The Road To Financial Independence was a Dead End For Me
My roadmap to financial independence included working at a startup company and collecting the equity when the company would go public. After attempting it at five startup companies, I gave up.
The roadmap started in 1992 at Specialized Health Management, (SHM). The business model provided outsourced mental health counseling services to nursing homes. I never lasted long enough to collect any equity options as I quickly discovered I disliked this business model. I am not a Health Care professional, even though my college major was Health Care Administration. In the end, SHM transitioned into a billing company and never went public.
After a tumultuous year in health care, in 1993, I made my way to financial services and landed at a wonderful “Startup Mutual Fund” company called North American Security Life. Yes, Mutual Fund companies begin as startup companies. This was an exciting time to be close to the markets and to be part of a company that was growing. It was exciting to see the distribution channel develop and the relationships with transfer agents. This role allowed me to find my passion to work in technology and I transitioned from the customer service side to the technology side. I held out hope that at some point the firm would bring the money management in house, but in the end they used an outsource model for money management. Eventually they were acquired by Manulife Financial. Once again, I did not receive equity options at Manulife.
The Manulife experience of 8 years, allowed me to meet a talented CTO where I got to join an amazing startup company, Gryphon Networks. I was employee number seven and I felt that the path I had gone through was finally going to pay off. It was the year 2000 and the dot com bust had not yet happened. Gryphon Networks was building a product that supported the growing legislation to help major financial firms comply with the telemarketing laws. The company had funding from the team that was wildly successful at Shiva communications. This had all the recipie for success!
After eight years, (minus 3 months at EMC), I departed Gryphon Networks. I bought my equity options of 11,667 common stock. I still believed in the company, but felt that it would take more time for the financial payout. In 2019, Gryphon was acquired for $.64 cents per share, I ended up with $8,003.08. My cost basis was $10,500.30.
Working in the Boston area, you are constantly surrounded by the success of Bio-Tech companies. I was fortunate enough to parlay my experience with Gryphon Networks to Targanta Therapeutics in 2008. This was another startup company that was building a “novel, semi-synthetic glycopeptide antibiotic being developed to treat serious Gram-positive infections in the hospital and other institutional settings.”
Working at Targanta allowed me to see the startup world of bio-tech. We were positioning for HUGE growth once the FDA granted approval. Upon the day of FDA Approval, we would have hired hundreds of sales people which meant expanding all areas of technology related to on-boarding, equipment ordering and office space. This would have increased the stock price. It was another great looking recipie for success.
Targanta taught me that bio-tech firms can buy “Failed drugs” of another company and try to resubmit the data for FDA approval. In December of 2008, I learned about this process as I watched the FDA deny the approval of the Targanta drug.
Faced with a move to New Jersey in 2009 to join The Medicines Company, that has acquired Targanta, I departed for Washington DC. I was fortunate enough to join Knight Point Systems (KPS) as a consultant that they placed at the US Customs and Border Protection. The KPS business model focused on winning government contracts to provide staff augmentation. It never occurred to me that this model could eventually be acquired for hundreds of millions of dollars. KPS treated me very well, but in the end, I was never offered any equity options and in 2019 KPS was eventually sold for $250MM to Perspecta. The founders of KPS did very well and they deserved it.
Specialized Health Management, North American Security Life, Gryphon Networks, Targanta Therapeutics and Knight Point Systems were the five options in life that I thought could lead to financial independence. I learned a lot in each of these opportunities, but in the end I ran out of patience and demographics. Every opportunity was a lottery ticket. I am glad I played to win. Fortunately, those opportunities allowed me to transition that work into a wonderful role with a government regulator that will keep me employed for the foreseeable future.
My only words of wisdom for those of you that are just starting out in your careers would be to do the startup thing early! It is risky and can lead to job loss quickly. I executed my startup adventures between the ages of 23–39, but at 40 I had to call it “Quits” and trade the independence for stability. Furthermore at 40, I found that the “pipeline” to find friends in startup companies or starting companies was also low, hence the transition.
It is an amazing adventure and you can learn a lot. Many of my Medium.com articles are based on what I learned at startup companies. Perhaps you can use this knowledge to gain your financial independence.