A private investment firm with ties to Western Michigan University recently launched a fund that will help aspiring owner-operators acquire small businesses in West Michigan.
Kalamazoo-based Sleeping Giant Capital, a firm launched out of WMU’s Haworth College of Business, said it established a $50 million investment fund with a goal of generating economic, social and educational returns by acquiring small businesses primarily based in this region.
The fund seeks to take equity positions in companies with $1.5 million to $10 million in revenue and transition a new owner-operator into leadership of the company.
Managed by Derrick McIver and Doug Lepisto, co-directors of the Center for Principled Leadership and Business Strategy at the Haworth College of Business, the fund will pursue at least two acquisitions per year with 80% of acquisitions within West Michigan.
The issue the fund seeks to address is that the transition of ownership requires a pipeline of talented future owner-operators. To solve this, the Center for Principled Leadership and Business Strategy will soon announce a training program that is open to MBA students, as well as experienced professionals. The interactive, digitally enhanced program will train aspiring owner-operators on sourcing, analyzing, acquiring and leading small businesses.
Graduates of this training program then will be eligible to apply for a competitive process in which aspiring owner-operators will be mentored by executives and backed by capital to source and acquire a company.
Sleeping Giant Capital was designed to create a “big win” for various stakeholders, including West Michigan businesses, investors, aspiring owner-operators and the Haworth College of Business.
According to McIver, a record number of baby boomers are looking to retire and transition the ownership of their businesses, but they lack a clear successor. This creates a dilemma — and an opportunity — for business owners.
“When owners lack a successor, their legacy and jobs are at risk, and there is risk the business will be acquired by those outside the local community,” McIver said. “Owners want someone they can trust that lives in the same community. With this fund and training program, we wanted to create a mechanism to generate investment returns and ensure business ownership stays with those who want to create economic prosperity and be good stewards within their community.”
Lepisto said the initiative will create “life-changing opportunities for West Michigan business professionals.”
“We want to show them that there is an attractive, meaningful and viable third career path that is different from climbing a corporate ladder or starting a new company. They can buy a company. With the right training, support and capital, we can create the next generation of business owners,” he said.
A portion of the profits from acquired companies will be distributed by Sleeping Giant Capital back to the Haworth College of Business to maintain and expand the impact of the Center for Principled Leadership and Business Strategy.
“The partnership with Sleeping Giant Capital is a win-win for our community,” said Satish Deshpande, dean of WMU’s Haworth College of Business.
“The opportunity to grow talent and expertise in the West Michigan business community is something that the college is deeply committed to. The acquisition training program and the ability for those who complete it to access capital will greatly enhance opportunities for MBA students, business professionals and those business owners looking to sell their companies to future owners who will lead in ways that honor their own financial and emotional investments.”
More information is at sleepinggiantcapital.com.