As part of my series about the “How to Navigate and Succeed in the Modern World of Finance,” I had the pleasure of interviewing Dewey Burke.
Dewey Burke is the Founder and Chief Executive Officer of Luxury Asset Capital, a leader in the alternative finance segment that provides loans using borrowers’ luxury assets as collateral. As CEO, he is primarily responsible for formulating the company’s strategy and overseeing its execution. Under his leadership, the company has experienced eight times growth in assets under management since January of 2017 and acquired its largest competitor, Borro, in January of 2020. Since its inception, the company has provided over $450,000,000 in loans and served over 15,000 clients.
Dewey was an executive in two alternative finance firms before founding Luxury Asset Capital. Before that, he was Vice President of a sub-Saharan Africa focused private equity firm backed by the Coors Family of Colorado, and a private equity analyst at the international law firm Morrison & Foerster.
He earned a Bachelor’s degree from the University of North Carolina at Chapel Hill, double-majoring in economics and management. As a student-athlete, he played Men’s Basketball for Hall of Fame Coach Roy Williams and won two Atlantic Coast Conference (ACC) Championships. At his alma mater, he serves on the Leadership Council for the Center for Entrepreneurship at the Kenan-Flagler Business School, investing his time and energy to build the program and foster the growth of startups coming out of the University. Dewey is also a member of the Advisory Board of the UNC Rams Club, the school’s principal fundraising organization for athletics.
Dewey lives in Denver, Colorado, with his wife and two daughters and still enjoys playing basketball as well as competitive amateur golf.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I’m a born and bred Philadelphian, still deeply attached to its rich history, diverse culture, and my family there even as I reside halfway across the country in Denver. I’ve been competitive and team-oriented for as long as I can remember. My experience playing Division-1 college basketball for Hall of Fame Coach Roy Williams at the University of North Carolina, making that team as a walk-on, is something that really kicked those traits into high-gear, which is where they’ve stayed ever since. As the NCAA commercials you’ve probably seen say, the vast majority of student-athletes pursue careers other than sports after graduation. For me, that was as a part of the finance industry that goes by various names today: including private equity, alternative finance, non-bank finance, and collateral lending. Before founding my current collateral lending company, I did stints as a private equity analyst at a large global law firm, as a VP at a private equity fund backed by the Coors family, as the COO of a chain of brick and mortar pawn shops and CEO of the nation’s first online pawnshop. All of those experiences helped me build insight into the various ways — besides traditional banks — that people and projects got financed, and the increasing need in all segments of the market for alternative financial services. That insight, and I suppose a latent entrepreneurial drive were behind my founding of Luxury Asset Capital as a service that brings collateral lending, perceived mainly as a low-transaction amount business for unbanked or lower-income segments of the financial market, to upscale, and high-net-worth market segments. It sometimes comes as a surprise that even those with significant incomes encounter liquidity challenges, but it happens all the time. Our business concept is rooted in the idea that leveraging one’s past hard-asset purchases, such as a classic car or a watch collection as loan collateral, is a viable alternative for raising cash, and we’ve built a growing business providing that alternative, having lent nearly half-a-billion dollars.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
As a young private equity analyst, I attended a meeting relating to a significant capital raise at the exquisite home of a billionaire potential investor. As I was told after the meeting, I apparently made myself right at home, committing the social faux-pas every mother and grandmother warns against — putting my foot on the furniture (in this case, a coffee table, and given the setting, probably an expensive one). I was oblivious to my host’s and my colleagues’ non-verbal cues to remove my foot until it suited me to adjust my sitting position.
Upon exiting the home, I was informed by my boss of my transgression in a rather stern way and was quite naturally pretty embarrassed. There were numerous takeaways from this experience that have stayed with me to this day. First, don’t get too comfortable even in a relaxed business setting — you must always be aware of your surroundings and environment. Second, regularly read the room for non-verbal cues that, when picked up and acted upon, can avert disaster (or at least, embarrassment). Finally, don’t forget about the lessons your mother and grandmother attempted to teach you — they knew what they were talking about!
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
Other than my parents and grandparents, Roy Williams, my college basketball coach has been the most influential person in my professional development, particularly my development as a CEO. The title of his book, Hard Work, is all the introduction it needs. Principles I live by today that were imparted by Coach Williams are embodied by statements like “The man on the top of the mountain did not fall there,” clearly expressing that hard work is what’s required to get to the top. Another is “help a teammate,” which has various meanings on the basketball court but is equally applicable in business — pick up for your teammates when they make mistakes or are overwhelmed, be a caring person, focus on achieving team goals over individual ones.
Are you working on any exciting new projects now at Luxury Asset Capital? How do you think that will help people?
