Doug Lepisto Built a Place-Based Holdco Buying Boomer Businesses in Western Michigan

The Setup Doug Lepisto is a tenure-track management professor at Western Michigan University's Haworth College of Business. In 2019, he and co-founder Derek McIver launched Sleeping Giant Capital, a fund that only buys businesses within Western Michigan and holds them long term. Doug's pitch: if Brent Beshore, Warren Buffett, the search fund community, and a university had a baby, this is what you'd get. The opportunity was sitting in plain sight. Southwest Michigan (excluding Grand Rapids) has roughly 5,759 boomer-owned businesses employing 72,000 people and generating $13B in sales. Coastal PE was circling, but sellers who spent 30-plus years building local companies didn't want their names on a deck in Manhattan three years later. The Deal Model Fund I closed at $34.5M. Fund II is being raised and is expected to be meaningfully larger. Target profile is boring and consistent: - $2-5M EBITDA - 50-100 employees - 30-40+ years in business (one portfolio company is 75 years old) - Manufacturing, value-added distribution, technical services tied to regional supply chains (auto, medical device, office furniture, ag, CPG) Each deal is run by a searcher-CEO. Sleeping Giant's equity package beats the traditional search fund 8.33% x 3 tranche model: 10% at close, 10% vesting over four years, 10% performance-based. That's 30% potential on the common versus 25%, with a tighter geographic mandate and a bench of institutional support behind the operator. Operating Moves Seven acquisitions are closed. Combined portfolio throws off $90-100M in revenue across roughly 300+ employees. Deal cadence is projected at 2-3 per year. The bottleneck is not deal flow; it is qualified searchers. Recruitment is word-of-mouth only, targeting mid-career professionals aged 30-45, typically post-MBA, who are either based in Western Michigan or willing to relocate. Selected candidates run through an 8-week individualized program called The Acquire, taught by Derek, with curriculum tailored to each operator's gaps. Western Michigan University students plug into portfolio companies on growth and market-expansion projects. Students get live reps, portfolio companies get cheap analytical horsepower, and the university gets a real pipeline of operators instead of consulting case LARPers. Operating Lessons - Place-based accountability is a moat. If Sleeping Giant flipped 20-30 businesses to coastal PE, the reputation would collapse in one local newspaper cycle. That constraint is the product sellers are buying. - Sellers self-select on legacy, not price. Some sellers told Doug they were embarrassed to wear company-branded gear after selling to out-of-state PE. Local continuity is worth real basis points of multiple. - ESOP alternative framing wins. ESOPs carry governance overhead and 10-year deferred payments. Sleeping Giant offers cleaner structure, faster cash, and a pre-vetted local CEO. That pitch converts owners who were previously ESOP-leaning. - Searcher equity economics matter at recruitment. 30% common trumps 25% when the searcher pool is the constraint. - Narrow geography tightens sourcing, diligence, and post-close support. One drive radius means the partners can be on-site the same day a machine breaks.