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One of the most successful players in the new-issue market is Arthur Rock, 57. During the past quarter of a century, he has compiled an extraordinary record of picking new companies and helping them grow into profitable giants (see box). In addition, he has become the cornerstone of the Silicon Valley investment community, where many of America's new industries are now taking shape. By investing money in dozens of companies, Rock has built a personal fortune of at least $200 million.
During the past year, a number of company founders have claimed paper profits in the tens of millions of dollars. Several have registered gains of $100 million or more, making them, overnight, some of the richest people in the U.S. The winners in the going public game include a Korean immigrant, a former disc jockey, a onetime airplane mechanic, a theater critic-turned-stock analyst, a college dropout, an engineer-turned-stock analyst-turned-financier, and a molecular biologist.
Most of the new multimillionaires come from middle-or lower-middle-class families, and few showed much early promise. Several had indifferent school records and drifted until some spark propelled them toward supersuccess. Yet all were independent enough to start or finance a new venture and canny enough to find fields ripe for development. Some profited from high technology and built companies that produce computers, video terminals or computer software. Others found fortunes in more traditional fields such as manufacturing and medicine. Still others turned to Wall Street not to raise money but to capitalize on new ways of analyzing stocks and sending stock information. Among the biggest winners in the new-issues market:
Allen E. Paulson, 61, founder of Gulfstream Aerospace, the maker of plush corporate jets. As an Iowa farm boy growing up in the Depression, Paulson supported himself by selling newspapers and cleaning hotel bathrooms. Following high school, he went to work for TWA as a mechanic and moonlighted at an auto-repair garage. After selling surplus airplane parts and advising competing airlines and then TWA on engine design, Paulson in 1951 set up his own business converting surplus passenger planes into cargo aircraft. It grew, and by 1978 he was ready to begin building airplanes on his own. He acquired Grumman's money-losing corporate-aircraft division in Savannah, Ga., renamed it Gulfstream, improved quality, cut costs and accelerated delivery times. When Gulfstream went public in April, Paulson collected $85 million in cash and stock worth $551 million.
Low-key and brimming with aw-shucks charm, Paulson had been moderately wealthy for several years before his half-billion-dollar windfall. Now he complains that "going public was probably the worst thing that happened to me. My private life became my public life. It's like living in a fishbowl." Paulson is building a 10,000-sq.-ft. replica of an antebellum mansion near Savannah that has 2,000 sq. ft. of porches, two man-made lakes, a nine-hole golf course, a tennis court, a boat dock and a landing pad for his five-passenger Bell JetRanger III helicopter. He uses the helicopter to make short hops for business trips and to visit his Hilton Head, S.C., retreat. Paulson also has four other