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Capital Pivot


Portrait of Shaun Stimpson, CEO of Mitten Fluidpower Corporation

CEO



Key Themes

  1. Shaun Stimpson is no career hermit. In 2021, he not only made the pivotal decision to leave his career in wealth management and start a search fund but successfully acquired a business soon after. CEO of Mitten Fluidpower Corporation and former Market Executive at the Bank of America Private Bank, Shaun uses leadership to navigate the unending challenges of running a firm.

  2. Shaun's "sponsorless fund" search model was unconventional but successful. A hybrid between the traditional and self-funded paths, it was supported by his business partner Robert Wolf and a network of mentors. Its merit demonstrates the power of straying from the norm and the importance of faithful mentorship in achieving entrepreneurial success.

  3. As a visionary with 13 years of leadership experience, Shaun believes that employment is ownership and that all individual contributors are a company's collective lifeblood. Shaun’s employee-as-owner leadership model has directly created success for Mitten Fluidpower Corporation and continues to inspire its members.

Fearless Wayfarer

When Shaun Stimpson decided to leave his lucrative position at the Bank of America Private Bank and step into the challenging realm of search funds, he was prepared to meet a vast abyss of uncertainty and immense stakes. Search funds are a safer alternative to venture capital-backed startups, but they are never risk-free. Funding the quest for an acquisition relies on investor support, approximately one in three search funds fails to secure a company within 24 months of launching, and even after a successful acquisition, a CEO role involves a whole new set of challenges. Shaun’s remarkable journey proved his mettle as he braved numerous setbacks during the search phase and a prolonged period of career ambiguity while dedicating time and effort to broaden his knowledge of search funds.

“I think the reason I was able to buy a business was: I had a lot of at-bats and got to try many different things. That's what led to me having success.”

CEO of Mitten Fluidpower Corporation, the Parker Hannifin distributor for upstate New York, and Founder & Managing Partner of North Iron Holdings, Shaun brings extensive experience in wealth management and leadership to his work. Before launching his search in June 2021, he spent over 20 years in the wealth management space, 13 years of which he was a leader in various management positions. Shaun’s ambitious tenure spans institutions such as Morgan Stanley and Merrill Lynch, in addition to the Bank of America Private Bank.


An Unconventional Search Model

It all began when Shaun drew a line in the sand in August 2016. It was a pivotal moment in his vision for the future. Over the next few years, he focused on search funds, diligently preparing for a search, and filling knowledge gaps that deal-sourcing experience or business school had not. In 2021, he switched gears.


Shaun established North Iron Holdings to seek and acquire a company which met particular criteria. He joined forces with his business partner Robert Wolf, who contributed capital for the search while Shaun drew from his personal savings for day-to-day living expenses, and they both owned 50% equity each. The traditional search fund model, which offers support from investors, advisors, and mentors, inherently requires independence and comfort with ambiguity for success. The self-funded search model, even more so. Shaun’s “sponsorless fund” was an unconventional hybrid that was made possible because of Robert’s faith in Shaun’s search. Robert's bold investment and willingness to take risks propelled Shaun's timeline forward, accelerating their collective pursuit. Without Robert, Shaun would not be where he is today. One of Shaun’s expectations while preparing for the search was that finding capital would be challenging, but he was quickly proven wrong.

“The day I updated my LinkedIn to say I was doing this, almost 50 people reached out to me and said, ‘Hey, if you’re buying a business, I'd be interested in investing.’”

While locating potential sellers also proved relatively straightforward, identifying the perfect company was more complicated. Shaun’s ideal scenario involved acquiring one with an experienced individual or team to bridge his knowledge gaps. However, the owner himself was the key source of expertise Shaun would replace in most cases. Still, nothing was impossible with the support Shaun had.

“The big vote of confidence for me was partnering up with a guy like Robert, and having the support of friends, family and my advisors as I went through this process.”

