Top 19 in 19: Meet the Woman Behind MiddleGround Capital

Apr 3, 2019 | Kayo Women

Recently we featured 19 women who founded buyout funds and Lauren Mulholland made the list with MiddleGround Capital,  a private equity firm formed specifically to invest in lower middle market businesses in North America utilizing our experience as operating professionals and as investment professionals to create value in everything we do

1. Why did you decide you to start your own firm? Where do you find your inspiration?

MiddleGround was started by three co-founders. We had worked together for many years and wanted to build a franchise dedicated to making control investments in the lower middle market B2B industrial sector for the long term.

My inspiration comes from the people around me: my parents, family and our team. My parents demonstrated a hard work ethic throughout my life and inspire me to drive toward a bigger purpose. My brother, a serial entrepreneur, and sister, a counselor, each inspire me to focus on my priorities and not be afraid to go after them. My husband is my biggest advocate and inspires me to be direct and tackle any obstacle head first.  My two little girls inspire me to create an environment where everyone is treated equally and diversity is celebrated. I am also fortunate to have a network of women who are similarly balancing careers and a family and they inspire me to focus on the big drivers and celebrate the wins. Finally, I think what my co-founders and I are the most proud of at MiddleGround is the team we have assembled. It humbles and inspires me every day to know that talented people believe in our strategy and want to join us for this ride. It takes a village.

2.“The otherness that was hard at the beginning was my towering strength as a CEO,” said former PaperSource CEO Sally Pofcher at our last conference. What unique characteristics do you have? Was there something that may have been seen as odd or challenging or a weakness at one point in your career that has emerged as a strength as a founder and CEO?

After I had my first child I went through a psychological assessment as part of a career advancement tool. I reflected on what drives me, the foundation of my ambitions and how my character traits were different from my mostly male colleagues. Perhaps it was my new mother instinct but I learned I was a “nurturer”. Within finance, many view this type of trait as soft or weak but it played out in the workplace as an ability to build meaningful relationships. As a founder, it ended up being a strength as I was able to leverage those relationships to bring in new business and get our fund off the ground.

3. Tell us how you came up with your firm’s name. What does your firm’s name mean to you?

I credit my partner, John, with our moniker. He is someone who is passionate about everything he does and he is passionate about fishing (which does not necessarily mean he is good at fishing). His favorite place to fish is the Florida MiddleGround, which is a reef 100 nautical miles NNW of Tampa. It is difficult to navigate your way out there but once you get there, you are rewarded with plentiful fish. We liken this to investing in the lower middle market. If you are able to successfully navigate your team within this vast and fragmented landscape in which we operate, there are plenty of opportunities to generate strong returns. That’s our marketing pitch but to me, our name reminds me of the passion behind why MiddleGround was started. All three of us are passionate about building a franchise dedicated to the lower middle market and John’s visible passion in everything he does drives me to instill that same passion in my team.

4.Tell us about the decision to go it alone versus partner up with co-founders. What would you look for in a co-founder?

MiddleGround has three co-founders. My co-founders and I have worked together for almost 8 years and my two partners have worked together for 22 years. We have complementary skill sets and backgrounds that yield different perspectives. I had historically focused on transactions and sourcing while my partner, Scot, had focused on operations and portfolio management. Our third partner, John, straddled both sides of the business and also had some limited experience fundraising. We had an honest reflection around where we needed help and brought on third parties to fill those gaps. For example, we hired Credit Suisse as our placement agent to assist with fundraising. We also brought on an anchor investor, Archean, to help build out our back office, compliance and reporting functions. Our investment strategy is very hands on and it requires all three of us to be successfully executed.

5. 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?

We held a first close on our fund in December 2018 with a second close right behind it in February 2019 bringing us halfway to our $425M target for the first fund.  Building out our team and getting deals done has been the biggest contributing factors of our success to date. Today, MiddleGround has 16 professionals, seven of whom have worked together previously. We also closed our first deal right before we launched our PPM and LPA, which gave us a live transaction to walk through with prospective investors. The level of consistency among the team and proving out our ability to deploy capital in line with our investment thesis has helped to alleviate some of the risks associated with first time funds.

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

To be successful in entrepreneurship in any industry, you have to be passionate about that industry and respect who you are working with. So I would encourage them to start at the bottom of an industry they are passionate about and work their way up to build confidence in their capabilities. They should look for entrepreneurial opportunities within bigger organizations to see if entrepreneurship is really for them and to build a resume. They should take advantage of all training opportunities provided to them. And if they need to take a step back to better position themselves or move into a different industry, they should do so. While we live in a competitive world, one’s career does not have to be linear and you have to enjoy the journey and make it your own.

7. How do you continue to develop yourself?

I am always trying to learn and develop as a professional.  Throughout my career I have been fortunate to work with talented people who have helped me to develop strong technical skills.  As a Partner and leader of MiddleGround, it is important that I focus on expanding my leadership capabilities. One training activity I have planned is to attend the Center for Creative Leadership training.  It is a program that both of my partners participated in while they were employed at Toyota and I have been able to see first-hand how this type of training has helped them develop into great leaders. MiddleGround is an organization that focuses on continuous improvement at our portfolio companies but it is important that we follow the same principles internally as well.