As seen in the Huffington Post: http://www.huffingtonpost.com/paul-wisenthal/the-ticket-boy-gives-back_b... By Paul Wisenthal
Financial pioneer Phil McNeill delivers an 18% return, transforming companies while working with at-risk youth, transforming lives.
Devoting his time mentoring at-risk youth, successful entrepreneur Phil McNeill teaches self-sufficiency and business acumen to young students raised in the poorest neighborhoods of Washington, D.C.
Twins Bruce and Glen Proctor grew up in a rough inner-city neighborhood in northwest Washington, D.C. Raised by a single mother, they moved often. At 15 they became successful teenage entrepreneurs designing hats and bandanas to support themselves and ease the financial burden on their mother. Today at 26, the boys are highly successful clothing designers, having worked with Beyonce, Sean Combs, Nelly and other hip hop stars.
They credit their success to the NFTE's (Network for Teaching Entrepreneurship) Adopt a Class program developed by their mentors Phil McNeill, a venture capital fund pioneer, and Patty Alper, President of the Alper Portfolio Group, a marketing consultancy at the Woodrow Wilson high school. To bring entrepreneurship to schools and youth at-risk, Steve Mariotti founded NFTE in 1987. Supported by corporate partnerships, foundations and individual contributors the organization has programs functioning in schools in 34 states and operating in 31 countries around the world including India and China. In two-hour weekly accredited classes, students learn how to write a business plan, marketing strategies, salesmanship, and how to manage their funds.
Using bedrock principles of commerce; buy low sell high, keep good records, and customer satisfaction, students are encouraged to dress and behave professionally. "Good Humor trucks had to be avoided at all cost. We just didn't have enough money for ice cream," said Bruce. Determined to succeed financially, the twins drew paper pets, selling them door to door. "On each new sale, we grew more self-confident. Poverty was a huge motivator for us."
Waking early, Bruce and Glen, age 6, set about mowing lawns, taking out trash, and running their own lemonade stands, finding any way to scrounge together money. In 2001 the boys took their first NFTE class, recommended to them by their favorite teacher Valerie Wheeler.
Leading Adopt-a-Class, Phil and Patty mentored the boys two hours every two weeks, helping them polish their marketing skills. Using the school mascot, the teddy bear, for inspiration, they hand painted their designs and team logos on bandanas and t-shirts which they sold at their high school's football games, in the hallways at lunch, and between classes.
"On some weekends we earned as much as $2000.00" stated Bruce. At many school events they were unable to keep up with demand, selling out, and unable to satisfy customer demand. Having graduated from the boys continued their education, enrolling in the fashion design program at Albright College in Reading, Pennsylvania. There they met Thomas Steinbreck, head of the program. "At school we read every style magazine we could get our hands on." they said.
After their junior year, Steinbreck returned to New York in 2006 to launch Beyonce's new clothing line. The boys left school to join him as his assistants, beginning a remarkable rise in New York City, living first in Inwood three to a room, working their way up and now residing in Harlem.
On Sundays the boys attend Rock, a Christian Church in Queens. There they preach, inspiring and teaching the artists in their congregation the business literacy taught to them by Phil McNeill in their early teenage years. "Part of working with these kids on Sundays is addressing not just the practical business side, but also the spiritual, which has helped us through difficult times."
Employing the skills taught to them at a young age by their mentors, within the next few months the Proctors will be launching their new online company. This new line of clothing and accessories will feature glasses cases, bracelets, and clothing. Along with the launch of their website they will be hosting an online reality TV show called BruceGlen, Lunch Break.
"Phil has continued to support our success to this current day. Without him we just wouldn't be here." According to Phil, "The best part of being a mentor, is watching students like the Proctors, gain the self-confidence and poise needed to run their own business."
"Low income youth have special skills in entrepreneurship, and in learning to run their own business. It helps them to stay in school. Phil brings a unique business skill set to youth at-risk," says Steve Mariotti, best-selling author and founder of NFTE. Like the Proctors, Phil McNeill was raised in a single parent home after his father was killed in a plane crash. At age eight he was earning a whopping twenty-five cents an hour clambering up the sideboards of huge 500-bushel trucks and small pickups to hand out receipts for massive loads of wheat, off loaded at their family-owned grain elevators. 1967 was a bumper crop year for farmers, in Thomas, Oklahoma, population 1211. Phil's family operated grain elevators, ran cattle ranches, and later owned banks and dabbled in oil and gas exploration. He and his mother relocated to Tulsa five years later.
Despite this, he returned to Thomas every summer to help farmers harvest their wheat crop and loading their grain into 150 foot high elevators. Phil often fought with competing grain elevators for the few railcars needed to transport the wheat. It was chaotic! Sometimes the railcars never showed up! Sometimes grain elevator workers were forced to dump tens of thousands of bushels of wheat onto the ground, forming one cone as much as fifty feet high.