We are excited to be expanding the business in several ways. For example, we are increasing the range of market segments we serve by increasing the forms of collateral we accept. We are always looking for ways we can help our clients tap the equity in assets that are high in value but low in liquidity. We have a dedicated focus on the community of professional athletes and entertainers. We have made it easier for our high-net-worth clients to obtain 7-figure loans by accepting luxury real-estate as collateral. We have also broadened our product line by introducing a line of credit products in addition to our standard loan product. Finally, we just completed the acquisition and integration of Borro, our most significant competitor in this space. We have introduced to their client base a much richer product offering with better rates and more flexible terms. In these cases, as with our core business, we help people by providing loans from $2500 to over $5,000,000 within a few days, discretely, with no credit requirements, no tax implications, and virtually no paperwork.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
Do you have a “number one principle” that guides you through the ups and downs of running a business?
We live in a world where capital helps people solve problems, realize opportunities, and live dreams. Our purpose from day one was to provide individuals and businesses with a new source of readily available capital by unlocking the equity in a wide range of assets that are high in value but low in liquidity. We make four to seven-figure loans by leveraging that equity. Our company mantra is “nothing great was ever achieved without enthusiasm,” which is again from my college basketball coach. Coach Williams used this phrase frequently as our thought for the day. It’s a simple thought, but I try very hard to bring enthusiasm to our office and team every day. When you are enthusiastic, your energy is better, you are more positive, you interact with your team and your clients better, and you have a happier disposition. No doubt, it takes extra work some days, but it is truly infectious.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
We are delivering a type of financial service to middle and upper-income individuals that have historically served a substantially different segment of the market. Consequently, we have a strong focus on strategic marketing programs, including market education and segment-specific partnerships, in addition to solid tactical execution in areas including pay-per-click advertising and search engine optimization.
Viable prospects for our business need to own luxury assets — that’s the collateral for the loans we provide. Partnerships with companies and service providers that are already serving that clientele naturally and efficiently generate highly-qualified leads for us. A great example of this is our partnership with WatchBox, the leading global platform for the buying, selling, and trading of luxury timepieces. We partnered with Watchbox to provide their clients the capability of obtaining loans in addition to buying selling or trading watches, tapping into their already extensive client base in a large luxury asset class. We are in the process of developing additional partnerships with other companies that are well established in other luxury asset classes. We are also regularly expanding our relationships with our target markets’ trusted advisors, such as wealth managers, attorneys, sports and entertainment industry agents, and insurance providers. These are the people whose clients are dealing with either problems or opportunities that require potentially large amounts of capital quickly to resolve. We want them to view us as another part of their clients’ financial mix, and this is happening on a growing basis.
Underlying all of this, whether it’s a client opportunity that comes through a partner or one we generate directly, is, of course, is earning a partner’s and a client’s trust by providing exceptional service. There are lots of lenders out there — for our clients, it’s about time, trust, and the flexibility to structure something to meet their individual needs.
If a fellow CEO would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
That’s quite a question. Being able to convince those you are closest to that your idea is worthwhile, and that they should trust you with their money takes a ton of guts and belief. You really must believe in your vision to ask your personal network for money. VCs are a tough bunch and seem to say no 99% of the time. The key question is, what is your ability to overcome the failure of repeatedly being told “no?” You need thick skin for that. I’ll also add a third category of advice here from personal experience, which I’ll call “be out there ready to talk enthusiastically about your business at all times because you never know who you’ll meet.” I was invited to a charity golf event a couple of years ago. It was on the east coast, so I needed to fly to get there, but Coach Williams was hosting it. By this point in the interview, it won’t surprise you to hear that for that reason alone, I went. I played my round and was back at the clubhouse changing out of my golf shoes when someone I had never met asked me innocuously, “What do you do?” I responded by enthusiastically describing the collateral lending business and my plans to take it upmarket. He asked a few questions about it and said, “I love that business model! Here’s my number if you ever want to talk about it more.” I had no idea who he was or what his career had been like. About four months later, he acquired the company, infused it with growth capital, and provided it with a $50 million line of credit that soon expanded to $100 million. Turns out he was an incredibly successful private equity investor who had made hundreds of millions in his career. It completely changed the trajectory of our company and my life. The point is, never turn down an opportunity to tell someone about your business because you never know where it may lead.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
I tend to stick to how most M&A valuations are done using a multiple of EBITDA. If you are not profitable or pre-revenue, it becomes tougher. Valuing patents, technology, or a SaaS product that doesn’t generate revenue is outside of my direct experience and conceptually more difficult for me since they don’t clearly indicate customer value. My principal advice to other leaders would be to do a great job of explaining what your sustainable customer value is. Your numbers should back up what you say, but numbers alone don’t tell the story. Make sure that whoever is evaluating the value of your business clearly understands the value you provide for the customers of your business.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill? From your experience do you have any general advice about how to boost growth and “restart their engines”?
