Capitalists on a Mission; since 1971, UNC Ventures Has Leveraged More Than $1 Billion in Financing for Minority Businesses
Lowery, Mark, Black Enterprise
RAGAN HENRY HAD A GOOD IF not unique idea. He wanted to buy several radio stations throughout the country and start a major black-owned broadcasting company.
The problem was that Henry - a Harvard-trained lawyer and a partner at a prestigious Philadelphia law firm - had absolutely no experience in radio.
Few doubted that the Hamilton, Ohio, native, who interrupted law school to serve two years in the military, would succeed at any endeavor he pursued. Still, few were willing to underwrite his dream.
With the help of Boston-based UNC Ventures Inc., Henry bought WAOKAM in Atlanta and WGIV-AM in Charlotte, N.C., in 1974. His company, Broadcast Enterprises Network Inc., soon owned five stations.
Back in those days, black professionals "couldn't go to a radio station owner and say, l want to buy you,'" recalls Edward Dugger III, the 45-year-old president of UNC. Even if they could have, their lack of experience would have kept traditional financing sources from investing.
"We had to make those kinds of leaps of faith all the time," Dugger says. "If you look at almost any industry [back then], you didn't find blacks operating them."
By 1990 Henry - who was inducted into the National Broadcasters Hall of Fame in 1991 - owned more than 60 stations throughout the country.
"The bottom line is: their [UNC] being involved helped me to get the other backers I needed," says Henry, whose latest radio venture is called US Radio Corp. "They gave me the equity that I didn't have. They helped us to get started. They were there at the beginning."
Since opening its doors in 1971, UNC has helped create or expand more than 50 businesses owned by minorities, ranging in size from $1 million to $100 million.
Their two funds, UNC Ventures Inc. and UNC Ventures II L.P., have raised more than $28 milllion that has been leveraged into more than $1 billion and created about 7,000 new jobs.
UNC recently announced the formation of a third venture capital fund, UNC Ventures III L.P., which plans to raise $100 million that's earmarked to develop at least 25 companies with annual sales ranging from $25 to $100 million.
The third fund, UNC managers say, will concentrate on emerging opportunities, but their primary focus remains the same: providing capital to enable minority entrepreneurs to succeed, while creating economic development in areas underserved by traditional financiers. It is a worthy goal that has attracted corporate giants such as Aetna Life & Casualty, American Express and IBM.
"I'm interested in any situation that can result in increased enfranchisement within the minority community," says William M. Lewis Jr., managing director of Wall Street's Morgan Stanley & Co. and a member of UNC's national board of advisors. "Dugger has been doing this for some time and his intentions are well directed."
One of the businesses that benefited from UNC Ventures is the Boston Bank of Commerce, New England's only black-owned bank.
During 1990 and 1991, banks throughout the country were struggling to survive. Those that could, raised capital to spur continued growth and protect against future losses. But how does a bank raise capital at a time when many are failing? The answer for BBOC was UNC Ventures.
"UNC stepped up and agreed to make an investment. The fact that they stood up helped us to go to other investors," says Ronald Homer, BBOC's chairman and CEO, who notes that the investment climate during those years made it virtually impossible for banks to attract investors.
UNC Partners Inc., the investment manager for UNC Ventures Funds, assumed the roles of lead investor and financial advisor to BBOC. They were able to convince several other prominent Boston corporations to invest in the bank, including Harvard University, the Bank of Boston, Reebok, State Street Bank, Fleet Bank, Boston Safe, Amelia Peabody Trust, Hyman Trust and Greenwich Capital. …