By Andrea Van Essen | May 24, 2019
Kevin Tupy has been successful in the Sioux Falls business community for some time now, but his latest venture should have local business owners and startups pricking up their ears.
Crescent Capital Holdings is an investment firm started by Tupy in 2016, with a focus on retail and real estate.
“I really use it as a platform to invest in businesses, locally and regionally,” Tupy said.
Tupy’s background in both retail and real estate is extensive. In 2001, he opened his first Z Wireless location, a premier Verizon Wireless dealer, which eventually grew to about 1,200 locations nationally (now operating as Victra).
After years of leasing retail spaces, he shifted his focus and began learning more about the other side of real estate.
“Throughout the process of growing stores, first in the Midwest and then nationally, real estate was always key to a successful business,” Tupy said. “When I found myself mostly divested from the day-to-day operations of the business, real estate was just a natural progression for me, and so it’s been interesting to be on the other side of the coin now, as the landlord.”
Crescent Capital Holdings currently includes 30+ pieces of real estate in its portfolio, with a mix of office space, commercial property, retail, and some industrial spaces.
Within Crescent Capital Holdings, Tupy has built out several supporting operations including Crescent Property Management and Crescent Real Estate Group, a residential brokerage group. The latter is just a few months old, but Tupy says they’ve already secured a few listings.
On the property management side, Tupy says they primarily work with their own buildings but are starting to expand to third-party properties.
“It’s grown into a fairly sizable business of its own,” he said.
Through these different spheres of business, Tupy maintains that retail and real estate focus.
“It’s where we feel we can excel, it’s what we have a successful history in, and we’ve got an experienced team,” he said.
Where Does Crescent Capital Holdings Invest?
When it comes to investment, Crescent Capital Holdings has its eyes on a tight niche.
“Our initial goal was to invest in businesses that were beyond seed, beyond that initial startup, just a little more mature,” said Tupy.
Specifically, Tupy seeks out businesses with EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) of $500,000 to $1 million.
“That’s below what they call middle market, which is $5 to $25 million, but we’re trying to find that niche beyond startup where businesses are right on the cusp of needing additional capital and management guidance,” Tupy said.
As such, Crescent Capital Holdings isn’t the first place a new business should turn to for funding, but it’s certainly a firm to keep on your radar as your business develops.
However, Tupy is not one to turn down a great opportunity.
He emphasizes that Crescent is not a private equity firm, but an investment firm. While he does work with partners, the firm does not solicit investors for funds, meaning much of the capital is his own.
Without a lineup of outside investors to keep happy, Tupy has the ability to take risks on certain ventures.
“Typically we try to invest in a bit later stage than startup, but if it’s a really solid concept with a proven industry, then I’m in,” he said.
Ultimately, Crescent is seeking businesses with a sustainable revenue stream, the opportunity to expand beyond their current structure—whether through unit or revenue growth, and most importantly, a strong partnership.
“I’d rather invest in a solid team with a more challenging environment than a solid business with a challenging team,” Tupy said. “I have a passion for developing people. I love to create value in people’s lives by giving them opportunities to be successful partners. I just want to see people succeed and realize their professional and personal aspirations.”
When businesses partner with Crescent Capital Holdings, Tupy believes it’s crucial to give them latitude and flexibility to run the business.
“We’re heavily involved in the capital structure, but we’re not experts in everything so we lean on our operating partners to manage things as we see fit,” he said. “It’s very important to be flexible and adaptable to different styles and philosophies of management.”
Tupy also believes in the power of incremental progress when it comes to business management.
“From my early days as a Verizon operator, their model was, “Make progress every day,” and that’s the central core of what we try to do,” he said. “You improve and grow the business by implementing a long-term outlook with short-term attention.”
Crescent Capital Holdings and Sioux Falls
While Tupy doesn’t limit his investing to Sioux Falls or South Dakota, he’s proud of his hometown and sees vast potential in the area.
He credits much of the city’s success to its strong network of business people willing to reinvest in the community.
For him, that looks like spending time with individuals who are building businesses or thinking about it, and investing in real estate with a long term vision in mind.
“Obviously we all look to make money and turn a profit, but I think there’s a lot of people in this city that have a longer term vision for it and they put their money where their mouth is,” Tupy said. “I aspire to be considered one of those one day.”
If you’re interested in getting on Tupy’s radar, he encourages entrepreneurs to reach out directly.
“We want to talk to people who are passionate about building a business, starting a business, investing in a business,” he said. “They can stop on by the office, they can send an email. We’re always there to help.”