We just acquired a company that, if you had asked me a few years ago about them, I likely would have said that someday they will acquire us. They were easily the best known, best-capitalized player in the market. As it turned out, they made a series of unfortunate business decisions in an attempt to reach who they thought were the most valuable segments of the market, and in the process, lost a good portion of the client base that built them in the first place. Worse yet, the segment of the market they targeted didn’t deliver the volume of business needed to make up for those losses. Since our acquisition, we have been reestablishing relationships with thousands of those former clients, who it turns out, have a continued strong need for luxury collateral loans that we can service profitably. What we’re offering is not radically different from what they provided during their growth years. At the risk of stating the obvious, my advice to leaders who are encountering a growth slowdown is that the grass is not always greener on the other side of the hill. Revisit the things you did when you were growing faster and find ways to build upon them. If you’re losing business to a specific competitor, find out what they’re doing. Starting over may be the answer for some companies, particularly if what they do or provide has been rendered obsolete by technology or some significant change in the marketplace. Still, I would recommend leaving no stone unturned relating to your current business before going down that path.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
Giving up too much equity early on in exchange for getting that initial amount of capital in. Sometimes it can seem impossible to raise that first round, and your desire to get it done can cause you to lose sight of your value proposition and what your idea could one day be worth. Take on a little debt IF you’re comfortable — hold that equity tight.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
- Be well-capitalized. Failing to properly service clients due to a lack of funding is a death wish. We are looking at an acquisition right now, and they’ve had to turn clients away because they are short of capital to lend. My experience in the lending business is that if you tell a current or prospective client even one time, “sorry, I can’t help you,” that you’re done in their eyes. If you are capital constrained, stay within your ability to service clients until you become better capitalized. Growing faster than your ability to service is not “a nice problem to have.”
- Be tough. Your worst days as an entrepreneur are WAY WORSE than those as an employee, but if you are tough enough to stomach those, your best days are WAY BETTER than those as an employee. There is no greater feeling in business than the success of your own venture. I can give hundreds of examples of this, but the point is you will have significant disappointments as an entrepreneur, and you have nowhere to look but in the mirror. Whether it is not getting a funding commitment, a client to say yes, a failure in hiring or marketing or whatever, the buck stops with you. As an employee, that is not how it works. Unless you make a colossal mistake, you (usually) still get paid every two weeks. Major pitfalls as an owner could include not making payroll or deciding to shut down a business entirely — that’s real pressure. Know and prepare for what you’re getting yourself into ahead of time and weathering the highs and lows should be easier.
- Understand your legal landscape and have a great attorney. Finance is a highly regulated industry, and regulations change frequently. Know how local, state, and federal laws and statutes impact your business. I’m not an attorney, and if you’re not, don’t try to be. Attorneys are expensive, but they protect you from situations that can be even more expensive. My example in this instance is very relevant: I remember talking through a legal issue with one of my investors, and he let me ramble on with my thoughts or how to solve it and then simply replied “are you an attorney?” to which I replied, “well, no.” He then said, “good, me either. So call our attorney and have him handle this. You’re not qualified.” While that was sobering, it was also very true. While you will be called upon to wear many hats during a financial career, don’t don an attorney’s hat unless you are qualified to do so. The cost of legal missteps can be exponentially higher than in other areas of responsibility.
- Always take the meeting. This is a personal mantra I live by, and my investor story is a great example. I have found that you never know what a person’s experience is, who you can introduce to them and they to you, or where a conversation may lead. Find the time, to take the 30-minute coffee meeting. You’ll be amazed at what happens — that’s been my experience. Always have an eye on building your network.
- Never lose sight of the fact that you are in the business of helping people. As a lender, it’s easy sometimes to get hung up in the metrics of the business, whether it’s the conversion rate of our marketing programs to our average loan size or the size of our aggregate loan portfolio. Obviously, those things have their place, but they are not our purpose. We lend money because money helps people solve problems, overcome obstacles, realize opportunities, and live their dreams. The best conversations I have with my team on any given day, are about learning what we, through our lending, are doing to help people.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Balance is essential, and I believe in a hyper-focus on wellness. We really preach that here. I encourage all my team members to have gym memberships, do yoga, go on walks, try to eat well, and hydrate. I try and set a healthy example, and I’m heartened when they choose to follow. The stress levels in our industry can be high at times. My best advice to mitigate the effects of that stress center on balance and wellness. They are accessible to and work for everyone who pays attention to them.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
It would focus on wellness — catalyzing people to eat sensible amounts of better foods and get more exercise. It’s not an original idea by any means, but there is no doubt that much still needs to be done to make our country healthier. Doing so will benefit an individual’s quality of life and society as a whole. It will help manage healthcare costs, reduce lost productivity due to illness, and I think to make it an overall happier place by reducing the stress and anxiety that is all too often overabundant today.
How can our readers follow you online?
LinkedIn — https://www.linkedin.com/in/deweyburke/
Website — http://www.deweyburke.com/