund community. Key
  14. 14. 14 Primary Programs Overview EGII (Training Institute)  Specialized courses and seminars tailored to the challenges in the minority marketplace featuring all areas of new enterprise development, growth, and investment.  Instructors will feature experienced, hands on professionals  Real life cases will be utilized from successful and unsuccessful deals. Networking Events & Summit  The Summit will be an intensive 3-day business conference among club members, industry experts, and invited guests focused on capital access, business networking, and new deal generation.  Networking events will consist of monthly/quarterly lunches and receptions featuring topical guest speakers on capital access and business growth. Venture & Job Fairs  Venture fairs that will showcase businesses owned by minorities, or targeting underserved markets seeking early stage, growth, or acquisition capital.  Job fairs involving club members, related companies, and others seeking to expand their management or operational team Mentoring and Internships  The Club will sponsor various non- member programs relating to entrepreneurial education and development targeted to minority undergraduate and graduate business and engineering sciences majors at colleges with significant minority populations.
  15. 15. 15 Understanding the Venture Process “A must for entrepreneurs seeking to raise capital” Pre-term Sheet Term Sheet ClosingPre-Closing The purpose of this course is to assist non-venture capital professionals with understanding the various stages and related activities involved in the deal making making process. A variety of different perspectives (i.e. VC, Attorney, Accountant and Entrepreneur)will be utilized to provide the participant with the maximum exposure to this very critical element of the venture development process. Date/Location Dallas February 4th – 7th , 2004 Westin Los Angeles April 9th – 12th , 2004 JW Marriott Chicago June 3-6th , 2004 Ritz Carlton New York September 5th- 8th, 2004 Westin Midtown Atlanta November 7th – 10th , 2004 Ritz Carlton Buckhead Price Non Members: $750 Members: $500 Register online at: www.themarathonclub.com
  16. 16. 16 Key Milestones for The Marathon Club (First 24 Months)  Milestone I: Core Fundraising of $400,000 by (December 2003)  Milestone II: First Board of Directors Meeting (September 2003)  Milestone III: Launch The Marathon Club (December 2003)  Milestone IV: Reach 250 members by (December 2003)  Milestone V: Host 1st EGII course (March 2004)  Milestone VI: Launch 2nd EGII course (August 2004)  Milestone VII: Reach 700 members by (December 2004)  Milestone VIII: Launch 3rd EGII course (March 2005)  Milestone IX: Hold 1st “Art of the Deal” Summit (May 2005)  Milestone X: Publish Plan Investors Report Card (September 2005)
  17. 17. 17 Partnerships, Alliances and Sponsors Founding Partners Strategic Alliances (Potential) Inaugural Corporate Sponsors
  18. 18. 18 Initial Capitalization Strategy The initial capitalization of The Marathon Club will come from three initiatives. Each initiative is designed to create value for both the contributing entity as well as The Marathon Club. This capital will enable The Marathon Club to operate until ongoing revenue streams (i.e. general membership, training programs and the annual conference) mature in year three.  Founding Partner Contribution: Both NAA and NAIC have made substantial direct and in-kind contributions to the formation and development of The Marathon Club.  Charter Membership Initiative: One hundred highly accomplished individuals engaged in the deal formation process have been invited to become charter members of The Marathon Club. Charter members pay a $7,500 fee for lifetime membership in The Marathon Club.  Corporate Sponsorship: A number of corporations interested in minority enterprise development have been invited to develop a relationship with The Marathon Club.
  19. 19. 19 Inaugural Corporate Sponsorship Levels  Platinum Sponsor ($50K)  Special press release announcing the relationship and action plan to assist minority enterprise development  Two Charter Memberships  All benefits included in Gold and Corporate Sponsorship Plans  Gold Sponsor ($25K)  Sponsorship brainstorming meeting to develop sponsor ROI plan  Special link from Marathon’s website to your marketing content  Logo or advertisement included in all publications  1 Charter Membership  Invitation to speak or present at relevant events  All benefits included in Corporate Sponsorship Plan  Corporate Sponsor ($10K)  Listing and Ad in sponsorship directory  Logo and link from Marathon Website to your corporate website  Listed as a sponsor in all club publications  Invitation to all club events
  20. 20. 20 Benefits of Charter Membership For the Charter Membership fee of $7,500 you will receive:  Lifetime Membership in The Marathon Club (no additional membership dues)  Significant discounts on The Marathon Club Events and Conferences (anticipated discounts of 25-50%)  Legacy Recognition as one of Marathon’s initial members.  Numerous opportunities for paid keynote speeches, lectures and to serve as a guest instructor at The Marathon Club’s Entrepreneurial Growth and Investment Institute.  Feature articles in The Marathon Club Publications

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