Top 19 in 19: Leslie Frécon’s Story

Feb 17, 2019 | Kayo Women, Professional Advice

Earlier this year we published Kayo-curated report on the Top 19 in 2019 Buyout Funds Founded by Women. This incredible group of women each have their own story to tell, so we sat with each of them to discuss where they’ve been, where they are going, and what advice they have for the rest of us.

Leslie Frécon is managing partner and founder of LFE Capital, a Minneapolis area growth equity firm that provides capital for health and wellness companies with a focus on businesses with female ownership and management.  She founded the company in 2000 after having served as senior vice president of corporate finance at General Mills (GMI), where she was both the youngest and the first female executive in the company’s history.  

Why did you decide you to start your own firm?

I had always wanted to do something entrepreneurial and I felt it was now or never — if I waited too long, I could run out of time because I realized that it would take at least a decade to build something from scratch.  Fortunately, I had some financial flexibility to take the risk of starting my own venture. It also helped that I come from an entrepreneurial background which has been a value that was reinforced in my family.

When I decided to pursue private equity, I considered working with an established firm, but as I met with people in the industry, I was turned off by the culture.  Part of my motivation in starting LFE Capital was to create an environment where the focus was less on transactions and more on building relationships and great businesses to achieve good returns while having a positive impact.

Was there something that may have been odd or challenging or a weakness at  in your career that has emerged as a strength as a founder and CEO?

I intended to go to graduate school to follow my passion for literature until my Shakespeare professor at Stanford University pulled me aside at graduation and recommended that I get an MBA.  I remember being offended at the suggestion, like he didn’t think I had the intellect to be a professor of English. He said, “You have fundamentally good judgment and express yourself well.” 

What about a career in business? 

As a woman, it could be a real competitive advantage to have an MBA and  I ended up following his advice after working for a year. While I was a liberal arts undergrad who’d studied voice and piano, it turns out I had a flair for financial theory. 

After a brief stint in commercial lending, I moved to GMI to learn more about business.  I started in corporate development, moved into divisional financial management and then into my executive role where I was responsible for treasury, corporate development and risk management worldwide.  I honed my strategic, transaction, and operations skills while working with senior management to grow GMI’s various businesses. 

These experiences served me well in private equity.  A lot of people in PE have analytical and transactional skills but lack operational experience and an understanding of how businesses work.  A large part of the value equation in growth equity comes from the resources and acumen that managers bring to the portfolio businesses in addition to sourcing and structuring the investments and exits.  

How long did it take to raise your first fund? What lessons did you learn during fundraising that you can share with future emerging managers?

It was the most difficult thing I have ever done, raising that first fund. I had gotten tons of advice not to do it and that it would be very difficult, which obviously I did not follow. I pursued it because I was convinced that the market opportunity was there, that businesses with women owners and leaders were a large, growing, and underserved segment, and that I could leverage my network of relationships to find good companies. Believe me, at the time, that was not a concept that was widely understood by the male-dominated investment community. 

My timing wasn’t the best; I launched LFE in the early 2000s, in the aftermath of the dot com bust, plus I didn’t have a partner. Instead, I built the team as the business grew. Fortunately, I had a network of people from my business and personal life who were willing to back me. The critical lesson I learned about fundraising is that the best strategy is to find the believers, versus trying to convert the non believers.  Persevere and stay focused. And don’t be afraid to start small.

We are now organizing our fourth fund. Our current investor base is primarily banks, foundations, and family offices that value what we’re doing. They know that our goals are to provide access to capital to underserved markets, create jobs through small business growth, and find solutions to help people lead healthier lives, all while delivering solid returns.  

I think it’s safe to say we were ahead of our time. Now, more investors understand the capital access issues for women business owners and the need to attract and retain more women in PE. They recognize the power of the female network to source deals, the value of having diverse management teams to deliver superior results, and the importance of collaborative relationships. These attributes are all part of our business model.

What advice would you have to a class of 11th grade girls interested in business, finance or entrepreneurship?

Stay true to yourself.  When I started my career, assertiveness from women wasn’t common.  Men didn’t have that much experience being around women with it. I got feedback that I had to soften my approach. In retrospect, while everybody gets coached in corporate roles today, that was not particularly helpful in my case. To the contrary, it caused me to second-guess myself and my natural style. People in leadership roles, while they need to be empathic, should not be discouraged from being themselves. Everybody must find their own voice, and that’s an important part of developing confidence and trust in yourself, which is an important part of being successful.

The second piece of advice I would give is to be courageous.  There are many paths one can follow to get to the same place, and don’t be afraid to pursue your dreams. Figure out what you want and how you want to get there. Study your options by speaking with people and trying different jobs and exposing yourself to opportunities to learn.