Attorney of the Month, Fred Hutchison

Fred Hutchison

Visionary for the New North Carolina

 By Bob Friedman

“I’ll go,” said Fred Hutchison. It was 1982. Hutchison was practicing at Allen Steed and Allen in Raleigh when partner Arch T. Allen, III said, “We need someone to go down to a meeting at the Raleigh Chamber of Commerce. They’re forming a committee to explore a new opportunity – something to do with incubators and new tech businesses. Can you go?” It was a decision that changed Hutchison’s life and helped shape the Triangle region’s business climate.

Out of those seminal chamber meetings came the Council for Entrepreneurial Development (CED) in 1984. Hutchison served as its first president. “It lifted the entrepreneurs on a pedestal; they were viewed as courageous visionaries rather than just techies starting up a business in their garage,” said Hutchison.

Today, over 700 local companies are involved with the private, nonprofit CED and it is the largest entrepreneurial support organization in the nation. The CED assists companies of all sizes at all stages of their life cycle. The CED is a resource for entrepreneurs, providing them with education, mentoring and access to capital resources.

Hutchison’s entry into the entrepreneurial arena almost didn’t happen. Fred D. Hutchison, 65, was born in Maryville, Tennessee and raised in Raleigh. After earning a Bachelor of Science in business administration from UNC, he got his law degree from the University of Virginia in 1975 and continued his trajectory north. “When I graduated, I frankly didn’t think I’d come back to North Carolina. It was a great state but I just didn’t think the future was here,” recalled Hutchison.

He spent five years in Washington, D.C. with Covington & Burling practicing in municipal finance, securities and bank regulations. Hutchison and his wife, Nancy, then felt the pull to return to North Carolina. “The best decision I ever made,” he said.

Hutchison joined Allen Steed and Allen (now Moore & Van Allen) when he returned to Raleigh in 1981. He joined Petree Stockton & Robinson (now Kilpatrick Townsend & Stockton) in 1986 to start their Raleigh office. Hutchison PLLC was founded in 1996 based on Hutchison’s desire to work primarily with entrepreneurial companies.

VISIONARY WORK

“The future of North Carolina is technology, it’s life sciences, it’s health care services, it’s specialized manufacturing,” said Hutchison. But, in the mid-‘80s, the region lacked venture capital and a culture and environment to support entrepreneurs. At the time that was all the purview of Silicon Valley.

According to Hutchison, it took visionaries like Then-Gov. James B. Hunt, Jr. and IBM’s Dick Daugherty and others to look at the Triangle and see the diamonds in the rough. “There is a fair amount of missionary work you got to do. And you’ve got to create an environment that’s conducive to startups and people funding startups and growing startups,” recalled Hutchison of those days.

Duke, UNC and North Carolina State were doing cutting edge research and development in areas like advanced materials, computer science, biotech and pharmaceuticals. “Those universities are where the treasure trove of the technology was and is,” said Hutchison. Today, the schools have tech transfer offices to help launch projects from the lab to spinoff companies. “In the practice area we are in, we’re often working with people who have never started a business; they come from academic environments,” said Hutchison.

The biggest hurdle for the majority of new ventures is financing. “Most early stage money still comes from angel investors and family and friends,” said Hutchison.

As young companies grow, so too does their need for financing, usually in the form of venture capital. “It’s always hard to raise capital for early stage companies; it doesn’t matter whether you’re in Boston or Silicon Valley,” said Hutchison. “Half of the nation’s venture capital flows to California, another 20 percent to Boston. North Carolina gets about half of 1 percent.”

But Hutchison is quick to add, “If you’ve got a good idea, the money will find you or you’ll find the money.”

TRUSTED ADVISERS

Durham’s American Tobacco Campus traces its roots back to 1890 when it was home to the largest tobacco company in the world, American Tobacco Company. With the decline in the tobacco industry, the Durham warehouses fell into disrepair. In 2004, the American Tobacco Campus was given new life with tenants ranging from the Durham Bulls to WUNC radio as well as restaurants, offices, apartments and NC IDEA. Developer Jim Goodmon was the visionary for the rebirth of the district. “American Tobacco Campus really symbolizes what’s going on as far as the growth and entrepreneurship within the region,” said Hutchison.

