9UNP0229SD_Loren_Mortenson

- I'd like to thank our partners in this effort. The UW Office of Corporate Relations, the UW College of Engineering for their technical support, and financial support from the Marion Ewing Kauffman Foundation which is committed to advancing academic education in entrepreneurialism. Additionally, we'd like to thank our media partners who are with us here today: Wisconsin Public Television and their University Place crew for taping today's lecture. I'm quite pleased to introduce our guest today. He is Loren Mortensen, chairman of the Mortensen Investment Group which is a multi-dimensional commercial real estate development leasing and private investment company. Loren is a native of Brooten, Minnesota. He first served in the US Navy before coming to Madison over 40 years ago. He has a degree in economics from the University of Wisconsin, and he began his career with Mortensen, Matzelle & Meldrum, an independent insurance group which he founded in 1970. In 1995, 25 years later, Loren founded Mortensen Investment Group and he currently serves as its chair. He is quite committed to Madison business, as you will learn through his discussion with us today. 

And he lends his years of experience to several other companies, many of which don't have anything to do with insurance or real estate. He is currently serving as chairman and director of Inacom Information Systems. He is director of First Business Financial Services and director of Ideal Builders, as well as an investor and director with several other businesses and charitable organizations in our community. Now beyond those entrepreneurial business endeavors, Loren's philanthropic commitments are also quite vast. He serves on the United Way's Alexis de Tocqueville Society. He's director of the United Way of Dane County Trust Foundation, director of The Capital Times Kids Fund, and a supporter and past director of Young Life of Madison. Of course, his ties to the University of Wisconsin are also quite extensive. And he was honored by the UW School of Business as a distinguished alumni. In addition, Loren founded the Mortensen Family Foundation which is a trust that assists charitable, scientific and educational organizations throughout the Madison community. Now I have asked Loren to share with us his extensive experience as an entrepreneur and broadly inform us what he thinks it takes to be an entrepreneur in business and in the community. 

So with that, please join me in welcoming Loren Mortensen. 
(APPLAUSE)

- Thank you, Jeanan. I am a businessman. I'm not a speaker. I've made a lot more mistakes than I've had successes in the business world. I hope I've learned from those mistakes as much as I have from successes, and after 45 years of trying, you get most of them right. And so I'm here as much as a resource to any questions you might have asking an old fart that's been around the block a couple times, and if you have any questions as you anticipate your career, that's kind of what I'm here for. I'm happy to see my friend -- I knew her 20 years ago. I was saying to Jeanan that this is one of the privileges of being around for so long and founding and being a part of so many businesses. 

Her mother worked for me 20 years ago, and I knew her when she was 3 years old and here she shows up today. So this is just one of those great blessings that you have being around and working with so many people for so long. My subject today is harnessing the entrepreneurial spirit. And I have seven or eight or ten points that I think are very germane, very relevant to the entrepreneurial experience. But I want to start today with my first point being not about business particularly. I've been a part of three meetings today. In two of them, we're talking about laying off people; we're talking about limited finances and what we can do to cut our payroll and survive. And it's not easy. And it's not easy for us, but we're going to be okay. My heart goes out to the people we're laying off and to the people who right here in front of Christmas time and so forth are going to be hurting a lot. 

And the person who introduced Jeanan to me, Laurie Benson, who's the chief executive officer of Inacom Information Systems. We're a technical company, not to get into all the things we do. On the Beltline you might have seen the sign. But anyway, somehow Laurie and Jeanan got together and I met with Laurie and she said, and I was kind of gloomy and I said, gee, how is this happening. And she said, Mort, do one thing for me, tell the story of the angels to the class and they'll like that. And I think at a time like this where we all want to be good business people, we all want to go out and make a buck, but it's time to think about others a little bit and touch on what I think we should be as Americans, certainly as business people even a bigger responsibility. So I just want to ask you to think about open-minded caring, compassion and understanding as I share with you the story of our angels. You see, I'm kind of a risk-taker; I guess that goes with being an entrepreneur. I go to Vegas a couple times a year, and I love to roll the dice. And I do okay, I probably lose more than I win but you can rationalize that away. 

