It is safe to say that Douglas Muir has lived a very interesting life. Long before founding the Family Business Fund, Muir was a commercial airline captain and spent much of his time in the clouds. After years of flying airplanes, Muir grew bored with the career and sought out new ways to make a living. It just so happened that during his time as an airline pilot, he founded and sold three businesses.
Having been bitten with the entrepreneurial bug, Muir launched the Family Business Fund in 2019. Since its launch, Family Business Fund has worked with clients on alternative investments.
Today, Muir is an authority on business strategy having successfully built several multimillion-dollar enterprises from the ground up. As a start-up expert, Muir is a go-to individual when it comes to entrepreneurship and innovation.
Douglas, Family Business Fund was founded in 2019. Can you tell us about the Family Business Fund?
The Family Business Fund (FBF) is an SEC Reg. D 506 C, high-yield, fixed-income fund. That means we pay out a fixed amount of interest (20%) every year (distributed monthly) to our investors, and we are registered with the Security and Exchange Commission. The underlying assets of the fund are merchant cash advances. This is a funding product that allows small businesses to access cash that they would otherwise not receive with banks or traditional lenders.
What led to the founding of the Family Business Fund and what were some of the difficulties you had to overcome early on?
I was working for a broker dealer on Wall Street that had 20 seats in the New York Stock Exchange. It always amazed me how a tweet or some type of news could affect the markets in such a volatile manner, but as most people, I had my money with a financial adviser earning an average of about 6% per year after fees. I knew there had to be a better and more secure way to invest my money. After studying the markets and investing for a few years, I learned there was an investment vehicle for accredited investors like me called alternative investing. One night it just so happened that I was having dinner with my CrossFit instructor and wife, who was also a broker for Merchant Cash Advances (MCA), which of course fascinated me. After studying the market of MCAs, I decided to become a direct lender for brokers and filed with the SEC to raise capital. The rest, as they say, is history.
Muir credits studying and learning about current trends for his excellent investment knowledge. Being a good student allows him to stay ahead of the curve, helping clients to safely and securely invest their funds.
How do you keep up with the changes in the stock market?
As with anything, being a good student is the most important thing you can do. Working on Wall Street, I had access to many different types of reports and I was sure to read them all. I also had access to many NYSE floor brokers who were more than happy to teach me the ropes of trading and capital markets. The more I learned about the stock market, the more I understood how volatile it actually is. Yes, 2016 to date, the market has been on fire and the volatility index has been fluctuating up and down like crazy, so everyone looks like a genius! But, when the music stops, they will be the real winners. One thing that amazes me the most is why my financial adviser never told me about alternative fixed-income investing. I soon learned that he did not make money if I took my money out and invested in alternative types of vehicles, which I did. I started off with a real estate investment trust (REIT) first and received a fixed 12.5% per year return, with no broker fees. That was the spark that removed me from the stock market and launched me into alternative investing, which is where I have my money now.
Muir used an unconventional tool to help him learn more about investing. While many Wall Street bigwigs would poo-poo his source material and learning tool, Muir has found success with its aid.
What advice would you give to our readers looking to invest for the first time?
I know this will sound funny, but I used the book, Investing for Dummies. It helped me understand the different markets available to me, the terminology, which at first was like a different language, and the history of investing. They can also watch my “Investing 101” videos, which are located on my LinkedIn page. I bring you through the history of investing all the way to alternative investing in four videos. This will give you a great foundation to start. Your readers can also contact me directly for free information that I’d be happy to provide.
You’ve been running financial businesses since 1994. Douglas what advice would you give yourself if you were just starting out with the experience you have gained?
Wow, what advice would I give myself as a 20-year-old? I would say to do what you love because work is a third of your life. Your readers may not know, but my first career was as an airline captain. As exciting and prestigious as that may sound, it was the most boring job I ever had! When I created my first telecommunications company in 1992 and sold it to a competitor, I was bit by the entrepreneurial bug. Although I flew airplanes for the next decade, I created and sold three companies during that time and loved every minute of it.
What do you believe the future will hold for yourself and the Family Business Fund?
I’m 60-years old and still working 12-hour days because I do what I love. FBF is a closed-end Fund, which means it has an expiration date of five years. The success of the Fund and investor interest is so great, however, that we are extending the Fund to 10 years. This will put me at 70 and I think that will be enough. Twelve years ago, I went back to school to get my MBA, so I could teach entrepreneurship in the engineering school at the University of Virginia. I loved being a professor so much that I continue to teach at different universities, sharing my experience, strengths, and hope with upcoming entrepreneurs. Giving back to the world is a big part of my life now and probably the most rewarding.
