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I own a company called Emilia George, which is a retail and lifestyle brand concept. I created it two months after my PhD and a month before my older son was born, while I was working at the UN.
I was the ultimate outsider. As a first-generation American living in Manhattan, I had no home in the Hamptons, no family ties to the board of public schools. I had never tried to lose my post-pregnancy weight (times two) and I wore makeup lower than five times a yr. I had no business or fashion degrees. And yet, here I was—taking a brand into the most difficult market even for the wealthy has the power to interrupt into.
And similar to that, in the first yr (and during Covid) we had almost half a million in revenue. We were profitable for three out of 4 years; the only yr we weren’t profitable was when we incurred a lot of one-time branding agency costs when opening our first brick-and-mortar location. I have built an amazing team that is with me day and night, and we have successfully recruited quite a few summer interns from Harvard Business School and Columbia Business School – all while launching the company.
Every company raises money for different reasons and deals with investors in another way. I only believed it was time to lift funds for my company once we had developed a profitable model and were able to scale our business innovation.
I have made angel investments through special purpose vehicles and direct investments in six-figure amounts. Now, speaking from the other side of the table, I learned a lot in the first three months of getting our company ready to lift funds and start receiving checks and soft commitments. There are things chances are you’ll only discover once you begin the process.
Every investor response is a blessing – and don’t take it for granted
As someone who doesn’t come from the enterprise finance ecosystem or graduate from schools where goal funds are ready to take a position, I took advantage of the SEC 506(c) general invitation. This implies that the company must take additional steps to confirm an investor’s accreditation status before he or she will be able to invest. There are online services that quickly provide this accreditation.
While we dream of yes, no is the next smartest thing. It saves you time and gives you insight into whether you are talking to the right investors for your online business. If an investor decides to share more information about the reasons behind the no, I consider it a blessing. All of the feedback on funding stage, sector interest and investment thesis has helped me narrow down which investors I can approach. Time is the only capital that is too expensive to dilute.
Focus on angel investors who also have strategic value
Countless LinkedIn profiles have the word (*3*) in their titles. While some may meet the SEC’s criteria for being an “accredited investor,” others do not. Are you looking for a direct investment or are you part of a fund that provides membership to investors so you’ll be able to at all times invest in a special purpose vehicle with a much smaller check size? I’ve personally found that angels who provide strategic value, whether in their area of expertise or networking resources, are invaluable. Any strategic partnership an investor makes might be price five or six figures. The same mindset when people give Sharks significant capital because they are strategically essential. That said, you must do your due diligence on any investor you discuss with or share your online business with. Going back to the countless LinkedIn profiles with investors in their titles, not everyone is accredited or lively. Be wary of anyone who reaches out to you first, as they often have a service to sell you. Typically, when someone is raising money for the first time, they also can profit from learning about their advisor’s options. Focusing on strategic investors has a huge impact if you’re really committed to this business for the long haul.
Make haste slowly – protect your brand
When my VC friend told me to organize for a round at least six to 18 months, I said, “No way!” Then I heard founders tell me that they had been fundraising for over three years, and sometimes that they had been fundraising nonstop from the day they founded the company to the day it went bust.
Building a successful brand takes a lot of money; protecting a successful brand takes a lot of money and greater than just money. Techcrunch articles actually don’t help founders stay patient in the face of all the sensible fundraising successes, regardless that no one talks about the long process and how much help family and friends might have to realize momentum. Babba, the founder of Ceremony, mentioned during a recent fundraiser that she initially raised $1 million from family and friends. The brand is amazing and was extremely honest in sharing how her journey began.
The idea is to do all the pieces you’ll be able to to position and protect your brand so that you simply are prepared to face the judgment of external players (good or bad). Once you expose your brand to others and ask for money, there is no going back. You must be persistent and resilient to take care of your valuation.
There’s only one likelihood to make a first impression. The query founders often don’t ask themselves is, “Why lift?”