But one time probably 10 or 12 years ago I went to Vegas and was very lucky. I was having a good year at home, I was making lots of money, had lots of companies and things were going well. I went to Vegas and I came back with $18,000 or $20,000 cash, like found money. I was strutting my stuff and feeling so good about myself and a couple of folks from our company came in to share with me, one of them in particular I'll never forget, little Morgan, this little girl, had undergone a five brain surgeries and I think she was 7 years old. And the family had no money and they were putting everything they had into their little girl, as well they should have. But they hadn't any food at home, and the mother worked for us there and she was asking for anything but she was just sharing with me and I felt so bad. And here I was hopping around of my $18,000 in my pocket and feeling so good about myself. A couple of other incidents came up, and by the way, this was right around the holiday season. So I thought, this is really not my money in this is not really who I am. There's got to be something better, something higher than this calling. 

And so I thought of not only Morgan's mother, but 8 or 10, there's probably 50 single parents that work for my Mortensen, Matzelle & Meldrum Company, many of whom were hurting a little bit and it's Christmas time of the year. And I said, I'm going to get them over here and listen to their stories and let them share their experiences so we can kind of, we don't want to get bummed out here but let's get real about what's going on in this world. And so they came over to my office and we sat around the conference table and we all shared, not about what was our problem but I said, you know, I'm so very blessed to be able to give to my kids, to my community, my businesses. I'm so blessed, but I know you're not all blessed and I have a problem. I don't know what to do. I don't know how to show how grateful I am. And I wonder if you could help me. I wonder if you'd be my angels. And if you would help me to reach out into the community and find somebody who needs this money more than I do or maybe more than you do. And hopefully you'll be happy to get this money and if you need it, keep it. 

But if not, pass it on to somebody else that needs it. I don't know all of your friends and folks from church and so forth, and so help me to pass this money around. And they just didn't know what I was talking about, couldn't believe it. I was a little cheap. I didn't throw it all out there. I threw $6,000 on the conference table. One hundred dollar bills. And I said, guys, I want you to take whatever you need and give it to somebody that needs a more. And they did. And some with tears in their eyes and I didn't know what they would do and I didn't know then that I was going to do that again next year. 

Next year I did the same thing only this time I had, with Laurie Benson's help, she brought in another 5 or 10 angels to join us, I had maybe 18 or 20. And the first thing we did is we talked to those 10 or 12 who were there the first year, what did you do with your money and how did it work? And they were so happy and excited because not many of them at all used it for themselves but they had the blessing of being able to give it to somebody else. And they could make a difference in somebody else's life. This chokes me up almost because every year now for 12 years we have done that, and we have passed out this money with no strings attached. Just whatever amount you need; if you need more come talk to me. And they've come back every year and told stories about people coming back from Iraq injured and wounded and demoralized and ill children and homelessness and all this sort of stuff and while that's certainly not joyful, it is joyful to know that my little angels are out there helping a lot of people. That makes me happy. So as I have gone through this day being a part of leadership in this community that is about to lay off 2200 people sometime here before Christmas, and knowing of some of the other misery that's going on in this economy, I just think that let's begin this meeting by saying whether you're a businessman, an entrepreneur, I think you're all human beings and I think wherever you're coming from, the first rule of business or life should be to reach out and be compassionate and understanding of others and try to bring them into your world and make a difference and maybe we can all be just a little bit more happy. So that's just rule number one. 

My subject then is harnessing the entrepreneurial spirit. I guess everybody would have their vision of who an entrepreneur is. I would say typically an entrepreneur is someone who is very positive, a risk taker, likes people, people like them, free willing, shoot from the hip, and go out and get them type people. And that can be a great blessing. That can be a great part of your personality to be able to have that spirit and to be willing to go out and make things happen. But it also can be a big trap. Because if you don't know how to harness that spirit, you're just potentially a gambler and you're just looking for, if you never saw a deal you didn't like and you throw that money around and sooner or later you're going to get caught. But if you have that spirit, that creativity, that drive and you have the patience to know how to handle it, that's what I'm going to call harnessing the spirit. Now, I have nine points here. These are observations and personal experience, certainly nothing that came from a book. 

