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Build The Damn Thing

Dec 22, 2022

Episode 7: How To Get the Money You Need to Grow Your Company


From bootstrapping to venture capital to just plain profits, there are many ways to fund the growth of your business and it’s an important next step that takes thoughtful consideration.  In this episode of Build The Damn Thing, you’ll determine what may be the best route for you and your company as you continue to build it. 



Lisa Price    |    Carol’s Daughter 

Brian Aoaeh    |    reFashiond Ventures 

Felecia Hatcher    |    Black Ambition 

Denise Hamilton    |    Watch Her Work 

Cheryl Contee    |    Impact Seat 

Denitria Lewis    |    Serial Entrepreneur/ Digital Marketer 



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Kathryn Finney


Twitter: @KathrynFinney

Instagram: @hiiamkathryn

Facebook: Kathryn Finney


Genius Guild


Twitter: @GeniusGuild

Instagram: @geniusguild



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Produced by Genius Guild Content Studios

Executive Producers:  Kathryn Finney and Darlene Gillard Jones

Post-Production Company: Prosper Digital TV

Post-Production Manager: Joanes Prosper

Post-Production Supervisor: Jason Pierre

Post-Production Sound Editor: Evan Joseph

Co-Music Supervisors: Jason Pierre and Darlene Gillard Jones

Show Music: provided by Prosper Digital TV

Main Show Theme Music: "Self Motivated" Written & Performed by Tamara Bubble


Full Transcript


Lisa Price (00:01):
When I started my business, I didn't actually realize when I was starting it that I was starting a business. Initially. It was something that I was doing, it was a hobby. And I didn't need funding, if you will, for many years. Now I say need with air quotes because technically I did need money, but because I didn't look at what I was doing as a business, but I was looking at it as a hustle, the thing that I did after work and on the weekends. And as long as I could get the work done with my husband helping me with an aunt helping me, or a cousin helping me, it didn't feel formal. It didn't feel like a company early on, I didn't think about funding honestly, until 2001. And that was because my husband and I got a warehouse because we were making everything in our home and we needed more room and thought, oh, we'll get a warehouse space and we can set up a kitchen in the warehouse space and then do the shipping from the warehouse space and everything will just run smoothly cuz it'll be bigger and there'll be more room, and had no clue about the different types of insurance and manufacturing properties and commercial properties and all of these other things that we learned as we went along. 

So doing construction on this warehouse kitchen was a lot more complex than we thought it would be, and we needed some money to make that happen. 

Kathryn Finney (01:40):
From bootstrapping to venture capital to just plain profits, there are many ways to fund the growth of your business, and it's an important next step that takes thoughtful consideration in this episode to build a damn thing. You determine what's the best way for you to fund your company. 

Some ways that builders can get money to grow their companies is really, um, there's a lot of different opportunities now, and it really depends on whether you're building a startup or a small business. And again, a startup is a temporary organization that you're looking to scale to reach some sort of exit positive event. Meaning you're looking at selling it to a larger company or listing it on initial public offering, or somehow letting go of equity in that company That's a startup. If you say you're building a startup, make sure you're doing that. A small business doesn't necessarily, uh, mean that you're building it to sell. You might wanna keep it, it may be that legacy company that you're gonna keep in your family and that changes what type of money you look for. A venture capitalist is going to wanna invest in a startup, and there are structural reasons why a venture capitalist is gonna wanna invest in a startup. It's not because they don't believe in your business, it's because I need you to sell. So I get the money 

Back I invested. And then some, 

Brian Aoaeh (03:02):
I think the question about whether you should raise from a VC or bootstrap is not necessarily known at every point in time before you, um, have figures, uh, some things out. So at the outset, it's usually difficult to tell if the business that you're building, um, if the problem that you're solving, if the customer base is the kind of customer base that lends itself to, to what a VC wants to invest in. So a, as a general rule of thumb, uh, some VCs will say, look, if we can't, if we can't see how your company or your startup gets to the point where it's making a hundred million of revenues a year, it's probably not a venture backable, uh, business. 

My name is Brian Long Aoaeh. I am a co-founder and general partner of Refashion Ventures and I am the co-founder of the Worldwide Supply Chain Federation. So people can debate if that's the right way to think about it or not. But, but as a general rule of thumb, if a startup founder can, can't see how what they're doing gets to the point where it becomes a big company and it's throwing off those sorts of re of revenues, it probably doesn't make a lot of sense to talk to venture, uh, capitalists. 

