Empire of the Rising Starr
As it turns out, Starr was an incredibly lucrative investment. His restaurants have delivered Robkin’s client an annualized return of about 30 percent. Throughout the country, in fact, multi-concept restaurant groups — chains of restaurants with top-notch negotiating teams and formidable bulk buying power and streamlined training programs, that manage, by maintaining several different restaurant brands, not to appear like chains — have grown tremendously as a business model over the past few years. But no one knew what would happen in 1997, when Starr came to Robkin for $1.5 million to build Buddakan. “He has this sort of immigrant mentality about him,” Robkin says, meaning Starr was stingy, “but he certainly wasn’t a hard-edged businessman then.”
Luckily, Robkin knew someone who had a lot of money on her hands — and a desire to spend some of it “glamorously.” Her name was Nancy Connor, and she had just left a software company she had helped found in Boston called FTP Software, which specialized in some of the first programs that enabled computers to talk to one another. She joined the start-up as a technical writer and ended up as its president. In 1994, a new CEO started mobilizing to take the company public, and she decided to leave, with over three million shares of FTP stock. By 1995, the company’s shares were trading higher than $50. Connor moved to Bucks County, for lower tax rates and to pursue her interest in shamanism, the tribal healing techniques practiced by Africans and Native Americans, and began spooning money into Starr’s ventures. She has since silently invested in each one of his restaurants, a total of $15 million little by little, never demanding a five-year plan or a timetable for building a chain or going public. For an ambitious entrepreneur petrified of going broke, she was the ideal investor. What’s more, her equity allowed Starr to build restaurants without accumulating much debt, meaning those restaurants can make it through rough patches without worrying about interest payments. “Stephen is the most financially conservative businessman I’ve ever met,” says Allan Domb, who put up all $3 million to build the Barclay Prime in his luxury condominium building. “Coming from a real-estate background, I have never seen anyone with so little debt.” (To be sure, Starr is a notorious tightwad: There’s no fancy furniture in the SRO headquarters, and no big Christmas party.)
But Starr couldn’t have gotten where he is the regular way, the corporate way. He couldn’t have done it with the usual crowd of bankers and investors eager to buy a chunk of the next P.F. Chang’s; he couldn’t have done it without a fellow free spirit who was willing to take a chance.