Leveraged buyouts played to Bain Capital's analytical strengths and Romney's caution. If venture investing requires vision, leveraged buyouts demand precision. To determine how much to pay, and hence to borrow, buyout firms must figure out how much cash their targets can generate. Overestimate cash flow by just a few percentage points, and the company misses debt payments and plunges into bankruptcy.

Despite the success of Staples, the venture capital world had too many unknowns for Romney's taste. So he steered the firm to focus squarely on leveraged buyouts. "I didn't want to invest in start-ups where the success of the enterprise depended upon something that was out of our control," Romney recalled recently, "such as 'Could Dr. X make the technology work.'"

Bain Capital applied the "Bain way" to increase the value of the firms it acquired.

In 1986, it bought Firestone Co.'s wheel-making division, renamed Accuride. Bain Capital revamped production, restructured executive pay, and offered discounts to customers that gave Accuride all their business, instead of splitting it among competitors, according to the book The Loyalty Effect, a collection of business case studies written by a Bain & Company director.

Accuride's earnings rose 25 percent. Eighteen months later, Bain Capital sold Accuride to mining conglomerate Phelps Dodge Corp. Bain's $5 million investment had ballooned to more than $120 million.

"Bain Capital is the model of how to leverage brain power to make money," said Howard Anderson, a professor at MIT's Sloan School of Management. "They are real first-rate financial engineers."

But, he says, "They will do everything they can to increase the value. The promise (to investors) is to make as much money as possible. You don't say we're going to make as much money as possible without going offshore and laying off people."

Not that Anderson has a problem with this approach. In addition to being a business school professor, he has also been a Bain Capital investor.

Despite being in charge, Romney usually didn't put together the firm's deals. Instead, he was the careful manager, testing assumptions and keeping his talented, aggressive group of partners together.

Romney opened meetings with corny jokes. At Stanford, Rehnert had been inducted into the honor society, called Order of the Coif. Romney would wonder aloud why he hired someone who went to barber school.