When Duane Stullich (’04) and Nishen Radia (’04) entered UCLA Anderson in 2002, they couldn’t have come from more different locales. Stullich grew up on a farm in Lancaster, California, and graduated with a bachelor’s degree in accounting from Cal State Northridge. Radia came from North London and graduated with a degree in economics from the University of Bristol in England.
The pair met in the first month of their first quarter and, despite their contrasting backgrounds, bonded almost immediately. By the time they’d earned their MBAs in 2004, they had founded their own investment bank, called FocalPoint Partners, were renting office space on Ventura Boulevard and were engaging classmates to work for them as unpaid interns.
Some 20 years of perseverance and partnership paid off in 2022 when B. Riley Financial agreed to acquire FocalPoint Partners for total consideration of up to $175 million. “We felt like B. Riley was a platform that could help us grow our business and augment our existing services with lots of new products and capabilities that we could offer to our clients,” Stullich said.
Their initial decision to join forces happened during a moment of serendipity. Stullich had enrolled at Anderson after finding himself “burnt out” on investment banking, following stints with the Houlihan Lokey group and with Murphy Noell Capital. Early in his first quarter, after a local cosmetics business contacted UCLA Anderson’s student finance club looking for a student to prepare a deck for a consumer product, Stullich arranged a meeting with the company.
At the same time, he and Radia were collaborating on a marketing project for their study group. Radia had journeyed to Westwood after becoming “disillusioned with banking,” following a stint as a VP at Merrill Lynch, “where the decision-makers were bureaucrats who were mostly trying not to lose their jobs by making bad decisions,” he said.
When Radia mentioned that he was considering doing some consulting work outside of school, Stullich made what he called “a snap decision” to invite Nishen to the meeting he’d already set up. The two were hired and soon parlayed what was initially a $10,000 assignment into a hefty $250,000 fee.
“I really liked and respected Nishen,” Stullich said. “My knee-jerk reaction was to involve him. If that hadn’t happened, I doubt we ever would’ve launched our firm and be where we are today.”
“We got to know each other in the same study group,” Radia said, “and we both had the same idea, to see if we can make the most of our network here and do something together.”
A turning point came in the spring of their first year at Anderson, when Stullich and Radia decided to forego the traditional summer internship to focus on securing clientele for the business. “It was a pretty risky move,” Stullich said, “because the internship is obviously a huge part of business school — to set yourself up for a job upon graduation.”
They plumbed Stullich’s contacts for leads, including companies, lawyers and accountants, and found inspiration in the Venture Initiation class taught by Professor (now Senior Associate Dean) Al Osborne, the founder and faculty director of the Price Center for Entrepreneurship & Innovation. “The class and Al personally inspired us to go for it,” Stullich said.
As their outside work grew, they approached Elaine Hagan (’91), executive director of the Price Center, about turning FocalPoint into their capstone project.
Decades earlier, UCLA Anderson had established itself as the first MBA program to require a field study project in lieu of a written thesis. Though the field study requirements vary a bit from master’s program to master’s program, the projects invariably involve a team of students performing a consulting project for a participating company.
Stullich and Radia, though, preferred to spend their time working on their new venture. With Osborne providing supervision on the project and helping to work out the academic and administrative details, launching FocalPoint became their capstone project. The assignment forced them to research and write a comprehensive business plan for their nascent partnership, what Radia described as “this wacky idea of starting an investment bank.” Today, entrepreneurial Anderson students may choose the school’s “Business Creation Option” to launch new companies under the supervision of Anderson faculty. The creation of FocalPoint, the first BCO company, proved a turning point not only for its founders, but also for future Anderson students.
“Since our pilot project with Nishen and Duane, roughly 2,000 Anderson students have participated in the BCO program, with more than 70 teams and 340 students across the full-time MBA, FEMBA and EMBA programs enrolled this year,” noted Hagan. “While not all team members will continue on with a project, and not all of these companies will launch, each team member will have developed knowledge and skills that they can use, should they launch a business in the future.”
“The whole BCO process was such a game-changer for us,” Radia said. “Up until then, we were working so hard on deals that neither of us had a chance to think about whether this was something we were going to do for our careers. What we found was that the BCO allowed us to put our thoughts onto paper and get formal about it, and that was extremely helpful.”
“Al challenged us on a lot of what we were doing,” Stullich said, “asking questions like, how are you going to differentiate yourselves in the marketplace? He pushed us to think about the future beyond ‘Hey, we can close a deal and make some money.’”
Dean Osborne added, “The BCO Program offers an ideal laboratory for students to experience the challenges faced in creating a business. The process of learning by doing complements their classroom education, and enhances their ability to manage the uncertainties of the startup environment. The structured approach that Nishen and Duane used to identify a market opportunity and develop an innovative business model still serves as the foundation of today’s BCO Program.”
Stullich and Radia took the same courses at Anderson so that if one missed class to meet with a prospective customer, the other could cover for him. Juggling courses and clients — working seven days a week, 12 hours a day — they were “two full-time business students moonlighting as investment bankers,” Stullich said. By the third quarter of their second year, they were “two full-time investment bankers moonlighting as full-time business school students.” By graduation, they were “happy not to have homework anymore.”
