Michael Duffy

When I joined Fort Point, the firm was at an exciting inflection point. Having established an excellent track record with our earlier funds, we were preparing to raise Fund III with the goal of building out the firm’s infrastructure and accelerating our investment pace, while staying true to our core focus on the lower middle market. I was excited by the opportunity to help shape and support that growth. Just as important, I wanted to work alongside people with good character who would help me grow as an investor. From my first interactions with the team, it was clear I’d be working with smart and motivated teammates, who just happen to be a lot of fun!

While there is no one-size-fits-all profile for a great management team, we look for three foundational characteristics: a growth orientation, adaptability, and a focus on human capital. Teams with a growth orientation are curious and creative, and they are willing to take calculated risks to stand out from their competition. Adaptability is also critical, as our companies will experience shifting industry and market dynamics, and other surprises during our investment period. We want to build management teams that can think even bigger and thrive regardless of the backdrop. Human capital is often the engine that drives B2B services businesses in our mind, so we seek management teams that understand the importance of attracting and retaining talent, creating a strong culture, and investing in leadership.

I’ve always been fascinated by the investment process, but I really fell in love with the middle market while working in investment banking. My most rewarding engagements were those with successful family and entrepreneur-owned businesses, which always seemed to bring something unique to the table, like a unique firm culture or customer service approach. Those same businesses seemed to have the most opportunity for improvement, be it formalized sales & marketing, hiring new talent, or M&A strategy. Moving to the private equity side of the table has allowed me to not only be introduced to these great businesses, but also to play a role in taking them to the next level, which is incredibly rewarding.

From a company strategy standpoint, the biggest challenge tends to be on prioritization – we have great management teams with tons of creative ideas, but we can’t execute on everything in year 1 and expect to do anything well. To manage this, we have a formal strategic planning process we go through with all of our new investments. During those sessions, we are trying to solve for two things: (1) which levers will drive the most growth during our investment period and (2) what do we need to start doing today so a future investor can benefit from continued growth. By starting with what the company will look like at our exit, we can work backwards and design the organization, infrastructure, and key initiatives that will be needed in each phase of partnership.

Investing in small businesses is a fascinating way to learn about the world. Every day, we are introduced to businesses that play a critical role in our day-to-day lives, but that often get overlooked. Early in my career, I invested in a business that was the leading manufacturer of wiper fluid nozzles for the US automotive market. The amount of engineering, design, and environmental testing that goes into those small plastic nozzles is incredible. It’s fun to become a mini-expert in these niche, but very important, pockets of our economy.

I enjoy private equity in part because it offers the camaraderie of a team environment and an outlet for my competitive streak. If I wasn’t doing this, I could see myself working in athletics as a coach or administrator. I played football in high school and rugby in college. Being a part of those teams was tremendously rewarding, and I was lucky to have coaches who were really influential in my development as an athlete and person. My children are still young, so hopefully I can scratch the coaching itch a bit with tee-ball or soccer!