"Our family treated all farmers as important clients." said Phil in a recent telephone interview. "Waking at 6am, sometimes we waited up till one in the morning the next day, for the last farmer to bring in their wheat." "We prayed it wouldn't rain, since water would delay the harvest and possibly damage the crop. School teachers, town merchants and even house wives... everyone pitched in to help our farmers get their wheat to market," said McNeill. This meant 18-hour days, 7 days a week, for as long as 3 weeks. Temperatures reached over 100 degrees in the shade.
Even while studying at Syracuse University, he returned home every year for harvest and continued to manage the family farm and grain elevator business. Armed with an undergraduate degree from Syracuse and an MBA from Harvard, Phil and his wife started their own chocolate retail manufacturer in Boston. "The Chocolate Dipper" gained notoriety across the chocolate world winning "Best of Boston" in two different categories. His creations became a Boston sensation leading to a chain of stores. "The harder I worked, the less time I had with my family. Running this enterprise deprived me of family time and being with my first son."
In 1988 he sold the business for a small profit and relocated to Buffalo, N.Y., to be close to his wife's family. At M&T Bank he joined its investment division to pursue new growth opportunities. "I enjoyed the strategy and planning" said Phil. His investments paid handsome returns to his employers. In 1993, he relocated to Washington, D.C., where he joined Allied Capital, and later become co-head of its private finance division. During his five years there, he oversaw $1.5 billion in company investments and personally directed investments in 20 companies, yielding a return of 18%.
Stefan Shaffer, founder/managing partner of SPP Capital Partners, recruited Phil in 2002 to run its new Mezzanine Investment Division. These mezzanine loans are given to companies to inject funds into a company before a bank loan can be arranged, or used to expand a current business in need of an injection of capital. One of Phil's deals was for Louis Vitali, president and CEO of Blueberry Broadcasting. With a $2.5 million mezzanine loan from SPP, he acquired 16 radio stations in Maine from Clear Channel. "He asks the right questions, understands our business, and is very professional," said Vitali in a recent phone interview. Even in 2008 and 2009, with the economic turmoil in the financial markets, McNeill's funds delivered an impressive double digit return.
According to Shaffer, Phil was considered "the bright star" of mezzanine financing: "Bringing in risk capital, McNeill has that unique capacity to find small companies with strong cash flow, low debt and a growing niche market." He continued, "He brings a high level of integrity, hard work and due diligence to every deal he gets involved with. If the deal began to go sideways, Phil was the first one to roll up his sleeves and work for a creative solution for the benefit of management, debt holders and the equity.
Today, Phil McNeill, 52, father of two, and a pioneer of mezzanine financing has built a stellar 24-year track record yielding returns of over 18% from investments in small capitalized businesses. Since the market crash of 2009, traditional lending institutions no longer cater to small businesses. More and more small entrepreneurs are seeking funding from mezzanine financers, like Phil to meet their credit needs.
His third fund, Farragut Mezzanine Partners III LP, launched in 2011, is projected to be fully funded from between $100-150 million by the end of the summer of 2012. In a recent interview McNeill stated "With small business driving the economic engine of this country, more mezzanine financial services will be sorely needed as small business bank loans continue to be scarce."
Over the past eleven years, Phil watched the Adopt-A Class program successfully expand throughout the greater Washington D.C. area. In 2012 the NFTE program will be taught in schools across the county. Successful entrepreneur businessmen like Phil will continue mentoring students like the Proctors. "It brings me great personal gratification to watch the Proctors flourish in the cut throat world of New York City's Fashion Industry." Says Phil, "Growing up fatherless in America is a challenge no matter where you come from, but inner-city youth face a particularly precarious future. Working with kids like the Proctors helps to give my life meaning that goes beyond any deal I've ever made."
About Farragut Capital Partners
Founded in 2011, Farragut Capital Partners, LLC is a private investment management firm providing mezzanine debt and equity capital to finance leveraged and management buy-outs, generational transfers, growth capital financings, and recapitalizations. The firm is actively investing out of its latest investment vehicle, Farragut Mezzanine Partners III, LP. Farragut seeks to invest up to $10 million in established small and middle market companies with proven business models and stable cash flows. The firm targets companies with strong, committed management teams and the potential for significant growth in equity value.
Farragut specializes in asset-light businesses with unique and defensible market positions, stable business models, and reasonable capital expenditure and working capital needs. The firm works with owners (family businesses, equity sponsors, and fundless sponsors), senior lenders, and directly with management teams to create and build value in its portfolio companies over time.