As a board member at SVP Seattle & managing partner at CMBIgroup, Mike is interested in pushing social enterprises to reach their full potential.
Q: Who are you? Introduce yourself as you would at a dinner party.
A: I’m Mike Cadigan, co-founder and managing partner of CMBIgroup, a boutique investment and advisory services firm with an emphasis on serving lower middle market companies. We have a particular focus on serving social impact companies.
And, I’m an active Board member of Seattle’s Social Venture Partners. SVP helps individuals make a greater impact with their giving, funds and strengthens nonprofits, and invests in collaborative solutions to critical social challenges.
Q: What is your background? How does it differ from what you are doing now?
A: CMBIgroup invests in and advises for private companies with revenue ranges of $1 - $50 MM on growth strategies, exits, and acquisitions. We work with both emerging and more mature companies, but regardless of their stage, these are companies that traditional investment and advisory firms neglect. And it’s a shame because it’s the companies in this range that are vital to our communities.
CMBIgroup’s services grew from my experience and strengths. I have an MBA with a concentration in finance and accounting. My partner in CMBIgroup has an MBA as well along with deep management expertise. We have invested and managed our own lower middle-market companies for the last 20 years. We are now looking to extend our expertise to a larger number of companies via advice and collaborative capital to create a larger impact.
Q: What are you working on right now?
A: Well, we’re pushing to develop those growth companies and assist them in reaching their potential. And we’re providing exit advice for companies owned by those in the older generation, who are looking to retire or otherwise transitioning to a new life-stage.
And in the big picture – and this is something I’m really excited about – we’re helping to attract more capital overall (not just our own) into this market segment, and especially marry funding with social impact companies. There’s a lot of promise and potential in that segment, and it would be a shame to see that potential go unfulfilled. Most private equity firms and investment bankers seek to invest in and advise companies over $50M in revenue. We think there is a significant opportunity to provide both advice and collaborative capital for those businesses past the start-up stage but not quite a middle-market enterprise for either growth or transition purposes.
Q: Why did you join Impact Hub?
A: We wanted to be able to develop as much of CMBIgroup’s practice around the impact sector as we can. Impact Hub brings together all of these incredible people dedicating energy and time to develop these social enterprises, and we want to be involved. We love that Hub members look at not just ways to make money, but how to do it in a responsible, conscientious way. We want to be part of that network. We want to support it.
Even in M&A and other transaction-oriented projects, there is an opportunity to advance the community’s interests. We believe there is a social good by assisting boomers who are ready to transition out of their company, but their company may not be ready. Small business transitions that are not successful have negative implications for the community (loss of job, taxes, human capital, etc.). Conducted with planning and expertise, these transitions can create a positive impact to the community by having these businesses successfully transfer either to a third party that shares the same set of values or to their employees.
Q: What is something that really excites you right now?
A: Hanging around Impact Hub you can get worked up about a lot of different stuff. Right now, I’m especially excited about how more community-conscious businesses are becoming – it must be the influence of the millennials! Community-consciousness seems to be more mainstream; more and more businesses are starting to incorporate that social responsibility element into their mission, and that progress is really exciting. You can think about profitable growth business while being aware of the community and recognizing the community as a stakeholder and the need to be fair to other stakeholders – and not just profits. That’s really exciting and interesting to see where that all goes. Maybe we’re overexposed because we’re in Seattle, but it seems to be a national trend.
Q: Where do you usually hang out when you are at Impact Hub? How often are you here?
A: Usually I’m here at least 2-3 days per week. I have a private office in the expanded space – which is great. I can close the door and bear down on work, or leave it open to interact. And one of the great aspects of the Hub is that there are so many opportunities to interact. The building’s spaces really lend themselves to socializing, and the community of people here is so vibrant and interesting, that you find yourself wanting to chat with everyone.
Q: What’s the last book you read?
A: I just read Michael Lewis’s Flash Boys, about high frequency traders and how some investors were using that system to gain an unfair advantage. The book was quite interesting. And it is promising that there are investment bankers out there who figured out that the trading game was rigged, and took it on themselves to create a new, transparent platform. That takes courage. It’s refreshing to know people with that integrity are out there, even on Wall Street.
Q: What’s on the horizon for you?
A: I like to think the horizon, generally speaking, consists of impact-focused investment and advisory projects. I hope there’s an industry of impact companies that grow up and mature down the road, succeed, make money, and give back at the same time. And I’m optimistic that will happen. On a personal note, my youngest son turns 18 in a couple of years, so I might have empty nest symptoms on my personal horizon – so I’m looking forward to warding those off by mentoring businesses looking to reach the next level.
Q: You have $10M to spend in the next year, and you can’t spend it on you, your friends or your family. How do you spend it?
A: That’s tough. I would go back to what we’re trying to accomplish at CMBIgroup: investing in impact and community-conscious companies. That’s really my passion, and the passion of CMBIgroup.
Contact Mike at [email protected]