But they do come from 45 years of making a lot of mistakes and learning a little bit along the line. I think the number one thing that we really have to learn as we all swallow this darn crisis we're going through right now is do not overly leverage, that's greedy. And today's problems, most of today's problems as I see it, could be tracked to greedy bankers and mortgages and even homeowners who extend themselves further than that which they can afford. And buy homes and buy cars and lease cars and leverage themselves into positions that they can't afford and it trickles on down to a lot of problems for our whole world now. It's turning into a world crisis. So what I hope that any entrepreneur would do, one of the first things they would do would be just like a parent or a family should do, create some reserves. Be ready to invest your moneys, even take risk with your money but always keep enough, I call it dry powder to get to the next day to the next opportunity, to the next challenge that we all will inevitably face. So maintain reserves, don't get greedy. Prepare to exploit opportunities. By this I mean if you do have reserves, if you do have cash you can be king. 

And you don't have to spend it the first day you get it. I mean, just like today the stock market, I don't even know I didn't look what happened in the stock market today, but right now there's opportunities out there in the stock market or in buying homes that are cheap because people are having to walk away and so forth. So be patient and opportunities will come to you if you have the dry powder and the patience to wait for them. Don't run after quote/unquote opportunities. Cash is king. Along those lines I have put down, out of adversity comes opportunities. I'm the contrarian. I like to buy when others are selling and sell when others are buying. That's where you get your wins. And so, therefore, if you harness that greed, be patient and let the deals come to you, remember a recession is a contrarian's garage sale. 

For those who have cash, this is a great time in the economy. This is a real unique opportunity to make money. Most investments, most dollars are made when you buy, not when you sell. So if you can buy right, and boy there's a lot of things that are for sale right now, you're going to do very, very well. So that's another thing about keeping those reserves so that when the opportunities come along, you can take advantage of them. Define and know yourself. I guess maybe this could have been my first point. You have to sit down with yourself, your family, perhaps an adviser and say, hey, how old am I? Am I 25 years old, or like me, are you 70 years old? There's a big difference in terms of risk tolerance. 

In terms of how long of a mortgage you can get at the bank or how long you want take out a mortgage or strap your estate with liabilities like that. Family status. Of course, are you married and do you have two, three kids and are they all dependent on you for college and their groceries and so forth. Man, now you've really got to be careful because you're not just thinking of yourself, you're thinking of your family and so forth. Your health. If you're and feeble health or ill health you better be careful because you here again may need some more reserves and who knows when that health might turn to something worse and that investment will have to be retrieved. And then of course your financial limitations. If you only have a few dollars here again reserves and limitations are inherent with what you are. But sit down and say okay, I'm X age and I have this kind of good health and my family hasn't begun yet so this is the time when I'm young enough that I can take a leap, make a faith and if all goes wrong, I have 40 years to work and get it back. And once you get to 45, 55 you've got to think about that and it's not always that easy to get back at those advanced ages. 

So my point is, be patient but I say, be prepared to act quickly when you recognize an opportunity. And here's another personal story, if you will. I had a good friend. He was a very prominent developer in the area. I was about 28 years old and I really looked up to him and we played a lot of golf at Maple Bluff and I invested $10,000 here in this office building and $50,000 here at the hotel and I spread my investments around with him, really looking up to him and thinking that a pro forma was the way things worked out. Pro formas don't work that way, guys, if you know what I mean. The developer or the salesperson is going to tell you this is how we got it programmed. The first year you're going to lose money, the second you're going to make $10,000, then you're going to make $100,00 and pretty soon you'll be a millionaire. And very seldom do pro formas work the way developers would like to have you think they do. Well, I got into four of his deals and now he's not quite the apple of my eye that he'd been. 

And we're playing golf and I'm grumpy and he's not too happy and so I finally got up the guts to tell him, Darryl, you got to be awfully disappointed. You've got to be sad with all the deals you put together and how badly they're going and how people must feel about you. And I just hit him right on the head. And he called me some names. And he said that's not true. You've had the tax advantages and the potential is there. It's only a matter of time and you're not giving that investment the right opportunity. And I said, Darryl, tell me what you think these investments are worth? He says, well a $10,000 investment is easily doubled and this one boy when we sell the hotel that's going to be a big one and he gave me all these numbers. And I said, boy, you are a beautiful dreamer. 

I sure would like to see that happen but I'm not feeling very good about it. At the same time I purchased a office building and I filled up and I had needs for another office building or a site to build an office building on and Darryl owned 26 acres out in the central Beltline. And, What is the name of the Catholic Church out there? I can't remember now. Anyway, 26 acres prime central Beltline stuff. I said, how much you think that's worth? He said, $2.50 a square foot. For the whole thing? Maybe for your front -- but that's not worth $2.50 a square foot. And again this is 30 years ago. 

