Launching successful start-ups is a passion of Kevin Shin. He has executed multiple mergers and acquisitions around the world in various sectors such as IT, real estate, green tech, manufacturing, agriculture, construction, and food and beverage. Safe to say Kevin is a start-up natural.
In addition, he has over 17 years of experience in the finance industry serving as a financial consultant at AXA winning multiple sales awards. He also led ChungKing Recording Studios where Russell Simmons and John King worked to bring Rap music into households. Here he restructured the corporation and brought this historic studio — with a roster that included LL Cool J, Michael Jackson, and Mariah Carey — back to profitability in three short months.
In 2004, Kevin founded an innovative corporation to house a venture capital company and a commodities trading desk. The venture capital company started at $20M in AUM in year one to $2.3B in AUM with IRR consistently in the ’20s before his departure in 2017.
Kevin also joined NewOak Capital as a Senior Advisor in 2009 on a limited basis and as a Limited Partner. He has worked with clients like Tongyang for restructuring their corporation during a financial crisis, Starwood Capital as a capital raiser and senior analyst for proposed deals, and taught Asia structure to multi-billion dollar hedge funds while working in Asia during his tenure at NewOak.
If you’re an investor or looking to launch a new business, Kevin’s start-up expertise is, literally, world class.
Can you share with us the story of what first introduced you into this business or helped you get interested in the business?
In my life, I was always able to stand on the shoulders of giants and I learned to respect advice in all forms, from a book recommendation to a discussion about politics or how to make myself a better person. I’ve always been lucky. My father is a strong figure, and growing up he never handed me anything. I remember the first business I proposed as a broke college student to my father. I wanted to build high-end custom PC’s for a small margin and asked to borrow $5,000 to get myself off the ground. He told me to write a business plan. Three business plans later, I had a $2000 loan with a hefty interest rate.
From that point forward I was on a mission to give back to people.
When my friend Andy called me and told me he wanted to come back to America after living abroad for seventeen years, I started brainstorming ways to help him land a job. Andy was living with me when we saw Phil Murphy win the election for Governor in New Jersey. Murphy had been a big supporter of legalizing cannabis, and that was the first time cannabis came onto my radar as a potential business opportunity. A few months later after much due diligence and reaching out to people who were working with cannabis to visit and discuss the opportunity, I knew this was larger than a local, one store operation. This was something I wanted to do with my whole heart. I saw the number of lives I could change in America, in my home country and thought if I could build a company it would be a worthwhile venture.
After months of preparation, strategy meetings, and hunting for the right people to join my team, I finally took the plunge, quit my job and started Grove Group. It all happened because I wanted to help a friend and in reality, he helped me. It is one of those situations that just shows that with an open heart good things can come your way.
Can you share the most interesting story that happened to you since you began leading your company?
Absolutely, while I was on my due diligence tour a friend of a friend took me to a warehouse storing cash after years in the business and multiple stores opened. It was straight out of a movie, with stacks of cash after stacks of cash. Then I saw there were four cats with the security and I asked the question, “why do you have cats here?” The response was, “Rats were eating the money and we didn’t want to order pest control to broadcast we were sitting on this much cash, so we got cats and the rat problem disappeared.”
Are you working on any exciting projects now?
We are working on a really interesting project that is pre-revenue and purely a venture capital play. They produce over 400 compounds found in the cannabis plant via cellular agriculture. This is so they can produce any specific molecule at a fraction of farming cost without mold issues or farming mistakes like auto-flowering. Given that the future of the cannabis market needs to see the agricultural market mature for any major player to develop serious products, this is a significant step forward that the market needs. We are still taking funding so the science behind it is solid, and for a pre-revenue company talking about a $30 million dollar valuation just with a proven scientific method behind it is exciting. The fact that they have already received funding if they make key hurdles at a $95 million dollar valuation just shows how far the market can mature.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Every partner and person who joined Grove Group deserves my thanks. I am surrounded by highly accomplished colleagues who can paint the picture in a light I would never see without their help. The networking genius of Tiki Barber, my co-founder, is unparalleled. He is one of my favorite people, just so down to earth and genuine, while asking all the right questions, and a major part of the reason we are here. I am thankful for everyone in every corner of this office. This is the most talent from diverse disciplines assembled under one roof in less than a year I have ever seen, from operations and technology to marketing and government relations. The segments we can list as happily serviced extend from food and beverage to distribution to things as far out as the chip in your credit card are represented at Grove.
