Bernie Marcus, who founded the Home Depot chain as a “regular guy” starting from one store, says that he couldn’t have done it in today’s legal environment.
We went public after opening our fourth store because we needed the capital to open more stores. Going public and entrepreneurship were the keys to our success. If you’re a public company today, you have to be surrounded with lawyers and you can’t make a decision without a lawyer on one side of you and an accountant on the other side. Today, you just can’t use your business judgment to take the risks that must be taken for a new company to succeed. And, one share valuekiller lawsuit can kill a startup company. Back in 1978, those lawsuits were rare. Today, all you have to do is pick up a newspaper and read about one after another.
(IBD staff, “The Home Depot’s Bernie Marcus On Why He Couldn’t Do It Today”, Investors Business Daily, Jan 30 pdf). Mr. Marcus dedicates a lot of his philanthropy to tort-reform. When asked why, he said “I’m concerned for the next generation of entrepreneurs whose creativity, risk-taking and innovation are stifled by the current legal and regulatory climate. Will they be able to create the next Home Depot?” As one of those entrepreneurs, thanks! (see also Jan 15).
