2 min read March 2024 — Invest: is joined by Michael Burcham, Executive Partner of Shore Capital Partners, to discuss how the firm has leveraged its capacity and expertise to guide businesses into major growth and scaling opportunities. “We look for partners who have a growth mindset, are experts in industry, and want to see their business scale, but need our administrative and capital expertise to achieve that,” he says.
How has Shore Capital Partners grown over the past year?
As investors, our priorities are in healthcare, business services, food and beverage supply chain, real estate, and industrials. That has given us exponential growth year-over-year. Along with our headquarters office in Chicago, we opened our Nashville office in 2019 to be closer to the healthcare talent here. Today, we have 20 members of our investment and operating team based here. Having a presence in Nashville has been a great advantage for our companies in the healthcare sector.
What have been the most significant market opportunities in Nashville recently?
We love the access to talent here in Nashville. The depth of talent is remarkable, from seasoned healthcare and logistics professionals to a growing tech industry. Nashville is home to a number of great colleges and universities in Nashville, so we are able to hire talent as they finish their degree programs and fill positions quickly. I also serve on the board of the Nashville Health Care Council and I chair the Healthcare Council Fellows Program. Now in its eleventh year, this program brings healthcare talent from around the country to Nashville for a six month concentrated study of healthcare trends as well as the core issues to be solved. Through both of those experiences we have developed deeply meaningful relationships and discovered new healthcare concepts to invest in.
How is talent development and coaching influencing how the firm develops talent?
Up to 40% of Nashville’s workforce are new graduates, so executives need to master the skill of managing a multigenerational workforce. While the boomer generation is beginning to retire, there has to be an understanding that Generation X and millennials respond differently to and need different things from their leaders. There are many people who are put into leadership roles who have excellent subject matter expertise in their industry but not a lot of experience in leading multigenerational teams. Often, that is where they tend to struggle. It’s great to understand the fundamentals of finance, operations, sales, and acquisitions. But understanding how to unleash the discretionary effort of an individual based on their generational preferences and world view is a leadership skill moving forward.
How are partnerships a key component of your growth?
We partner with younger organizations to help them grow by connecting their market knowledge with our expertise in scaling and growing businesses. We’re a Micro-Cap private equity fund, so most of our partners have been individual or family businesses that have grown to $6 million to $10 million in revenue but have gone as far as they can with the capital they have. By partnering, we help our partners grow by both acquisitions of other smaller companies as well as creating structures to help generate organic growth. We look for partners who have a growth mindset, serve as experts in industry, and want to see their business scale — but need our administrative and capital expertise to achieve that.
What is your assessment of the current macroeconomic environment?
While access to debt (and interest rates) matter, we are a private equity business with cash to invest in businesses. We’re also very good at forecasting and planning ahead. For example, we were planning for recession pressures over a year ago. Since we were prepared, we have been able to execute based on what we knew was coming. It gives our portfolio a level of comfort knowing we look for longer-term trends in the market and have the resources to capitalize on those trends.
What are the challenges facing the market today?
Our challenges revolve around making sure we identify the right kind of partners. Having our own internal sourcing team helps dramatically. They are able to identify partner opportunities for us to explore. But even if we identify someone who wants to partner with us, they must have the right cultural mindset to qualify. It’s all about finding the right partners. The second challenge is hiring the right C-suite leadership team to scale that business. Most of our founders will have the capacity to run a division or local operation, but often lack the expertise to jump from a $10 million business to a $200 million company. So we need to find the right talent to lead a high growth company.
What is your outlook over the next two to three years?
Our outlook is very favorable and we like the market dynamics we see. Healthcare will continue to be a good investment area and the overall growth of Nashville will lead to additional investments in business services, food and beverage supply chain, and industrials. There is a great infrastructure here for logistics because most interstate highways run through Nashville. We fundraise in those verticals every other year or so. I suspect we will grow another 20% to 30% over the next few years.
What makes Nashville a great place to do business?
I came to Nashville 40 years ago with my first job in Healthcare. I immediately fell in love with the city. What has kept me here is Nashville’s creative culture and collaborative community. There are various types of entrepreneurs from artists and songwriters to small business owners and healthcare pioneers. That creates a contagious environment – a place where people want to stay and build their careers. As a result, it’s a very vibrant economy which tends to have much softer landings during tough economic cycles. Nashville has a strong and resilient economic infrastructure and as long as we keep the right leaders in place, that will continue to be the case. Nashville is a very progressive and welcoming city – and that sense of inclusion, the nucleus of great talent, and the drive for better technology and innovation make it an exciting place that people from all backgrounds want to live and work.
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