Retales: E-Commerce Growth Stories

Bonus Episode! E-commerce Experts Reveal Their Fundraising Secrets For Attracting New Investment In Your Business

• Brightpearl Podcasts • Season 4 • Episode 10

Share episode

For our last episode of the season, we have something extra special for you! 

In this episode, we present a recording of a recent online event hosted as part of Brightpearl's Peak Season series on finance and fundraising in e-commerce. Our host, Caroline Baldwin sat down with Emily Bendell, Founder and CEO at Bluebella, and Nick Torday, Co-founder and CEO at Bower Collective.

Unmask the secrets behind successful e-commerce fundraising with Emily  and Nick.  This episode is an exploration of their fundraising sagas, the highs and lows, triumphs, and lessons learned. They pull back the curtain on the emotional roller coaster of fundraising, offer nuggets on securing a diverse pool of investors, and take a deep dive into the persistent gender gap in the investment sector.

As we navigate the twists and turns of their journeys, we'll dig into their experiences during the pandemic, their reasons for picking crowdfunding over angel investment, and the weight of having a supportive brand community. They candidly discuss the perks of crowdfunding,  and the crucial role of timing in the crowdfunding process. You'll gain insights on the current state of VC funding for female-founded businesses and why it's crucial to proactively seek out female investors.

Together, they share their remarkable e-commerce fundraising journey and the priceless lessons they've learned.

If you're in search of expert guidance on attracting investment or exploring
funding options for your e-commerce enterprise, regardless of its size, then this is an episode you don’t want to miss.

Subscribe to Re: tales and get an instant notification when a new episode is released. We are available on Apple Podcasts, Spotify, Amazon, Stitcher, or wherever you get your podcasts.

Speaker 1:

Hi everyone and welcome to Retails. I'm Caroline Baldwin and this week we have an episode that's a little bit different. It's a recording of a recent online event I hosted as part of Brightpills Peak Season series on finance and funding. I sat down with Emily Bendall, founder and CEO at BlueBella, and Nick Torday, co-founder and the CEO at the Bauer Collective. Together, they shared their e-commerce fundraising journeys and the invaluable lessons they learned From the emotional roller coaster of fundraising to finding diverse investors who understand their brands. This session explored everything from inequality and the gender gap in the investment sector areas of improvement for crowdfunding platforms to the key areas they invested their funds into and why it's crucial to stay true to your mission and principles. I think you're going to get so much value from this conversation From Brightpills. This is Retails.

Speaker 3:

Welcome to Retails e-commerce growth stories, where we unveil captivating tales of triumph, hard-earned lessons and the secrets to success in retail and e-commerce. Join us as we sit down with e-commerce titans, disruptive challenger brands and industry experts to explore winning strategies, market and leadership insights, and future-shaping trends and innovations. From AI to venture capital, global expansion to automation these powerful conversations will fuel your growth trajectory. We believe every story contains valuable lessons. Retails is your ultimate destination to uncover them. Now to our host, caroline Baldwin.

Speaker 1:

Hello and welcome to the main event, the Retails Takeover of the Brightpills Peak Season Series. We are thrilled to have you here today. Are you eager to level up your financial strategies and explore fresh fundraising opportunities for your e-commerce venture? Well, that's good, because that's what we're talking about today. I'm Caroline Baldwin, your moderator for this conversation, and I'll be guiding this discussion for the next 60 minutes or so as we explore the strategies behind selecting the right funding options and attracting potential investors to fuel your brand's expansion.

Speaker 1:

Our panel today features Emily Bendle, the founder of luxury lingerie brand Blue Bella, and Nick Torday, the CEO and co-founder of Bower Collective, which provides natural and sustainable household products. Both have unique perspectives on e-commerce fundraising and will be sharing their own success stories, including lessons learned after raising millions of pounds of investment through crowdfunding. So, yes, let's get a move on onto e-commerce fundraising, which is an incredibly dynamic and critical topic in today's e-commerce environment, in order to unlock scale and growth. Our esteemed panelists are here to provide unique insights and expertise, so let's get them on stage. We're excited to learn from them. Welcome, emily and Nick. Do join me. Hi, caroline. Hi, caroline, good to see you Hi, thank you.

