Investing in an often-overlooked business model—family-run businesses—can create jobs, strengthen communities, and support families.
Nearly two years ago, my business partner and I founded the private equity firm, The HiGro Group. Part of our purpose was to positively impact families and local communities through business growth. We sought to do this by acquiring control positions in family run businesses that illustrate stable financial and operating history. Armed with only our unique backgrounds and experiences–two preacher’s kids turned financiers, one from Haiti and the other West Virginia–we became destined to use our twenty plus years of investment banking and private equity experience towards a larger vision.
At HiGro, we work with business founders and owners to advance the companies they poured their passion into. These founders often grew their business to a specific scale, but for various reasons, require more financial and human capital firepower to continue driving the company’s growth. For capital sourcing, we call upon our unique and curated investor bases that understands HiGro’s ability to balance the demands of meeting the owner’s vision, positively impacting people, and generating financial returns. Convening owners of businesses and our investor base leads to more intimate and proprietary conversations. Through gaining the trust of all parties, we define success to include positive impact in local communities, allowing us to be true impact investors. For example, we work with business leaders in our network to grow our portfolio companies and use portions of incremental profits to provide living wages and drive hiring decisions.
Since our founding in 2016, we have acquired two long lasting and very profitable companies: CSA Services Solutions, a 20+ year old company, with nearly 300 employees nationwide, servicing mostly Fortune 500 healthcare companies; and DRS Imaging Services, a 55-year-old leading provider of document management and conversion technologies, with nearly 200 employees across seven offices nationwide and servicing nearly 1,000 unique customers. How did we do it? We believe our formula for success works based on the following tenets:
Create and Foster Generational Relationships. The HiGro brand is built on developing multi-generational relationships. This approach means none of our conversations or decisions are made for short term gains or in a vacuum. For example, as we carry out negotiations, we require sellers to own and operate with meaningful stakes in their business after we close. For us to succeed we also need our owners to be our strongest advocates, and with this knowledge, we know we must always strike to be fair.
Provide Service, Not Just Capital. HiGro is a full-service provider. We believe that throughout economic cycles, the availability of capital reaches commoditization periods. This requires us to provide more value to all of our stakeholders: (1) business owners; (2) employees (3) investors; and (4) the communities we serve. In practice this means while we control the major decision-making functions, our role is not to simply sit idly by. At times we may serve as Chief of Staff to the CEO of our portfolio companies. At other times we serve as counselors to front line employees or advocates to city governments. This means being readily available to support any task at hand. For example, during our ownership of our two initial portfolio companies, we’ve worn more hats than we can count, including: forecasting the financials, actively working with our lenders, creating and managing board communications, creating new revenue streams, spearheading public private partnership initiatives, leading and assisting with senior executive hires, advising municipalities on utilizing workforce development practices and winning keynote customers. With humility and hard work, we work daily to identify new businesses opportunities, implement overall strategies and to simply serve all stakeholders.
Think Different and Be Different. We believe the biggest rewards come from creativity and differentiation. To that end, we are constantly pushing the envelope on new ideas and approaches to improve our companies and our results. A notable point is how we drive differentiation in impact. While driving the bottom line is a fundamental truth to being good stewards of capital, we believe viewing and treating the local communities supported by our portfolio companies as resources to be nourished and cared for. Given we seek to acquire businesses with significant numbers of employees, we believe fostering partnerships with local community leaders to be important to driving success. For example, we spearhead the corporate social responsibility strategies within both of our portfolio companies, including leading conversations for partnership with key influencers and decision makers with local, regional and state level officials.
With hard work and a bit of luck, the risk paid off on our maiden voyage. Within 15 months and on the heels of two successful platform acquisitions, we became indirectly responsible for the livelihoods of nearly 500 employees and hundreds of families through our portfolio companies.
We are a little under two years into our journey, but we have every reason to look forward optimistically, extending a collaborative eye towards our next partners and our next wins. We look forward to continuing sharing our successes with you for years to come.
Learn more about the HiGro Group and their mission at their website.