Women in PE to Know: Erin Andrew

March 23, 2023

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].

Erin Andrew

Erin Andrew is a senior managing director and senior member of Turning Rock Partners’ investment team. At Turning Rock, Andrew focuses on origination, underwriting and deal execution. Prior to joining the firm, Andrew served five years as managing director and senior vice president at Live Oak Bank where she launched its merger and acquisition services division to provide growth support services for small businesses and was one of the founding members of the inclusive small business and government contracting teams.

Previous experience includes seven years at the U.S. Small Business Administration (SBA) where, as associate administrator for capital access, she oversaw SBA’s lending efforts that included $100 billion of government loan programs for small businesses. She also held positions of assistant administrator for the SBA’s office of women’s business ownership where she oversaw the agency’s efforts to promote the growth of women-owned businesses, director of SBA’s innovation clusters and skills initiatives, and senior adviser in the SBA’s office of entrepreneurial development.

Andrew holds an MS in public policy and management, urban and regional economic development, and earned a BS in industrial management and business administration from Carnegie Mellon University.

Q: Why is it important for more women to pursue careers in PE?

Erin Andrew: When you look at the companies in the United States today, we have more than 13 million women-owned businesses, and we have businesses that serve everyone in our country, including women. To understand an investment, it’s often helpful if you understand the product or the business. When you have an industry that’s 95% made up of one gender that’s investing in companies that are close to a 50-50 split in terms of ownership by gender, it can be difficult to understand the opportunity set that’s available.

In PE, equity and equality are important because they help deliver better outcomes from an investment perspective. You can return limited partner (LP) capital when you know the business you’re investing in and can see the opportunities for it. Equity is also important because it provides long-term opportunities for wealth generation.

For example, there are a lot of women-owned and women-led companies in this country that create products and services. Women make up more than 50% of the purchasing power in the U.S. and we should seek to have decision-makers in the investment space follow suit.

Q: Why do you actively support providing capital to women entrepreneurs?

EA: Because they generally have great businesses. They’re serving a huge part of our economy with the companies they create. They do an amazing job of being risk-realistic and understanding opportunities and returns. I think they’re often undercapitalized because the networks aren’t there yet for women, and they’re not tapped into the more male-dominated capital networks that exist in our country. Many women also do not know about the possibilities of leverage from a growth perspective. I think our opportunity to support women entrepreneurs is twofold. It’s making sure we’re in front of them and have capital available to deploy to them, and helping them understand how to leverage that capital to grow and compete in the business market.

If we’re not putting adequate amounts of money into those women-driven markets, we are failing to serve the consumers, businesses, supply chain and everyone else who would benefit from such investments.

At the end of the day, investing in women entrepreneurs usually yields a great return for LPs. I think women-owned and diverse businesses are a great investment.

Q: Why is it important for more women to pursue finance careers?

EA: A strong pipeline is critical for any profession. If you don’t have people entering the profession, you won’t have people continuing to succeed and grow within the profession.

You see a drop-off with a lot of women who pursue finance careers. That’s why we must focus on not only getting more women into different professions, but also keeping them in their professions of choice. That includes finding ways to provide situations that are more family-friendly — that’s for both women and men. It’s identifying opportunities to make women feel like they are part of a team and organization that align with their values.

I also think it’s about finding more mentors and sponsors to support women in finance so women can see other women who have found success and know this is possible to achieve.

Q: What do you think is the biggest challenge facing women entrepreneurs? What advice would you provide to overcome it?

EA: As I mentioned, women entrepreneurs tend to be very risk-realistic, which is amazing when you want to ensure you will get paid back. On the other hand, leaning into the levers that are sometimes needed for growth requires taking a little more risk, and that is often a challenge. To do so effectively requires understanding how to leverage tools like acquisition and convertible debt.

I think another big challenge is making sure women can maintain ownership of their companies. I’ve found that in PE, women often give up too much ownership. How do we provide women with the tools they need if they’re looking at wealth generation and the transfer of wealth long term? How do we make sure they’re aware of the tools they can access to maintain ownership while also getting the growth they want out of their company so they can compete and succeed? This requires broadening their network, making sure they’re aware of all the tools available, and making sure they know the best levers to pull for the success of their businesses.

Another thing women must consider, and this is for any business, is understanding the exit they want. Most owners of businesses are eventually going to sell those businesses. If you don’t have a plan for your exit, you can easily get stuck in the day to day of that business rather than working toward growing the company and eventually achieving that exit. An end goal is very important to determining which levers to pull.

Homing in on what that exit strategy is will help a person figure out what levers to pull, how much ownership they can continue to maintain and how much equity they might need to give up to get the right partners in.

Q: What advice would you provide to a woman-led company interested in securing PE?

EA: Understand that giving up equity is not the only option to getting what you need. There are credit options. There are convertible debt options. There’s a way to look at equity and debt and be creative around how much ownership and control of your company you want to maintain and how much you want to give up and what your growth should be. Understanding these details will help ensure you choose the best partner.

A final thought: I work for a woman-run private credit and structured equity fund. It’s been inspiring to see and be a part of the company our partners have built — the way they run their business, the way they think about investments, the way they build their team have all been inspiring. It’s great to see this diversity, and I hope we see more of it in the future.

To contact Erin Andrew, email [email protected].