As a mentee, Shaun received valuable advice from mentors, mostly from his network. He was introduced to several people who became beneficial advisors, each playing a critical role in making strategic decisions and offering unique perspectives. One advisor Shaun particularly remembers—a professor who had owned five companies during his career—was a senior executive at a large company who had trodden a similar acquisition path. His generosity is one of the many testaments to the consistent openness within the search fund space.

“I am forever indebted to him for the time he spent with me, walking through situations in significant detail. We're talking multiple-hour phone calls. And I actually never even met this guy, because this was during the pandemic.

Ending the Search

Finding the right establishment was a formidable task. It took Shaun 18 months of surveying 50 opportunities and a rigorous 9-month sale process. Still, after an arduous trek, he successfully acquired Mitten Fluidpower Corporation, a prominent distributor of Parker Hannifin's hydraulic, pneumatic, and connector products. The business caters to original equipment manufacturers (OEMs) and maintenance, repair, and operations (MRO) customers in upstate New York.


Despite his expertise in the field, Shaun’s departure from wealth management was inspired by leaders like Lou Gerstner. Former CEO of IBM, the multinational technology company, Gerstner did not have a deep understanding of technology when he was recruited as the struggling company’s CEO. But he knew it had to be rooted in the marketplace to survive, and he noticed its employees were demoralized. Over the next six years, Gerstner turned the one-trick box maker into a leading service provider despite having no background in the field. Shaun had also met the CEO of a chemical company at a Patriots game who admitted that the lab was foreign to him, but understanding the general process was all he needed to lead successfully.

“I met enough guys like that to make me realize that I didn't need to go out and look for a wealth management business to buy. I could really impact any business given my experience in leadership, and really learn enough to be dangerous about the particular industry I’d be in.”

More concrete reasons that Shaun chose Mitten Fluidpower Corporation were the increase in retiring owners in such industries without committed successors to inherit their businesses, and the “value-add” strategy of operating across different sectors to make it significantly challenging for a company like Amazon to replicate and scale their operations in the same manner. Mitten Fluidpower Corporation also came with a leadership team of five individuals who could support Shaun with technical information and allow a smooth transition.


Leading a Newly Acquired Business

Upon assuming leadership of Mitten Fluidpower Corporation, Shaun made it a priority to personally connect with and understand the dynamics of the leading team. Its members welcomed him with open arms and showed no hesitations toward a change in leadership and operation. Shaun was also pleasantly surprised by the lack of resistance when proposing technology conversion for the corporation’s digital platform. So far, he has significantly expanded his knowledge of upper management and grassroots day-to-day affairs thanks to the leadership and warehouse teams.


Running a business requires an indomitable spirit. It entails managing departments, cultivating relationships, optimizing tools and processes, and generating revenue—oftentimes in the midst of ambiguity. A good CEO builds a robust bottom line and maintains enduring connections with people and partners. But none of this was news to Shaun—he was prepared for running and growing an organization to its full potential.

“I don't think I would have had as successful of a transition if I didn’t have 13 years of leadership experience: coming in, clearly articulating my vision and where I wanted the company to go, recruiting people to be on the same boat as I am, and moving us forward.”

Shaun continues to acquaint himself with fundamental skills such as cash conversion, which is a metric that represents the efficiency of a business through its cash flow. According to the U.S. Bank, 82% of businesses fail due to poor cash flow management—like any successful CEO, it is vital for Shaun to keep learning how to make his company thrive (Houston, 2020). The leadership team has been invaluable in their support, and getting to know everyone and understanding them as individuals have also given Shaun deep insight into the company. Shaun’s approach to growing Mitten Fluidpower Corporation without changing its identity was implementing a strategy that complemented the company’s previous work. This method ensured development on top of the existing structure and showed respect toward the leaders who built it. Shaun also sought help from a consultant hired during the search process with industry knowledge, who played a significant role in the pivoting decision and added credibility to Shaun’s plan. Overall, Shaun is pleased to report that the past six months have been exceptionally successful.

“If you take anybody who’s been hired in the last two years, I think the average tenure is around 19 years with the company. So the majority of the people have been here for quite a long time, and they want to see it succeed.”

