IBJNews

Wealthy local entrepreneurs hew to conservatism

Back to TopCommentsE-mailPrintBookmark and Share
Small Business Trends

Bill Godfrey raked in more than $30 million from the recent $525 million sale of his Carmel software firm, but don’t expect to see him zipping around in a super luxe car or moving into a mansion.

Bill Godfrey Godfrey

Godfrey stands squarely amid a quiet class of Indianapolis-area entrepreneurs opting for modest, unassuming lifestyles—values that, if anything, turned more conservative during the Great Recession.

Godfrey declined a request to talk about post-recession lifestyles of top local entrepreneurs, preferring to dwell on Aprimo Inc.’s success.

But people who know him say they’d be shocked if he suddenly veered from mores considered modest by affluent Carmel standards. He wasn’t a lavish spender before the recession or the Aprimo sale, and he isn’t now.

“He could afford any of the toys a rich guy wants, but that’s not his demeanor,” said Bill Johnson, a Godfrey friend, Aprimo investor and early sales vice president at the company. “It’s not something he cares about.”

Flashy displays of wealth seldom erupt in Indianapolis after an entrepreneur makes good, and they’re even more unusual now that the recession sobered even the most successful among them. Local entrepreneurs are driving cars longer, taking less risk with investment portfolios, and balking at luxuries like ski trips—quite the opposite of parking Masaratis conspicuously in driveways.

There are exceptions, to be sure. Among the highest-fliers was entrepreneur Tim Durham—now under indictment as the alleged architect of a massive securities fraud—who lived lavishly in a Geist Reservoir mansion and drove exotic cars. But he turned heads in part because he was so unusual.

“Most entrepreneurs live extremely conservatively whether the economy is booming or in a recession,” said Christopher Day, who started and sold broadband and meter-reading businesses to Fortune 100 companies before co-founding local investment banking firm Navidar Group LLC. “They’re not necessarily people that are asking for a lot of attention.”

Added Mark Hill, an investor who in 2005 sold Carmel banking software firm Baker Hill for tens of millions of dollars: “The thing about Indianapolis, the thing about Midwestern culture is, that’s not who we are.”

Big payday

Aprimo’s January sale to Dayton, Ohio-based Teradata Corp. was the largest for a locally bred company since publicly traded Adesa Inc., an auto auction headquartered in Carmel, was acquired by four private equity firms in 2007 for $3.7 billion and taken private. The renamed KAR Auction Services Inc. went public again two years later.

The last available public document on Aprimo, an initial public offering statement the company filed in September 2007 but withdrew months later, showed Godfrey owning 6.8 million shares, or 8.6 percent of the company.

Insiders won’t discuss whether Godfrey’s stake was diluted by an additional capital infusion before the sale. If his share stayed the same, and considering the sale price of $4.97 per share, he would have received nearly $34 million. Viewed another way, 8.6 percent of the $525 million sale price comes to $45.2 million.

Godfrey, Aprimo’s CEO, wasn’t the only one who fared well. Godfrey disclosed to IBJ in February that 23 Indiana employees and investors each received at least $1 million in returns.

The odds of the largess showing up in lavish lifestyles, though, are remote, said Bob Compton, a former venture capitalist who also invested in Aprimo. It simply isn’t in the DNA of Hoosier entrepreneurs; those preferring opulent lives start businesses elsewhere, particularly in Silicon Valley.

“Money and success among the entrepreneurs I know in Indiana doesn’t change them as people,” Compton said. “Indiana’s entrepreneurs are much more well-grounded, much more family-oriented.”

Back to roots

Some Hoosier entrepreneurs, like Steve Hilbert, a co-founder of Conseco, now known as CNO Financial Inc., are more ostentatious. He was renowned—and sometimes castigated—for building a Carmel mansion complete with a ceiling painting that included him in a toga.

And Scott Jones, a neighbor of Hilbert’s until Hilbert was driven from the ailing Conseco and eventually his mansion, keeps a higher public profile than many entrepreneurs are comfortable with.

Yet, if many other Indianapolis-area entrepreneurs had been tempted to flaunt their wealth, the recession brought them back. A spot check of some of the most successful suggests the recession reinforced their values and in some cases drove those values deeper.

Brent Tilson, who owns a human resources firm and completed successful real estate projects in the Greenwood area, said he’s hard-wired to live conservatively, and as a result drives a 7-year-old car.

Tilson recently traded up to a larger house to take advantage of a spectacular buying opportunity and not, he said, to make a statement. He and his wife and four daughters had no intention of leaving what he described as their modest executive home until the real estate market collapsed and brought values crashing down.

Anticipating paying for four weddings, Tilson joked that he will continue living conservatively. Ultimately, he added, the recession brought a necessary cleansing of the economy.

“We’re all going to be a stronger nation,” he said. “Businesses are making good decisions.”

Tech entrepreneur Mike Simmons is in the same Zionsville house he and his wife built seven years ago, and they have no plans to move.

Simmons’ T2 Systems Inc. survived the recession because the parking garage software it sells helped companies protect revenue streams.

Still, the recession presented a dilemma. Simmons harbors painful memories of a grandfather who was killed in a farming accident just six months after he retired at age 60. A high school student at the time, Simmons got a crash course in realizing life can be fleeting, so he has tried to balance work while enjoying his hard-earned money.

The recession tweaked that philosophy, if ever so slightly. This winter, his family opted against a ski trip to Big Sky, Mont., when the cost and complications to his children’s schedule mounted. A few years ago, they would have pushed ahead with the trip.

“We have been a little more conservative in the past couple of years because of the recession,” he said.

Dyed in the wool

Professionals who work closely with top-notch entrepreneurs say they notice the recession dying their values in wool.

“I’ve noticed that today’s entrepreneurs are more frugal than their predecessors,” said Barnes & Thornburg attorney David Millard. “They have had to do it to survive, and now I see them doing it in their personal lives, too.”

Instead of snapping up second homes and airplanes, they’re socking away extra money for retirement or investing it in other people’s startup companies.

Most, however, have retained a guilty pleasure, Millard said. One of the most common: the iPad.

Venture capitalist Don Aquilano sees entrepreneurs recalibrating both businesses and lifestyles to operate with significantly less debt. Too many entrepreneurs came close to losing companies and were distressed by having to lay off valued employees.

Now they seem content to live in existing homes and drive older cars.

The chastening will linger, Aquilano predicted.

“Folks will wait until their situation allows them to sort of spend on that personal luxury. They’ll wait until the kids’ college funds are funded and their retirement is put in place. I don’t think they’ll live beyond their means.”

Not all, though, Aquilano hastened to add: “History is littered with examples of people who don’t remember history.”

Godfrey isn’t likely to be one of them.

Johnson, an admitted car buff, said the car Godfrey drove to a golf course last summer was so bland that he couldn’t recall the model. It was an “everyday car” like a Ford or Toyota, he said.

Moreover, Godfrey told Johnson an initial public offering or other exit for Aprimo investors wouldn’t change how he lived.

Johnson noted Godfrey, who early on donated Aprimo stock to Guerin Catholic High School in Noblesville, remains a “phenomenal family man.”

“He’s about a man who likes to follow his passion. His passion is about creating a business. It’s not about being ostentatious.”•

ADVERTISEMENT

  • Smart Moves
    Fiscal Responsibility, pass it on.

    If any of you mentioned in the article egosurf this please contact me. I'd like startup/exit advice on a new business with similar potential.

    dcowburn at distinctav.com (not the business I'm describing)

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

ADVERTISEMENT