Risk Diary: Sometimes, you just have to take the leap

Thursday, April 17, 2003

By Donald I. Hammonds, Post-Gazette Staff Writer

Mel Pirchesky is the founder of Eagle Ventures, which assembles groups of investors with experience in manufacturing to take over small manufacturing companies whose owners want to sell. The group, mostly retired chief executives and company presidents, invests in companies with annual revenues ranging from $3 million to $10 million. He has raised almost $50 million in equity mostly from Pittsburgh investors.

What was happening in your life to prompt you to take that risk and found Eagle Ventures? I'd been around entrepreneurs since I was young. My dad owned a scrap yard in Monongahela. Ever since that time, I always had it in my heart. Later, after working two years for someone, I realized if I was going to make a mark, I would have to do it on my own.

How did you decide when to take the risk? I had been thinking that I would need $50,000 in the bank to cover my start-up expenses and losses, and I decided that I would be going to my grave trying to save $50,000 in the bank. I started my business with about $14,000 in credit card debt and no $50,000 in the bank. I just took my entrepreneurial leap.What surprises, if any, were there? Whatever amount of money and time you think a venture capital deal will need, it will likely be more than two or three times that amount and take two or three times or more, longer than you think.

What advice would you have for others who are thinking about doing what you did? It's particularly important to know how to articulate your deal. A lot of what I've done over the years involved raising money for great deals that were disguised as just good ones. If you have a great deal that's not being funded, it's all in the articulation. That's what I do today. I help people articulate their deals.

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