Acquiring Minds Podcast Summary
Episode: The Flywheel of Buying Businesses in a Single Region
Date: September 11, 2025
Host: Will Smith
Guest: Doug Lepisto, Sleeping Giant Capital
Overview
This episode features Doug Lepisto, co-founder of Sleeping Giant Capital, a unique place-based investment firm focused on acquiring and growing businesses exclusively in Western Michigan. Will and Doug explore Sleeping Giant’s innovative model blending search fund, accelerator, and holdco structures with a deeply rooted local and university partnership. Their approach challenges both conventional private equity norms and the boundaries of what impact and non-concessionary investing mean. The conversation is a deep dive into building a thriving acquisition ecosystem anchored in community, relationships, and long-term thinking.
Key Discussion Points & Insights
Doug Lepisto’s Background & Motivation (05:03–14:18)
- Background: Doug’s career is a blend of academia (psychology major, PhD in management and organizations) and the business world (management consulting, professor at Western Michigan University).
- Motivation: Passionate about life-changing moments for students, aspiring operators, sellers, and the broader community.
- Academia vs. Business: Doug enjoys teaching but pushes back on academic stereotypes. He values integrating theory and practice and seeks to redefine what a business PhD can be—more akin to the medical model (teaching, researching, practicing).
“For us, it’s about life-changing moments, whether with undergrads or with operators. If you just lock yourself to writing papers, you miss engagement in the real world.”
— Doug Lepisto [07:15]
The Origins of Sleeping Giant Capital (15:03–19:12)
- Observation of Macro Trends: Inspired by HBS's ETA course and the “Silver Tsunami” (wave of baby boomer owner retirements).
- Niche Opportunity: Noted a lack of structured capital or support for aspiring business buyers in West Michigan.
- Higher Ed + Business: Doug and his partner Derek wanted to bridge higher education and business ownership through practical, practice-based learning.
The Sleeping Giant Model – Place-Based Investing (19:12–23:21)
- Essence: A hybrid model—part search fund accelerator, part holdco, but rooted in a specific geography (West Michigan).
- Why Place Matters: Many local entrepreneurs don’t want to sell to PE and value local, long-term stewardship.
- Local Relationships: Emphasizes engaging with local banks, service providers, and strengthening regional economic ties.
“A seller might not want to sell to PE. They don’t want their company bought and sold in three to five years. Place-based investing builds that trust.”
— Doug Lepisto [19:12]
Economics: Impact + Returns (23:21–29:59)
- Non-Concessionary: Combines positive local impact with market returns.
- Competitive Differentiation: Accesses off-market deals and builds alpha through reputation and relationships. Sellers trust Sleeping Giant’s commitment to the region.
“We are not an ‘impact fund’ in the sense that we give lower returns. We’re aiming for PE-level returns while elevating our community.”
— Doug Lepisto [23:47]
- Balancing Place and Returns: They sometimes pass on higher-yield decisions to protect long-term reputation and deal flow.
How Searchers Join & What They Get (30:21–37:10)
The Pathway for Owner-Operators
- Demographic: Primarily mid-career professionals (30–45), post-MBA from industry.
- Intake: Word-of-mouth, then an intensive eight-week, one-on-one executive education course (“Acquire”).
- Outcomes: Some go solo, some work with Sleeping Giant (as “CEO in Residence”), others leave.
- Support: Rigorous selection, hands-on diligence, and financial, legal, sourcing supports.
Economics for Searchers (CEO in Residence)
- Equity Structure: Superior to traditional search funds ("10/10/10"—10% at close, 10% vesting, 10% performance).
- Emphasis: Find the operator first, then the deal; entrepreneurs have real ownership from day one.
- Committed Capital: Sleeping Giant brings the certainty of committed capital for transactions.
“We are a people-first shop. That person needs to sit across from a seller and build trust.”
— Doug Lepisto [37:40]
Portfolio & Deal Dynamics (40:04–44:09)
- Current Scale: Seven acquisitions, $90–100 million in combined revenue, 300+ employees (as of air date).
- Deal Profile: Enduringly profitable “boring” businesses (e.g., manufacturing, value-add distribution); generally 2–5 million EBITDA, too big for SBA, often too small for traditional PE platforms.
