Main Line Mavericks
Even after 60 years, venture capital leaders Pete Musser and Steve Zarrilli are still identifying game-changing innovators
by Karen Appold

For the past 60 years, Safeguard Scientifics has helped to make hundreds of companies successful. The company provides growth capital to innovative health-care and technology companies in the Philadelphia region and beyond.

At its peak—the height of Internet-based stocks in the late 1990s—Safeguard Scientifics had $100 billion worth of public companies. Located at the Safeguard Corporate Campus in Wayne, Safeguard Scientifics was founded by entrepreneur Warren V. “Pete” Musser in 1953, currently chairman emeritus, president and chief executive officer of The Musser Group, a financial consulting company that also advises young growth companies.

Both firms are located at 435 Devon Park Drive in Wayne, a beautifully wooded 142,000-square-foot campus that was once wholly owned by Safeguard.

The Man Who Makes Millionaires
To many in the greater Philadelphia region, Musser is an industry icon. He was integral to the creation and success of such Philadelphia staples as Comcast, QVC, Nutrisystem, ICG and Sanchez Computer Associates. After 60 years in the business world, Musser, 86, is still identifying new technologies.

Gamespeed Digital Marketing, a digital software company also located at the Safeguard campus, is one of The Musser Group’s newest ventures. “If you’re a new business startup and striving to take it to the next level, Pete Musser is the man to turn to for guidance and structure,” says Jon Showers, founder and chief creative officer of Gamespeed Digital Marketing. “When Pete Musser gets behind you, incredible things start to happen. We feel fortunate and blessed to have this industry icon see our company as something viable and necessary.”

Says Musser, “Of all of the businesses I’ve put together, Gamespeed has one of the strongest business strategies and team of very experienced professionals.”

When choosing a company to work with, Musser says he looks for a startup company that is headed by enthusiastic knowledgeable entrepreneurs with a good idea. Gamespeed’s founders, Jon Showers and John Zeglinski, are professional sports marketers who have identified a need and developed a powerful new fundraising tool for the nonprofit industry. Set to launch their business in March 2013, Gamespeed promises to be a game changer in the industry. Their brand-integrated turnkey digital marketing program will provide the 1.8 million nonprofits in the United States with a seamless way to engage digital donors. 

A New Man at the Top
Musser remained CEO of Safeguard Scientifics until 2001. On November 1, 2012, Stephen T. Zarrilli succeeded Peter J. Boni as president and CEO. Previously, Zarrilli was chief financial officer of Safeguard Scientifics.

As the new CEO, Zarrilli wants to re-establish Safeguard Scientifics locally as one of the premier capital providers not only in the Philadelphia area but in the Mid-Atlantic region as well. “We want to be the place in Philly where an entrepreneur seeks capital,” Zarrilli says. “We want to be a real destination for people looking to grow their business.”

Zarrilli met Musser in 1994 when he was looking for initial capital for U.S. Interactive, a technology company that was also located at the Safeguard campus. “My relationship with Pete has grown over the years,” Zarrilli says. “For the last eight years we have served together on the board of Nutrisystem, and he has been a significant mentor in guiding my business career.”

Zarrilli shares three guiding principles he learned from Musser.

No. 1: Ensure that you have empathy for the employees and companies you interact with.

No. 2: Establish a common relationship with companies you are helping to grow. “Capital is important, but also recognize the value that you can bring to other areas,” Zarrilli says. “Be a mentor to CEOs and management teams where possible; help them to achieve goals by helping them to solve business problems. Don’t just think money will solve all growth needs.”

And No. 3: Don’t be afraid to take a risk; go with your gut.

The formula has worked well for Safeguard Scientifics. Zarrilli attributes the company’s success to its ability to provide resources beyond capital to companies Safeguard invests in, such as operational support, marketing support and financial or legal support.

Today Safeguard Scientifics has approximately 20 partner companies; most are located in the Mid-Atlantic region. One-fourth of them are headquartered in the Philadelphia area, including NuPathe (NASDAQ:PATH), and ThingWorx. Safeguard Scientifics continues to principally focus on technology and health-care companies.

435 Devon Park Drive
If Safeguard Scientifics is the go-to source for capital, then being located at the Safeguard Corporate Campus is an ideal place to make it happen.

“We want to try to use this campus as a hub of activity for entrepreneurial endeavors,” Zarrilli says. “We are working with our landlord to see our vision come to fruition.”

Safeguard Scientifics occupies a significant portion of Building 800 and may extend its footprint in the business park. The campus includes eight low-rise buildings built between the early 1980s and 2000s. It’s an ideal location, with plenty of parking, just one mile to the King of Prussia shopping district and very close to Routes 76, 202, 422 and the Pennsylvania Turnpike.

According to Jeff Mack, partner at Newmark (leasing group for the campus), “People love the environment at the Safeguard Campus. There’s a mix of “friends and family” companies including the start-up Gamespeed, to the headquarters for Safeguard Scientifics, Johnson Matthey (US), and TL Ventures. Most companies have their own building, and the windows open!”

On any given day, Musser can be seen strolling the Safeguard Scientifics campus, with his golden retriever Higgins II—a.k.a., “Chairman of the Floor”—alongside him.

More Secrets of Success
Musser earned a bachelor’s degree in industrial engineering from Lehigh University. He says he pursued that degree because it gave him “a broad background that allowed me to do anything I wanted to pursue.”

When deciding which companies he will work with, Musser says, “I look for chances to take something relatively small and with modest amounts of money and create real wealth. You want them to be worth something sizable themselves and create public value so everyone who is a stockholder benefits.”

Safeguard Scientifics refers to every company in its portfolio as a partner company, and owns anywhere between 20 and 50 percent of each. They make employees a part of every business they are a part of.

For information about 435 Devon Park Drive, Safeguard Corporate Campus, contact LV Real Estate Advisors by reaching Beth Vopper at 610-337-7619. For leasing information, contact Reid Blynn or Beth Maggitti Dixon of Newmark Grubb Knight Frank at 610-265-0600.