Jack Stephens: The Birth of Venture Capital

An Arkansan who helped transform a family company and his home state at the same time.

Here is the full transcript of the video:

On the farm in rural Arkansas where Jack Stephens was born, the whole family worked hard. It was The Depression, and many families struggled to get by. But Jack’s older brother, Witt, became a salesman and built himself a small bonds business. Being close to his family, he helped Jack find his way too. Jack went on to graduate from the Naval Academy in 1946. World War II just ended. There was a quite substantial economic boom. Dad was planning to go to Wall Street and get a job. But he decided to bet his whole future on a return home to Little Rock, Arkansas. Jack might not have thought it at the time, but he was making the most independent decision of his life.

The decision to go back to Little Rock does seem obvious in hind sight but there was a lot of risk professionally in his career to go do that. I mean, Stephens was tiny. Jack took a shot on the larger possibilities in the bonds business. He ventured into equities. Built up a capital management business. Invested in regional companies. He envisioned the financial firm in Little Rock that would rival Wall Street.

Dad created private equity. He was a venture capitalist when nobody knew that term. He would put his money side by side with you in a business. In 1968, Jack made an early investment in one of the first main frame computers. That gave birth to Systematics, and later, Alltel information services. Eventually it led to a Billion dollar return for Stephens. In 1970,  he helped take a young Arkansas company public. The growth of that company, Walmart, forever changed the economic outlook for the people of Northwest Arkansas. And in 1985, he led the charge to save the state’s largest bank from certain failure. The steps he took preserved a life savings of families across the state. Beyond his legendary investments, Jack’s true genius lay in his ability to choose the right people.

He later told me, “Joe, most of the money that I have made in my career, I’ve made by betting on people.”

He bet on Sam Walton. Walmart. He bet on Don Tyson. Tyson foods. He was a great judge of people. And I think he did make a lot of money by betting on people.

Jack bet on the future of America, all while keeping his heart at home.

I learned from Dad the importance of hard work. You work hard every day. You go home with your reputation intact. And you come back the next morning and you have a chance to be successful.