- **Deals are typically from owners prioritizing legacy and community roots over PE-style exits.
Competition & Seller Perspective (46:25–48:33)
- Competing with PE & ESOPs: ESOPs require complexity sellers often avoid; SG provides a clean cash-out and CEO succession.
- Long-Term Hold Commitment: Reputational risk deters “flipping”; local trust is key differentiator.
“Could we buy 20 businesses and flip them to the coasts? Sure. But that would be the end of Sleeping Giant.”
— Doug Lepisto [48:33]
University Connection & The Flywheel (67:10–71:17)
- Student Engagement: Undergraduates get high-value practicum placements on portfolio company projects, guided by exec mentors.
- Mutual Benefit: The university gets “real world” immersion for students; companies get insights, talent, and growth projects.
- Talent Pipeline: Students often become future business leaders or participants in the local business ecosystem.
“Our students did 900 outreaches for one portfolio company, generating a hundred customer interviews and real strategy options.”
— Doug Lepisto [67:10]
Scaling & Replicability (56:30–80:22)
- Market Size Limitation: While Sleeping Giant’s model is capped by local TAM and time (the ‘silver tsunami’), the opportunity is still substantial.
- Expansion: Currently more good deals than searchers—talent mismatches, not deal scarcity.
- Replication Potential: The model can work elsewhere if you have five ingredients: closely-held businesses needing transition, local capital, operator pipeline, a university or training connection, and a “GP” to network and unite these stakeholders.
“We have more deals we could do than searchers to back… Our model could exist in any American community with the right ingredients.”
— Doug Lepisto [59:52], [71:48]
- University Connection: Valuable for networking, credibility, and talent, but not strictly required for replication if local investors don’t prioritize it.
Notable Quotes & Memorable Moments
-
On Being Laughed At by Fund Managers:
“I remember the first time we proposed this… I’m pretty sure the person laughed at me, literally. You guys are just absolute morons.”
— Doug Lepisto [63:33] -
On Fitting in Nowhere:
“Business people think I’m an irrelevant PhD; PhDs think I’m an evil private equity capitalist, a barbarian at the gate. I fit in no world all the time.”
— Doug Lepisto [10:18] -
On Model Innovation:
“If Brent Beshore, Warren Buffett, the search fund community, and a university had a baby, that’s what we would be.”
— Will Smith paraphrasing Doug [00:37] -
On Local Reputation:
“If you walk around, you said one thing and did another… there’s a reputational shame network effect. You can do that if you don’t live in the place, but you can’t here.”
— Doug Lepisto [48:33] -
On Name Origins:
“Derek’s hometown in Thunder Bay, Canada, has an island called the Sleeping Giant—because there’s gold under it. But, honestly, we just liked the name.”
— Doug Lepisto [61:41]
Timestamps for Key Segments
- 05:03 – Doug’s professional and academic background
- 14:18 – Higher education’s changing value proposition
- 15:03 – Sleeping Giant’s origin story
- 19:12 – Overview of model and “place-based” thesis
- 23:47 – Defining “non-concessionary” impact investing
- 30:21 – The path for prospective owner-operators
- 33:27 – Searcher economics and why 10/10/10
- 40:04 – Current portfolio and acquisition profile
- 46:25 – Competing with ESOPs and seller motivations
- 48:33 – Local trust versus flipping for profit
- 54:44 – How the Acquire course fits, selection and trust
- 56:30 – Scaling constraints and data on local opportunity
- 59:52 – Why searcher talent is the bottleneck, not deal scarcity
- 67:10 – How students and the university tie in with the model
- 71:44 – What’s needed to replicate Sleeping Giant elsewhere
- 79:15 – Is a university partnership strictly needed?
Resources & Contact
- Sleeping Giant Capital: sleepinggiantcapital.com
- Doug’s preferred contact: LinkedIn
Closing Thoughts
Sleeping Giant Capital is an innovative, regionally anchored acquisition firm rewriting the playbook for search funds and small business investing. By prioritizing place, community trust, and a long-term approach, they’re building both financial returns and sustainable local impact. Doug’s insights into both the successes and real-world challenges of their model offer a potential roadmap for replicating the “Sleeping Giant” effect in other regions across America.
For more episode summaries: Acquiring Minds Summaries