Why Carofin?

Any organization, if it’s destined to last, needs a leader who, as the saying goes, can’t lead from the rear. This article, taken from a wide-ranging conversation between Matt Brown and Bruce Roberts, Carofin’s CEO, from the Direct Private Investments Show, talks about leadership, Carofin’s origins, the evolution of commercial banking and venture capital, and touches on the reasons investors and issuers come to Carofin. You can watch the video above.

Carofin’s origins*

After a leadership stint as a Navy Seal, Bruce Roberts, Carofin’s founder, was attracted to investment banking. Year’s ago, there were six firms in what was called at the time the “Special Bracket” – firms like Morgan Stanley, Goldman Sachs, Lehman Brothers, and First Boston, some of which still exist. This was when Banking Act of 1933 (Glass-Steagell) was followed, maintaining a clear division between securities and commercial banking.

But, after many years on Wall Street, Bruce moved to Brevard, NC with his family for personal reasons and founded Carofin’s predecessor, Carolina Financial Group, an investment bank which spawned our first broker-dealer and began raising capital for small companies.

Early Years

Part of the reason there’s a demand for what Carofin does is that the private capital world is the least efficient part of the capital markets. And what Carofin tries to do is to add some guardrails around it and develop a repeatable process. In that way, we can complete transactions more efficiently, investors can get better experiences, and issuers have a higher probability of getting funded.


Two decades ago, a young company could go to the town’s bank manager and get financed based on the three C’s of credit: creditworthiness, collateral and character. As commercial banks consolidated and credit decisions were being made a thousand miles away in headquarters, small ventures needing capital faced a dire situation. Venture-stage companies could find financing on the coasts, but there are thousands of good companies with good business models outside those areas who struggle to grow.

As we continued to succeed, word spread, and our practice began to grow.

Diversified Business

The number of small to medium businesses in the U.S. is enormous. But commercial and investment banks won’t support small businesses, as the revenues generated in these deals won’t warrant a large organization’s time. And, furthermore, they don’t have the expertise needed in this market.

We have an advantage by offering individuals investments. They are investors in other companies who, often as not, will need financing at some point, and most of our referrals come that way.

Why has Carofin succeeded?

Bruce notes that he’s led organizations all his life, from the Boy Scouts to Seal Team, and founding several businesses. He’s been lucky to take his Wall Street skill sets and adapt them, coordinating how deals from many industries get done in this space. One of his strengths has been to match the “happy place” of his employees to the critical roles in the company and, in the end, he hopes to make himself obsolete.

What is the most important quality of a leader?

After all, Matt noted, Carofin has lived through the dot.com explosion in 2000, market crashes in 2008, and pandemics. Why has Carofin made it? Bruce’s response was that you must have a high pain threshold. In his words, failure is not an option, and you have to be persistent. It’s a 24/7 job.

He’s drawn to this job, of course, because he can facilitate an outsized investment return and provide vital capital help a young enterprise grow, innovate and succeed. At Carofin, we understand that providing vital capital to promising companies not only contributes to their success but also to the health of the economy and the well-being of society.

But there’s got to be a “why” there, and Carofin has found that our investors are most intrigued when the issuer is offering something meaningful to them. Our investors often are passionate about the enterprise they are financing. Each company is unique and presents something that we feel is meaningful. Imagine a company that can provide a unique product that can save lives in Sudan, or Ukraine, or natural disaster sites. We really like to get behind companies like this.

Why choose Carofin?

We are regulated by FINRA, and every year Bruce asks whether they know of another company like us. And, for the better part of 15 years, FINRA has said no. Investment banks’ expertise tends to get narrow and deep; some are experts in short-term debt, or equity research, or M&A. Carofin must be generalists — a throw-back as investment banking goes.

Being able to do what we do is unique. We look at a company cold, evaluate what makes that company tick, formulate a security structure, financing the entire balance sheet, create an offering document, have a sense of the most appropriate investors, sell and then support the investors for the life of that investment. That’s a really tough assignment, and we’re glad to offer it to our investors and our issuers.

Please enjoy the video here. And, if direct private investments make sense for your portfolio, we’d be happy to sign you up after a call with one of our colleagues. Schedule a call now.





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