Withastrongmanagementteaminplace,MichaelLazarusstartedontheseriousworkoffindinginvestorsforNewAir.
"Theideaofinvestinginanairlinehasfourstrikesagainstitfromthestart.It'snotanintuitiveinvestmentforventurecapitalistsinthatitdoesn'tmakesensetomostpeople.Second,anairlineiscapitalexpenseintensive,andthereforecanquicklyeatuplargesumsofcash.Third,airtransportationisacommodityindustryintheeyesofmost:Anairlineseatisanairlineseat,andfewinvestorswillbetthatanairlinecanbreedtrueloyaltyandattractcustomersbynamealone.Andfourth,ofallthepeoplewhohavetriedtostartasuccessfulairlinesincederegulationin1978,everyone'sfailed.Youhavetobeabravesoultoinvestinanairline."
?──MichaelLazarus
Lazaruscommittedhisfirmtoinvest$35millioninNewAir,andthenapproachedfiveventurecapitalfirms:BankofAmerica,BankofBoston,MassachusettsMutual,JPMorganChasePartners,andSorosQuantumFunds.Eventually,allfiveofthecompaniesendedupinvestinginNewAir.Overthecourseoftwoyears,MichaelLazarusandDavidNeelemanendedupsecuring$130millioninstart-upfundingforNewAir.TheSorosFundendedupbecomingthelargestinvestorputtingin$40millionfora24-percentstakeinNewAir.
"Intheventurecapitalworldyouwanttospendallyourtimematchingtalenttothetask.InNeelemanandtheproposedairline,investorshadtheultimatecombination.Davidisperfectforthisjob.Hefocusessolelyontheneedsofthecustomer.He'salsoanaturalbornleader.Ittooktwoyearstotrackdownthefundingbutintheendnooneturnedusdown.Wesecuredourfundingevenbeforegettinganairlinecertificate,airportgateslots,andaircraft.NewAirwasthebestcapitalizednewairlineinaviationhistory.InvestmentanalystscalledNewAirthemotherofallstart-upairlines."?
──MichaelLazarus