Tom Auth: ITI
Two entrepreneurs with experience in the security-alarm industry started ITI in 1980. Their goal was to build a wireless security-alarm company after the Federal Communications Commission (FCC) modified regulations that made the development of reliable wireless systems possible.
Tom Auth got involved with ITI in 1981 when he invested $25,000 in the company. He was aware that the company was without funds and was still in its infancy so he didn’t do much due diligence.
Shortly after investing he found that the company had not filed any payroll tax returns and that used up his entire investment. So he took control of the company and raised an additional $300,000 from friends and neighbors.
Between 1981 and 1983 he also raised an additional $3 million from Network Security Corporation, a publicly traded alarm installation and monitoring company and from others. From this beginning, Auth built ITI to annual revenues in excess of $120 million and valuation in excess of $350 million. This is how he did it.
This introduction is excerpted from Bootstrap to Billions: Proven Rules from Entrepreneurs who Built Great Companies from Scratch by Dr. Dileep Rao. Copying or reproduction in any format or medium without the prior express, written consent of the author is strictly prohibited.