Stories about starting a company tend to be filled with drama: Sleepless nights, maxed-out credit cards, and never-ending series of make-or-break decisions.
Fewer stories are written about the middle stage of a company's life: Sustaining growth, creating a team, building an infrastructure...
And even fewer are written -- if only because relatively few startups make it that far -- about raising capital from a venture partner.
So here's one. Earlier this month Vuori, the activewear and performance clothing startup that makes casual shorts and t-shirts that look like everyday apparel -- and who also make my favorite shorts -- agreed to a $45 million equity investment from Norwest Venture Partners. (I've written before about Vuori, here and here.)
As you'll learn from our conversation, it's an investment Joe Kudla, the founder and CEO of Vuori, wasn't looking for -- at least not yet.
The investment from Norwest is significant, but not one you actively sought.
On our strategic road map we didn't plan to raise money until 2020. We had so many initiatives on our plate... and we weren't in a position where we needed capital.
We've built a profitable business. We started generating profit in 2017 and haven't looked back. And our business has grown increasingly profitable. So we didn't have to raise capital.
But we had been developing a relationship with Norwest. We believe great people make great products, and that's what makes great consumer brands. So does Norwest; their people are great, they believe in our strategy... we feel like they can partner and help guide us through the growth that lies ahead.
Long story short, raising capital this year wasn't on the plan, but we feel like it's a great opportunity for our shareholders and the future of our business -- and we're thrilled to have gotten it done.
Having significant capital on hand is a good problem to have... but it still creates challenges.
Maybe... but having more money on our balance sheet doesn't really change anything. It will expedite some of our plans, but we've already been on a dynamic growth trajectory: We grew 180 percent in 2018, this year we're forecasting 120 percent... with or without capital, our plans were to continue that level of growth. We didn't need money in order to do that.
So in that respect, the money doesn't change our company at a fundamental level. It will help us hire more more great people, to continue to invest in the channels we're investing in, to possibly expedite and pull forward some of our strategies... but it doesn't change our culture our our vision for the brand.
It had to be fun to not have to raise money.
Not being desperate -- at all -- gave us the freedom to look for a private equity partner that believed in our vision, wanted to jump on board for the ride we're on, and support us without wanting to change our special sauce.
Their goal is to help us execute, not step in to change the business.
Some entrepreneurs struggle with the idea of bringing in investors because it adds, for want of a better way to put it, more parents for their baby.
(Laughs.) I get what you're saying. And it took me a while to get my head around the idea.
But we have big aspirations for the brand. We really believe in it. We believe we can do something meaningful. We believe brands have an awesome ability to influence and inspire people in a positive and healthy way.
And we think Norwest can not only help us do that but also expedite that process.
So bringing in people who might want to shift or change your brand... those were real concerns, but having gotten to know the people at Norwest over the course of a couple of years, and going through a long, rigorous due-diligence process... we became really comfortable that they see the world the way we see the world.
Sometimes employees feel anxious about investors coming in because they naturally worry about the impact on their day-to-day, but also on their future.
We were really transparent about the process. We were an open book: Why we would do this, what the goals for the business are, how it will help us meet those goals...
By being so open, instead of the investment being perceived as a risk, or something that would change the DNA of the business, our team was excited by it.
The more your employees understand why you make a decision -- any decision -- the more they can get behind that decision. And the more they trust you.
How will this change your role?
Hardly at all. (Laughs.) I'm still the CEO. Norwest doesn't control our board, they don't control our strategy... it's business as usual, just with a new investor on board.
Actually it's not business as usual: They bring resources that will help us navigate our strategy, help connect us with people who have been through this before... but ultimately it's a minority investment. Business as usual -- except with even more smart people to lean on.
And this will help me focus more of my time on the things I need to do. Through the process they helped me reconnect with why I started the business in the first place, and are really supporting me in wanting to stay close to that.
I'm product obsessed, but as every entrepreneur knows, the more a business grows the more you get pulled away from why you started your business. Norwest is incredibly supportive of me staying connected to the product.
Speaking of starting the company... if you think back to the person you were then, reaching this stage probably seemed impossible.
You're right. I had no way to even imagine what would be required.
But it's funny: You don't have to know everything up front. The process of starting, and working hard every day, helps you learn what you need to know.
I even take that one step farther: Sometimes having significant experience in the field of the business you start can actually hold you back. When you understand and know how much will go into it... it can scare you away from ever starting.
But when you're innocent and naive and have a ton of passion and heart and energy, you get into it and figure it out as you go. Day after day, working hard, staying focused, making tough decisions, always keeping that north star really clear... occasionally you pop your head up and realize how far you've come.
And then you put your head back down.
Because there's still a lot farther you want to go.