Speaker 1:

So much for sharing your time today to talk to us about this all-important topic. Before we get our teeth into all things fundraising, it might be a really good idea to introduce yourselves to our audience, explain a little bit about yourself and your business and how you got to where you are today. Nick, would you like to start? Thanks, Caroline.

Speaker 4:

Yes, so Nick Torday, co-founder of Bower Collective, as you said in your introduction, we are a sustainable consumer goods business with a North Star mission to eliminate plastic waste. That's why we founded the business. So myself and my co-founder both come from a background of running businesses with a sort of sustainability impact Ben. My personal background was in technology and my co-founder ran a compostable packaging business. We came together a few years ago with this hypothesis how could we create a really transformational, scalable business that directly addressed the plastic waste crisis? Long story short, bower Collective was born. We launched in January 2020. We basically deliver natural household products on subscription in reusable packaging. So our promise to our customers is you shop with Bower, zero plastic waste comes out of your home because we reuse and refill the packaging. We reuse and refill the packaging over and over again.

Speaker 1:

Incredible, and I'm sure we're going to be drilling into that sustainability side of things later on, Emily welcome.

Speaker 2:

Hi Caroline. I'm Emily Bendell. I'm the founder and CEO of Blue Bella. We are a lingerie brand. My background is nothing to do with lingerie I was working as a journalist, actually but I always loved lingerie and I couldn't find what myself and my friends wanted.

Speaker 2:

When I started the business, lingerie was a very binary industry. It was very much oh, here's your smooth lines, functional wear under clothes, boring underwear. Or here's your sexy dress up for someone else male gaze lingerie. And I found that deeply problematic in the sense that if we're telling young women that this product that they wear closest to their skin is not for themselves but for someone else, what does that tell women about their bodies? So what I wanted to do was create a brand that really reframed how we thought about lingerie that this is a product for women, to reflect their style, to reflect their mood, that we remove those patriarchal layers from the product.

Speaker 2:

So the brand is very much about fashion. It's a fashion lingerie brand about female empowerment. We're known as a campaigning brand We've broken many first in the industry and is inclusive, partly in terms of the aesthetic we put out and also size range. We are a team of 45, now based in Hoxton East London. We sell via e-commerce through seven different country facing sites UK, us, australia and four European sites and via wholesale. So that's the short intro.

Speaker 1:

Fantastic. So two incredibly mission driven brands with very different stories and very different backgrounds. So, emily, what year did you launch Bubella?

Speaker 2:

About 100 years ago, I think Feels like that sometimes. I started a long time ago, in 2006, and it was really a one woman show. I was doing it around another job. I had a very small collection. I started selling to friends, family, at local events and then initially grew through a direct selling channel model. That then started to sort of hold as a sales channel in the UK. We then worked in licensing, which we did to really sort of transition the business. So really in its current form Bubella brand, e-commerce and wholesale that's sort of eight years old. I would say Eight years old or so.

Speaker 1:

I asked this because I'd love to understand when exactly was the time that you thought it was a good idea to start looking for external investment. What was that? Like old moment, considering that the brand has been around since 2006 and through different entities. What was that point? We were like, okay, yeah, we need to do this now.

Speaker 2:

Yeah, it's like a really high level strategic answer that isn't. We're running out of money, which is what most entrepreneurs will tell you. I mean, I think well. So my most recent round was in 2016. We've been profitable since then. We've funded our own growth ourselves.

Speaker 2:

But start looking back at the beginning. You generally, particularly in a consumer business, particularly in London 40 sizes per bra even if you're doing well, you need money for working cap to fund your growth. So the very early rounds, which for me was angels, was really just to kind of get it off the ground, etc. Then there was a follow on round really to scale At that point, the direct sales business. And then, interestingly, once I realized I needed to transition the business to e-commerce and wholesale I would have had to raise a very low valuation at that point.

Speaker 2:

So, unusually, I kind of found a licensing deal that was very profitable for us. So we designed and produced for another brand you know a very well-known global brand, which was sort of a deal that then allowed me, focused on that for two years, was profitable, invested that money to start e-commerce and wholesale, to demonstrate we could do it. And then the crowdfund which was 2016, was really for US launch growth the US is now our largest market and also to expand product categories. So we were just really quite narrow at that point. We now do nightwear hosiery every day, lingerie We've sort of expanded that product offering.

