The interview below is part of an ongoing effort by McGuireWoods to profile women leaders in private equity (PE). To read previous profiles, click here. To recommend a woman for a future interview, email [email protected].
Hilary Fleischer is a partner with Strattam Capital. She sits on several portfolio boards as well as on the leadership council of the Jerome Fisher Program in Management & Technology at the University of Pennsylvania, where she earned her B.S. and B.A.S. degrees. Fleischer earned her MBA from the Stanford University Graduate School of Business.
Q: What attracted you to PE?
Hilary Fleischer: I was initially attracted to PE as I believed it would give me the opportunity to use both “hard” and “soft” skills. This mix is what has kept me excited about my work a dozen-plus years later. In addition to the “hard skills” — things like analytics and valuation — PE is so much about people, understanding their natures and building relationships. I enjoy the continuous evolution of the role. As an associate getting started, I was mostly focused on running numbers, but the job is so much more than that. Don’t get me wrong; you do have to be really strong on the analytics, but as you move up, you have to maintain and develop different skills. For example, I’m now focusing more on deal structuring and the soft skills of convincing someone to work with you, which might arguably be the harder part of the job.
When compared to other kinds of investing, PE interested me because of its long-term nature. I get personal fulfillment from working directly with founders to help them build long-term value for their businesses. And working in tech PE was especially attractive because, while I appreciate software market fundamentals, I love learning about the different industries and end-markets that benefit from technology innovation.
Q: What advice do you have for PE firms and investment banks looking to bring on more women?
HF: It is critical to think long term. Firms should not just try to get associates into their associate pool; they need to present an attractive and viable career path for women. That starts with mentorship. Senior men and women need to help young people out and teach them the skills needed to move up in the organization because what it takes to be a good associate isn’t the same as what is needed to be a good vice president and then partner. Associates need to be coached along the way to be able to succeed, but women in particular also need to see that there are women in senior roles, and that progression is possible. And I would advise firms to hire more than one female associate in a class, so they know they’re not alone.
In addition to mentors, women need peers with whom they can trade ideas and feedback. I have personally benefited meaningfully from this kind of networking, both informally and through formal memberships in groups like PEWIN, the Private Equity Women Investor Network.
Q: Why did you join a new firm in its infancy?
HF: When I moved out to the Bay Area as a student at Stanford, I was surrounded by entrepreneurs. I didn’t think I wanted to start my own company, but I knew I wanted to be involved in building something from the ground up. Joining a first-time fund as one of the initial investors was my own unique version of joining a startup. There was a bit of risk, since I joined before we made our first investment and before we had completed our first fund closing, but I loved the idea that I’d get to see it all. I have been able to learn more about how firms run, including things like investor relations, fundraising and fund operations. I believed I could have more of an impact on the team and the way we engage with companies than joining a more established firm.
When I joined about six years ago, we had five or so people. Now, we’re double that. We’ve got about $500 million in assets under management, which is also pretty significant growth. And we’ve honed both our differentiation in the market and our operating engagement with our portfolio companies. We’ve moved into permanent office space, and our annual meetings have doubled in size. We have partnered with 25 different founders, and it has been fun to see this all develop.
I’ve helped shape elements of our business model that are now part of our broader everyday processes. That’s been the exciting and fulfilling part of joining a new firm. We have a lean team, so I feel connected to everyone in the firm and at the portfolio companies. We give our portfolio companies extra support since the early ones are so critical to the foundation of the firm and really need to succeed.
Q: What is your advice to women-led companies that are looking to secure PE funding?
HF: Fit with your investors can be just as important as the financials. Do your due diligence, and find out the firm’s approach and how much attention you’ll get. Some firms are more hands-on; some are more hands-off. I would recommend doing reference calls with other business owners to hear about their experiences. Find the approach that aligns with what your goals are for the business. And as you look at specific investors, be sure you understand not just their funds and strategies, but also who they are as individuals because you’ll be working with them directly. At Strattam, alignment is incredibly important to us, which is why we developed our five-point plan. Essentially, the idea is we all agree up front on what we’re going to do together so that there are no surprises. I think that kind of transparency is critical.
I’ve also found that deals are more successful from a valuation perspective when you find a great adviser whom you trust, so get someone who can help you in the process and can preach your company’s growth story. That way, as you’re out in the market talking to investors, you have other people repeating your story.
Another key piece of advice is to be up front about your goals. Remember: You’re signing up for a long-term relationship with your investors, so you have to clearly state what you want — for yourself and for your employees.
To contact Hilary, email [email protected].