By Craig Flagg
For Home Page Media
It’s highly unlikely that Brian Fox will ever be mistaken for a superhero, but then again, no one in the sprawling city of Metropolis ever imagined Clark Kent as anything more than a somewhat geeky, clumsy journalist for the Daily Planet.
And we all know how that turned out.
No, Fox can’t leap tall buildings — even if he was a pole vaulter in his high school days at Brentwood Academy. And though he was also a successful wrestler at BA, he’s clearly no match for locomotives. And while it is possible he may have logged more air miles than the Man of Steel, Fox sticks to commercial airlines to carry him from nation to nation to nation.
But make no mistake, if ever a number-crunching CPA could be seen as a superhero, Fox just might be the man.
A graduate of Southern Methodist University who earned an MBA at Vanderbilt University’s Owen Graduate School of Management, Fox has grown from playing cops and robbers in his back yard with his little brother to being the founder and president of Brentwood-based Confirmation.com.
And in case you haven’t heard, the company is becoming a worldwide leader in audit confirmations and has already been a major player in unraveling the efforts of dozens of crooks — some white-collar types, others of the state-sponsored variety — who’ve preyed upon law-abiding people from Brentwood to Berlin to Bangkok.
“We created electronic audit confirmations,” Fox explained. “What that service does, in a nutshell, is, if you think of any financial fraud that involves somebody stealing cash or somebody inflating revenue. That’s the fraud that our technology is there to catch.”
Before earning his MBA, Fox worked in Dallas at Ernst & Young and later at PricewaterhouseCoopers. It was through his back-office duties during that time that he came face to face with an antiquated paper process and how it left a tremendous opportunity for the unscrupulous to circumvent the law and commit financial fraud.
“I came back home … to business school at Vandy and wrote a business plan to use at the time on what was this new technology called ‘the internet’ to create a secure clearing house for the confirmation process that would make it more efficient (and) at the same time help the auditors catch the frauds,” Fox said. “And so, now I say we’re helping the good guys catch the bad guys.”
Truth be told, this hero stuff started long before he knew anything about acquisitions, venture capitalists or the unapologetically ravenous nature of greed.
In fact, it first showed up when he was just 5 years old.
Already a quick thinker with a fearless tenacity, young Brian flew into action when he saw his 3-year-old brother drowning in the pool at his grandparents’ home. He recalls that his grandmother couldn’t swim, but he’d practiced fetching stones from the pool floor as part of his early swim lessons. So he jumped in, swam toward the bottom and yanked his brother from the water.
Despite Brian’s efforts, emergency responders informed his family that his brother would not likely survive, and even if he did, he most surely would suffer from brain damage.
As it turns out, they were wrong — on both counts.
Fox, who shared a laugh while recalling that his story of heroism made the front page of the Nashville Banner — above the fold no less — said his mother deserves the credit.
“She was in the first class of female officers for Metro,” Fox said. “There were, I believe six of them who had gone through patrol school together. So my brother and I grew up running around the backyard in her police uniforms with the bobby sticks chasing after the bad guys.”
Fox’s journey from MBA student with a business plan to successful entrepreneur has been filled with just as drama as that remarkable day at the pool.
“My thought was always to spend some time in business, in large companies, to kinda learn the ropes,” said Fox, who says he’s always had an entrepreneurial bent. “And so my intent was to
come back to Vandy for business school and then go work for an Internet startup of some sort. I mean they were all startups at that point.”
It was while taking a class on entrepreneurship that Fox wrote his business plan on how to use
new technology via the internet to solve what he saw as a problem.
“Fortunately for me, my professor, Germain Boer, had been an accountant, and he saw my paper, recognized the problem I was trying to solve and said, ‘Hey, you oughta go show that around.’ ”
Fox was inspired, but faced with the reality of life, he tucked away that advice and began to mull
a couple of internship offers.
“My intent was to go work for a small business as an intern that summer, which most people do between their first and second year of business school,” Fox said.
