Editor’s Note: John Shen is a founding partner of Sunstone Management Inc, a private capital management and investment firm, and the CEO of American Lending Center, a specialized non-bank lender focused on EB-5 visa investment opportunities. Both companies are headquartered in Downtown Long Beach and employ a total of 33 people locally. American Lending Center, which was founded in 2009, has offices across the nation. Together, the two companies have a total of 44 employees globally.
LBBJ: Your company, Sunstone Management Inc., has garnered some attention recently, especially through its involvement with the city’s first startup accelerator. Can you provide some company history?
Shen: The company started back in January 2015. We don’t have a long history, but this company has grown tremendously in the past few years. A part of the reason is that before we started this company, we already had a pretty strong, high net-worth clientele that we built with our other company, American Lending Center. So we have many investors who are ready to make some investments. This is a company that we believe would be able to provide them with those opportunities.
LBBJ: Sunstone Management Inc. focuses on finding small business investment opportunities for international investors. How common is this investment approach and why did Sunstone decide to focus on it?
Shen: I’m a big advocate for small business. If you look at how we operate all our businesses, I think the key is that we love small businesses. We believe that small business and entrepreneurs – grassroots entrepreneurs – are the true engine of the U.S. economy. I mean, they create 70-80% of the jobs. We love those business owners, we love to see them grow, we love to help them. This is why we started American Lending Center using the SBA loan program as the primary investment vehicle. Now, Sunstone [has the same philosophy]. We love to look at opportunities where we can invest, but we can also help the small business to grow. At this point, the primary investment programs we have built for Sunstone include our fixed-income fund that goes to the lower-middle market [segment of the economy]. These are still small businesses, but they’re a little bit larger than the small shops on the street. We’re also looking at a lot of venture capital opportunities, where we can help startup companies to grow. So that’s our main focus for Sunstone.
LBBJ: Long Beach is home to a robust financial services industry. What sets Sunstone apart from the competition?
Shen: Long Beach has a solid financial sector, but I don’t think it has a solid foundation for startups. The traditional finance industry doesn’t really help startups; it doesn’t really help them in the way that it helps other sectors. Startups need some special financing opportunities because, let’s face it, they don’t have a solid cash flow, which means they can’t get a traditional commercial loan from the banks. They don’t have a lot of assets where they can secure any financing or any equity. All these things are challenges for startups to grow. They can’t access the traditional capital. So this is why, I think, Sunstone can help them: because we do private equity funds. We have access to capital that we can use to support the small business growth.
LBBJ: Personally, you’ve been doing business in Long Beach since 2009. Can you talk about your experience working in the city?
Shen: I love Long Beach. Before I chose the World Trade Center location, I was actually shopping around. I looked at different locations in Southern California and I thought Long Beach had a unique location. It’s a big port, so there’s a lot of trade activity here, and it’s a very dynamic city as far as the economic structure – the ecosystem here – [goes]. Geographically, it’s [well-positioned] to attract high-quality employees to work here. It’s not too far from LAX, it’s not too far from Orange County, it’s not too far from Downtown Los Angeles. Yet, it doesn’t have the traffic, it doesn’t have the big city problems that we usually see, for example, in Downtown L.A. This is the reason that I thought this was the best place to do business. Over the years, I [have come to] believe that we’ve made a smart decision. Long Beach, to me, is the best place to work.
LBBJ: Where do you see as the biggest opportunities for foreign investment in Long Beach?
Shen: The port business is an interesting opportunity for a lot of foreigners. I’ve got clients who told me that they wanted to relocate to Long Beach simply because they were in the export-import business. But I think on top of that, Long Beach has a pretty active government that has pushed out a lot of new policies to support international businesses to relocate to Long Beach. We have been entertaining delegations, a lot of entrepreneurs, businesses from other countries. We know that they love Long Beach. It’s going to take a little bit of time to attract all this foreign investment to Long Beach, but I think the future looks really good.
LBBJ: What are some traits or skills every executive should strive to cultivate?
Shen: Number one, you have to love what you do. This is the key. You need passion to lead a company. As an executive, you’ve got to work hard. You lead by example, so you need to let people – especially your employees – understand that this is a great business. That’s why we work hard. And the other thing is that you need to mold your company into a well-run machine. In other words, you need to create chemistry, you need to create a culture that supports the operation. I think we’re still in the process, but I enjoy the process. Corporate culture means that if you’re part of the company, you share the same vision, you share the same values; that you can click with anybody else in the company and do anything that [the] company wants you to do. I think that’s the key.