There are certain firms that become a breeding ground for entrepreneurs and consequently new firms. When Bowles Hollowell Conner & Co. (known as BHC) opened its doors in 1975, the firm was just that. Firm founders Erskine Bowles (who later became President Bill Clinton's White House chief of staff), Thomas Hollowell and Charles Conner had the foresight to see that the M&A market was growing - not just with larger deals, but rather the opposite. An increasing number of smaller deals were proliferating, and Wall Street didn't seem to care much about them. In the mid-1980s, there were only about 25 middle-market private equity funds. Today, there are 2,500. BHC seized on the opportunity and created the first boutique investment bank dedicated to the middle market. The firm specialized in advising companies with annual revenue of between $30 million and $500 million and did so with superb service. Looking back, some argue that BHC's high-level service was better than that of its much larger bulge-bracket brethren.
During the process of building a legendary investment bank, the founders hired scores of professionals who had the entrepreneurial itch. Indeed, the founders of BHC had a knack for hiring strong talent. In 1993, Harvard Business School published a case study about the firm's recruiting process. The majority of the people that worked at the firm realized that BHC focused on its employees, which in turn pushed them to do their best.