And so I thought about it a little while. We played a couple holes, we we're not speaking very well with one another and we got in and I said, Darryl, let me buy you a Manhattan. And we sat down and he bought me one and I bought him one and he bought me another one and pretty soon we were in a deal making mode. So I said, let's go back to those funny numbers you were talking about. If all of those are really true, I've got about $400,000 worth of stuff I didn't even know I had. I said, how many acres out there? 26 acres, $2.50 times how many square feet. That's about $400,000 or $500,000. I said, you know what Darryl, you're crazy about how much the value of that land out there. You're also crazy about the valuation on other investments but, you know what? 

I'm sick of these investments. I'm sick of doing business with you. I'll tell you what, you pay me what you say my investments are worth and we'll use that as a credit against I'll buy your whole damn 26 acres out there. And of course after four or five martinis or Manhattans it was a very hard at all for him to say, yeah, I want to get rid of you too. So, I said, my attorney will call your attorney the next morning. They did. We did the deal. That is where my vantage point office park is now. I built six office buildings over a period of six years. I had a couple million in it, and I sold it for $7 million. 

That was kind of the basis for where my-- I was pretty young then, 30 years old maybe at the most and that was the nut that I needed, because I supported my parents while I was going to college, working three jobs so I didn't get it from my parents. I just got the work ethic maybe. So anyway, that's the nut. That is, if you will, and entrepreneurial move that was made quickly because I had to be quick to seize that moment, all those Manhattans I'd paid for and called his bluff. And I had a need for that land out there and I knew myself and I knew I wanted some land I wanted to build some buildings. It all came together. I recognized it because I thought about it beforehand and I had some dry powder and acted quickly. So just an experience of an entrepreneur and a lot of it's luck, but that's the way you've got to think and how you've got to act. Relationships in business or in school or wherever you are. Relationships and integrity. 

In business your reputation is your greatest asset. Who you know and how you are perceived is very important. Lawyers, accountants, bankers, brokers all need each other. And must be counted on to help. A good entrepreneur could simply not operate without help. Bring together a good team and trust. Pay up for a good lawyer. So many people don't want to pay $400 an hour for a lawyer, and certainly I don't want to pay that either but I won't go into a deal unless I have the very best legal guy drafting the papers and reviewing all the alternatives because a lot of the money is in the details. And I want to make sure I don't get any detail pushed at me that I didn't realize or remember and I want to make sure I get the angles that I need to get in or out of the deal if I have to. So get a good lawyer; get a good accountant. 

This is not the place to scrimp. And the other thing is know your competition. Here again, it helps to be an old fuddy-duddy in a few things is that I've been around this town for 50 years. I've dealt with a lot of people. Bankers and so forth. So I know the ones that can be trusted. I know the ones that exaggerate. I know the ones that would just as soon take advantage of me. And basically that's okay. I deal with them all, I could be friends with all of them. 

As long as you know the devil you're dealing with. If you know somebody's kind of crooked and exaggerates and so forth, it's okay to deal with them but know who you're dealing with. This is a very important one. Probably served me as well as anything. Do not fall in love with your deals. You've got to know when to hold them and know when to fold them. And when you know how to fold them that's just as important as getting into a good deal and riding it out and patting yourself on the back. It's harder but probably every bit as important when you get into a deal and it's not going the way you wanted it to, you're not liking the personalities or the dynamics of the deal, cut the pain. Get out of there, lose the money and get on with your next opportunity. I think a big part of that is that to be an entrepreneur, to be a good businessman, you have to have a positive attitude. 

If you're grumping about the guy screwed you and you should have done this and why did I do that and I've got a find a way to get out from under this, that's not a good attitude to come to the office with. That's not a good attitude to go back to the next positive opportunity. So cut your losses. Get the heck out of there. Don't fall in love with the opportunity. I put down, don't cry or cling to a problem. Very basic, you're all in business school, you're mostly engineers, I don't know. You're smart folks.

- They're from across campus.

- Across campus, everyone here. 

