Originally Posted to the Charlotte Observer:
March 5, 2013
By Caroline McMillan
Hugh McColl Jr. has an eye for potential.
The former chairman and CEO of Bank of America saw it in Charlotte, and he helped grow the budding city into a financial powerhouse.
Now, his eye for potential is trained on Ben Harrison, the 27-year-old co-founder and CEO of Charlotte-based startup DealCloud, a web-based software platform that streamlines the buying and selling of companies.
Harrison, is a former employee of McColl’s private equity firm, Falfurrias Capital Partners in Charlotte.
“I’ve had a lot of very bright people work for me over the years,” McColl told the Observer. “But I was struck by his thinking. He’s smart, energetic, thoughtful. He works around the clock, is driven for success. … I have confidence in him.”
That’s one of the reasons that McColl and former Bank of America CFO Marc Oken were two of the first DealCloud investors and advisers.
Harrison plays a key role in the 20-something generation of young entrepreneurs who’ve decided to put down roots in a business landscape far from New York and startup mecca Silicon Valley, in both distance and scope.
And Harrison’s DealCloud is one of many local startups seeing incredible growth.
Two years after it was founded, DealCloud has 5,000 users from around the world, a team of 10 and a slew of prestigious awards. And between 2011 and 2012, revenue grew by about 200 percent, Harrison says.
Most recently, Harrison was selected to present DealCloud at the upcoming Southeast Venture Conference March 13-14 in Charlotte.
The event showcases the most promising emerging technology firms in the Southeast, while offering exposure to the region’s top venture capitalists and private equity investors.
“We were able to do everything in Charlotte – hire a team, raise money, get first users – and we did it all in a 30-mile radius,” says Harrison. “The truth is, we’re not Silicon Valley. But there is a story to tell about Charlotte.”
Inefficiency breeds opportunity
The son and grandson of entrepreneurs, Harrison was a business major at UNC Chapel Hill and was hired after graduation to be an analyst at investment bank Edgeview Partners in Charlotte. There, he experienced firsthand the process of buying and selling companies.
Two years later, he took a job as an associate at McColl’s Falfurrias, where he oversaw strategic investments in companies.
“One of the things we started to notice … is that the process for buying and selling a company is extremely cumbersome … and manual,” Harrison says.
There are so many players in mergers and acquisitions – buyers, sellers, service providers, lenders, investors, financial advisors, portfolio companies, industry experts – but they lacked a secure Web-based channel of communication and a common network to manage deal activity.
And where Harrison saw inefficiency, he also saw room for innovation, ways to compress the buying and selling process, which typically takes six months.
So after water cooler talk grew more serious, he and Falfurrias executive Rob Cummings stepped down from their roles with the private equity firm and, with the help of software engineers, built DealCloud.
Harrison describes DealCloud as a combination of targeted connections – a Match.com-meets-LinkedIn for only people who buy and sell companies, with a Dropbox-like component, for sharing highly confidential and secure documents.
Connecting through competition
When you’re a startup, connecting with other local entrepreneurs is critical, Harrison says. So the budding company jumped in headfirst.
They were one of the first tenants of Dan Roselli’s South Church Street entrepreneurial hub, Packard Place, where dozens of startups now reside.
And DealCloud entered – and won – a number of startup competitions, which helped with company visibility.
DealCloud was one of 117 startup companies from the Carolinas, Virginia and Tennessee to enter the Charlotte Venture Challenge, the region’s largest entrepreneurial competition for early-stage, high-growth companies. The three-month competition included workshops, mentorship with other entrepreneurs and, during the final rounds, exposure to angel investors and venture capitalists.
DealCloud took first place in the Information Technology and Informatics category, earning $10,000 and an additional $1,000 for winning the People’s Choice award.
DealCloud also was awarded a $50,000 grant from NC IDEA, an organization that offers small grants to high-tech startup companies to help reduce the risk of early failure and help them on the path to self-sustainability.
And Harrison was recently named the 2012 “Young Entrepreneur of the Year” by the Charlotte Chamber of Commerce.
“When we were first getting started, doors were opened to us,” says Harrison.
Roots in Charlotte
But when all signs say “success,” why stick around Charlotte? Why not pack up your ambitions and move to New York, Los Angeles or Silicon Valley, where young entrepreneurs can brush shoulders with the likes of Facebook’s Mark Zuckerberg, Google’s Larry Page and Sergey Brin, and hundreds more of the Next Big Things?
Because DealCloud doesn’t need to, Harrison says.
“Charlotte has every piece of the puzzle: community, space, resources, people,” says Harrison. “The one thing we’re missing is (early-stage) capital.”
There’s more capital in the bigger cities, he says, but there are also more hands grabbing for it. And when you’re 27 years old and have a mentor, investor and friend in Hugh McColl, well, putting down roots in the Queen City sounds pretty prudent.
“When you’re young, you tend to run as hard and fast as you can,” says Harrison. “… It may not always be clear the exact direction you’re headed.”
But “he (McColl) is a very patient and thoughtful investor. It’s a privilege to spend … time with him.”