Latest / Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast) / GEMS: Pivotal Lessons from a Decade in Business with Repurpose founder Lauren Gropper

Transcript

GEMS: Pivotal Lessons from a Decade in Business with Repurpose founder Lauren Gropper · Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast)

• 0:08
  So it's not often that I actually have someone on the show that's been in business for such a long time. You know, we're talking like 11 years, nearly 12 years here that you've had the business going. And I really want to understand like what it takes to get from there where things were really hard and really pushing to circa now, which is like stocked in 15,000 stores, you know, all over the place. 10x growth since 2015, something crazy. Like how?
• 0:35
  Like it's hard for me to comprehend that kind of scale and the journey of what's from A to B to C to D. Do you know what I mean? So I'm trying to understand what those pivotal moments have been in the growth and why you think it's been able to get to this point and how. I think it's really been, well, for one, it's definitely like one foot in front of the other.
• 1:07
  There are easier ways, but I mean, also, okay. So back then as, as many understand when you, when you're raising money, you, you generally raise with a, either you have a price round worth a set valuation or you're doing a convertible note or a safe where you often do have a cap or some discount or whatever. And so that determines how much equity you as a founder get to keep and how much you have to give away.
• 1:35
  And back then, the valuations were a lot smaller, especially for consumer companies, especially for female and feminine companies, especially for sustainability companies. So we started out with this very, very tiny valuation and as such had to give away quite a bit of the company, even just to get, you know, nominal dollars.
• 1:54
  And so that kind of plagued us from day one because we never could do this gigantic raise, which we needed, but couldn't do because we'd be giving away so much of the company because our valuation was really low. So my takeaway there is if you can raise on a convertible note or a safe where you don't have to price it and can just say, I'll give you a discount to the next round, 100% do that because then you don't box yourself in. But at the time, that was kind of the only way we could get the funding. So we did it.
• 2:24
  And because of that, we had to kind of continually raise in these small increments. And we had the need for inventory.
• 2:31
  So those that are in consumer businesses, that's a huge, huge thing. Your inventory costs are going to be a big piece of basically your investment and where, where money's going in the early days for us, at least. I mean, it's always just a source of a constant source of like, you know, you have to buy the inventory. We, we produce our inventory in Asia and you know, we sell in the United States. And so for us, there's a very long lead time between when we have to pay
• 3:01
  our partners, factories to produce the product. And then it has to ship here. And then we have to get it to the stores and then it has to sell. And then we get paid. So you're always, as you grow, you're, you're running out of money constantly. So it's like this double-edged sword. Like the more you grow, the more money you need. And the bigger that kind of value is in terms of covering your costs. So it,
• 3:24
  For those that are starting anew, if you can create some sort of terms with whoever's producing your inventory, like you pay them when you get paid or you have some kind of like net 30 or net 60 or something where you're not putting a cash advance to get the product, that will save you in terms of how much you have to raise in the future, etc. And just leave the cash in your business.
• 3:46
  Because the more the cash is going out for those big purchases, the more you don't have to spend on marketing, to pay your people, to grow the business. And is that what you were doing? In some ways, yeah. We would do like inventory funds where we'd raise from investors to buy inventory because, again, back then we were profitable. So we weren't bankable. So we couldn't just get a bank loan to do it. Now there are tons of different, there's like all these online resources where you can do money.
• 4:12
  like working capital funding, they take a huge interest rate. It's like a bigger credit card, but sometimes that's even cheaper than equity, but a way to kind of purchase your inventory. So yeah,
• 4:23
  As we grew, we were in this conundrum of like, okay, well, now we're growing and we need more money and more money and more money. And luckily, we did have some incredible supporters from the early days that continued to support us. But I was just in a constant kind of like hamster wheel of fundraising because as we grew, we just needed more and more. And also, that means your equity is constantly going down. So you're thinking like, if I ever want to exit. It's got to be big.
• 4:51