But at the end of his first year of business school, Fox’s father died unexpectedly. His passing left a void, but it also created an opportunity.
Fox teamed up with his mother and brother and in June of 2000 used the money from his father’s life insurance policy as the seed capital to launch the business.
“I spent the next year finishing my second year of business school and trying to grow the business, start the business, get it off the ground,” Fox said. “And then, when I graduated in May, I just rolled right in to doing this business.”
Not so fast, boy wonder.
As Fox pointed out, May of 2001 “was right as the Internet bubble was bursting or had just burst.”
With his grandmother as an initial investor and having already ponied up the money from his dad’s life insurance policy, Fox was determined not to let his family down. And even though money was not pouring in, he says he remembers feeling good about where the business was heading.
But there would be another challenge — a big one.
From bad to worse
“My business partner, Chris Shelbourne, and I were literally pitching the lead investor. We were going to raise a million-dollar round of funding,” Fox said. “We had it all wrapped up. They just
needed to pass it by their investment committee.
“There were three companies that presented to them on that night. It looked like all three were going to get the investment. But they came to us … and said, ‘Hey, we’ve got an HR issue at another portfolio business. We’re going to need some time on that. We don’t want to waste y’all’s time. You guys go on home and we’ll call you tomorrow.’
“Everything looked great,” Fox continued, as his mind drifted to the late summer day that would turn the world upside down. “So they called us the next morning — midmorning — and said, ‘Hey, we’ve got to apologize. That HR business in the other portfolio company … we had to spend a lot of time on them and we didn’t get a chance to vote at last night’s meeting. We’re going to vote at next week’s meeting.’ ”
The pair had presented their plan to the investment company on Sept. 7. That midmorning call came on the 8th, hours before Shelbourne flew back home to Connecticut. Three days later, hell broke loose.
“Before they could have the next meeting, 9/11 happens,” Fox said. “So the Internet bubble burst and then 9/11 happens. And the entire financial market, globally, was dead.
“We were pre-revenue,” Fox said. “Most PE and VC companies weren’t making any new investments. In most cases, they couldn’t even afford to reinvest or finish up the investments they committed to certain companies because their limited partners were saying, ‘Look, sue us if you want to, but we’re not giving you any money because we don’t know where the global economy is going right after 9/11.’ ”
For about two years, it was almost impossible for any company to raise money. As Fox put it, if you weren’t cash-flow positive, you were pretty much going to die “and the VCs and private equity firms were letting you do so.”
But just as America persevered, so, too, did Fox and his team.
“We spent two years in my grandmother’s garage — there were four of us — and paid everybody in stock and put everything on my credit cards and deferred my $92,000 of student loan from Vandy — as far as they’d let me.”
As fate — or fortitude — would have it, the business survived. In fact, its profitability surged in 2008-09, when some of the nation’s top banks began requiring that their auditors use the Confirmation.com service.
The company now has about 200 employees, half of whom are IT folks. And its service is used by about 5,000 banks and 4,000 law firms in roughly 180 countries.
What’s more, Fox has the deep satisfaction that the bad guys didn’t win.
“I saw an opportunity,” Fox said. “I thought not only was it an inefficient, bad process, but it was bad in the way that people could take advantage of it and manipulate the process. And I feel strongly about our profession, meaning me as a CPA, and what our job is, which is to help catch fraud. “This is my way to contribute to what I think is our mission as a CPA. Because there are so many people who, as I look at those companies, whether it is Enron or HealthSouth or WorldCom or others … people invest their savings. That’s where their retirement accounts are. That’s where their pension accounts are.
“I literally just had lunch … with a group that runs a pension account for a lot of the unions out there and those people are working hard, and that’s their retirement funds. And if somebody were to steal it, that’s not right. That’s not fair.”
Who knew that number-crunching and fact-checking could be so heroic?
As for Fox’s brother, the one who nearly drowned? Well, he went on to become a police officer.
As for Fox, you won’t see him tooling around town in anything as outrageous as the BatMobile,
but then again, he does drive one sweet-looking Porsche.