Speaker 2:

So really it was sort of US growth and product expansion.

Speaker 1:

It was getting to that point where you had that laser focus and you needed that written to fundraise for a specific endeavor.

Speaker 2:

Yeah, and, interestingly, if I'd gone out saying, oh, we're moving out of direct sales, we're going to do e-commerce and wholesale, and we're going to go to the US and we're going to develop and we haven't proven we could do any of that, that would have been a tough sell. You know, maybe I would have got the money at a very low valuation. But actually sort of finding money in a more creative way to sort of show a little bit of what we could do and then doing around in the end was a better way of doing it. So I think, yeah, being at that sort of that right point where you've got a few KPIs demonstrated obviously puts you in a stronger position. Yeah, Fantastic.

Speaker 1:

And Nick, how about yourself? So you said you launched in 2020, so much different timescale, but you've done a couple of rounds. Talk to us about your moment when you knew it was important to start investing, start the investment journey.

Speaker 4:

Well, yeah, I guess you know, as a sort of counterpoint to Emily's journey, where she built the business organically and that's amazing to like get this licensing deal and reinvest, be cash generative, to get to a crowdfund, we're at the sort of other end where we raise money right out the gate and we're, you know, we launched in 2020, which obviously was quite interesting times to launch a new business. We launched in January. Covid hit two months later. It was chaos, but we our first pre-seed investment was a group called Founders Factory, who you may have heard of, who back very early stage pre-seed ideas that they like, and I think we just you know we were ambitious to like take ownership of this emerging category really quickly and we felt the best way to do that was to raise some capital and really go for it and build the innovation in the business which is our sort of product innovation and packaging technology, and we could have done that in another way. I think the truth is with fundraising, with building it. There's, like Emily you probably you know well, hopefully we would agree there's like 100 different ways you can build this and none of them are. None of them are like entirely linear or like in sync with one another or the right or the wrong way to do it. So, yeah, we've raised a fair bit of capital in over a couple of rounds. Over the years We've grown the business at about 270% year on year, so it's been very rapid growth. But I think then everything changed again this year, particularly for consumer businesses, because the whole market context change right. Well, really going back to last year and all the sort of challenging things, starting off with the conflict in Ukraine and then the ripple effect and global markets, and then the high inflation and all that sort of stuff, and also a lot of consumer businesses quite well known sort of big ticket consumer businesses on the public markets have not done so great, and so that's been a sort of challenging context and environment within which to fundraise. But you know, it's kind of it's peaks and troughs and it's.

Speaker 4:

I always describe the founder journey as being I don't always describe it. Everyone describes it as being an emotional roller coaster and I think that's you know. That applies equally to funding. We've had, you know, funding round where we closed it in five weeks and it's been very successful. And you know, this year was harder and it just took longer and was definitely, you know we really had to batten down the hatches. So I think that you know there are so many different ways you can approach it. You have and Emily and I were chatting about this before we came on live we do, to a certain extent, have to be in tune with the kind of market mood music, whether you agree with it or not, whether you like it or not, whether it aligns with your strategy or not. You have to be adaptable. But you know, our journey has been not an unfamiliar one, I think, for a lot of founder entrepreneurs and so far, you know, we've raised, we've managed to raise capital at positive valuations and we're in good shape as a business. But it's not easy.

Speaker 4:

I just like to say that, and as a founder with limited resources, I mean our team is much smaller than Emily's. We've got 12 people FTE and probably another five contractors. You know you pulled in so many different directions and fundraising is all consuming in terms of the allocation of your time as a founder.

Speaker 2:

Yeah, and it's always the thing, isn't it? And investors always say you know, during this process we've been speaking, you haven't hit your targets, and it's like no, because you keep emailing me with questions. You know, when you're small, it's sort of it can really distract from actually running the business. You know, it's a really, it's really challenging if you've not got that senior team in place yet, which generally you don't right because you're still in that growth phase. So yeah, absolutely it's it's, it's tough.