“I’m the accidental entrepreneur,” Radia continued. “I came to UCLA with an open mind. What I noticed about the school is that if you’re open to things that interest you and if you’re flexible, you can really write your own future. That’s kind of what happened to us.”
They scrambled and scraped to find and sign clients. Once, when they arranged a meeting with a prospective client at their subleased offices in Sherman Oaks, they raced out and bought furniture so that FocalPoint came across as a legitimate firm. They soon found work handling transactions involving a wide range of clients, from Physicians Formula to World Gym to the Lucky Strike bowling alley chain to ACT Litigation Services.
“If we weren’t closing transactions and signing new clients, the business would have become FizzlePoint,” Stullich said. “We’ve always divided and conquered on the internal aspects of growing the business.”
“For an entrepreneur, something about the business is always the first or second thought you have when you wake up in the morning,” Radia said. “You’re constantly obsessing about it. Like, what is on the to-do list today?”
They found their niche as an investment bank serving middle-market companies (typically, those with revenues ranging from $75 million to $500 million), while delivering a diversified array of services, including mergers and acquisitions, private capital advisory services, financial restructuring and corporate bankruptcies, and debt and equity recapitalization. They ramped up internally by hiring a tight-knit team of investment banking professionals who specialized in such fields as aerospace and defense, consumer goods, health care and technology/media/telecom.
Challenges awaited them that tested their partnership. Early on, one of Stullich’s former partners dragged the firm into a lawsuit that forced them to spend hard-earned capital for an attorney. “Nishen had never even met this guy, but to his credit he never gave me grief about that,” Stullich said. “We were in it together. That speaks to a fundamental level of trust, which is the foundation of any successful relationship.”
Another, more dramatic moment came in 2008, when the global financial crisis impacted commerce around the world. Their strategy of doing business with both healthy and distressed companies allowed them to survive relatively unscathed at a time when FocalPoint was still a small-sized firm with limited overhead and few employees.
That wasn’t the case during their most recent and harrowing challenge: the COVID-19 pandemic. In 2019, the company and its approximately 50 employees had just enjoyed record revenues. Across its 20-year history, the firm had closed transactions worth $17 billion, including many deals in the private equity market, and had opened office branches in Chicago, New York and Shanghai. For four consecutive years, the Los Angeles Business Journal recognized Stullich and Radia among “the top 500 most influential and impactful business leaders in Los Angeles.”
But when the lockdown happened and worldwide business came to an abrupt halt, FocalPoint struggled to maintain its level of success. “During the pandemic, unlike during the global financial crisis, we were a real company with real overhead,” Radia said. “We were burning about $1 million a month and watching our bank balance dwindle. In June of 2020, we were like, ‘Are we going to make it?’ Thankfully, we were able to turn it around.”
Stullich and Radia attribute their survival to not terminating employees, even while their revenues flattened. “The kneejerk reaction is to start laying people off or reducing salaries,” Stullich said. “We were optimistic enough about the future and knew that if we laid people off we’d be cutting muscle. On top of that, in January [of 2021], we gave people raises. It turned out to be one of the best things we ever did because the job market got so hot around that time. Had we not put through that salary increase and done what we did to keep our team together, we wouldn’t have been in position to capitalize on all the opportunities in 2021.”
That included their decision to sell the business to B. Riley Financial (conveniently based in Westwood in the building next door to FocalPoint). The company had had other suitors in the past, according to Stullich, “but the platform gives us access to public capital markets because B. Riley can do IPOs, SPACs, debt offering and public bonds — in other words, a lot of things that we weren’t capable of offering our clients.”
The synergy between the two companies was another attractive aspect to the deal. “B. Riley thinks about business the same way we do,” Radia said. “It felt like we were looking at ourselves in terms of culture because they’re very entrepreneurial and they don’t have layers and layers of bureaucracy. We felt like it would be a really good home for our entire team.”
The acquisition hasn’t yet altered much in their day-to-day business routine, with FocalPoint running essentially as a standalone entity specializing in M&A transactions. As the company transitions into its new role under the B. Riley umbrella, it’s given Stullich and Radia occasion to reflect on what they’ve learned as entrepreneurs and as partners.
“When people ask me about starting an investment bank, I always say either keep it really small with very limited overhead, and if you close a couple of deals a year you’re going to make good money,” Stullich said. “Or, you really have to grow the business and reinvest in the business, and set up systems and procedures and ultimately build equity value. To be stuck in the middle, that’s not a good place to be.”
“Duane and I had disagreements all the time,” Radia said, “But we always had trust and respect and the ability to be straight with each other — where it’s not about being right, it’s about getting to the right answer. It’s one of those things we learned at Anderson: We learned to look at an issue from every different viewpoint, to poke it and prod it and see what we could find out. If you maintain the focus on finding the right answer, as opposed to your answer, you tend to get there. I can’t recall any time we had a debate where we thought we were going to break up the partnership. That just never happened.”