Lane MacDonald was staring at a conference room monitor at Boston-based Alta Communications as the first news reports of the Sept. 11 attacks began streaming in. Few specifics had been provided, but MacDonald was already uneasy about the safety of his colleagues.
“When I first heard the reports, I had some concern because we almost always have someone flying somewhere, and they were saying that at least one of the planes had left from Logan,” remembers MacDonald, a general partner with the 6-year-old venture capital firm. “It wasn’t until CNN said it was Flight No. 11 that someone checked Dave and Chris’ itinerary and we realized that they had been on the first plane [to hit the World Trade Center].”
Dave and Chris were General Partner David Retik, 33, and Senior Analyst Christopher Mello, 25, who were on their way to scout a new deal opportunity in California. They were part of a close-knit firm whose Web site features six “photo albums” of group activities like community service days and whitewater rafting trips. Nearly one year after the tragic deaths of Mello and Retik, the remaining Alta team has grieved, regrouped and learned to continue doing business in the midst of the most painfully unusual of circumstances.
“Work was therapeutic for several months, but it wasn’t like a day went by where you didn’t think of those guys,” says Phil Thompson, a general partner with Alta since 1996. “Dave and Chris were two of the most likable people I’ve ever met.”
Place In Time
Bill Egan, who had eaten dinner with Retik the previous evening, first heard the news as he drove into work. Phil Thompson was on a business trip in Knoxville, Tenn., and was soon driving north in a rented car. Bob Emmert had already passed through security at Logan Airport and was crowded around a tiny television until the Pentagon was attacked and everyone was herded downstairs to baggage claim.
Despite their lack of proximity to one another, the Alta investors all remember virtually the exact same feeling: unending shock and simultaneous concern for people like Susan Retik, David Retik’s wife, who was seven months pregnant with the couple’s third child.
“It was really just sadness and disbelief, but everyone was really focused on trying to help the families,” says Emmert, a general partner. “We were all very upset, but knew how that must have been multiplied by 100 for the families.”
That afternoon, those who could, gathered to console Susan Retik in her Needham, Mass., home. The following morning, the partners held a conference call to develop an on-the-fly contingency plan that resulted in a grief counselor being available to Alta staffers on Thursday morning.
“One of the things you realize in a situation like this is that you take everything you have and focus it on the individuals,” explains Egan, co-founder of Alta and its predecessor firm Burr, Egan, Deleage & Co. “My father died when I was just 14 years old, but this is the most difficult thing I’ve ever experienced.”
Funerals for Retik and Mello were held that Friday and Monday, respectively, and the Alta office officially reopened the following Tuesday. Egan says that a significant amount of time in those first days back was spent discussing such future options as cutting back on air travel or moving out of its 51st-floor office space in the John Hancock Building. In the end, however, few of those tangible changes were actually made. Alta added a fancy new videoconferencing system, but it didn’t really reduce the flying needs of a bi-coastal investment house with just one office. The firm also kept its skyscraper digs, even though it resulted in a secretary quitting because she didn’t feel safe in Boston’s tallest building.
Moving Forward
It would have been easy for Alta Communications to quietly fade away following Sept. 11. The firm had committed most of its $486 million third fund (Fund VIII), and its targeted media and communications services market was beginning to go from bad to worse. It had slowed its investment pace and was focusing on investing only in portfolio companies through the end of 2001.
Perhaps because of the team’s relative youth (most partners are in their 40s), no consideration was given to closing up shop. The firm also didn’t hesitate to move full-steam ahead with raising a new fund targeted at $500 million. It held a first close of $422 million in July and is expected to hold a final close in the third quarter.
Although preliminary plans for the fund were developed prior to Sept. 11, the firm opted against adding a new partner to replace Retik, who focused on traditional media and communications companies.
“We had already gone through so much dislocation that we didn’t feel we needed to add to it by adding someone new,” Egan says. “We may have the need to add someone in the future, but we didn’t feel we had that need right now.”
Different Fund-raising
While the Alta team is deservedly proud of raising its new fund in a down market, each partner interviewed by VCJ seemed much more excited by a slightly smaller-scale endeavor: raising cash for the David E. Retik and Christopher D. Mello Charitable Foundation. “Fund-raising for Alta is a job, but doing it for Dave and Chris is personal,” Emmert says.
In the days immediately following Sept. 11, the Retik family directed donations to a New York City firefighter charity, while Mello’s parents asked that any related charity be given to a local YMCA. As time went by, the Alta partners felt that they should create something of their own as a legacy in honor of Mello and Retik.
“We weren’t sure whether or not we’d be able to raise any money, but then I got a check for the foundation from a local VC who I know, although I don’t know all that well, for $25,000,” Egan recalls. “I was stunned by that.”
Eileen McCarthy, chief financial officer of Alta, says that the foundation had collected approximately $1.4 million through the beginning of August. Nearly $50,000 of that came, she says, from pledges collected by over 430 runners who participated in a 3.1-mile Father’s Day fun run and walk organized by Susan Retik. Other major contributors have been Alta portfolio companies, which the firm credits with being particularly supportive in the months following Sept. 11.
Proceeds from the foundation are being used to fund non-profit youth programs involved with education and athletics. An annual scholarship has already been set up in the high school in Retik’s hometown of Weston, Mass., and the foundation’s board will soon announce new grants.
“For a long time after [Sept. 11], almost everyone who’d call or who you’d see would say something about how sorry they were,” McCarthy explains. “That has obviously lessened as time has gone by, but people are still asking how they can help.”
Not only will the foundation help the community outside of Alta, it has also served to provide some additional comfort to the staff itself. It has helped refocus attentions on Mello and Retik themselves rather than on how they passed away.
“I hope this firm is linked to Chris and Dave, not to 9-11,” Emmert says. “To me, that would be a disservice to both them and to the firm.”
Contact Dan Primack
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