Employee-as-Owner Leadership

Shaun’s initial boss at Merrill Lynch, Gary Hernandez, was a newcomer to the firm. Given the absence of prior rapport, employees were apprehensive about the compatibility of management style. A few months into their tenure, Shaun took the opportunity to check in with Gary and gain insights, and Gary responded along the lines of, “I really feel like I'm converting more people to be owners—as opposed to when I first got here, and we had a lot of employees.” Shaun was initially unsure about what he meant by this, but with time, the wisdom of the words sunk in.


For over a decade, Shaun has spent his leadership career by inspiring, not merely instructing. He believes that respect plays a prominent role in ownership and that employees should have a stake in the company.

“I hate when people introduce me as their boss. I'm not your boss. I'm your business partner. I'm here as the leader to remove any obstacles that you have. That is a big part of who I am and my leadership philosophy. I understand who keeps the lights on. At the end of the day, they're truly my partners.”

According to Shaun, even though he is the business's owner, spokesperson and public face, his absence won’t keep it from running. The people within an organization power it, and Shaun never forgets that. The ability to think like an owner empowers employees to go beyond menial labour to higher-level strategy and truly assess their client base. Shaun is also mindful that if employees leave a firm for a competitor, they take the customers with them, especially in departments like sales.


Marc Benioff was a similar empowering influence as the CEO of Salesforce.com (Ibarra and Hansen, 2011). Through the firm’s collaboration software, Chatter, he noticed that employees with critical customer knowledge who could add tremendous value were not even on management teams. Benioff decided to bring 200 executives and 5,000 employees together in a video service broadcast, and what came of this was a weeks-long dialogue filled with innovative ideas and empowered culture. Aligning the company’s mission with all 5,000 employees motivated them to participate, innovate, and communicate more. This inspirational approach is the new direction leadership has taken and is set to endure.


Advice for Acquisition Entrepreneurs

Inspiring people to innovate for 13 years and strategically pursuing risky entrepreneurship paths has taught Shaun some invaluable lessons. To entrepreneurs considering acquiring a business, Shaun explains that acquisition is a process and, ultimately, a numbers game. The more you try, the more you’re likely to succeed.

“The only way you're going to succeed is by getting in the batter's box and getting as many at-bats as possible.”

Shaun recalls that early in his search, he signed his first letter of intent (LOI) within a month of searching. But the deal didn’t work out, and he had to search for a business again, after which he found another opportunity and was disappointed by yet another collapse. Mitten was the fourth LOI Shaun had signed out of 50 hard-found possibilities. Despite the underlying incompatibilities that all 46 opportunities had, Shaun gained useful skills. He learned how to ask the right questions, exercise judgment, face the disappointment of failed acquisition pursuits, and, most importantly, persist. Admitting defeat is easy. But it destroys the potential to turn a crisis into applied wisdom. And Shaun’s legacy as an entrepreneur, leader, searcher, and CEO speaks volumes about the rewards of perseverance.


Conclusion

Shaun Stimpson began his search fund journey with zero opportunities and unlimited determination. As the CEO of Mitten Fluidpower Corporation, his leap from a coveted and familiar position in wealth management to successful entrepreneurship was painted by resilience, strategic vision, and commitment to empowering others. His story embodies the new face of management, characterized by collaboration, innovation, and a deep understanding of the value of every individual within an organization. Leaving your comfort zone takes self-work and teamwork. Shaun's journey clearly projects his entrepreneurial spirit and the boundless possibilities that lie ahead for those who dare to pursue their dreams. But his successful stewardship undoubtedly reflects the brilliant and supportive people he gets to lead.


Ribbon-cutting ceremony at new location, joined by the Greater Rochester Chamber of Commerce (June, 2023).

References

Houston, M. (2020, December 22). How This Cash Collector Turns Outdated Accounts Into Cash Quickly.

Ibarra, H., & Hansen, M. T. (2015, July 15). Are You a Collaborative Leader? Harvard Business Review.

 

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