Speaker 4:

And investors expect to speak to the founder, even if you're a much more established business and you have a C suite, and there is still that expectation. Maybe that changes when you're at significant scale it probably does. But yeah, it is. It is a big focus is everything and, as you say, the longer it takes, the numbers change, the context changes, so it's sort of incumbent upon you to really try and close the funding round within a, within a certain period of time. Before you know, things change. The external environment changes in a way that it becomes more problematic or challenged.

Speaker 1:

That's really interesting and yeah, emily, to your point, leave me alone a little bit and then I'll be able to prove everything that is going right. So we'll touch on kind of the market and how investors are a little bit fickle as we go into both your stories in a moment. Before we jump to that, I'd love to understand why, why you chose crowdfunding as your your roots. You know, nick, you mentioned there's there's a host of different options. You know loans, capital, angel investment and, emily, I believe you did start looked into the angel investment route and you crowdfunded. Since do you want to tell me about your decision of going down that route?

Speaker 2:

Yeah. So for me I was kind of the real, kind of a harm moment for me happened when I was having a meeting somewhere with someone I don't actually know who now and it was in some kind of restaurant or bar or something and he went, oh, they've got my beer here behind the counter. So what do you mean? Are you invest? You know, what do you mean? Your beer? And he was like, oh, I invested three. And I was like, oh, that's really powerful, that ownership he feels. You know, he put in a small amount of money and that sort of ownership of pointing out the brand. And I was like there's something, there's something in that. So I was sort of interested in it from that, you know, as if you're a consumer brand, having that kind of army of ambassadors that are speaking to your brand and supporting your brand, so that that held my interest for sure. I think as well.

Speaker 2:

You know, realistically, we've always struggled to secure institutional investment. We've struggled a little bit, but typically you know a sort of retail brand creating a physical product. You know, yes, it's e-commerce, but it's not. You know tech and really the appetite for institutional money for that kind of business at that time, or for PE or VC or whatever. It's obviously different now. We're a bit bigger, but that was tough. And so the angel route. You know that was also challenging the first two rounds mainly, you know, female focused product, male dominated. You know most angels are male and didn't inherently understand the brand. So you know it was kind of difficult everywhere really, whereas crowdfunding I felt that it worked for us as a kind of, you know, aesthetically pleasing, consumer focused brand. I liked the idea of these brand ambassadors and it allowed us a way to do a kind of million plus raise without an institutional investor. So it was really those two things.

Speaker 4:

I'm just starting with interest, Emily. What was your, did you raise on CrowdCube?

Speaker 2:

Yes.

Speaker 4:

What was your split in the end of female to male retail investors?

Speaker 2:

Yeah, so interesting question. So what happened was so CrowdCube. Obviously they're super keen that you as a business promote the raise to your own network and watch your own customers, right, because they want more people in the crowd, so they want you to be sending emails out, putting it on your homepage, et cetera, et cetera. So they were sort of saying to us you need to be doing that. And I was saying well, you know, our customers are young women. I've only got so much real estate, you know, on my site. You know so much space in my marketing calendar. So absolutely we will do it.

Speaker 2:

I want to do it measure if that actually doesn't a thing, because how many young women are actually crowd investors? For whatever reason, you know, and I pushed for those numbers from them and it's tiny, right, it might have. This was quite a while ago, obviously, so it might have changed. I don't want to make any assumptions now and I hope very much it has changed. But actually, for whatever reason, it's multi-led and I can talk. You know we could do a whole hour on the reasons behind this and it's obviously a personal passion of mine.

Speaker 2:

It is problematic that it is a relatively small portion of women. I was in this little interesting dilemma of sort of ethically thinking well, there should be more women on this platform, but equally, I'm running a business If I'm sending out emails about this and it's not really connecting for whatever reason. Should I be? You know, selling products. So the majority of investors that came through on CrowdCube were not actually our target customer, you know. But they can talk to the brand. They maybe they would buy gifting. We don't target a male customer, but of course we have one for Christmas, etc. So yeah, it was a predominantly male, for sure. Interesting.

Speaker 1:

That's so interesting and, Nick, your journey. Was it a similar reason to go by the crowdfunding route? I can imagine there's a lot of ambassadors in the sustainability space and people really wanting to take your product and wanting to make it work, but even they're not being a lot of options out there.

