Life’s not a promise, and if there’s something you want to do, you really have to go for it.

By Cathy Melocik

David Grain was only a month or so into his first year at Tuck when the biggest stock-market crash since 1929 hit—the 1987 crash, one factor that Grain says just happened to make it “a great time to be in grad school, a place to hide for a while.”

This February, repping a Dartmouth-green sweater and sipping from a Tuck mug at his home, Grain shared his years of experience since that challenging time in a Zoom fireside chat with Dean Matt Slaughter, and a record number of participants, on minority participation in private equity as part of the 16th Tuck Private Equity and Venture Capital Conference.

Prompted by questions from Slaughter, Grain traced the arc of his career and life, from college, to Wall Street, to Tuck, and then a return to Wall Street before moving into telecom and—his biggest career risk and reward—founding Grain Management in 2007, where he remains the successful communications-investment firm’s CEO.

On His Early Career & Coming to Tuck

Grain entered Wall Street in the municipal-finance area—as he said, “a fairly common on-ramp for African Americans to the financial-services/investment-banking world,” as mayors and other political figures insisted on diversity of any team that would be handling the financing for, say, the city of Atlanta, or Chicago. But what really fascinated him was the takeover activity accelerating in the ‘80s, and Grain knew that the path to that kind of work meant graduate school. Having worked with T’85 Jamie Miller—“a really terrific guy”—Grain was introduced to Tuck and accepted into the class of 1989.

In November of his first year at Tuck, Grain opened the newspaper to a report of the largest leveraged buyout in history at that time—the $985 million purchase of Beatrice Foods’ international division by Reginald Lewis, part of the $6 billion Beatrice deal structured by Kohlberg Kravis Roberts. Grain remembers turning to the full article “and there was this Black man, standing with financier Michael Milken of Drexel Burnham Lambert, having gotten this deal closed, and it really changed things for me in terms of what was possible.”

KKR prefigured more directly in Grain’s career path when, as a student, he approached T’73—and KKR partner—Paul Raether at Tuck. Their conversation, and their meetings that followed, led to Grain’s summer-associate position at Drexel. And Grain returned to Drexel after Tuck, noting “there was something a little different about the firm: they didn’t care what color you were or where you came from, just whether you could get things done. It felt much more meritocratic than other places I had been.”

Grain was recruited after the fall of Drexel (which filed for bankruptcy in February 1990) by Morgan Stanley. And while at Morgan, “I came across the greatest business model I’d ever seen,” he recalls—a cell-tower company named Spectrasite spinning out of Nextel. Meanwhile, Grain’s wife, Lisa, was then sickened with breast cancer (“she recovered nicely, and she’s still doing just great”), which “brought into stark relief the reality that life’s not a promise, and if there’s something you want to do, you really have to go for it.” This led to Grain’s pitching AT&T himself about buying cell towers, though the project didn’t work out, as AT&T spun off its wireless business. Grain continued on at Morgan.

On Taking Risks

In the wake of the failed deal, Grain was approached by AT&T’s CFO Dan Somers—a Canadian, and later president and CEO of AT&T Broadband—"and it was the first time that I had a boss who was really in tune with the challenges of being a minority in the American business world. Dan basically said, ‘I know how hard it is, I see it in the rooms—however, all you have to do is your job, OK? Any other judgments of you, I’ve got those covered.’ It was an amazing, liberating experience.”

Grain was successful at AT&T as the SVP of the Northeast Region, and, when the company was sold three years later, he did well because of the stock options he was awarded. With this he recognized that it was the equity holders in a successful transaction who enjoyed the potential for the greatest financial success—“I really saw the power of equity.” After moving on to lead the turnaround of a portfolio company of Fortress Investment Group, Pinnacle Towers (renamed Global Signal), Grain noticed the same when that company was taken public and then sold. He recalled, “After this amazing experience, it was clear to me that I couldn’t work for anyone else again, and I decided that I was in a position where I could take some risk and launch my own firm.

Slaughter asked whether Grain’s wife, Lisa, was comfortable with that risk. Grain said that when he and Lisa—an orthodontist and, Grain says, “a brilliant woman”—decided to get married, they discussed his path and goals, with Grain saying, “If we marry, you have to know that we’re either going to the moon, or we’re going down in flames; there really isn’t anything in between, because I’m going for it.” And together, they went for it.

On Diversity, Equity, and Inclusion

During the chat, Dia Draper, Tuck’s assistant dean for diversity, equity, and inclusion (DEI), recalled a quote from a talk Grain did years ago at Tuck about his belief that diversity in all areas leads to the identification of greater opportunities and the clearer recognition of risks. Grain responded that the greatest DEI impact at his firm has been that of gender diversity, noting that the initial all-male team had been developing a less than optimal dynamic, particularly with regard to risk taking. He started intentionally recruiting women, with the first woman hired coming from Morgan Stanley. Grain knew from his own experience of the deeply quantitative people working at Morgan and knew that quantitative focus would fit with his firm’s arithmetic, algorithmic approach to investing. And it has.

T’22 Susie Peerson then moderated questions from the audience, beginning with “probably our most popular question: Were there any obstacles for you as an African American man raising your first buyout fund in 2007, and if so, how did you overcome those?”

Grain noted, “It’s important to say at the outset that, it is what it is. People have biases, and you can’t control those. I’ve never found value in worrying about those issues because nobody ultimately cares if or why you don’t get it done. I also think it’s just generally hard to raise your first fund—I had to put up an unusual amount of my own capital to complete my first raise. I had 185 one-on-one meetings to get five people to say yes and three to actually cross the finish line. I thought I was done after 10 months, and then my lead investor pulled out the week before we were going to close. Duke University’s endowment stood by me, but it was 10 more months, starting from scratch again, before we finally closed.”

Not a Map; More of a Compass

Other questions came in, including a direct question from a prospective student: “Any advice for a Black 20-year-old undergrad looking to work in private equity one day?” Grain’s twofold answer: planning (he annually reviews, in writing, his own accomplishments and goals in all areas of his life) and “developing your own kitchen cabinet of personal advisers” from different backgrounds and with different perspectives. Grain said he has a handful of people he can call for guidance and to talk about course corrections “because I don’t see that there was a map that would have worked well for the last 30-some years for me—it’s really more of a compass.”

In closing, Slaughter asked Grain what counsel he would give Tuck students, in light of a year that students couldn’t have anticipated. Grain’s response? “I would just be very open. It’s extremely difficult to have an inflexible perspective of how things are going to work out, as we’ve seen in the last year—really the last four years. But if you’ve gotten to Tuck, you’re far enough along to know that your gut is working well and, with it as a compass, you’ll know if something’s not feeling right. Along the way, if you do have an ‘aha’ moment and see a clear path as I did with cell towers, you should go for it.”

Visit www.tuckpevcconference.com to view the complete chat with David Grain and Dean Matt Slaughter, as well as other segments from this year’s Tuck Private Equity and Venture Capital Conference.