But even the most basic of business knowledge people would say diversify. And so it's very important asset allocation and diversification is the key to any good business opportunity. Just take for a minute, think for a minute if you had all your money or a lot of your money tied up in the stock market a month ago, those assets would be worth about half, maybe 60% of what they're worth today. Because the Dow-Jones is down 43% from where it was two months ago. If, on the other hand, you had diversified and you had 25% in bonds and the 25% in real estate and maybe you gambled in Vegas for 25, well make that's probably not the best thing, but any of these various types of investments that you could have as an alternative to the stock-market or whatever. You'd still be losing some money, but it would be watered down considerably. So how and where to diversify, well, I guess I should go back to that third point of knowing yourself. Just as an example, and I kind of touched on this, I'm 70 years old, my health is okay. I'm secure financially. My family has grown, and it's only my wife and I to worry about. 

So what am I looking for in an investment? I'm just trying to preserve that which I have. I don't want to get out there and double my money. I don't really need to do that to be happy with what I have left in life. On the other hand, if you're 25 years old you probably might look at this as an opportunity to just get in there with both feet and jump on these stocks. My recommendation is I think there's a lot of buying to be done in the next couple months and there's going to be some smart contrarians that are going to get out there and do it. And if you've got some dry powder, you recognize the opportunity, I think now is the time to do it. In summary, I say harness that environmental spirit. Don't be greedy. Too much leverage can be bad. 

Don't necessarily follow the crowd. Contrarian's can do well also. Know and define yourself and your objectives. Recognize opportunities and be ready to act just like I did with the Darryl Wild thing. Relationships are important. Create trusted advisers. You're all probably great students and you'll do well academically but I don't think you'll do very well in business if you don't get out in your community and go to the church and join the Rotary Club and be open to meetings and opportunities to meet others. Because relationships are really very, very important. Do not fall in love with your investments. Manage and diversify your investments. 

And most importantly, trust your instincts and be lucky. But as Warren Buffett says, "The harder you work, the luckier you get." So that's all I have on entrepreneurialism. Maybe, do you want me to ask questions now or do you want me to talk about the trust?

- If you have questions about entrepreneurialism as they relate to business, we can certainly explore that. I asked Loren to be prepared to talk with us about the other life that he leads and that is as a philanthropist. So we could start by asking questions and I mentioned to Loren that I, of course, hand the mic over so that we can capture your questions on tape. Does anybody have an immediate question that they want to ask? Terrific. Right down front. 

And if you can introduce yourself too so Loren knows who you are.

- Hi. I'm Dylan. I was wondering how you came into the money to invest and start your own business because coming out of college you said you were working and supporting a family.

- That's right. Slowly and incrementally building on it. I was an insurance agent, I began as an insurance agent and I was good at it. And I made way back 40 years ago maybe $3,000 or $4,000 a month. And I lived frugally, and when I could, I would mess with Darryl Wild in the stock market here and there. But incrementally. 

It wasn't any big hit. I'll tell you a story about that in a minute. But just work hard and save everything you can. You don't spend, you don't buy a new car. I drove an old beater for I think 11 years in and out of college. And so one of the things I dislike most is what I call big dogism. Folks who can't afford to try and be something they're not. That bothers me. I've never been that way and I suggest that's helped me to created an estate such that I was ready when the opportunities came.

- Darryl, before I hand the mic off, I'm going to ask you step up just a little bit because those of us in the back can't quite see you illuminated all the way unless you standing in that, that's right with that beautiful smile. 

Next Jerry is going ask a question.

- Hi, Loren, my name is Jerry. You said not to fall in love with your deals and know when to hold them and know when to fold them. Like when would be an example of when you had experienced that?

- Well, it's happened to me so many times when I've gotten into deals I shouldn't have, or didn't recognize an opportunity when I saw it. But hopefully I've got it right more times than not. But allow me, if I may, to use today, use last week or last month. These stocks are tanking. You got to know when to hold them and know when to fold them and right now I'm not folding because I think the stocks are down so far that I believe that there's opportunities out there. On the other hand, when the market started giving negative indications two or three months ago, I recognized that, I talked with my advisers and I lightened my load. 

