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Dan Hudson spoke in the laid-back tone of someone who’s given the same pitch many times, but his words gave them hope: “I believe now is the best time to start a bank.”
...the three-year failure rate for new banks is less than one in 1,000--compare that with the 60 percent failure rate for new restaurants. And the profits are handsome.
Many banks are started by small-businessmen--the local dry cleaner or hardware store guy, says Len Rubin, a Washington, D.C., lawyer who’s helped launch more than 20 banks. Often, they’re folks fed up with the service they’re getting at big banks; they think they can do better.
Under one common model, about 20 entrepreneurs each chip in about $100,000--enough to retain an executive team, outfit a branch, buy a technology package and print a bunch of fancy posters. To raise the $20 million or so in lending capital, they issue shares to local investors.