Kathryn Finney (04:33):
Now, as an investor, as a venture capitalist myself, I think what a lot of people don't realize, particularly in the black community, uh, is how venture capital works. Um, venture capital really works along this thing called power law, which is really basically that of the 10 companies that they invest in, um, one is gonna be the unicorn, two are gonna be okay, and the unicorn means over a billion dollars and the rest of them are gonna be duds. And so there's a lot of pressure when you take venture capital to scale rapidly so that you could be that unicorn so that you can get to a billion dollars. And the only way you can get to a billion dollars is if you get massive, right? The only way you can get to a billion dollars is if you become the next Google or Facebook or WhatsApp. 

And so it's a lot of pressure as a founder to get that when having a hundred million dollar company would be also great too, right? It would be amazing. But that wouldn't be amazing from a venture capitalist because they need you to re what is called return the fund. They need you to be that once that they make sure that they return capital back to their investors. The investors in venture capital is called limited partners. These are people who are investors in the fund. So when I was at the budget fashionista, I was like, I don't want that pressure. I don't wanna have to try to figure out how I'm gonna make the budget fashionist into a unicorn billion dollar company. I don't wanna be known as the budget fashionista for the rest of my life. 

Felicia Hatcher (06:07):
I think that's the question that the individual companies need to be asking of themselves. Do I need to fundraise? Because a a lot of times you don't. Right? And I think what has been, um, really interesting in this race, in the startup community, uh, is that the only way that you can have a validated company or an idea is how much money you can raise as opposed to how much revenue you can create, um, and keep your business whole, right? And so I think as organizations that support entrepreneurs that more and more of us should be asking that question, um, instead of taking people all down this journey, which is not necessarily a good fit, right? And like you have a lot of small businesses that happen to play really well in the, in the startup space, right? And you have a lot of people that are start that think they're startups that sh that are more long small businesses and it's okay to have that slow sustainable growth. 

My name is Felicia Hatcher and I am the CEO of Black Ambition and the co-founder of the Center for Black Innovation. 

As long as you have an understanding of what your end goal actually is, but, um, I think if you're not careful, you end up spinning your wheel in an area that actually doesn't make sense for the business model that you have or the long term sustainability of who you are and what you're trying to create, create. Uh, so being very clear on that in the very beginning is important. 

Kathryn Finney (07:31):
So when you hear VCs saying that we need you to scale and press you to scale, that's why, it's also why when people come and say, Hey, I want my company has a million dollars, I can grow to a million dollars. A VC is like, oh, okay, that's cute, but I'm not gonna be able to invest. And it's very important because I feel like particularly in communities of color, we don't understand that Now in building a small business where you are going to keep it for a while, there's other funding options you can to get started. There's grants. So there's a lot of grants, especially with the Build Back Better program that's going on now, the legislation that passed a lot of grants to help small businesses grow, and you can check with your local small business administration, you can also look online. Um, there's also microlending platforms like a c um, even cabbage that give business money to small businesses. PayPal even has a version of a loan program that you can get that gives sort of consistent interest rates. Um, that's very good for a small business because you don't wanna necessarily sell equity in your company. It's also good for startups that don't wanna sell equity in their companies, but they have consistent revenues that allow them to pay back the loan. 

Lisa Price (08:46):
So the first time that I got funding, I, it was a small business loan through, um, my bank and it was 125,000 $150,000, which to me at that time was like, I took out a loan for 1.5 million and I was panicked and nervous. Um, but it, it, it all went well. It was a great experience, it was a good thing, um, that I did do that when it came to actual funding and having an investor invest in the brand. That was something where I was sitting here cause my office was in this room and I was sitting here and I listed all of the things that I had been able to do without very much assistance from the outside. 

I am Lisa Price, the founder of Carol's daughter, 

And there were more things that I needed to do for the brand. I needed to upgrade our phone system. I needed to have new labels designed for the products, and I needed to do some upgrades to the website. All of those things had their own price tags attached to them. It was easily 350 to $400,000, which I couldn't afford. I didn't have that sitting around. I couldn't borrow that much. I couldn't put it on a credit card. And I ended up doing the phone system because I was able to finance that and the other things I just had to make do with what I had. But it was in that moment that I kind of realized I think I've done all that I can on my own and organically, and if this is really going to survive, I need money from someplace else. But I didn't know what that looked like and I didn't know what it meant for the company or anything. 

Kathryn Finney (10:46):
So when I started the Budget Fashionista there, there were no options for venture capital <laugh> for what I was doing. Um, so I didn't raise anything for the Bud Fashionist. And it was actually towards the end when I start to think about where I was gonna go next, that I had this choice between either venture capital or private equity or just selling it. And I took some meetings. This was in, um, 2000 and like 12, 2013. I took some initial meetings with, uh, a number of private equity funds, um, as well as a couple of VCs. And what I realized that in order for me to stay, uh, in, in order for me to take this money, if I took it, the expectation would be that I had to stay. In fact, I would've had to sign a contract that said I would have to stay for two to three years. 

