Great Moments in Financing
If you think your advertising is effective, consider John Peterman's. He is the founder of The J. Peterman Co., a three-year-old mail-order house in Lexington, Ky., that specializes in unusual, nostalgic clothing. Last June, he placed an ad costing $3,000 or so in the New Yorker, hoping to generate orders for his cowboy-style duster coat. What he wound up with was $1.1 million in growth capital.
It seems that the ad caught the eye of Edwin Goodman, managing general partner of Hambro International Venture Fund, who decided to call J. Peterman on the off chance that the company was looking for investors. As it happened, Peterman had just spent almost a year in a fruitless search for expansion capital, contacting some 35 venture capital firms in the process. "Most of them were not particularly interested in what we were doing," he says. Those that were interested did not appeal to him as potential partners. Goodman, however, was different. Within a couple of weeks, the two had met and worked out the preliminary outlines of an agreement; within two months Hambro had put up $1.1 million in return for a substantial minority stake.
Peterman is now using the money to expand his company's catalog mailings. He reports 1989 sales of $5 million, up from about $2 million in 1988. Hambro, meanwhile, is hoping that large numbers of Americans will find the company's style even more appealing than Goodman did. After all, Goodman has yet to buy the duster he saw advertised.
-- Martha E. Mangelsdorf