I would be amiss if I didn’t mention my wife. She is raising our two sons while finishing dental school at Columbia. Without her unilateral support to pick up more time with our kids and do workbooks with them while being a student then none of what I can contribute would count. I have two sons, one that is almost four years old and the second closer to one year and my wife didn’t bat an eyelash at me when I came up with this idea. She just told me, “You always do what’s best for our family, so just do it already.” That was the five-minute discussion from the only person who could convince me to not work with cannabis. I was lucky, really lucky in that trade.
This industry is young dynamic and creative. Do you use any clever and innovative marketing strategies that you think large legacy companies should consider adopting?
Yes, yes and yes. But if I told you then I should quit my job now. Can’t give away too many secrets!
Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?
- This is a young person’s market. When you talk about Millennials and see old stalwart giants failing like Chili’s, then you know a shift is coming for the future. You look at the statistics and young people prefer cannabis as a safe option for enjoyment.
- Research in the market has started and now some real money is being invested in cannabis. The cannabinoids market potential will quickly be realized just by applying methods that already exist. In the 1920s there were already a large number of medical applications for cannabis and we will see an exponential increase in usage. This is like discovering penicillin for the first time again. I hope safer sleeping applications and anxiety medications can be derived in the future to reduce the potential of prescription overdoses. DEA doesn’t even have overdose records for cannabis.
- As cannabis gets more widely accepted the number of criminal convictions being expunged will be great. If you look at prison populations and young kids with a minor offense like marijuana possession and how that can affect a life in the long term, this is a very positive step. And will definitely help minorities.
1. The cannabis public stock market and seeing public offerings at 80 times gross revenue due to a lot of hype since people don’t know what to invest in. People choosing the only thing they can find easily and investing in a lot of public cannabis stocks is totally unhealthy as an investment. Private deals are the space to be in and you should rely on professionals to rate them.
2. I once saw a deal with a great location and a great story and some decent partnerships, but the owners decided to price their retail business pre-revenue and pre-construction at $30 million dollars. The fact is that that owner raised money at that valuation when sunk costs were at most $1.2 million. Just because they are selling cannabis doesn’t mean it is good business; look at the rent and the OPEX and estimated net profits. There is a discipline needed for investing that most investors are not sophisticated enough to develop including tranches for investment and goals to reach more funding. Some people are selling lotto tickets with some nice packaging and investors will lose their money.
3. Enforcement, given that cannabis, will impair your ability to drive has to be accepted and just like alcohol you don’t want to give this to a minor unless they have a medical need. I think education must improve and accurate enforcement technology has to be developed. Driving impaired is never cool, the physics behind a weapon that weighs 4,000 lbs and can go 100 miles per hour is just dangerous.
Aside from your particular vertical, which other cannabis ancillary industries do you think have very strong potential in the next few years? Can you explain why?
Research and development. Currently, we know of only a few ways to work with cannabis from a tincture to the flower and I think that the delivery method will expand. When you have the population at the level it is now, we will come up with clever ways of delivery. Distribution is also very cool to look at since it is currently an abstract painting that you have to blink a few times to come up with some interpretations to work within the future. There have already been some really interesting methods proposed and this will continue to develop. When you thought the tobacco industry was dying, all of a sudden vapes came along and revived an industry that had all these negative connotations. When you look at any industry there is a cycle of re-introduction or re-invention in their themes that make them work in the current environment, if you can’t adapt you will eventually just fade away. A great example is McDonald’s, they are currently doing a made to order quarter pounder since fresh is good despite adding a few seconds to your order, I personally think Ray Kroc would be proud.
What advice would you give to other CEOs or founders to help their employees to thrive?
In the first couple of years if you don’t’ have the support I do then I would say that a strong voice with clear goals is the biggest benefit for a CEO. Any CEO that wavers with any challenge doesn’t have the vision and foresight to take the company to the first level. I hate to sound like a broken record, but I am surrounded by talent that I respect and am not new to the CEO game so I am just really happy where Grove stands right now.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Prison reform, opioid reform, minority support in three short points. All three of these issues should be discussed and the benefits are what America needs.
What is the best way our readers can follow you on social media?
You can connect with me personally on LinkedIn, follow us on Twitter, like us on Facebook, and watch our informative videos on YouTube. I love connecting with individuals who are either in the industry or support it. We also have a great team at Grove Group Management, so feel free to reach out and a member of our team would be more than happy to answer any of your questions.
Jilea Hemmings is the CEO & Co-Founder of Leaf Tyme. She is running a series on Leaders In The Cannabis Industry.