Running a Minority Enterprise Small Business Investment Company (MES-BIC) has never been easy, as Walter Durham, president of the nation's oldest one, MESBIC Financial Corp. of Dallas (MFC), well knows. "When we started in 1970, we were understaffed and undercapitalized, and I didn't know anything about the venture capital business," he says. "We lost money until 1975," the company's first profitable year.

MFC is no longer in the red. It has been profitable in three of the last four years and in 1981 earned $68,000 on revenues of $494,000. In April, the Small Business Administration and the President's Task Force on Private Sector Initiatives gave Durham an award -- the first of its kind -- for "serving as an example of how the private and public sector can work together toward economic progress."

MESBICs, inaugurated by President Nixon in 1969, are private institutions that invest exclusively in companies owned or controlled by members of minority groups. They are regulated by the SBA and are eligible to sell notes or stock to the SBA to leverage their private capital.

Starting with $150,000 from one investor in 1970, Durham tried to persuade Texas corporate executives that aiding the growth of minority-owned companies would contribute to a favorable business and social climate. Since then he has talked 82 banks and corporations into buying shares in his company -- significantly more shareholders than any other MESBIC can claim. "We are extremely well connected in the business community," Durham asserts.

MFC's supporters include banks, law and accounting firms, and industrial companies of all sorts, many of which contribute expert advice -- or even just a crucial introduction -- to MFC clients.

MFC's private capital now totals $2 million and is leveraged with another $1.8 million of SBA money. It invests primarily in Dallas/Fort Worth-area businesses, but makes a few investments in other parts of Texas and in other states. Its 20 portfolio companies include a window-glass contractor, several restaurant companies, an oil-field equipment distributor, a radio station, and an electronics company.