The lower-middle market generally occupies the largest section of most economies and hence, it significantly contributes to the GDP and generation of employment opportunities within the nation. Apart from its vast, complex, and dynamic landscape, this segment of the economy has a huge potential despite the risk involved. However, with the onset of the COVID-19 pandemic, many of us are wondering what it means for this community. In addition to teaching how remote work can be used effectively to increase efficiency, this period can cause some serious shift in the way this market operates all together. This means there’s ample opportunity to get other things right as well before everything goes back to normal. Keeping operations up and running throughout this year while contributing socially and economically without disrupting the environment will be considered a huge benchmark to measure an organization’s aptitude for growth, and to attract prospects and investors in the future. In this segment, we sat down with Brett Hickey, the Founder and CEO of Star Mountain Capital, a leading lower-middle-market asset management firm, to talk about how current events have shaped his perspective as compared to earlier in terms of looking at his future both personally and professionally.
As a specialized investment company purpose-built to address the challenges and opportunities of investing debt and equity capital into established, private, small, and medium-sized businesses, we are investing in the Growth Engine of America.
Aspioneer (A):What motivated you to establish Star Mountain Capital in the first place and do you think you are fulfilling that purpose?
Brett Hickey (B): Growing up in a small town of 10,000 people in Northern Canada, it was natural to collaborate with your neighbors and community. I think of the small business marketplace similarly. After working on Wall Street for Citigroup / Salomon Smith Barney as an investment banker in New York City, I thought it would be great to bring those type of large market resources to passionate small and medium-sized business owners in a purpose for-profit manner where we could help grow jobs, optimize ESG and create strong shareholder value for our investors at the same time that too in an aligned manner. I believed the world was ready to recognize that purpose and profits could be aligned. Therefore, with a passion to create a culture and collaborative ecosystem, I founded Star Mountain Capital, LLC in 2010. As a specialized investment company purpose-built to address the challenges and opportunities of investing debt and equity capital into established, private, small, and medium-sized businesses, we are investing in the Growth Engine of America. Our goal is to create and protect value for our customers, clients, team, and community. At present we have people in over 20 cities across the U.S. and 2 locations in India, and our mission is to continue being a leading U.S. lower middle-market asset management firm, serving the businesses we invest in, the diverse investor base that entrusts us with their capital, our dedicated team and our community with the highest degree of ethics, integrity, passion, and commitment as a value-added member of society.
A:Job creation is indeed an important aspect of any business especially at the lower-middle level as employed capital assets and the number of employees is a crucial metric to classify a business’s growth. Please tell us more about how you approach this like a business yourself and what changes you wish to bring in this regard?
B: The importance of job creation cannot be overstated and that is a key element of ESG for Star Mountain. In addition to creating more than 40 jobs within Star Mountain itself since I founded the business in 2010, the approximately 80 growth-oriented investments we have made in U.S. smaller businesses we believe ensure support for job creation and diversity of people that have benefitted from Star Mountain’s investments in portfolio companies across the U.S. At Star Mountain, we place a high degree of value on team diversity believing it leads to better decision making and superior investment performance.
I believe that in everything we do, we can always do better and that we should pursue continued growth.
A: To succeed in any industry, it is critical that you stand out from the rest.How do you distinguish yourself from your competitors, and what do you think gives you an edge as compared to other players in the field?
B: Precisely, we believe the combination of leading large market expertise, decades of experience across multiple economic cycles, exclusive focus on the lower middle-market, tailored product offerings for both investors and the businesses we invest in, substantial investment in customized technologies, and award-winning culture including 100% of full-time U.S. employees sharing in the profits of the 100% employee-owned firm creates deep passion, focus, and alignment to maximize long-term stakeholder value.
A: What is your major concern right now, considering the ongoing COVID-19 situation and its aftermath once it subsides? Are there any specific steps you are taking to contribute to the fight against this virus?
B: We are always highly focused on where the world is going, which as a Canadian I like to quote Wayne Gretzky in focusing on “where the puck is heading” to help guide our investors’ capital and the businesses we invest in to protect capital and maximize long-term shareholder value. However, COVID has made us rethink the optimal way to work in a more energized and better work-life balance, particularly with young children. We are adapting with further use of technology and opening additional local offices across the U.S., most recently in Denver and Dallas. Apart from this as a small contribution from our end, we have set up Star Mountain Charitable Foundation supporting many causes locally and globally. Also, by creating free content for business owners and investors in U.S. small and medium-sized businesses on our YouTube channel, we are trying to help synthesize and educate people to help create jobs and assist others in making informed decisions. For our people, we are providing our team health-focused technology watches, healthy food, and complete homework systems to be fully functional at home just as in the office.
A:Let’s move on to lighter but still a significant topic. Leadership is a continuously evolving process. No matter how long one has been working, there is always something new to learn. What are the leadership principles that you have discovered over the years that have contributed to your success?
B: As a CEO, I believe team, culture, and strategy are some of the most important aspects I can bring our team. I attended and became an alumnus from Harvard Business School, later joining the Global board of Harvard Alumni Entrepreneurs and joined the Young Presidents’ Organization intending to become the best leader I could be. I believe that in everything we do, we can always do better and that we should pursue continued growth. We believe in an open culture where we can robustly debate ideas and investments without people taking offense to form the best decisions in a world without certainty but with the ability to make educated decisions. As in sports, I have always believed in leading by example and being a player-coach. At Star Mountain, we foster an environment of curiosity, cross-disciplined learning, and the ability to grow and take on as much responsibility as one can handle at any level of the organization.
A: Some may find our final question a bit nebulous and far out but we believe that all good leaders self-reflect about their legacy, not just as a professional but also as a person. So, what do you believe your legacy is going to be? How will the success of your company help manifest it? And what will be your endgame?
B: If we speak of legacy I want to be remembered as someone who authentically cares about our team, portfolio companies, and investors, creating value for all Star Mountain’s stakeholders as well as for my family. As we continue to grow larger, my focus has been able to shift more to strategy and “working on” the business while maintaining a team development and culture-centric mindset. Through the Differentiated year-round internship program, mentor programs, and empowerment, we encourage junior people to speak first and present work. In the future, I want to continue expanding our presence across the U.S. and providing additional products for our investors and flexible capital solutions for the private companies we invest in. Like what Blackstone Founder & CEO, Steve Schwarzman’s “What It Takes” says- Focus, perseverance, and long-term commitment are going to be critical to long-term success. It is inspiring to see what can be built with a strong plan and the will to succeed.