Senior Paulie Harraka has long dreamed of being a full-time NASCAR driver. But while the talent showed itself rapidly, finding the funding for his dream has taken more time.
His company, Paulie Harraka LLC, has raised more than $2 million from investors since its establishment Dec. 1, 2011. The company funds Harraka directly, allowing him to use the proceeds for his racing. He currently drives the No. 5 Ford F-150 for the NASCAR Wauters Motorsports in the Camping World Truck Series, one of the many levels of professional auto racing.
“Unless you have significant financial backing, you can’t just keep climbing step-by-step,” Harraka said. “You hit a ceiling in racing because it’s such an expensive sport. You can’t just go about it based on talent.”
Harraka targets potential investors with a business model that depicts the current landscape of NASCAR funding. Rather than asking them to invest in the sport, Harraka said he approaches investors with a more personal business proposition.
“The economics of the investment makes sense,” said Eric Keller, chief operating officer of Nano Terra, Inc. and one of Harraka’s investors. “[Harraka] has put a lot of time into making a model that fits into the return that individual investors would look for in this investment… [but] nobody is doing this for the return.”
Harraka’s investors come from wide-ranging backgrounds. Like Keller, Daryl Morey, the general manager of the NBA’s Houston Rockets, saw potential for a profitable relationship with Harraka as both a financial opportunity and the chance to give money to somebody charismatic.
“I think [Harraka] is really unique not only from an investment standpoint but as a person that people can really rally behind,” Morey said.
The funds have helped Harraka to hire a race team to manage his operations and support travel to competitions across the country. The team works on an array of tasks, including building race cars and engines.
Harraka credits Carmichael Roberts, a Duke alumnus and vice chairman of Nano Terra—a Mass.-based nanotechnology company—with the success of the company’s business model.
“[Roberts] has helped me think entrepreneurially about ways to achieve my dreams, including thinking of creative business ideas, writing business plans and the like,” Harraka said. “He has gone the extra mile in continually making himself available to me and to the company as we continue to fund raise and grow. Carmichael went from mentor to me to becoming one of our lead investors and is on the board of directors of Paulie Harraka LLC.”
Although the company almost directly finances Harraka’s racing, many of his investors do not have a prior significant history with NASCAR. Harraka’s skill in selling the opportunity beyond the financial benefits has helped garner interest.
“I have never seen a NASCAR race and I had no intention of ever investing in NASCAR,” Keller said. “I invested in [Harraka] because he’s a remarkable kid, and he’s fundamentally different than any other driver in the business.”
Keller is somewhat unusual among contemporary NASCAR investors, who often give out money to new drivers more on the basis of existing funding than talent.
“This was a chance to flip that model,” Keller said. “We’re going to take people who are used to investing in technology and science and put that in [Harraka] to build a company that allows talent to flourish.”
Keller said the model could potentially assist many drivers and even expand to other entertainment industries that have a high cost of entry.
Besides creating his own company and racing full-time, Harraka balances a major in sociology with a history minor and markets and management certificate. Each semester, he speaks with his professors on an individual basis regarding his racing conflicts with classes.
“When you really have a dream and you’re dedicated to it, then you’ll be willing to make a lot of sacrifices along the way,” he said.
The double life of zipping around racetracks and Duke’s campus has not been easy for the senior, with different people giving him competing advice at every step along the way. But Harraka has made it through almost four years now balancing those commitments and knows the two undertakings can work together.
“I had guidance counselors telling me to stop racing and go to college and I had people in racing telling me to give up school,” Harraka said. “I know that the two can be symbiotic. I’ve taken classes that have helped me in my racing career [and] I’ve been able to connect with a lot of alumni. Being a Duke student has been a part of my brand as a racer.”
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