Denise Hamilton (11:40):
My journey of raising money for my company was really challenging. Um, there was a lot of resistance. I'm in Houston, Texas, so definitely not in a hotbed of investment in startups. Um, and, um, there was a lot of resistance to me as an older founder. Uh, lots of challenges there. Um, but, but I decided, you know, I'm just gonna fund this myself. And I gotta tell you, I'm so glad that that's how it ended up because I know, um, I own everything. I own all of it, it's all mine. 

I'm Denise Hamilton and I'm c e o of watch her work. 

So, you know, if I had to do it all over again, I think that's how I probably would've started out. I actually felt like I wasted a lot of time, um, looking for investments instead of just self-funding it and seeing where it, where it built. And there were so many lessons I learned along the way that helped me to refine my message and to refine my positioning and, um, to now have built a thriving business. Um, you know, and know that I did it brick by brick all by myself is really, it's, I'm very, I'm really proud of that. 

Kathryn Finney (13:08):
My philosophy in VC may be very different than others, which is venture capital is really fuel. Think of it as fuel. It's, it's not starter, it's not the kindling, it's not the thing that you start the fire with. It's the thing that grows it. And if you think in that way, then it makes it easier to understand. Um, it makes it easier to know how to navigate the VC relationship because if VCs are looking for you to do rapid growth and you only take venture when you're at the point where you wanna do rapid growth and that works really, really well, you'll often find like a lot of venture capitalists trying to get in early with people, meaning, so that they can have a bigger chunk of your company. And there's a whole bunch of different things that are put towards, uh, black founders. There's a whole bunch of different things that are put towards black, uh, investors like myself, I'm a general partner and the Greenhouse Fund, which is genius skills, fun. And the number of crazy things that people have presented to me is, is crazy. 

Felecia Hatcher (14:09):
I think, you know, all of us as as black women have our horror stories or we have our chapters of our lives around this investment space that we don't read out loud, right? Because it's just so heartbreaking to put your heart into what you're building, um, whether that's on the for-profit or non-profit side, and for people to tear holes in it or to understand that there's just true, true bias, um, that should not exist, right? If we are all on the same page about green, right? Having something where someone can get a return on investment and knowing that you could be a good steward of that, but you can't even get to that part of the conversation because they don't think that you're a fit because of the color of your skin or what they pr uh, assume, um, is not a worthy investment or a smart investment. 

I think between the nos, um, between just the sheer crazy ass comments that you get from people and have to sit there sometimes and grin and bear it, bear it till you get to the point where you're like, I don't have to sit here. Um, and you are the one that's missing out on, on, on this opportunity as opposed to the other way around. And so, um, but yeah, I've had crazy experiences. I've had, uh, founder, you know, investors say things to me that I know for a fact they would never say to my husband. Um, right? So not just the racial bias, but the gender bias that that has existed as, as well. 

Kathryn Finney (15:32):
One of the craziest things that was presented to me as the GP at Greenhouse Fund was a major institutional investor. Um, one of the biggest ones who we really wanted to have as an investor in our fund was going to put a million dollars in our fund and be the lead investor. And this was right at the beginning of our fund. Um, when you're creating a venture fund, getting a lead investor is one of the hardest things you want. And that, and this is the lead investor is the first person to write a sizable track. So we were so excited at conversations we're going back and forth and the the VC said, okay, this is really great. Um, so here's what we wanna do. We want a long-term relationship with you. Now, this is the trigger for me because in venture capital, most venture funds are in existence for seven to 10 years. 

So I'm like, I don't know how much longer relationship you wanna have other than seven to 10 years. But then said, well, we want a deeper relationship. I'm like, well, what do you mean by deeper? And what we found out is that not only do they wanna be an investor in the fund, but they also wanted to own part of what is called the general partnership. Venture capital funds are actually many different companies that comprise the fund. You have the limited partnership. These are the people who are actually investing the money that you're going to invest in other companies. You have the general partnership, they're the people who actually manage the investments. And it is the general partnership of the venture fund that then manages all of these companies, aka called the portfolio. So you, the limited partnership for all the money for that's gonna be invested is at, is one company. The general partnership, the people who manage the investment is another company. And so what this institutional investor was asking and wanting was a part of the general partnership, and that made no sense to me. 

