KALAMAZOO, MI — A private investment firm has formed with a goal of acquiring West Michigan small businesses, and those owned by alumni of Western Michigan University.
Sleeping Giant Capital, a Kalamazoo-based private investment firm with ties to Western Michigan University’s Haworth College of Business, recently announced the launch of a $50 million investment fund to generate economic, social and educational returns in West Michigan by acquiring small businesses.
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, according to a news release from WMU’s Office of Marketing and Strategic Communications.
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 located within West Michigan, according to the release.
The fund is being established to facilitate economic returns to the Kalamazoo area, Lepisto told MLive on Tuesday, Sept. 1.
Lepisto said the biggest problem Sleeping Giant is solving through its new program is the retiring generation of baby boomers in the area, who sometimes leave their businesses without a succession plan. The fund aims to address that transition of ownership, which requires a pipeline of talented future owner-operators.
“Those companies then have a choice of either liquidating or perhaps selling to private equity or other organizations that maybe don’t have vested interests in our community, they don’t use our banks, they don’t use our lawyers our doctors, they don’t live here,” Lepisto said.
Through the $50 million fund, Sleeping Giant Capital hopes to provide another option for those sellers, while also granting business professionals in the area a unique opportunity to become an owner in a non-traditional way, Lepisto said.
“We want to make sure the folks coming into our program are really representative of our community — so that means we’re looking at the Black community, women, veterans — to ensure everyone has an opportunity to own capital and we think this is a great mechanism to do that,” Lepisto said.
The Center for Principled Leadership and Business Strategy will soon announce a training program called Acquire, that Lepisto will be available to MBA students as well as experienced professionals. The digitally enhanced program will train aspiring owner-operators on sourcing, analyzing, acquiring and leading a small business of their own, Lepisto said.
Graduates of this training program will then be eligible to apply for a competitive process where aspiring owner-operators would be personally mentored by executives and backed by capital to source and acquire a company.
“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,” Lepisto 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.”
Particularly as economic insecurity remains high due to the pandemic, Lepisto said creating opportunities for those in West Michigan remains at the top of Sleeping Giant’s priorities.
“These initiatives create life-changing opportunities for West Michigan business professionals,” Lepisto said. “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.”
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 investment firm said.
“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.”
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