The following is a conversation between Molly Simmons, general partner at Tonka Bay Equity Partners, and Jeff Prouty at The Prouty Project. It’s part of an occasional opinion series on BringMeTheNews, in partnership with Prouty, featuring insights from business leaders.
Prouty: What trends are you seeing in the world of private equity?
Simmons: Overall, there is too much capital chasing too few high quality deals. The data I have seen says there is over $300 billion of “capital overhang.”
You are also the Chair of the Board for the SBIA (Small Business Investor Alliance). What are the future goals?
The SBIA is the premier organization for small – midsize private equity funds and their investors. Typical fund sizes are less than $500 million. We have nearly 250 members today, and in the future I would like to see us attract even more limited partners and general partners, as well as continue the networking, education and legislative outreach.
You see many businesses and many CEOs in your work. What “three bits of advice” would you offer CEOs, in general?
I would ask all CEOs to consider three big questions / concepts:
– Honestly assess your business and strategy today. What is next?
– Who are the stakeholders in your business? Whom do you need to pay attention to?
– What resources do you need to be successful? People? Capital? A partner?
I encourage CEOs, in general, to get out of the weeds if they want momentum. Our relationships are ongoing, but at Tonka Bay our investment period is typically 5-7 years, which is longer than others, but it goes by fast. We need velocity to really make a difference.
What about advice for the young man or woman heading into their senior year of college?
Be curious, with your classes and interviewing. Ask why.
Work really hard. Proactively network to get the internship experience you need, realizing that internships are not only for summer, and experience is more valuable than pay at this point.
Pay a lot of attention to your first job out of college. These early mentors will kick-start your career.
You grew up on a farm, got your graduate degree from the Harvard Business School, spent some time as a consultant with Bain & Co. How did you decide to get into private equity?
Anyone who knows me would say I am a people person. I didn’t start out in finance. As I grew in my roles in business and finance, I realized I wanted to partner with people, be aligned with the results of the business, but not tied to one particular industry or company. I love my job. Every day is filled with different people, new challenges, and exciting opportunities. As a board director, I get the privilege of working with management teams to help them get to the next level of growth and achieve their goals.
As a leader in your firm and on various boards, what are your toughest challenges in the business world?
Outside of trying to find one more hour every day, I’m always thinking about:
– Bold leadership: How can I be even more innovative? How can I help management teams?
– Focus: Am I making the highest and best use of my time and my portfolio partners’ time?
– People: What am I doing to develop my talents and the talents of my team and partners?
You’re married with two kids, ages 5 and 7. Any wisdom around juggling all your priorities in life?
There was a big sign in the gym of our high school that said, “There is no easy way.”
My husband and I think of ourselves as the Co-CEOs of our family. Here is some of our wisdom, which might be helpful to other parents:
– Spell out success. What are you trying to do, exactly? Chart your path.
– Who is going to help you? Draft the team that will help you create a high quality life.
– Be flexible and outsource. What non-core activities can you farm out?
As one of my early mentors told me, “Unless you are in indentured servant, life is really about tradeoffs, and it is your choice.”
I’m always curious about big goals that people have set for themselves. Any big goals that you’d like to achieve over the next 15-20 years?
Fifteen years from now, I want Tonka Bay Equity Partners to be known for “enduring partnerships, and lasting value.” Our success over the past 15 years was made possible through over 30 partnerships with business owners and management teams. We’ve developed expertise in building bigger better businesses together with management. We want to continue that in this fund, and in the future.
Fifteen years from now, I also want to be celebrating 30 years of marriage, having raised happy, values-based kids. As a family, we have a goal of taking 10 big trips worldwide, over the next 10 years.
As you think long-term about your career, any thoughts on your legacy as a leader?
One of my mentors told me awhile ago, “Molly, you’ve got what it takes to make the boat go straight.”
As described by Henry Cloud in his book called Integrity, you need results, and you need relationships in business—you need both sides of the “wake” to go straight in a boat.
There are certainly past successes and future goals in business, philanthropies and my family, which will all be part of my legacy. However, overall, I hope people will always know me as someone who values both results and enduring relationships.
Any final thoughts for the leaders among our readers?
Take the time to ask yourself — and your key partners (personal and professional) — how will you measure your life? What are you trying to accomplish? I highly recommend Clay Christensen’s book: "How Will You Measure Your Life?"
Jeff Prouty founded the Prouty Project in 1987 after seven years with PricewaterhouseCoopers in Minneapolis and New York City. He specializes in working with senior management teams and boards of directors on strategic planning and team issues.