His Way

PREV 1 | 2 | 3 | 4 | 5 | 6

Reed's went public on October 11. This time the offering was not only legal, it was successful: It sold out in two months, raising $8 million for the company and valuing it at $28 million. Reed started spending the cash right away. Besides finally paying that two-year-old Bowne bill, he began building out his sales force and making plans. He wants Reed's to be not just a natural brand but a mainstream brand, in grocery stores, delis, and restaurants across the country. The company has been growing fast. In the first nine months of 2007, the most recent figures available, sales hit $10.4 million, up 31 percent from sales in the same period a year earlier. Losses, however, were $2.6 million for that nine-month period. The stock has been trading at about $6, and it just got listed on the Nasdaq.

The cost of going public was extraordinarily high for the small company--$2.3 million, plus the $835,000 in rescission costs. That's money the company could use, because it has never stopped gulping cash. Just six months after the IPO closed, Reed's did a private placement for $9 million; at presstime the company was putting together another private placement, for $10 million. Reed's own stake is steadily decreasing: Before the IPO, he owned 68 percent of the company; after the $9 million round, he was down to 37 percent.

Reed is now 49, and he still likes wearing his tie-dye shirts, especially to his investor meetings. "I'm not really a suit-and-tie kind of guy, and I don't think my story is a suit-and-tie kind of story," he says. That's true, but he's coming around to some Wall Streetish ways of seeing things--he finally hired a CFO rather than doing the accounting himself, and he kept that expensive lawyer onboard because it looks suspicious when a public company switches lawyers every six months. ("He went beyond his estimate by three times," Reed grumbles. "But we try to educate him on the nature of our company and how we are not a $200 million company able to afford all of his excesses. He's getting better.") When he talks these days, he has a wry smile on his face and breaks into frequent guffaws, as if carried away by the improbability that he, Chris Reed, would be running a public company. You may have made me comply with your rules for the past five years, he seems to be saying. But look at what I got away with in the end.

Senior writer Stephanie Clifford wrote the October 2007 cover story about Pandora.

PREV 1 | 2 | 3 | 4 | 5 | 6

Try a RISK-FREE Issue of Inc. Today!

Renew | Contact Us | Current Issue

Select Services