Lessons From The Top

Three of 11 Titans of the B.E. 100s share their trials and triumphs on the climb up

became the first step in transforming Def Jam from a mom-and-pop label to an independent record
company. By 1985, Def Jam was selling close to 500,000 records, and Simmons was about to have one of the biggest meetings of his life.

Executives at CBS Records noted the growing popularity of rap music and became interested in the upstart company, offering Simmons and Rubin a $600,000 deal. The young partners would produce records, while CBS handled distribution, marketing and promotion. Def Jam would receive royalties on record sales. They went for it, launching 17-year-old LL Cool J and his first single, “I Need a Beat.” It sold a million copies. “It was great. I made my first $300,000. I was actually more excited about that milestone than when I made my first million years later.”

Emma C. Chappell
United Bank of Philadelphia
It was Emma Chappell’s baby. She conceived the idea, and bore the heavy burden of giving it life. Then, from the day she launched United Bank of Philadelphia, she nurtured it, protected it, expanded it. It took six long, hard years.

The venture got off to a promising start. With her impressive credentials and fat Rolodex of contacts, she organized a group of 12 African American investment bankers and business leaders to plot the founding of the bank.

Building a financial institution from scratch would take loads of capital.

First, Chappell and the others ponied up $600,000 to develop a business plan and a feasibility study. To take the next step-establishing United as a state-chartered institution-they needed to raise $3 million.
Chappell put in place a strategy to gain the financing. She would approach insurance companies, corporations and leading financial institutions. Her leverage would be the poor track record of majority banks providing loans to African American customers. Moreover, the institutions held mediocre performance ratings as measured by the Community Reinvestment Act (CRA), the 1977 federal law created to induce banks to provide credit and other services to low- and moderate-income communities.

Chappell’s pitch: what better way to improve your CRA performance ratings than to invest in a bank that would fully serve minorities? It worked. Within months, Chappell persuaded such monoliths as Mellon Bank, PNC Bank and Corestates Financial Corp. to shell out more than $1 million. United was on its way. Then Chappell’s world fell apart.

On October 19, 1987, the stock market plunged 508 points and wiped out as much as $500 billion in equity value on the New York Stock Exchange. Institutional investors became skittish. United’s sources of financing dried up. To make matters worse, the state raised the capital requirements to $5 million.

“We put all this work into trying to start United and our strategy for raising the money from institutional investors just collapsed. But we were not ready to give up. The idea came to us that we should raise the money from the black community. Such a move had not been tried for decades. I believed that if we [African Americans in Philadelphia] truly wanted our own financial institution then we had

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