So I have limited risk out there. I'm losing money but not as much as I could have because I knew when to fold them and now I'm hoping to think that I know when to hold them. Because I'm getting in again. But a lot of it's luck, but watch the talking heads on CNBC or have trusted advisors that have been there and done that a couple times and a lot of it's luck, but I think you develop an instinct and if you don't have that instinct because you haven't had experience and so forth, find a trusted advisor. I think that's it. Don't try to wing it on your own say, hey, I've always wanted Microsoft so put it up and let me shoot the wad. Be careful. Diversify. Don't buy just Microsoft. That's a good buy but let's talk about a little General Electric and Citi Corp. 

and so maybe one of them is going down, but maybe one or two of them will hold their own and one of them will go up and have a better chance, diversifying.

- Hi, my name is Alex. I work for a commercial real estate company in Middleton. And I was wondering what factors do you look at when purchasing properties? Like what are the benefits that you see in the property? We do a lot of rehabilitation of properties but, I noticed you kind of build from the ground up. I was wondering why you do that?

- Well, I'm doing a bunch of rehabbing out on Parmenter in Middleton right now. What I'm looking for out there as would be the case almost anywhere, is the Beltline just moved out west in Middleton, you know that well. And Parmenter is beginning to be the main street in Middleton. 

So I'm buying up real estate along Parmenter Drive. I just bought Cornerstone Shopping Center there. I bought another office building back there. So location, location, location is really, really key. And, of course, the price. I mean, you've got to really, really try to buy right. Here again that's when you make your money, is when you buy. And the big, big thing is you have a tenant. And so I've been around for 45 years. I know a lot realtors. 

I probably know your boss. Real estate companies and agents and brokers around, they know that when the opportunity is right they can turn to me and I can act quickly. So who you know, where the real estate is located, is it properly priced and do you think you can lease it. That's what drives the deal is the lease.

- The next question is over here.

- Hi, I'm Beatrice. I was wondering what type of environmental concerns you guys take when you're starting to build new properties?

- I'm sorry, what was the first part?

- What types of environmental concerns do you guys...?

- Well, absolutely, we know that green is in. 

And we know when that if we buy building and there's asbestos in it, nobody wins. Because for the most part, you're going to have to rip it down and recycle, and do a lot of that stuff. So how do I deal with it? Mostly I try to avoid it, I guess. Because I'm talking about old, old properties. I usually don't develop a lot of new ones. Although our newest project is the one out on Todd Drive. 250,000 square feet that's just starting. They're just moving into it over Thanksgiving. Wisconsin Heart and CPAs. 

So that's our project but for the most part, and that's green by the way. But obviously there are architects and engineers and folks who know the difference. And you pay up just a little bit. In this environment there are so many people, probably not unlike yourself, that are very concerned about the environment and about being green you can get dividends back by being green even though you might have to charge a little bit more because people respect you for appreciating our environment.

- Hi, my name's Lisa. And I saw on your web site that the vacancy for your buildings that you lease is really low, like 2%. How do you keep it so low?

- Well, here again that's a very, very good question and very, very important to our success is that we do keep our space-- We have over a million square feet of office space in Madison. And almost all of it with a few people coming and going here and there now and then, you find a few months where you're not collecting rent, but for the most part we are fully occupied. Now we're just opening this 250,000 square foot building and we're only half rented and I'm a little worried about that because of the economy. 

But how do we do it? We try to have good properties that are well-managed that the utilities and janitorial services and whatever are right. And if anything, we price it under the market. Because we would rather earn a little bit less out front and put an escalator on it, by that I'm in the rent goes out 2 or 3 or 4% every year, get a good ten year lease with a good tenant. You're better off even if you lose money for a year or two to lock a good tenant in there and they'll bring along their friends and pretty soon you have a full property and so that's how we do it. We hardly ever lose a tenant. And what we do, the biggest one answer to your question is we take care of our existing tenants. I'll tell any prospect to come on in and talked to my tenants and see how they like our management style and system. And apparently they like it because they have brought us a lot of prospects for tenants. Thanks for looking up our web site.

- The next question is back here, Loren.

- Hi, my name is Jeremy. You spoke earlier about trying to keep what you have and not going out for really risky things, how do you slow down and eventually retire or are you ever going to want to retire?

- Boy, that's a great question. My wife would tell you that I've never seen a deal I didn't like, and it's very hard even though I'm older and there's no real reason to go keep charging on but I just love the thrill of the hunt. So it's very hard, Jeremy. But you've got to get real with yourself. I have chosen to live half of my year in Florida now, so I just avoid the temptation. And I've turned a lot of my investments and my properties over to my son-in-law and my daughter. And I'm not quite as involved day to day and I've done that gradually over the last few years. 