Speaker 4:

Yeah, I mean I think it was timing as well. So in the early rounds we were tiny and we didn't have a community, you know, we had like a thousand customers or whatever, and so we kept on and you know, in the early round, a couple of rounds we did okay. You know we've got institutional VCs, got some corporate venture and some sort of high net worth angel investors. But then we felt the timing was right for being completely transparent One, because it's really tough funding environment and we thought maybe now's the time to go to the crowd, because we've now got a community of 200,000 people, which we didn't have before, and they're really highly engaged. So timing is good and, just echoing everything Emily says, it's that idea that people walk into a boutique, airbnb or whatever, or a glamping site or a pub and they see power products while they're washing their hands. They're like, oh, I'm a shareholder, that's so cool. They stock them.

Speaker 4:

In the places I go there is that feeling of that sort of equity brand advocacy which is just so important. So yeah, it just felt timely to do it and yeah, it was good, it was a success. And, going back to that gender thing, I think the most successful crowdfund crowd cube did last year was Zoey, which is a female founder-led brand form in which I think was one of the biggest ever raises. I think it was something like over 80% female retail investors. So I think it probably has changed and actually our customer base is around 90% female and I haven't done the exact split, but I know a lot of our investors bigger ticket investors were women or were men investing on behalf of their partners that were custom by our customers.

Speaker 1:

That's really interesting Because, emily, we talked about this on the podcast and we had you as a guest a little while ago about that seeking out those female investors, and how you need to do it quite proactively. Do you want to share your experience?

Speaker 2:

on that front.

Speaker 4:

Yeah.

Speaker 2:

And, as Nick says, things move. It's a while ago that I raised I mean I know the figures have improved slightly Caveat to that. They're still appalling. It's still like 3% of VC funding goes to female founded businesses et cetera. I mean it depends how you cut it, but it's somewhere between one and 10, but probably about three. So it's still like really really long way from where it needs to be. But it's good if it's improved slightly.

Speaker 2:

But sorry to go back to your question, before I get on my soapbox, I think that for me it was important to me to have. Well, it was two things. So, first of all, I was quite honestly struggling to get investors initially. So I was going to the usual kind of angel investor events et cetera, and people tend to invest in things they know and they understand and they're comfortable with. So you've made your money in biotech, you invest in biotech and that's understandable. That's an industry you know. Whatever, if you've got a, you know it's a female founded business, but it's also a female focused business. It's just there's a very small pool of people that are in these angel communities that actually understand like, oh, you make bras, but other companies make bras already, so why, what's different about your company and the nuances of the design in the brand, et cetera, weren't really connecting. So I was struggling to find I was getting a lot of no's, a lot of rejection, and I wasn't finding people who understood it. So, and I was realizing as well I mean at the time I think it was 95% of the angel community in the UK were male, you know, also predominantly white, predominantly middle-aged. So there's lots of issues there. So I basically put on my own event for high net worth women I didn't know any high net worth women cold invited people to come, but it was actually through that that I, through that event, which I did in London I wasn't living in London at the time, but you know put it on and it was through that I met an all-female angel network that had just been founded, called a DD, and we became their first investment and so it was important to me. You know it was partly important to me. I wanted female investments, but it was also I kind of felt I might not get there without it, you know. So it was kind of both those things.

Speaker 2:

And you know, if you look at all the data, you know generally, you know generally, it seems pretty clear that investors actually get more per pound of investment from female-founded businesses. You know, despite lower valuations, despite less investment, despite all those things, they're getting that return. So you know, it's very. The issues are generally about comfort, you know, whether it's a VC, which again a predominantly male run, or whether it's angels people investing people they feel comfortable with, they understand, they went to the school, they get you know, and so this is this cycle that needs a very, very conscious thought to break. And it's a complex cycle because actually the evidence shows that even if a female founder has investment from a, say, female-led VC, she's going to struggle. She's going to be twice as hard for her to raise her second round from a male-backed VC Because of that inherent bias. Harvard's a bit harder business review did some research on it. So it's really multi-layered, it's complex.

Speaker 1:

Yeah, I can imagine. Is there anything that immediately you think needs to change to improve that right now? Is there any any things that you'd like to see different?

