Home Depot’s Founders Combined Early IPO Financing With a Retail Model Borrowed From Costco and Walmart

Home Depot was built by a founding team with distinct roles: Bernie Marcus as CEO, Arthur Blank, merchandiser Pat Farah, and investment banker Ken Langone. Langone helped take the company public when it was about one to two years old, at a stated IPO market capitalization of $32 million; the account leaves open how much of that outcome reflected his banking ability versus broader market conditions.

Before the IPO, Ross Perot was described as having offered to finance Home Depot in exchange for 70% ownership. The deal collapsed after a dispute over whether Marcus and Blank would drive Cadillacs rather than Chevrolets, and the founders walked away.

The founders were characterized as retail operators, not home-improvement specialists. Home Depot’s model combined their prior experience with Costco-style warehouse retail, including pallet-based self-service, while also adopting Walmart-influenced employee compensation and everyday-low-price positioning. It was not established whether the company seriously considered a Costco-style membership model.