In The News
"DRIVEN DEALMAKER BUILDS FINANCE FIRM", Los Angeles Business Journal, Apr 16, 2001
Almost all investment banking and finance boutiques in town are founded by seasoned professionals who decided to cash in on good reputations and hang out their own shingles. Take Jim Freedman, at Barrington Associates, who earned his stripes at The Foothill Group Inc., or Michael Tennenbaum of Tennenbaum & Co. LLC, who hung his hat at Bear Stearns & Co. for a generation.
And then there is Lorne Goldberg, 32, founder of West Coast Capital LLC. Something of a mustang in a financial world of thoroughbreds, he started up his own investment banking shop in 1995 as a virtual unknown. His work-world experience was a three-year stint at Heitman Financial, a real estate financial house in West Los Angeles (later acquired by Chicago-based JMB Corp.), where his uncle, Stuart Isen, ran shop.
As it turns out, the timing of Goldberg’s launch was perfect. The biggest venture and private equity investment boom in all history ran from 1995 to 2000. And Goldberg made use of the connections that he did have: Isen was tight with the Belzberg clan, as in the Canadian billionaires. An introduction was made, and one of the Belzbergs funded Goldberg’s first real deal, a 1996 early-stage private equity financing for delivery service Pink Dot (since renamed PDQuick Inc.)
With that jump-start, and a proclivity for working the phones, Goldberg was on his way. By 2000 he had raised nearly $200 million for growth companies, usually in venture situations. For microcap companies – those needing $5 million to $30 million in equity growth capital – he is one of the few options in town for financing. Most shops these days have so much capital, they are looking for bigger deals, and that, Goldberg said, leaves him with a lot less competition.
“Our phone rings off the hook,” said Goldberg, a Montreal native. “And I remember when I would call 75 people a day, just to get someone to talk to. When I started, I worked by myself out of a cubicle in a rented office suite.”
Calling lots of people lots of times is a Goldberg trait. One client, Marty Caan, recalls how Goldberg approached roughly 100 investors in an ultimately unsuccessful effort to get a restaurant project in Las Vegas funded.
“Lorne went to many, many people who have an appetite for restaurant investing. He sent a private placement memo to 100 people, and called most of those people as well,” said Caan.
“It seemed like when the Nasdaq was booming, people said, ‘I don’t want to invest in a restaurant, I am making too much money on the Nasdaq.’ Then when it started going down, everybody said, ‘I don’t want to invest in a restaurant, I am losing too much money on the Nasdaq.’ We just couldn’t raise the money,” said Caan. “Even though we talked to more people than you can imagine.”
Goldberg concedes that the Las Vegas restaurant didn’t work out as he’d planned, but said he usually can place needed money, if only through lots of legwork.
“I know if I get a quality client, then I can raise the money. It’s a question of being aggressive enough, and just showing a deal to enough people,” he said.
The Pink Dot funding is what probably helped launch Goldberg more than any other. He met the founders of Pink Dot, the specialty retail delivery company, in 1996. “I cold-called them. In those days I cold-called everybody.” He raised $3.2 million in equity for the retail chain from Westminster Capital, a Westside financial shop run by William Belzberg. That encounter has proven fruitful; and since 1996 Goldberg has participated in many further rounds of financing, helping the service raise more than $60 million.
“Bill Belzberg has done very nicely,” Goldberg said.
Phones start ringing
Gaining a reputation in investment banking may be nearly impossible for a young upstart, but once somebody has demonstrated the ability to find good clients and raise money, the phone calls stop going out and start coming in.
Goldberg has become known for “private placements,” or the raising of equity growth capital from select funds and high-net-worth individuals.
“I must know more than 100 venture funds, at the general partner level or better,” he said. “When I get a client, I can select the venture or private equity fund that is the best fit for the client.”