Speaker 2:

I mean definitely. You know you can't just look at the entrepreneurs, you have to look at the investors. You know, the more women you know that control wealth should look to invest. We need to encourage women into investing. But also, you know, it has the men, the VC, the male VC partners, the male VC, the male angels. We have to kind of get this awareness of this unconscious bias. We need to talk to it. We need to. You know, it's really kind of everybody needs to really focus in on it, because we all have it. Even women have it. You know, in the research that has come out recently, even women sort of have this bias against women who've raised money from women. So you know, we're all kind of infected by this patriarchal stuff, so it's really hard to unpick.

Speaker 1:

No, I can only imagine. I think we need a whole hour to get into the. You know, you can see, you can see of this. But on that point, actually we're getting some questions coming in from the audience. So just a reminder out there, if you do have any questions to ask our esteemed panel, please do pop them into the chat Before I go on to those.

Speaker 1:

Nick, I'd like to bring you in here to talk. You know, about a different kind of side of the mission-driven business that you run in. So you've told me previously that you describe your business less of like a typical e-commerce business but more of a consumer tech business, and obviously it's the recyclable side of the product and the packaging that you've done amazing work on. Talk to me about how that impacted the fundraising. Did that make you stand out almost in a crowd? I can imagine there's a lot of sustainable and I'm saying this in inverted commas because there's a lot of greenwashing going on in this area People saying that it's sustainable, like when people said that you're much more likely to get investment if you throw AI into your headline, as it was a few years ago. I can imagine that's turning into the green side. How do you make sure you stand out as a truly sustainable business compared to all the others when you're trying to get the money.

Speaker 4:

Yeah, there's quite a lot to unpack there, so maybe the first part of the question was positioning.

Speaker 1:

Yeah, and then maybe Like this is the business, yeah.

Speaker 4:

Yeah. So yeah, I think, as of the beginning I was saying earlier, it's just like the context, the wider global market context for consumer businesses, where the direct consumer or just standard retail has been really challenging in the last 24 months and therefore the investor appetite has been massively diminished and I guess, to that point of hearing no a lot. You do hear no an awful lot on your fundraising journey for a whole bunch of different reasons, but we were increasingly hearing like not just no, but like there's just no appetite for businesses like yours, even though our metrics and our numbers and everything were pretty good. So then we just sort of came back to like what is it that actually makes us distinctive? You know, investors often want to see like defensibility is a word that comes up a lot Like what is it you do that makes your business like you can build a motor around it and defended against being cannibalized or being just commoditized by x, y or z.

Speaker 4:

And for us it's been right from the beginning, this idea of reusing material, reusing resources. So our whole hypothesis is like back in the 1950s. That's going back a while. I appreciate that. But people would reuse stuff right. Consumers in the UK and the US would take bottles and cans and containers to the local grocery store. They'd buy stuff in these containers, they'd take them home, wash them, take them back. This was just standard consumer behavior.

Speaker 4:

And then in the post-war period there was an explosion in the plastics industry and this idea of disposability being sexy and that's kind of like the linear use once throwaway market model kind of exploded in sort of particularly US and European markets and all we're saying is it's not a big thing, a big effort to go back to a world in which we want to just reuse resources Like these things.

Speaker 4:

We produce over 380 million tons of plastic packaging every year, over 50% of which are designed to be used once and thrown away. And it's just extraordinary. It's like why would you tolerate that sort of waste? And this applies to there's so much waste in all of our industries in fashion, in consumer goods, in food. It's really problematic. So we designed this system to basically reuse resources and in our case, the packaging. You can use it over and over again because of this circular system we've defined. So increasingly our story has been more focusing in on that as the sort of defensible innovation at the heart of our business, as opposed to being just another sustainable e-commerce direct consumer player. So that's kind of part one, I suppose.

Speaker 1:

And then what was the second part was about, Because that gave you that standing out, I suppose, next to the other people that are calling themselves sustainable. Did that mission. The consumer, tech, business side of things give you the I don't know attractability to the investors? I think so.

Speaker 4:

I think it does and hopefully will continue to do so. But that doesn't delegitimize other. There's lots of really great legitimate sustainable businesses out there. Everyone's got to find whatever their thing is that gives them that kind of point of difference in the market and is in some way protectable or defensible. I don't necessarily mean with IP or patents, but it has to be demonstrable that you're doing something that it's really really hard for, like could you leave a comment and just do what we're doing? No, it would be really hard for them because they've got enormous linear supply systems that are 50 years old and really difficult to unpick. So that's been important.

