The possibility of being rich and driving a luxury car was what attracted Evan Betzer to Enron. He was also competitive, a trait needed to survive there.
Betzer, 35, took a job at Enron fresh out of business school in 1998, then left after its downward spiral in October 2001. Rather than entrust his future to someone else again, Betzer, who put together multimillion-dollar deals for Enron's broadband division, decided to test his entrepreneurial skills.
In January, Betzer teamed up with Charles Harris, 32, who worked in corporate finance in Enron's industrial markets division, to form Stoneworth Financial LLC, an investment banking firm that helps small energy and telecom businesses sell or restructure their companies to gain more value. They also help businesses raise capital from banks and investors.
"Starting our own business wasn't an option; it was a necessity," Betzer says. "It took us two months to pool our money and business contacts to start up Stoneworth Financial." In mid-January, after just two weeks in business, Stoneworth had three deals under its belt, far exceeding Betzer and Harris' expectations. "We're no longer worried about getting paid back on our investment," Harris says.
Watching Enron file what was the biggest bankruptcy in U.S. history, Betzer and Harris have learned valuable lessons from their former employer. One key: "Cash flow is more important than earnings," Betzer says. "Enron sacrificed cash to make earnings. I won't ever do that."
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Moreover, Betzer and Harris say it's crucial to listen to their clients and not preach to them what they should do. "It's important not to make the customer feel stupid," Harris says. "I don't want to make my clients think I'm better at running their businesses than they are."
Despite the allegations of fraud at Enron, Betzer and Harris say their success is due largely to the Enron culture, which pushed employees to be innovative. "It was an amazing learning experience," says Harris. "The possibilities were endless."