So I'm not quite as involved or exposed, I should say, to those opportunities. Sometimes I just don't return phone calls because I know darn well they're going to have a deal and I'd like to get in it. That's a good question. And that's hard.

- The next question's here.

- Hi, I'm Alice. You said that to be a successful entrepreneur you need to act quickly, but how would you draw the fine line between acting quickly and acting rashly on a deal?

- Well, here again I guess knowing yourself and knowing what you want. I'm thinking of a specific situation. Rashly I would say would be more of a hothead, more of an aggressive personality that's maybe trying to prove something to themselves or somebody else rather than looking at the realities of the specifics of your objectives. 

And to act quickly doesn't mean that you avoid knowing who you are, where you are and why you want to get where you want to go. It's just you don't want to be an impulse buyer, put it that way. You go into the grocery store and buy this and buy that and come home and say why did I do that. It seems like we're all tempted to do some of that and somehow we have to train ourselves to avoid all that.

- I always have questions too, Loren, but I keep my eyes open in case somebody raises their hand and says they want to ask something too. You have been involved in so many different ventures and adventures. You started in insurance, moved into real-estate development, certainly have seeded efforts in technology in the financial industry and other development efforts, not to mention, I will call it, your career in philanthropy. Particularly earlier in your career, how did you gain the confidence or know that you were ready to move into something that was totally different from the last venture? I think that certainly as college students, a lot of people follow a track and veering off that track intellectually can be a real challenge.

- I have a good answer for you, I think, Jeanan. 

Good operators, people who get into a business and run that business and do it well aren't necessarily the guys who want to get out and buy a building and start a new deal. Conversely, I can't be an operator. I'm too restless. I get bored. I need to change directions now and then. And so that's what would happen. Over my years, I've had 27 operating businesses that I've controlled. And so after two or three years when you kind of get them right, you get the people in place, you get the product moving or you get the heck out of there because it isn't working, you get on to the next one. And that's when it's fun. Those first few days of trying to figure out what's right and what's wrong and try to clean it up and make something good out of it. 

That's the thrill of the hunt. That's most fun to sit there for 27 years and massage a deal that gets boring. That's not me. I don't know the that's an answer for everybody. But I think for the most part an entrepreneur is a restless person, and I guess that's why.

- Hi, I'm Billy. I was looking on your Web site as well, and it says that MIG invests in a lot of other businesses around Madison like parking and food concepts. What do you look for in your investments for your company?

- For the most part, I look for good people. Those investments Food Concepts and what was the other one? 

Storage. Those are businesses that came to me actually where lawyers or accountants or somebody said to me, boy, we've got a great concept here, we've got a good basis, we've got some people in place but they need capital. And you have to have a good product, you have to have a good distribution system and you have to be able to get it out to the people. And so they only had two or three, one or two of the legs on the stool and sometimes all they need is some extra capital to take their product out further or build a new facility or to hire some key people. So if I can come in with some capital and leverage off of the good people that are in place and the good concepts and products that might be in place, it's easy. I mean, I just have the easy part, just writing a check. And that's what happened with those two, -- storage is a 400,000 foot temperature controlled storage facility in McFarland which I just love that investment. We just got in it a couple years ago. It's going to be a great one. But the people were there. 

All I do is go out there and second-guess them now and then. So that was good. And here again the lady from Middleton, you know where Food Concepts it, it used to be something that ran back to where Cornerstones is. That new building that we just bought the building and part of the company. So I'm leveraging off of Brad -- who is the president and founded it and he's doing a great job. So, people are very, very key. I mean, entrepreneurs aren't necessarily the smartest guys on the block. They just know what they don't know. And they find people who do know more and they leverage off of them.

- I'm going to take us down this next track to talk a little bit about philanthropy because as I was introducing you, at least half of your bio included all the work that you do with community. 

Including having established a Family Foundation. It's an area that our School of Human Ecology is taking a really close look at because so many Family Foundations have been developed. But few of them really think strategically about their gifts and things along that line. So if you could start or if we could at least start the discussion as a philanthropist, Loren, what do you look for in the nonprofits or the ventures because they can be social ventures just as easily. What to look for in them before you invest in them? Are you looking for them to deliver measurable outcomes? Are you looking for them to deliver something else? We've been talking about social entrepreneurialism and we'll talk about philanthropy in the weeks to come, so you're comments will be helpful to us.

