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| For Main
Street Resources, It's People |
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Daniel Levinson, founder and chief executive officer of
Main Street Resources.
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by JOE CHRISTINAT
BUYOUTS
NOVEMBER 03, 2003
Perhaps the last thing you'd expect from a group of accountants
and economists is for them to form a people- oriented private
equity firm. Throw in a founder with a degree in applied mathematics,
and it's not a stretch to think the group would spend its time
huddled behind closed doors, crunching numbers. But for the
folks at private equity firm Main Street Resources, it's all
about personal interaction.
"I consider money and private equity expertise to be commodities,
so I tried to figure out what more Main Street Resources can do to differentiate
ourselves," said Dan Levinson, who founded Main Street in 1998.
"We want to provide more than just money, and we want to bring
people in that are committed to developing the resources and
personnel that add value to our investment process-and to the
companies."
Main Street Resources is currently using its inaugural fund, Main Street Resources I SBIC LP, to
finance deals. It is a $66 million vehicle, which includes $22
million from LP commitments and $44 million from SBA leverage
commitments. To date, the firm has invested $17 million in six
portfolio companies (see snapshot).
With plenty of dry powder left, Main Street Resources allots a generous amount
of time bringing its portfolio company CEOs together.
Levinson says his firm never forces the CEOs of his portfolio
companies to interact, but lets them know that resources are
available. "We are doing very innovative things, such as having
CEOs of separate companies work together," he said. "Because
we're small and regionally-based, we help our CEOs to get to
know each other."
The idea behind this is simple. "We offer our CEOs access to
strong professionals, all within our portfolio and investor
base. For example, if a CEO needs PR advice, strategic consulting,
a systems expert, access to a potential customer, or a new CFO,
our portfolio CEOs and investors jump in."
Aside from acting as liaison between portfolio companies in
need of specific services, the firm boasts a 90- person list
of individual investors with backgrounds ranging from retired
CEOs of manufacturing companies to surgeons to appointees on
MIT's senior research staff.
"For a normal private equity firm, managing 90 individual investors
might seem like a nightmare, but to us it's a gem," said Levinson.
"It's a lot of work, but it's who we are."
Also unique, Main Street Resources posts its investors on its Web site. "We've
been doing this for a long time, it's about trust," said Levinson.
"That way, we can be easily verified through third party means.
Almost everyone running a midsize company in the Northeast will
know at least a few of our investors."
Main Street Resources invests in companies from Maine to Maryland, preferring
to stay regionally focused in an effort to allow easy access
across the firm's portfolio.
So to what does Levinson attribute his firm's desire to be more
than just a financial firm? "We approach the world through people,"
he said. "We have a good mixture of business savvy, strong basic
business and financial skills, but we look for people that are
service and people-oriented. Our whole strategy is based on
proper communications, and making sure our team is filled out
with people who aren't asking what's in it for me?'"
Regarding this philosophy, the Main Street Resources team pools its compensation
(after investor payouts) and donates 10% of earnings to charity.
"We do more than just giving money, we're on the board, and
we offer feedback and support."
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