The interview below is part of an ongoing effort by McGuireWoods to profile women leaders in private equity (PE). To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com.
Farrah Holder is a managing director at IMB Partners (IMB). She has more than 20 years of business development, marketing and finance experience. At IMB, she sits on the investment committee and oversees deal origination, marketing and communications, and all business development activities.
Prior to IMB, Holder co-founded ThinkNXT Marketing, a boutique marketing firm focused on developing and executing marketing and business development strategies for small to medium-sized businesses. She began her career as a financial analyst at Morgan Stanley in its investment banking division, then moved to the strategic ventures and investment group where she focused on providing operational and financial due diligence for venture capital investments in the online space. After pursuing her MBA, Holder joined Time Inc. as a marketing manager for Sports Illustrated, then joined Rodale as the director of strategy and business development where she structured and negotiated seven partnership agreements with Fortune 500 and startup companies.
Holder lives in Bethesda, Maryland, and serves on the boards of e&e IT Consulting, Carr & Duff, Virginia 529 Investment Committee and Hi-ARTS. She enjoys spending time with her family and friends and lives a very active life. She has a BS in commerce from the University of Virginia and an MBA from The Wharton School at the University of Pennsylvania.
Q: What attracted you to PE?
Farrah Holder: At the top of the list are the more obvious things about the industry. It is fast-paced, challenging and dynamic.
The appeal of PE doesn't stop there. My work allows me to use all facets of my brain and different skill sets: social and emotional intelligence, analytical and strategic thinking, intuition, and creativity. I really enjoy hearing stories of how entrepreneurs build their businesses and telling the story of IMB and why we may make a good partner to that business. Each day, my brain can be stretched by assessing the character or skills of a target company's owner and management team, reviewing a company's financials and evaluating the investment opportunity, or by analyzing growth opportunities that will lead to value creation for a business.
Outside the direct work with companies, I appreciate the endless opportunities to build relationships with the various stakeholders within the industry: accounting, bankers, diligence providers, finance sources and investors.
I never get bored of learning all the ways companies enter markets, serve customers or become a solution to a pain point. Working in the lower middle market, it's gratifying to significantly impact the growth trajectory of a business and the wealth trajectory of a family by being the first institutional capital infused in a business. I also see how teams get energized with the backing of a new capital partner, which propels the company to new heights.
Q: Why is it important for more women to pursue careers in PE?
FH: Women are currently underrepresented in PE, especially on the investing/deal execution side of the business. Studies have shown that PE firms with more diverse teams and/or teams that include women or are led by women tend to outperform those with less diverse teams. More diverse perspectives lead to better business outcomes. Again, studies show that more diverse teams are more creative, profitable, productive and socially responsible. Women tend to lead and solve problems in different ways than men. Women can often listen and read a room differently. They tend to be more collaborative in decision making and bring a different perspective to problems, solutions and opportunities.
In addition, women-led companies often face more challenges accessing capital. Having more women in PE leads to a greater chance that PE firms will recognize and invest in women-led companies or find avenues for them to gain access to capital. I try to be helpful to anyone who calls me for advice or an investment opportunity, but when female entrepreneurs call me, I often go the extra mile to introduce them to another source of capital or spend more time in the conversation brainstorming with them if IMB is not the right investor for their firm.
Q: What do you think is the biggest challenge facing women entrepreneurs? What advice would you provide to overcome it?
FH: One of the biggest challenges facing women is access to capital. This can be driven by a number of factors, including lack of networks to access capital, uncertainty around the process and/or terminology, or the size and scalability of business.
It's essential for women to network, network, network. There is a lot of capital out in the world, but you must know where to find it, understand what type of capital makes sense for your business and determine if your business will be attractive to a capital source.
Start by educating yourself and building your network. Leverage your company's bank. Commercial banks are multifaceted and often have various arms associated with providing capital. Take advantage of networking opportunities and educational seminars they offer.
Try to join organizations or participate in activities from groups like Young Presidents' Organization, Women's Business Enterprise National Council, National Association of Women Business Owners, National Minority Supplier Development Council and your local chamber of commerce. They often run sessions around scaling and accessing capital. You may also want to join industry groups so you can meet more like-minded entrepreneurs and spend time with those who have secured capital to learn from their experiences. These efforts will help with access and uncertainty around the process and/or terminology.
There are numerous, additional steps female entrepreneurs can take to help with the size and scalability of their companies. First, look for programs offered by your customers, especially Fortune 500 companies, that are designed to aid you in growing your business. Second, build a team around you that compensates for your weaknesses and best leverages their strengths and skills.
Lastly, try to run your business each year as if you are going to sell it. Even if you do not intend to sell, the rigor of thinking about your business in this manner will push you to create growth plans and put structures in place that will always make your company attractive to investors or capital sources.
Q: Why do you actively support providing capital to women entrepreneurs?
FH: Supporting women entrepreneurs is vital to the economic growth of our country and for the well-being of our communities. A more diverse entrepreneurial system leads to more innovation, prosperity, job creation and equality for all. Women-led businesses tend to have more inclusive and supportive work environments and more family-friendly policies, which can serve as an example for all businesses. Seeing successful, women-led businesses in our society provides inspiration and a blueprint that other women can follow. When others follow, it feeds the circle of a more diverse entrepreneurial system.
Providing capital and exit opportunities to women entrepreneurs and women-led businesses helps to level the playing field for access to capital. An injection of capital can provide scale, growth, succession and new thinking in and around a business. Studies have shown that women- and minority-owned businesses often face more barriers to securing capital for their businesses, even at the same size and in the same industry as majority-owned businesses.
In my role at IMB, investment bankers have told me numerous times that they do not have exit options for many of the women- or minority-led business they come across. We have positioned ourselves to be a unique buyer of these types of businesses within the utilities/infrastructure and government contracting sectors. We are a capital source that goes deep in these sectors and utilizes our strengths and capabilities to grow all businesses, especially diverse businesses. More than half of our investments have been with women- or minority-led businesses.
To contact Farrah Holder, email fholder@imbpartners.com.