- Well, my daughter is the director or the chairman of our foundation. She and my wife will go out to the shelter for battered women or certain of these United Way agencies or whatever and they will come back and say there's a great need here and you'll get a good bang for your buck and people manage things well and so on and so forth. 

So they help to define the direction for the most part. Obviously I have some favorite charities and the Boy Scouts and certain things that have helped me over the years and the Boys Clubs. And of course, the university and athletic department and things like this. But in terms of those tender things, plus I give substantially to the United Way which I think it has 44 agencies that it gives to, certainly they know much more about the needs in the community and coordinating those needs than do I. So I have a lot of confidence in Leslie Howard and the staff at United Way that they're going to make my dollars work well.

- Sounds good. One of the things that you and I were talking about before the class started was I guess the concept of philanthropy and I think that how we as a world are starting to realize that each of us, regardless of our means, has the potential, we have the capacity to be a philanthropist. At what point did you realize in life that you had something to give and that it would, in fact, give back as you were talking about the angels earlier?

- Well, to be really honest with you, back maybe 15 years ago, I was really paying a lot in taxes. You know, let's get honest. 

And when you make donations, charitable donations that reduces your taxes. So I thought I'm really only giving 50 cents on the dollar and yeah, there are some needs there and so I guess a little bit practical and a little bit selfish is kind of the way I began. But then I also rationalized with myself that I'm going to leave all this money down the road a generation or two, they're going to thank my daughter or my grandchildren or whatever for what it is that I worked for. I want to get some credit for this, and I want to have some fun about giving and sharing and so forth so if you put it into your Family Foundation and now you go out and deliver it and you go, like the way I began, you go into those charities and you see the smiling faces and you get the little notes from the kids and so forth, I am enjoying the gifts that I give, I'm getting blessed with that every day. So I'm not above needing and deserving and desiring, not deserving, needing some pats on the back and some love. You know, I like to get love from folks that we give it on to. Give it on to them and they'll give it back. I just love that.

- Do we have any other questions for Loren, either about his adventures, as I like to refer to them, as an entrepreneur or as a philanthropist in our community? Oh, right here.

- Hi, I'm Ariel. I was just wondering, you talked about your daughter and your son-in-law and how they're kind of taking over a little part of your business, was your daughter always a part of your company or are you deciding just to pass it down to keep it in the family?

- No, she's not necessarily a business person. Her husband, my son-in-law is an attorney and he's the president of Mortensen Investment Group. And he's a darn good businessman and he's taking over for me so together they're doing it and my daughter gave me two wonderful grandchildren and so forth. But frankly, she was looking for a meaningful place in life, and I talked to her about would she be willing to run down these requests for donations and follow up to make sure they were doing what they said they were going to do and kind of help to manage our donations, and she hesitantly said yes and now she's absolutely ecstatic. She is enjoying that which I was just sharing, the love. To out to these meetings and see the people being helped and being grateful. So she's very good at it. No, she wasn't trained that way and it didn't happen all at once. 

We kind of worked her into that role. Let me just say one other thing, if I may. My kids, maybe I worked too hard when I was younger or whatever, I'm not offering excuses, but my family wasn't a beautiful together family always. And I found this opportunity with the Family Foundation where we had this pot of money and who's going to manage it and how are we going to manage it. So my kids are all on the board of the Mortensen Family Foundation. Now they have reason to get together to help others and allocate dollars and work like this, and they are working together more readily and happily and functionally than they have in anything else in life. And so the Family Foundation will hopefully go on for generations and hopefully they'll be a part of it, and hopefully they'll be working together and this will be a big plus to that which I leave behind is that the family is not only helping needy folks in our community, but we're helping our family to be a family.

- That's a beautiful statement. And you started your conversation with us about giving and I thought that was a very interesting way for you to start, because I think that in the end certainly entrepreneurs are giving in so many ways. Either through their innovation or their creativity and hopefully ultimately to their community by that which they reap. 

Any other questions for Loren? Well, I know the students join me in thanking you so much for taking your time to be here with us today. 
(APPLAUSE)