Preheat your oven to 400°F and prepare a baking sheet by lining it with foil or parchment paper.

In a large bowl, mix together the ground beef, breadcrumbs, egg, steak sauce, ketchup, mustard, onion powder, garlic powder, and season with salt and black pepper. Shape the mixture into small meatballs (about 16 to 20) and place them on the prepared baking sheet. Bake for 16-20 minutes until the meatballs reach an internal temperature of 160°F.

While the meatballs are baking, heat 1 tablespoon of butter in a large skillet over medium-high heat. Add the sliced mushrooms and sauté for 3 to 5 minutes, stirring occasionally, until softened. Remove the mushrooms from the skillet, leaving any juices behind.

In the same skillet, melt the remaining 2 tablespoons of butter over medium heat. Once melted, whisk in the flour, stirring constantly until smooth. Gradually pour in the beef broth, followed by the tomato paste and Worcestershire sauce, whisking to combine. Bring the mixture to a simmer, scraping up any browned bits from the skillet, and cook for 3 to 5 minutes until the gravy thickens.

Return the mushrooms and their juices to the pan, stir to combine, and simmer for an additional minute. Once the meatballs are done, transfer them into the gravy and heat for another minute.

If desired, sprinkle chopped parsley on top before serving. Enjoy!