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Bethesda's WealthEngine digs deep into data to find potential donors

By Thomas Heath
Washington Post Staff Writer
Monday, March 1, 2010; A14

I am an unapologetic fan of Forbes magazine's annual list of the 400 richest Americans, much to the horror of some friends and not a few colleagues.

So how could I not write about a Bethesda company called WealthEngine, which scours public records in search of rich people who might give money to WealthEngine's extensive client list of nonprofit organizations.

Everybody knows the big names. Think Lerner, Leonsis. Rales and Rubenstein. Kimsey, Bradley, Snyder and Smith.

WealthEngine digs deeper.

"We look for the millionaire next door who started a private business that nobody knows about," said WealthEngine chief executive Tony Glowacki, 49, who made millions in the 1990s boom and owns an interest in a 44-store chain of Panera Bread franchises in Montgomery County.

Glowacki's 51 employees troll auto and boat records; business, real estate and regulatory filings; and other databases for signs of wealth. Once they identify people with money, WealthEngine drills down to learn whether they have donated before and what causes they favored.

The data-mining company has gone from 10 clients and near bankruptcy a decade ago to 2,000 clients and revenue projected at $15 million to $20 million this year. It has offices in Bethesda and London.

Last month, two prominent Washington area venture capital firms, Novak Biddle Venture Partners and QED Investors, which bring experience in technology and data mining, invested $5 million in WealthEngine. Novak Biddle partners Jack Biddle and Janet Yang will take seats on the company's board of directors. QED managing partner and Capital One co-founder Nigel Morris will serve as an adviser.

WealthEngine plans to use the cash to expand its footprint overseas and increase its menu of products and services. In other words, it hopes to use the $5 million to make more money.

Glowacki's entrepreneurial story is interesting. He lost his father at age 2 and is the ninth of 10 in a Davenport, Iowa, family. He majored in general science and studied computer programming at the University of Iowa.

"I saw the opportunity in the mid-'80s to get into an industry that was really just starting out," Glowacki said.

He refined his technology and database skills at area computer firms before making his way in 1992, at 32, to Manugistics, then a highflying Bethesda computer firm that helped companies manage supply chains.

Glowacki was a mid-level manager at Manugistics, where he worked until 1996. He also had his eye on the stock market. A family friend had sent him "A Beginner's Guide to the Basics of Investing" by Peter Lynch, known best for managing Fidelity's Magellan Fund, and who coined the famous phrase "invest in what you know."

"I followed Peter Lynch's approach," Glowacki said. "I knew the [technology] business. Manugistics and these other companies were going places. I made a fair amount of money . . . all aboveboard."

Actually, he made millions, which he put into a variety of small ventures, some of which fizzled (frozen soy entrees, a $25 million Indianapolis technology start-up) and some that sizzled (Panera Bread, WealthEngine).

He credits another book, "Crossing the Chasm" by Geoffrey A. Moore, published in 1991, with teaching him how to turn a good idea into a useful business application. He applied that book's lessons to WealthEngine.

Glowacki learned from a friend in 2000 that the company, then on K Street in downtown Washington with $1 million in revenue and nine employees, was for sale. He acquired the assets for a total of about $200,000. Glowacki didn't take a salary for three years and then started paying himself $100,000 to $200,000, depending on the company's cash needs.

He hired a cadre of fellow techies, including a colleague from Manugistics, to help with software and databases. He cobbled together a sales force, including hiring people who worked for his nonprofit clients.

There were two seminal moments in WealthEngine's growth. The first was in 2001, when WealthEngine signed St. Albans School, Pepperdine University and Inova Fairfax Hospital in a span of three months, giving Glowacki the confidence that the company had a product that people wanted.

The next "aha moment" came a couple of years later, when Glowacki targeted smaller nonprofit groups, such as food banks, local museums and neighborhood theaters.

"We were able to sell to the small guy for $3,000 or $5,000, while everybody else was focused on these big dollar signs," he said.

WealthEngine added 350 clients in one year.

WealthEngine contracts run from $3,000 to $300,0000 annually. Clients are as diverse as the American National Red Cross, the Alameda County Food Bank, the Greater Los Angeles Zoo, the Walters Art Museum and Colorado State University.

If a university is in a capital campaign and needs to raise a billion dollars over three years, WealthEngine will screen its alumni to help the school know which alums to approach for major gifts and who might give only a couple hundred dollars a year to the annual fund.

Or take the children's theater that needs to stretch beyond its board to raise money. WealthEngine searches Chevy Chase, Potomac, Bethesda and neighboring affluent neighborhoods for high-net-worth individuals who have children and an interest in the arts.

Glowacki, who still owns more than half of the company, said he could have sat back, taken a nice salary and run the business from his Chevy Chase home. He opted for a home run instead, rolling several years' profits into the business and trying to build something big. He plans to boost his staff to 71 by the end of this year. He is shooting to grow his client base from 2,000 to 20,000, maybe 30,000.

Someday he might end up on one of WealthEngine's lists.

Follow me on Twitter at addedvalueth.

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