Crowd funding should use the late great James Ling as its poster boy.

Let me tell you about this great but little known American entrepreneur. His name comes to mind whenever someone mentions crowd funding.

I first discovered James Ling (1922 – 2004) at about the age of ten when I came across an article on the conglomerates of the 1950s and ’60s. Ling was the greatest of all the conglomerate building tycoons. In ten short years he had built the 14th largest company in the United States from scratch with his amazing wheeling & dealing talents.

By voraciously gobbling up corporations, the LTV Corporation became the fastest-growing company in the United States from 1955 to 1965, according to Fortune magazine in 1966. At its peak in 1969, LTV employed 29,000 workers and offered 15,000 separate products – from hamburgers to missiles, from tennis rackets to jet bombers. It was all a result of Mr. Ling’s awesomely byzantine deals. Inc. magazine in 1984 called him “a financial Beethoven who could visualize a symphony where others hear only a tune.” Colleagues said that when he talked you had to “listen fast.”

The Great Deal-maker

Mr. Ling’s track record as a deal-maker is so amazing that the Tycoon Playbook is dedicated to him.

One of the most interesting things about Mr. Ling is how he started. He grew up in a poor and broken home. His father was a devout German Catholic immigrant who worked as a railroad locomotive fireman. Being in the Midwest he had a hard time of it because of his religion. One day he got into fist fight with another employee, a Protestant, who was badgering him and killed him. The jury ruled it a case of self defense. Ling senior was so overcome with guilt that he left his family to live out his days in a monastery. The Ling family fell apart as a result.

At first young James was shuffled between various relatives for short stays before finally hitting the road on his own as a hobo. He fed himself by doing repairs and handiwork. By around 1940 he was married and had children. In 1944 he joined the U.S. Navy and came out of it in ’46 as an electrician. This is where the story starts to get interesting. After the war Ling made the decision to be his own boss. One of his first steps was to sell his home for $2000 and use the money to start up a small electrical contracting firm that specialized in wiring new homes. Not too long afterwards, as the business grew, he began going after industrial contracts. In 1947 the business grossed $70,000. The following year it grossed $200,000.

Seed Capital

Needing more capital to grow, Ling stumbled upon a new method for raising capital. Back then in the mid-1950s you could have a prospectus drawn up and approved by the Texas Securities Commissioner. Ling jumped on the opportunity and started selling shares in Ling Electric wherever he could find an audience to listen. He even sold shares from his booth at the Texas State Fair. Within three months he had sold 450,000 shares at $2.25. Now that’s what I call crowd funding old school-style.

The rest is, as they say, history.

Obviously, there are some people who will take advantage of this type of financing vehicle as they will with any other. Sadly, they are always with us. However, Ling’s life is an inspirational story about a man who overcame a bad start in life, worked hard, was creative in his financing strategies, and built an empire. If crowd funding keeps individual investment sizes small so as to minimize the risks, it has the potential to democratize the capital markets again.