Speaker 4:

And then the other side of it is just being credible and being authentic. And we're a B-Corp. We've got carbon neutral certification at a product and service level with climate partner. We manufacture everything in the UK, so we have a really low carbon localized supply chain, all that sort of stuff, and I think we just try and communicate that very transparently. And also we're transparent about when we screw up and we get things wrong, which we often do. And I think in our category in sustainable products, sustainable goods, very often people cover up when they've messed up and that messing something up has had a detrimental impact. I think we try and be transparent about that.

Speaker 1:

That's great, and just slipping in B-Corp there, that is no mean feat whatsoever. For those out there that haven't necessarily tried it, that is an incredible achievement. It's a good thing.

Speaker 4:

And Emily mentioned she's on the journey to B-Corp certification. Well, it's pretty rigorous. It's like it is a good undertaking, but we think it's a really valuable thing for any sort of business. I went to a B-Corp event a few weeks ago and there were like accountancy firms, fashion businesses, consumer goods businesses, law firms. It can be applicable to a whole range of categories and industries and it is, I think, probably the most credible global kite mark there is at the moment.

Speaker 1:

Yeah, congratulations on that and good luck on that journey, emily. And what I would also love to jump in on here was what we were saying earlier was the nuances in the market and how the market can change and how investors can be quite fickle. I feel like both of you have experienced that with different approaches. Maybe, nick, you could begin off the back of what you were saying there about making sure that you're able to adapt to what the market wants.

Speaker 4:

Well, I think it's yeah. So I'd like to sort of caveat that by saying you have to be adaptable but at the same time, you have to stick to your guns. Yeah, and particularly when we are first raising money, we got a lot of rejection and, emily, this is familiar experience to you. But you'll hear like you'll speak to 50 investors and 48 of them will give you different reasons as to why they're not investing. And in the early days you're like, oh, yeah, yeah, yeah, yeah, yeah, ok, yeah, great, thanks, we'll take that on board and we'll iterate our deck.

Speaker 4:

And we were doing like 26 different versions of our funding deck and in the end we spoke to one of our partners at Founders Factory, our original investors. He's sort of very experienced in that world. He said you have to just stay, actually not be buffeted, of course, by these constant, basically people's nice way of just saying can you get off the call I've got I don't believe in your business because of this? And you're like, really hadn't really even thought about that. Eventually, you have to just slightly bang your fist on the table and stay true to your strategic principles and your mission and why you're building the business that you're building. And actually so, yes, you have to be adaptable to a degree, but you also have to be consistent with the mission that you're representing. I think Emily's been very clear about the mission that BlueBella has, and staying true to that is the same way with Bauer. If we stay true to that and if people, if that resonates with investors, you're getting the right investors to come on board with your business. I reckon.

Speaker 2:

Yeah, and I think it also is. I think there's like a few different things in it for me, because so you're obviously trying to get money right, so you're trying to like say the right things and all the rest of it to kind of and it's tempting to you have an investor like well, I'm really interested in this element, and it's tempting to kind of overemphasize it or restructure the deck or as all the things. Next, saying that you could do and I think that's okay to an extent right If you want to do that anyway, and it's just to maybe change in the order slightly or whatever, because that's their particular interest. But I think much beyond that is very, very dangerous, because taking investment is someone said to me once, and it's so true it's like a marriage. You take someone's money. You wouldn't get married unless you had talked about. Do you share the same hopes and dreams? Do you have the same vision? Are you on the same path? And I think if you kind of skew it slightly to close the deal but actually that's not what you believe, that's not the right path. You believe there's the right path it's only going to cause massive headaches. You do not want to be at odds with your investors. So I think it's really important to moderate that and I think, as Nick says, you kind of need to know what you think from.

