All Fran Dunaway wanted was a cool shirt. "Something like Robert Graham, but for women," she says, referring to the colorful men's shirts known for unexpected details such as contrasting cuffs. In February 2013, Dunaway, a producer of political videos, and her partner and now wife, massage therapist Naomi Gonzalez, ginned up a Kickstarter campaign for the shirts of their dreams, squeaked past their $75,000 funding goal, and began production

They got a lot more than just a bunch of cool shirts. While they were promoting their Kickstarter campaign, Dunaway (at left in the photo above) and Gonzalez (at right) noticed that the name of their company, TomboyX, was attracting more attention than they thought it would. So they put the TomboyX logo on plain white T-shirts, which quickly sold out. Then they got an order of plain men's briefs, and put the TomboyX name on those. TomboyX jewelry? Bags? Why not?

While Dunaway's parents were in her Seattle garage ironing the shirts as they came in, Dunaway and Gonzalez were trying to figure out if they could make a bigger business out of TomboyX. The underwear was selling the best. "The shirts were selling and doing just fine," says Dunaway. "But when we introduced boxer briefs for women, our revenue tripled in six months."

That was back in 2013. Since then, TomboyX has shipped its briefs-for-women to 38 countries, and this year expects revenue of about $4 million. In July 2015, Dunaway and Gonzalez closed a seed round of about $1 million. They've received fan mail from a 12-year-old and a 78-year-old, both thankful for underwear that isn't trying to squish them into a hyper-sexualized version of femininity. "We're honoring this unseen group of women," says Dunaway, who characterizes her customers not just as self-identified tomboys and women in uniform (more on that later), but also plus-size women, transwomen, and women who she says simply "skew masculine." 

"Naomi was saying to me, well, you're always complaining about the lack of clothing options. Well, how hard can it be to start your own line?" says Dunaway. "That's what we say to each other now. 'How hard can it be?' Well, it's pretty damn hard."

A Brand for Tomboys

The success of men's underwear with the TomboyX logo was encouraging. But then Dunaway and Gonzalez's friend Carma Clark, a police officer, suggested they make a longer version of men's-styled briefs and adapt them specifically for women. Clark said that traditional women's underwear wasn't comfortable for many women in uniform, who routinely bought men's underwear instead. At the same time, Dunaway and Gonzalez had heard from Julie Nomi, a product development and sourcing veteran who had admired their Kickstarter project and contacted them wanting to know if they needed help. "It was like the sky opened up and dropped her in," says Dunaway. 

Dunaway and Gonzalez considered another Kickstarter to fund their Good Carma briefs, named after their pal, but decided to presell the briefs from their website instead. "We had about 5,000 emails and a few Facebook followers," Dunaway says. The co-founders ordered 600 pair of underwear; they had 450 orders before the first pair even reached TomboyX's new warehouse space.

In December 2014, TomboyX applied to Boulder-based MergeLane, an accelerator for women-run businesses, and was accepted into its first cohort. "Sue [Heilbronner] and Elizabeth [Kraus, both co-founders of MergeLane] helped Naomi and I get our heads around the fact that this could be a real company," says Dunaway. Through MergeLane they met ad agency Crispin Porter + Bogusky, who agreed to take on the branding for TomboyX in an unusual cash-equity split arrangement.

In the meantime, TomboyX was introducing six styles of underwear in five lengths, in sizes XS to 4X. That range of sizes is expensive to produce, because patterns for larger sizes have to be drafted separately--they can't just be extensions of smaller sizes. "The standard is not to do it because it costs more," says Dunaway. "We are adamant that we are not for everyone, but we are for anyone." Dunaway says there is four times as much fabric in the 4X size as there is in the XS, but TomboyX prices all its sizes the same.

Finding a Girls' Network

While MergeLane had made an investment in TomboyX, Dunaway realized her company would need more money if it wanted to keep product on its shelves. She quickly found that the vast majority of that money was going to have to come from women. "We pitched to men in the beginning, but the glazed look made us quickly realize it wasn't going to resonate," says Dunaway. "They're not familiar with the space. They think, even if I write a check, it's not value-add." She hastens to point out that their few male investors "absolutely" are adding value beyond their checks, and that one is currently helping her figure out the best way to finance the company's next stage of growth.

But overall, Dunaway saw she'd have better luck raising money from women. She won investments from Women's Capital Connection, in Kansas City, Missouri, and the Women Founders Network in Los Angeles, among others. Through the Women Founders Network they met the former president of Nasty Gal, who encouraged them to hire Amanda Nelson, Nasty Gal's 15th employee, as the chief merchant for TomboyX.

When Nelson joined in the fall of 2015, she looked at revenue from the previous year and realized it should have been double what it was. But TomboyX kept running out of inventory. "The first thing Amanda said was that we had a 75 percent sell-through rate [in the first two weeks], and we were like, Is that good?" says Dunaway.

It wasn't. TomboyX was leaving money on the table, and customers were unhappy because their orders couldn't be filled. When the company introduced its nine-inch brief, the 800 units it ordered sold out in three days. In retrospect, says Dunaway, the company should have ordered 2,300 units, but it couldn't afford to tie up that much capital.

Even with a healthy seed round, that problem continues. To be properly stocked in December, estimates Dunaway, TomboyX will have to place an order that's four times the size of its June sales. As a new company, manufacturers demand deposits. And because TomboyX only sells directly to consumers, it doesn't have purchase orders from large department stores that it can use to back a bank loan. "We only have the assets on the shelves, which are flying off the shelves," says Dunaway.

Despite the financial challenges, TomboyX isn't eager to sell to large retailers. It'll experiment with a few boutiques soon, but selling directly to consumers has much better margins. TomboyX isn't set up to hire or pay sales reps, and there's no doubt that the organic, grassroots approach is working. Dunaway thinks that once the company hits $5 million in sales, which could happen as early as this year, it'll have more credibility with potential financing partners.

"I've got tons of ideas about new product we could introduce," says Dunaway. "But the hardest thing is to stay in business and not run out of money. Now that Naomi and I realize what we have, we feel so responsible to all these women who are looking to us. We feel like we know them. We just know them."

Published on: Jul 15, 2016