As seen in

Eagle Ventures principal ‘never’ does the easy deal
With Andrew Carnegie’s advice nearby, Mr. Pirchesky builds $25 million investment record

By DANIEL BATES

SHADYSIDE - If you really want to understand local deal maker Melvin Pirchesky’s true business philosophy, just look in the bottom drawer of his office cabinet.

Inside that drawer is a stack of books all entitled “Think and Grow Rich,” by Napoleon Hill. The book is a compilation of business advice based on steel magnate Andrew Carnegie’s

philosophy of success. And it’s a book he not only lives by, but one he recommends - and gives away - to anyone with lofty financial aspirations.

Such aspirations should come as little surprise for a man whose sole business is to raise and make money for others. In fact, he and his investment firm, Eagle Ventures Inc., manage millions of dollars of investor money and , at the same time, are in a position to greatly influence the future of promising entrepreneurial startups in the Pittsburgh are.

But according to those who have dealt with him in the last few years, 48-year-old Mr. Pirchesky runs his business and directs others with a “do-or-die” flair and a sense of integrity that follows him even into his work as both a member of the board of the Allegheny Trails Council chapter of the Boy Scouts of America and as chairman of the county’s Children and Youth Services.

Generically, Mr. Pirchesky’s specialty lies in three areas: oil and gas partnerships, acquiring existing companies and funding startups through an investment vehicle known as a private placement. A private placement is a semi-public investment, regulated by the U.S. Securities and Exchange Commission, in which a pool of investors is put together specifically to purchase equity in a particular startup.

Of late, he is beginning to gain attention, particularly in Pittsburgh’s growing high-technology sector, where entrepreneurs are turning to Eagle Ventures more and more in search of startup funding. Such support largely has dried up in recent years, at least from the venture capital community.

Eagle Ventures, for instance, recently has raised at least $5 million for computer software startup Guidance Technologies Inc. and another couple of million dollars for a computer-based heart monitoring equipment maker called Cardiac Telecom Inc.

In these situations, Mr. Pirchesky not only raised the capital, but he also took an active role in both companies. Currently, he represents the investment group as a board member and, as evidenced with the recent difficulties at Guidance, will jump into an even more active role when the going gets rough.

Melvin Pirchesky Founder and principal of Eagle Ventures 48 years old Mr. Pirchesky started his career at accounting firm Arthur Young

Eagle Ventures principal Melvin Pirchesky offers funds to startups others shy away from. (Terry Clark photo)

Only a few weeks ago, Mr. Pirchesky and the rest of Guidance’s board stepped in and replaced the company’s chief executive officer, hoping new management would better penetrate the computer software market.
Is the investment manager looking for control?

“ As an investor, I don’t want to control the company,” Mr. Pirchesky says of his general investment style. “I just want the ability to control it when things go wrong. This is all about providing resources, not to control.”

Jeffrey Bonar, chairman and founder of Guidance, describes Mr. Pirchesky’s efforts as very committed.

“He is very committed to making it work,” Mr. Bonar says. “When he says his is going to do something, he moves heaven and earth to do so. He has extremely high integrity."

Apparently, that’s where Mr. Pirchesky differs from some others who arrange private placements.
Says Frank Demmler, vice president of venture development for the nonprofit Enterprise Corp.: “In general, I am very skeptical (of private placement investment firms). The reason is that I’ve seen many people get burned, ending mainly with boxes of private placement memoranda. By distinction, Mel Pirchesky works very hard to attract the money itself. I’ve been impressed by their professional approach and their commitment.”

Mr. Pirchesky sums up his livelihood this way: “I’m a galvanizer of assets - a guy who just happens to be lucky. But I don’t have money; I have to go and get the money. However, I can get it.”

And get it he does. Since Mr. Pirchesky launched his company in 1981, he says he has raised at least $25 million from more than 300 investors to fund upwards of 25 investment deals.

But as he notes, “I’ve never done a deal that’s easy to raise money for.”

Then again, he says he won’t raise money at all if he can’t find a respected expert that wants to invest in a given opportunity himself. He says he only trusts his experts. In addition, the investment must be reasonable enough for both himself and his family - even with the inevitable risks involved.

“ If the deals aren’t good enough to put my family in them, then I don’t do the deals, ‘ Mr. Pirchesky says.
Mr. Pirchesky is quick to admit that not every investment is successful, but that doesn't seem to stop him from finding the next promising opportunity. He says anyone investing in the kinds of deals he arranges should have the ability - and temperament - to invest in three to four such deals.

“ You cannot play major league baseball and not expect to strike out,” he advises. “I can only hope that my family and friends make more money than they lose. But you have to diversify your risks.”

Mr. Pirchesky says he got his start after working as a certified public accountant for 15 years with the former Arthur Young accounting firm. He says he used to spot investment opportunities for some of his clients, but he could never participate himself. A frustrated deal maker at heart, he decided to give it a shot in 1981 Surrounding himself with what he describes as a lot of experienced people with good advice, he built himself a business that continues to grow in both size and the deals he arranges, though he won’t release any exact figures

The main difference between now and then: “There are more ‘zeros’ tacked on to the (potential financial) consequences.”

(Reprinted with permission from the Pittsburgh Business Times)