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He raised about $50,000 for the venture from private investors. But in the summer of 1990 the deal collapsed. The reason, Mack explains, is that the partners "didn't quite understand what it takes to accomplish these things."

Zan Smith, who owned one of the strings of centers in Colorado Springs looking to expand, and who became the first president of what would later be known as Child Care Centers of America, remembers it differently. He says he came to believe that child care and high finance just didn't mix.

"After working for them for six months, I just decided I didn't like the feel of how things were going," he explains. "We felt that [Mack] was going through the money without doing anything with it. Most of us were small-business people used to using money to pay the bills. And every cent that was raised was going out the door in office costs and salaries."

Although the Colorado Springs deal fell apart, Mack walked away with a company name, Child Care Centers of North America, and he was convinced there was a huge opportunity to make money in the kid-watching business. "My concept," he says, "was simply to find mom-and-pop operators who get a high degree of burnout in the industry, and they're almost begging you to please take their center away." Once the project was together, CCCNA would go public, the company's shares would be vigorously traded and the original investors would make a bundle of money.

The idea, he discovered, was not hard to sell. "When you take a company public, you've got to have some pizzazz," Mack explains. "You've got to have a story to tell, or why else would people invest? The child-care industry--now that's a positive story to tell."

Four years ago Cary Polevoy was running a not-very-busy public-relations company after a stint as a securities researcher at the ill-fated Blinder Robinson brokerage house. In the spring of 1990 he hired Don Mack as an account executive. Although Mack almost immediately began pitching him on the idea of a new child-care chain, Polevoy says the idea grew on him slowly.

Over time the vision of a new child-care giant came into focus. Polevoy spent more and more time on the project until, in late 1990, he gave up his public-relations company altogether and became chief financial officer of Child Care Centers of North America.

As Mack seriously began setting about raising money for the project, Polevoy, who had established the securities-research department at Blinder Robinson, tagged an acquaintance from the penny-stock brokerage, Harvey Cohen, to join them. Together the three men raised about $110,000. And they began shopping.

The company sprouted like a teenager during adolescence. A letter of intent to purchase six metro centers operating under the name Children's Enrichment was signed in early 1991; the deal was completed in January 1992. (Mack claims he brought the deal to the table; Polevoy says the deal "never would have been done without my involvement.")

The company snatched up other deals in quick order. A center called Creative Hands was purchased in November 1991. Regatta Day Care Center joined the fold three months later and, several months after that, Happy Day Learning Center and Tower Road Learning Center signed up. In the summer of 1992 the company added two "Before and After" centers, housed in public schools. Today it operates fourteen facilities.

Despite CCCNA's stunning growth, not everyone jumped at the chance to join the company. Lee Thomas, an Aurora dentist who owns a half-dozen child-care centers in the Denver area, says Mack approached him in 1991 and talked to both him and Polevoy over the next several months.

Thomas says he was left cold by what he describes as Child Care Centers' big-money attitude. "I felt that their primary focus was corporate, as opposed to quality care," he recalls. "As we had discussions, they liked to bring up scenerios of La Petite and the stock offering, and how much money people could make."

Another center owner, who refused to sell and who asked to remain anonymous, agrees. "They made me an offer to purchase the company--and they never set foot in one of my centers. For all the talk about good, quality child care, they just liked my balance sheet."

Thomas says the bad vibes were confirmed after he declined to sell his centers to Child Care Centers of North America. Soon after he backed out of joining CCCNA for good, he recalls getting a call from an acquaintance who informed him that Polevoy promised to "bury" Thomas and his centers. ("That's absurd," Polevoy says. "We don't want to bury anybody.")

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Eric Dexheimer
Contact: Eric Dexheimer