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PowerPoint

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Click Here To View Governor Romney's PowerPoint Presentation: http://www.mittromney.com/News/Photo-Albums/AEI_PowerPoint

 

Mister PowerPoint Goes To Washington

By: Matthew Rees

The American

Friday, Dec 01, 2006

 

"Look at the invoices!"

 

That's what Tom Stemberg, then a fledgling entrepreneur, told Mitt Romney in 1985. Romney was the head of a new venture firm, Bain Capital, and was skeptical of Stemberg's idea of launching a chain of office-supply stores. Romney had called 100 businesses in the Boston area and found that they were spending far less on pens, paperclips, and the like than Stemberg was claiming in his business plan.

 

Stemberg had heard this complaint from other venture capitalists, and he always told them the same thing: the businesses didn't know how much they were spending. If the VCs would simply go to the companies and check their office-supply invoices - a dreary, labor-intensive task - they would find that the companies were actually spending a remarkable $1,200 per employee on the mundane supplies. No other VC had taken Stemberg up on his challenge - but Romney did.

 

He and two Bain Capital colleagues, Josh Bekenstein and Adam Kirsch, went back to the businesses, got their invoices, and ran the numbers. The exercise provided the Eureka! moment that would come along many more times in Romney's venture career. Stemberg was right. There was a lot of money in paperclips. After spending three months grilling Stemberg on every conceivable dimension of the proposed business, Romney recommended to his partners that the idea - a company that would be called Staples - deserved an infusion of capital.

 

That initial investment - about $600,000 - paid off brilliantly. Staples started in May 1986 with one store, in the Boston suburb of Brighton. It went public three years later, and today has 1,800 outlets with 69,000 employees. Last year, Staples registered $16 billion in sales. The business has handsome profit margins, little debt, and a stock-market value of more than $18 billion. Today, Mitt Romney says he's prouder of this investment than any other.

 

The episode highlights what would become the defining characteristic of Romney's career as a venture capitalist - and later as a government executive. He was willing to pursue - and analyze - data that others wouldn't bother to chase down. His dogged persistence paid off. During the 14 years Romney headed Bain Capital, the firm's average annual internal rate of return on realized investments was a staggering 113 percent. At that growth rate, a hypothetical $1,000 investment would grow to $39.6 million before fees. Few, if any, VC firms have ever matched Bain Capital's performance under Mitt Romney.

 

Since 2003, he has served as governor of Massachusetts-a Republican running the most Democratic state in America. Romney, who turns 60 in March, is now laying the groundwork for a presidential campaign. His record in business and government, coupled with his personal discipline and a strong campaign organization, give him credibility even in a GOP field where Arizona senator John McCain and former NYC mayor Rudolph Giuliani are now far ahead in early polls. ...

 

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