Hutchison PLLC has worked with over 400 startup companies in the Triangle and the Southeast. The list of clients includes such well-known local firms as Cree, Pozen, LipoScience, Geomagic, Yap, SciQuest and Trimeris.

The firm typically gets involved with new ventures at their inception, “It’s all about growing the company, dealing with the day-to-day issues and then creating an exit strategy. I think they look to us as more than lawyers, they see us as trusted advisers. There’re times when you’re giving them legal advice and times when you give them personal advice or business advice,” said Hutchison, “I think our job is to craft good advice that takes into account what the law is and what makes good business sense and blend that with common sense to come up with a solution for the client.”

JUST LIKE RIDING A BIKE

Hutchison’s schedule during the week is like a treadmill, on weekends he can be found on a bike with his wife, Nancy. They do 15-25 mile rides along trails like the Neuse River Trail and other trails on the Raleigh Greenway. Vacations are spent biking overseas in countries like Spain, Ireland, France, Italy and Croatia. “My life is pretty fast at work. On the bike you see things you don’t see from a car, you sort of slow things down. You’re outdoors and it’s a great way to appreciate things; whether it’s buildings or nature and I enjoy getting to spend time with my wife, Nancy. And besides, you can’t read emails or text from a bike so you really do get away from the office,” said Hutchison.

The Hutchisons have two daughters, Ann, 34, and Kay, 32, and two granddaughters. Both got the entrepreneurial gene—Anne worked for CED and then was the first executive director of SE BIO. Kay works for San Francisco tech startup, Hipmonk, an online travel site. “It’s like Travelocity only better,” Hutchison said.

BEATING THE HOUSE
In addition to CED, Hutchison is involved with two nonprofit entrepreneurial support organizations – NC IDEA and First Flight Venture Center. “Companies need a place to get started and they need mentors,” Hutchison said. Since its formation in 2006, NC IDEA has awarded more than $3.4 million in nondiluting grants to 88 North Carolina companies. First Flight currently houses and mentors over 40 startup companies on flexible and affordable terms. In 2006, Hutchison was awarded the Order of the Long Leaf Pine from the Governor for his efforts in fostering entrepreneurs in North Carolina.

Unfortunately for Hutchison PLLC, their clients who grow with outside capital can have a short shelf life. “If Google buys them, then Google’s lawyers take over. And, if they don’t do well – if they fail, then we won’t have them as a client,” Hutchison said. “We take our knocks, too. Sometimes we don’t get paid, but for the ones that work, it makes it worthwhile.”

Despite the risks, Hutchison likes his firm’s niche working with entrepreneurs. “They’re bright people; they’re driven to create something that is cheaper, better, faster. They possess persistence and perseverance. They’ve got a different vision. They think of how you can do things that no one has thought of.”

In person, Fred Hutchison is friendly and charming. Despite my repeated prodding, he was reluctant to take too much of the credit for his role in the emergence of business incubators and entrepreneurial startup ventures that have become an engine for the Triangle region’s growth and prosperity. He’s much like a proud parent not wanting to overshadow a child’s achievements.

For inspiration, the even-keeled Hutchison looks to his 94-year-old mother who he said is still active and engaged and even more unflappable. “My mom is way above where I am,” Hutchison said. “She can get through anything and remain optimistic and positive.”

Hutchison and the various business incubators are fulfilling their mission of more than 30 years. “It means a lot to us to see an entrepreneur grow his or her company, hire employees, be successful and maybe even sell the business and thus create an influx of wealth into our community. Wealth that can be redeployed into new businesses and fund community nonprofits,” he said.

Hutchison and his firm put their money where their mouths are by providing angel capital to some of their clients. “I’ve never gone back to add up the wins and losses, but we’ve had some of each. You’re going to if you are on the angel investing side, but I think we are beating the house,” said Hutchison with a smile.

For more information, visit www.hutchlaw.com.