GRAND RAPIDS — With the April 15 close of an initial investment in excess of $30 million, Bridge Street Capital Partners LLC was officially up and running. “We still have a lot more money to raise,” said John Meilner, Bridge Street managing partner. “But we’re going to take the next couple of months and stay pretty focused on investment opportunity.”

With a target of $50 million, Grand Rapids’ first private equity fund — formed in conjunction with The Right Place Inc. — is on the smaller side of the private equity arena. Meilner says Bridge Street was designed to be just that.

With its smaller size, Bridge Street will seek out investment opportunities ranging from $2.5 million to $7.5 million with companies ranging in value from $5 to $50 million, the majority being in the $15 million to $20 million range. Although that may seem like a large spectrum, Bridge Street’s high end is the low end for many private equity funds, which rarely become involved with businesses valued at less than $50 million. A prime example is the most recent employer of Meilner’s partner, Chicago-based Bill Kaczynski. Trivest Partners’ private equity fund didn’t look at anything below $50 million.

To date, three out of every four opportunities Bridge Street has investigated have been involved in the transition of ownership. “We’re looking at entrepreneurs and founders of companies who for reasons other than the business, such as retirement or health, are seeking to sell,” Meilner said. “Many owners thought about selling in the late ’90s, but times were good. They were growing, profitable; but the last couple of years have not been nearly as much fun, and some of the folks are just flat out tired.

“We want to be a solution to that business owner today.”

He said many owners fear selling their business to companies that may consolidate or dismantle their firms. Many times they want to sell to management, but although management was well compensated, they don’t have the capital to purchase the company. Sometimes the only option is to maintain partial ownership — essentially giving away the upside of the business and retaining the risk.

Bridge Street’s strategy is to provide the owner an exit strategy and possibly assist management in buying the company. One such method, Meilner explained, involves the owner retaining 25 percent or so of his investment in the company. The idea is to allow a more orderly transition, as the owner is able to stay involved but with only a quarter of the risk. The owner could also partner with Bridge Street in acquiring the company, investing in the company he or she helped build.

Bridge Street may also acquire companies in situations where the owner makes an immediate exit, and could do this either as a single investor or as a joint venture.

Meilner said most of Bridge Street’s ventures are likely to be transitional or buy-out. The firm also seeks where companies need “a shot of capital to execute their plan.” He said such firms will trade an equity stake to Bridge Street in return for being able to build a new facility or otherwise expand.