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BY: CHRIS ROPER

It Took This Visionary Financier 20 Years to Disrupt Investment Banking – Now He’s Earning $15 Million RevenueWhen you speak to David Frank, you immediately think, investment banker. Don’t let the open collar and jeans fool you: David exudes confidence, gravitas, and doesn’t suffer fools gladly. And while that might raise your hackles a bit, I’ll remind you not to judge a book by its cover, and in David’s case, he’s so much more than a financier – he’s a visionary.

David has managed investments for over 20 years. He has a stellar academic record and an impressive list of letters after his name. The hallmarks of another Gordon Gekko? Maybe, but note that he’s also a grinder. In 2001, at just 23 years old, he founded Stonehaven LLC, a capital-raising firm that’s evolved into a global private capital markets fintech platform.

Today, David’s business generates around $15 million in revenue and is growing fast. Whatever your opinions on investment banking, you can’t argue that’s an impressive number for a bootstrapped company. While it’s taken Stonehaven decades to evolve into a fintech business, David believes this is only the beginning as it develops its collaborative ecosystem for investment bankers and placement agents.


“We’ve been working at an incredibly hard pace for a very long time,” David said. “We’re a 20-year-old firm still at chapter one, as far as the opportunities we have. We grew approximately one hundred percent last year across almost every metric, and we’re continuing to scale significantly. We’ve reinvented our business model and are fortunate to have an awesome management team to help us scale to the next level.”

If you’re lost as to what David does, you’re not alone. Investment banking is a complex, technical, and heavily regulated market. Think of him as simplifying it. In the early years, David raised capital for hedge funds and then private equity. Today’s Stonehaven didn’t manifest until much later, when David realized the value in streamlining the market for its participants.

“Our platform has over 50 capital-raising businesses, like placement agents and investment banks,” David said. “We’d been a traditional finance business and then became a full technology stack for everyone operating on our platform about four years ago. That change in our business model has accelerated our growth, but it wasn’t easy bootstrapping through all the politics.”

How Stonehaven Evolved from Raising Capital to Building Fintech

David graduated with honors from the University of Michigan’s Ross School of Business with a B.B.A. He’s a CFA charter holder, and a member of the Young Presidents’ Organization. If David is such a master of raising capital, why did he pivot to fintech nearly 16 years into his 20-year journey building Stonehaven?


“A handful of independent placement agents and investment bankers wanted to help us raise money for deals that we originated while still working on their own,” David said. “So we started building our affiliate platform to support them approximately 15 years ago.” Today, Stonehaven has rolled back in-house origination and execution and recruited over 90 affiliates into its platform.

“We saw a gap in the market,” David said. “Most broker-dealers were just small firms with light infrastructure. And our affiliates all used different CRMs, spreadsheets, Google docs, and so on to track their investors, pipelines, and clients. No one had the economies of scale to build the right tech stack for it all. But we’d been building our foundation for years and saw that we could go all-in creating a fully integrated infrastructure, technology, and community platform.”


Stonehaven’s platform combines compliance, legal, accounting, deal structuring, and more. David knew the pain points of origination and executing mandates (sourcing and fulfilling investment opportunities) and had been addressing them, iteratively, for years. In 2018, he realized it was time to invest all of Stonehaven’s resources in building a best-in-class affiliate platform fit for the 21st century.

“Our platform is better than anything our affiliates have individually,” David said. “We help them find and onboard opportunities, identify the right investors, track pipelines, manage projects, close transactions, and report to clients. We also help them collaborate on originating and distributing opportunities. Our platform consolidates thousands of workflows, saving time and money.”

Sound familiar? Zillow for capital markets? MicroAcquire for investment banking? You’ll find many parallels to Stonehaven’s opportunity in the market today, all consolidating a fragmented market or process into a single platform. Doing so eliminates a lot of the frustration, uncertainty, and time spent doing everything separately, resulting in some powerful network effects.

But just how complicated is the process of origination and raising capital from investors? David believes the problem is that each participant in the industry does things differently, using ill-adapted and isolated systems and communication channels. Despite working towards a common goal, participants misalign on speed and method.

“Before, forming a contract and performing due diligence on a new mandate would require a barrage of emails, calls, and worksheets with a broker-dealer’s team,” David said. “But we’ve created intelligent workflows with insightful decision trees that take into account all the different steps and questions. We can now ramp up a mandate quickly with better precision because we’ve married great talent with well-designed technology and process.”

In other words, Stonehaven builds technology that reflects the logic and decision-making process for all participants in the chain of raising capital and other types of transactions. Stonehaven’s legal, compliance, and due diligence technology automates a traditionally manual and labor-intensive process, leaving affiliates more time to focus on origination and fulfillment (so they can do more business).

David and his team have also built a technology stack for their affiliate partners called Nexus. It helps affiliates identify investors in their database, manage pipelines, track activity, collaborate, close transactions, run email marketing campaigns, and so on. Think of it as an operating system for capital markets.

“We think everything through on a granular level,” David said. “Due diligence, for example, might involve close to 100 steps, each triggering different people, and we ask, where could we do it better? Or could we add a step or contingency or improve the user interface? It’s the same with introducing affiliates to opportunities. We’re always optimizing these super manual processes.”

How Reinvesting in the Business Helped the Pivot Succeed

David became a successful producer early in his career and bought out his former partners in 2007. He began building a platform when he invested in solving problems his team identified during their front-line experience. “Instead of cutting ourselves big checks, we reinvested everything into the businesses,” David said. “We financed our evolution with revenue.”


David also credits Stonehaven’s success to operating in a niche part of the market. The platform gives market participants independence, essentially creating a platform for the gig economy of investment bankers and placement agents. Few others could handle the sheer complexity of tech-ifying the investment banking market, which has meant little to no competition.

“Most people in our industry are focused on raising capital and executing other transactions, not building tech,” David said. “On the flip side, tech people aren’t thinking about broker-dealer and capital market operations to identify this as an opportunity, either. How would they build an entire broker-dealer and all the elements of an investment banking platform without any experience running a capital markets organization?”

Today, Stonehaven has approximately 90 affiliate partners that support over 110 clients across real estate, private equity, venture capital, private credit, hedge funds, long-only strategies, and direct private placements. David’s team has also grown, with 22 people working across internal management, operations, tech, and data, as well as new equity-holding partners. Although Stonehaven remains management-owned, it might consider raising capital to accelerate growth.

“We have a very seasoned management team that has a long history of working together,” David said. “Steven Jafarzadeh has been with me for 14 years, Mark Sullivan’s been with me for eight, and Alex Brooks has been with me for two years. We’ve also brought on a handful of new partners in 2021 who’ll help us accelerate growth. We can finish each other’s sentences. We know exactly where our strengths are and how to work together.”

Stonehaven has a development team in Belarus and an operations team in India. Their affiliates are in over 15 states plus Mexico, Brazil, Israel, and South Korea. Since he began enabling capital raises instead of raising capital, David has found remote working less of a challenge than most in his industry. Much of this is down to building efficient workflow processes that help him and his distributed development team stay on task.

Stonehaven’s affiliates have always been geographically dispersed, so it makes sense that his team is, too: “Whether we’re onboarding new clients, closing transactions, forming cross-marketing agreements, or facilitating collaborations, we’re used to doing it remotely. And Nexus, our technology architecture, streamlines all of that and allows us to scale.”

You might have little sympathy for the pains of investment bankers, but if David’s efforts to modernize the industry create better opportunities for economic growth, we should applaud them. Indeed, any victory, no matter the battleground, deserves recognition – especially those that were the result of a decades-long, bootstrapped struggle to revitalize a tired market.