  Yeah, it's going to have to be so big to be able to make it worthwhile. Exactly. Especially over such a long time. Exactly. So what happened? How did you get around that? Well, we've been doing things like issuing options and giving ourselves stock options. But, you know, that's been the issue. We've had to raise really carefully and choose when we do, even though we need more money. And so it's been this constant balancing act of, you know, I would love to go out and raise money.
• 5:19
  you know, 10 million, 20 million right now, we can really use it. And, and that's something that we are considering. But again, it comes at, you know, will that, will that investment, I think the question to always ask yourself is whatever investment you're taking in, whatever equity you're giving away, will that result in the kind of growth that you're looking for to, to increase the value of the company by a multiple?
• 5:44
  Right. It's like to 100 million with that valuation kind of thing. Yeah. You have to be. It's hard because when as a founder, when someone wants to give you millions of dollars, that's very.
• 5:55
  you know, that's gratifying. You're like, Oh yeah, that's amazing. It's a new shiny thing, but it's not always the best thing for your business. Like if I could do it again and take way less money and exit early and still have that same take home, like that's, and there's, that's, that's the equation that you're always sort of doing. But at the same time, you're just like, I just want to grow my business. I just want to build this brand. I'm working so hard on my day to day just to get this going. Like,
• 6:20
  At the same time, you have to be thinking through these other things. And so I think to me, that's one of the biggest challenges that like you have to work in the business to grow the business, but at the same time think about, well, how am I going to fund this in the right way and the ownership, et cetera, et cetera. And so the great thing I think also about having partners or co-founders is you can each take on some of those roles.
• 6:45
  almost to a full-time capacity. So that, you know, for me, I was always out fundraising. It would have been really hard to manage day-to-day and fundraise at the same time to the amount of fundraising I had. Like, it just is impossible. I know some people do it.
• 7:01
  I, you know, I couldn't do that. And so I have co-founders and partners that were managing aspects of the business, like some of the day to day or managing all the sales. Like I would be involved, but not to that day to day level. And so it freed up the time to fundraise and make sure that we always had, you know, the money that we needed to execute whatever we need to execute.
• 7:22
  So it is in terms of like getting from A to B to C to D, every stage has its massive challenges. A lot of it is just like, especially when you're pioneering a product, it's just the time, like you need time to get...
• 7:38
  to get people aware of your product and to get the growth happening and, and time is money and you need people and people to work, you know, super hard, but at the same time, you don't necessarily have all the money to, to reward them with all that hard work. And so you've got to give equity or something to get them excited about wanting to work for you that hard. Um,
• 8:01
  I mean, we're super lucky with who we have on our team. Everybody's really passionate about what we're doing. Super hard workers and just really put in that extra mile to make us what we are today. So it's like there's just every stage, I think. Like you get to a certain point, for example.
• 8:21
  you know, maybe from zero to 1 million is a thing. And then after 1 million, it's like, wow, I've fully made it. But no, no, no, no. There's so many challenges. And from 1 to 5 million is kind of like another stage. And after 5, and then after 10, and after 20, and after like, at each stage, there's just different massive challenges that I think
• 8:45
  It's all about the people you surround yourself with and who, and, and bringing in, like, we have tons of advisors that have kind of been there and done that. So they can sort of say, Hey, when you get to this stage, here's the things you need to be thinking about. I mean, this stage needs to be thinking about because you don't know what you don't know. You know, we, I've never done that. And so I think.
• 9:09
  I think there are some founders that have a bit of that cocky attitude where they think we can do it. You know, I always took the attitude of like, I have never done this. I don't know at all what I don't know. And I will take all the help I can get because I want this to be successful, you know.
• 9:25
  And I want this to be, you know, I want this vision to be realized. And this is going to be like, we just knew that this is going to be something that people are going to care about. And this is going to be something that will be in people's lives. So it should be us. You know, we're the ones to do it. Totally. Totally. And so that has actually been part of my motivation. Like somebody is going to do this. And this category is growing and growing. And we were here first and we should be the ones to do it.
• 9:54
  Yeah, I love that attitude. That's a great attitude to have.
• 10:00
  Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
• 10:25
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• 10:47
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