Cheryl Contee(17:37):
We saw people in our space getting funded and we started reaching out to investors in our network. And I would say it probably took 50. I figured out very quickly that I was going to have to knock on a lot of doors because even though I had built a multimillion dollar revenue business, even though I had some micro celebrity through my blog, my media appearances, even though I had a a great network, people weren't taking me seriously as someone who could create a startup. I, I remember literally sitting in front of an investor who was representing a fund whose specific mission is to fund people like me. And after I showed him a demo of the product and how it worked, he said, well, I can see how this is really important and that there's a market for this, but I don't know if you are the person who can actually bring this to market and bring this to fruition. Yeah, he said that to my face. 

I'm Cheryl Contee, chief Innovation Officer at the Impact seat and chair and founder at Dub Things Today. I sold my company attentively in 2016 to Black Bob. 

So there was a lot of that. There was a lot of unanswered phone calls, emails that went unanswered, crawling on my belly, begging for meetings. But finally I ended up sitting on a park bench with, uh, the person who had become our lead investor for two hours. We sat on park bench and just talked about our lives, you know, talked about our dreams, my dreams for the business and, and what it could do, his dreams for what his investments could create in the world. And, you know, that started a wonderful adventure. 

Kathryn Finney (19:20):
There's crowdfunding and equity crowdfunding, which I think is a really interesting phenomena where you sell ownership in your company to the crowd, um, to, to your potential customers, to the larger community. Um, and there's platforms like Republic and others that are really, really good at that. And it's very different than, um, like a GoFundMe where you're basically asking for charity with the equity platforms. You are selling for all purposes. Equity stop in your company to um, your community. And that can be an excellent way to get money for your company and can also be an excellent way to build your community because now people are invested in your success and that becomes very, very important. They're investing your success because the bigger you get is the opportunity for them to get a return as well. 

Felecia Hatcher (20:16):
I think more organizations or people or mentors that support founders should be asking them, should you be fundraising? Are there alternative sources to capital? Cuz there are a lot that doesn't require you to play that game and allows you to be focused a little bit more on the growth of what you're trying to build and the impact that you're ultimately trying to have. 

Kathryn Finney(20:40):
So we talk a lot about raising the money, but we don't talk a lot about what happens after you get it right. Say you have a successful raise, um, you have all this investment in things like one of the things I see that happens is a lack of like real basic financial management, um, not learning how to read a balance sheet, not even learning what a p and l is, the number of companies that are not using QuickBooks or some sort of spreadsheet management of their bank accounts. And I'm like, well, how do you know what you're spending as an investor? If I was asked you to send me a report you couldn't, like, you don't even know what it is that you have coming in and what's coming out on a regular basis. And so those are the sort of mistakes I see once people receive the money is that they don't have financial systems set up on the back end to be able to really manage. 

They don't have an accountant and you need an accountant who knows how to work with venture backed companies who know how to work with scalable, fast moving high growth companies. That is a different type of accounting. Another is mistaken the money that they get for investment in their business as personal money and it's not, um, I, the number of startups I've met who don't have separate business accounts for their businesses, um, and that it's all tied into personal is pretty amazing. People end up misappropriating funds and things like that because they're not keeping things very, very separate. And I can tell you that has been the downfall for many, many A C E O. 

Denitria Lewis (22:30):
Is there something that I would've loved to known before I started my business? Yeah, I would've loved to known <laugh> like how critically important it was to set yourself up Well operationally, um, lots of individuals go from their businesses being either a hobby or something they're doing as a side hustle or something they just happen to be really good at and they have decided to strike out and make it a business. You might file Lll c paperwork, you may not, you might file an S-corp, you may not. You. All of those steps are things that you need an expert to walk you through. So whether that's the small business administration or organizations that are focused on helping businesses go to scale, you need to seek out that knowledge, um, because it's going to be critically important when it comes time to file documentation, file taxes, file all of these different things that are ultimately going to mean some type of financial payout to the government. 

I'm Denitria Lewis. I am a serial entrepreneur and digital marketer, 

So I would definitely tell any new entrepreneur, do not skimp on, um, really just immersing yourself in what you need to know operationally, even if you are not the individual to execute those things. Know what is necessary, know what is needed so that you can make sure that all of your ducks are in the row. Because when the year ends and you're trying to recap all of this data, you're gonna wanna know that you are protected because you filed the appropriate paperwork. 

Kathryn Finney  (24:19):
All founders should take the time to ask themselves whether or not it makes sense to fundraise. Not every company is venture backable and not all money is good money. And even those companies that are investible may have better success Focusing on revenue before looking to raise capital. There are many different ways in which you can scale your business and figuring out the best financial plan for you and your company is what will take you to the next level. 

For many entrepreneurs, the idea of letting go of their babies is hard to fathom. But with foresight and some planning, letting go can be easier than you think. On the next and final episode of season two of Build a Damn Thing, hear how I and others stepped away from a thriving and sometimes failing business and seamlessly moved on to the next.