Having been in the industry since 1994, Muir has seen a lot of changes. Some have been great, while others haven’t been quite as good. In fact, some alterations have created volatility in the marketplace.
Looking at your background you have had vast amounts of experience in the industry since 1994. How has the financial marketplace changed in that time?
Well, we have to look at the financial market as both a business and as an investment. Let’s look at each one separately. As a business, it has decreased significantly. A trade on the NYSE would cost pennies, which doesn’t sound like much, but multiply that by billions of trades and you get some money. Now the floor trades in .003 cents on the penny and it has become commoditized so it’s a race to zero. On the other hand, as an investment, the change had been dramatic. What used to be controlled by the institutions, i.e., Goldman Sachs, JP Morgan, are now controlled by retail investors such as mom, dad, and son day trading. This has turned the market on its head and makes it hard to predict anything, because retail investors trade on the news, not the fundamentals. This is why it’s so important to add alternative fixed income to your portfolio. This fixed income part will flatten out the volatility curve in your portfolio.
What advice would you give to someone who wants to build a successful business up from nothing?
Considering I teach this at the university level, I would be more than happy to share some important lessons on this! The first class I teach is called “Presentation Strategies for Entrepreneurs.” What we do in this class is teach students how to cycle through their next big idea. We place it on a Business Model Canvas and see if it’s going to work, then I teach them how to make a pitch deck of their company and pitch it to investors like me. Once the 15-week course is completed and they have the money needed to start the new company, they then take my class called, “Startup Operations for Entrepreneurs.” This teaches them how to run the day-to-day operations of their new company and sell it to a PE firm in five-years.
So, to answer your question with a few statistics, a person who goes through a training program like the aforementioned has an 80% greater chance of success over a five-year period than one who doesn’t. My advice is to be a good student and take direct and deliberate action steps to create and move forward.
Douglas, you have published a book on business in the 21st century. How did you come about writing the book on how to do business in the 21st century?
The textbook I created for entrepreneurs was a compilation of many years of experience and many other text book sources I thought were needed for a student to successfully run their own business. I have students who became entrepreneurs and to this day keep in touch with me and tell me how my class has helped them. That part of my life is by far the most rewarding!
How has the COVID-19 pandemic affected your business?
Once things started shutting down, we thought that our portfolio default rate of small businesses unable to pay would have been staggering, but it was not. The forbearance rate (having to change the payment plan) increased to 17.5% of our portfolio, but we were happy to help our clients through such troubled times. Our default rate only went up to 3%, while the national average was 8% to 12%. This was due to the type of industries we were invested in, which included medical and transportation. These two industries increased their business significantly, so we were very lucky.
Douglas, what is a day in your life like?
I wake up at 5 a.m. and pray and meditate for 30 minutes every morning. Then I answer emails that came in overnight for an hour, and from there I read about the markets and review the company’s portfolio for two hours. I then go to my CrossFit class (yes, I do CrossFit at 60). After that I have meetings, conference calls, and Zoom until 8 p.m. I then prepare for the next day until about 9 p.m. and head off to bed. The next day is rinse and repeat!
What is something most people don’t know about you?
That I’m a Buddhist, and prayer and meditation is a huge part of my life. Most people don’t know that I was an airline captain for 20 years, a fun fact that always gets a rise out of people. I have two beautiful sons and three grandchildren that I absolutely adore!
Can you share two of your favorite quotes with us?
“Tough times never last, but tough people do.” — Robert H. Schuller
“Whoever would overthrow the liberty of a nation must begin by subduing the freeness of speech.” — Benjamin Franklin
If you had the power to change just one thing in the world, what would it be?
We are in an unprecedented time where the hate and disdain for each other is the highest I’ve seen in my lifetime. The lack of communication between us is at a very dangerous level and can’t sustain much longer. I’m a Thomas Jefferson Libertarian and I believe the quote of Ronald Reagan:
“Government is not a solution to our problem, government is the problem.” — Ronald Reagan
We have to come together as a people and let humans live their lives as they see fit!
From airline captain to restaurant owner to investment guru to university professor, Muir has done a lot in his 60 years and is still hungry for more. After starting his first business in 1992, Muir has been on a hit parade of successes and is still going strong.
Muir is the first to note that he got “his ass kicked” a time or two as an entrepreneur. However, he never gave up and knew when to make needed changes or stick with a winning formula.
Family Business Fund is just another in a line of entrepreneurial moves Muir has made over the years. He truly was bitten by the entrepreneur bug and the poison from it continues to run through his veins.
For more information on Douglas Muir and Family Business Found, please visit https://familybusinessfund.com
Images credit : Kimberly Craven Photography – www.kimcraven.com
Journalist and author. Contributor