LEVITTOWN, N.Y. – Shelly Manheim doesn’t believe in paying salaries to his entrepreneurs.
“If you’re paid, you’re not hungry,” he said. Someone has to dangle the carrot, and Manheim, a real estate professional who runs an incubator called zPartnerships, is happy to oblige.
“Only out of the profits of the company will I pay the entrepreneur,” Manheim said. “The entrepreneur has to build up the company quickly.”
Sound tempting? Manheim happens to be in the market for a few bright entrepreneurs with good ideas for zPartnerships, which he touts as a venture capital firm complete with 100% financing. In this case, the financing is really the infrastructure – office space, some of the most innovative technical and computer equipment available, plus human resources like tech support, graphics artists and administrative staff. In return, would-be entrepreneurs pay a rental fee and any phone bills. If the business is successful, you will be too. If not, you eat a lot of chicken pot pies for awhile.
Clearly, this project is not for the faint of heart, or for someone who lives paycheck to paycheck. If you’re independently wealthy, incredibly risky or fully confident in your abilities to defer a salary for a time, this may be the place for you.
Manheim’s business strategy runs contrary to the methods of the traditional dotcom company, or, for that matter, virtually any company. His Spartan formula calls for scant overhead, even less spending, and a pay-as-you-bring-in-revenue approach. Manheim says he got burned once when he paid a hefty salary to a partner in a former business only to have him bolt for a better-paying job a year later.
“He viewed it as a job, not his heart,” Manheim says disdainfully.
Manheim’s passion for the Internet and technology coupled with the dotcom craze prompted him to create zPartnerships. The business is housed within a commercial real estate office – Manheim Realty, his main business – in the basement of a shopping center in Levittown, on Long Island.
Manheim’s zPartnerships has secured roughly 4,500-domain names, including the heavily trafficked PR.com (geared to both public relations professionals and Puerto Rico tourism). All he needs is bodies.
To date, Howard Schwartz is the only entrepreneur-in-residence at zPartnerships. The former stockbroker is heading up CEOheadlines.com, a resource for troubled public companies that have upside, as well as for unknown firms that have potential, or distressed companies looking to be taken over.
The Web site provides publicity through press releases and business and financial information. In addition, CEOheadlines delivers customized e-mail campaigns targeted at the general public as well as qualified investors including venture capitalists, fund managers, investment bankers, stockbrokers, research analysts and accredited investors. “We’re filling a void for a lot of companies that need the exposure,” Schwartz said.
The site also provides consulting and networking assistance for companies looking to raise capital, or interested in exit strategies. Six companies have signed up with CEOheadlines site, including Ask Jeeves Inc.
CEOheadlines receives from its clients a $300 monthly fee plus restricted stock (worth about $15,000 at the time of the deal) that must be held for one year. With private companies, CEOheadlines receives a higher portion of stock, plus other fees. Schwartz, who previously worked for angelfinders.com, a similar Web site, said CEOheadlines does not solicit business from any suspect companies, such as “pump and dumps.”
For the privilege of working at zPartnerships, Schwartz pays Manheim $1,000 for rent, which includes use of computer equipment, tech support, clerical and administrative staff.
Manheim, a one-third partner in CEOheadlines, said zPartnership.com “has been doing fantastic since the crash of the Internet sites. The more dotcoms go under, the better we like it because we know how to make money.”
“In 30 days of operation we made net to the company, after all expenses, of over $100,000. If we continue, which we believe we will, we could have net profits in one year over [$1.5 million]. I never made that much in any start-up company I ever owned.”