Speaker 2:

My experience in the fashion retail market is a few years ago, it was two things. One, it was all about DTC. Forget about wholesale, forget about DTC, dtc. Why would you do wholesale? You're diluting your brand, you're diverting your customers. Why would you do that? And two, it's all about growth. Don't worry about profitability. Grow, grow, grow, grow, grow. You need to demonstrate these numbers and that was really the kind of environment. I was sort of against that. For me, wholesale has its place. I think, if you've got the right retail partners, that you work well with that, elevate your brand. I believe some customers, particularly for something as sort of emotive as a lingerie, you want to touch and feel it. Everybody's different and you want to be in a number of places to capture those people who might just might not be DTC customers, or at least won't for their first purchase.

Speaker 2:

but might come to you for their second. Equally, I've kind of always believed businesses would eventually make money, which now is all in fashion, but that profit or first acquisition just wasn't. And obviously in the lingerie space there's been quite a few brands that, sadly, have shut down recently because they were on that growth trajectory. The fashion changed, everyone pulled back, they've run out of money and it's been a fire sale. So you have to kind of take your own view and be comfortable with your view. The one thing I'd sort of say, though, that's talking about getting investment, and one thing I would say is who are you speaking to? If it's somebody who's incredibly successful in your space and you really value that opinion, obviously listen to them.

Speaker 2:

My chairman, he's also an investor. I hugely respect his opinion, and if he says what about this, then I will absolutely listen and relook at things. So, obviously, moderate who you're, think about who you're speaking to, and maybe you have missed something, maybe the emphasis isn't quite right. I think you also have to be open to that feedback. And actually the investment process I found painful though it is and it is, it is a good opportunity to really examine your business, really think about what you're doing. If you're doing it in the right way, what people think about it, etc.

Speaker 4:

Yeah.

Speaker 1:

Great answers, both of you.

Speaker 4:

I totally agree that that idea of it being a marriage is a really long term relationship and if you're chasing an impossible dream with someone that you just sense is not right, it's not going to end well.

Speaker 1:

Watch out, there's red flags that trust your gut.

Speaker 4:

Yeah, but just also trust that, like the people that are investing and making the really significant investments in your business genuinely align with what it is you're trying to build.

Speaker 1:

So we have some questions coming in, so I want to get to a few of those before we start wrapping up and changing track. A minute, I can't believe how quickly our time is going. So we've got a question here, which is what is the single most common mistake you as leaders, or potentially yourselves, should have made or should avoid when approaching investors for funding? So have you made any mistakes yourselves that you could share or that you've heard along the great lines happened? Just kind of a word of warning to our audience, emily, how about you take this?

Speaker 2:

I'm sure I've made a huge number of mistakes. So I'll go through my phylogets of my mistakes and think about it. I mean, I think for me, looking back on my experience, it's probably wasting time in places that probably you know it was perhaps clear weren't going to go anywhere or you know it could be terribly time consuming. I think you have to. You know we talked about early about running the business whilst doing the fundraise. You know running. You know running it to a timeline. I think it's really important.

Speaker 2:

You know, when I was younger I was a bit more timid about like what's your ticket size or when could you? You know I didn't kind of you kind of felt a bit, you know I felt a bit you're asking for money and it's kind of, whereas you know I think you have to be, you know, very clear, run to a timeline. You know for both sides, not waste time, get to the heart of it. So I think probably, you know, for me I probably spent quite a lot of time in places that in hindsight weren't worth it and also might have slowed down the process in other places. Because of that I would say, and the other thing I'd say is leaving it too late to start, because it always takes longer than you think. So you know, I think you know, later you leave it. You know they can smell the desperation you have to, you know, and it's typical, and you don't need money. Everyone's offering you money, you know. So you need to kind of get the timing right. That's so important. Yeah, how about?

Speaker 1:

you, nick? What's your top mistake that you've been doing then?

Speaker 4:

Well, it's not necessarily a mistake, but it's a really cautionary tale. We had a really bad experience. Crowdfunding that I think is worth sharing, which is the crowdfund space is and maybe this was a naivety on my part, but is like full of competitors trying to get their hands on your business intelligence and I think it's quite common that you like, if you're putting out an investor debt, your competitors and you know our competitors would be like signing up under the business name, right. So anyway, we did a webinar not unlike this, which was requested by investors. So it was a private, invite-only webinar talking about business Me and my co-founder. We had maybe 30 people sign up and during the webinar there was this one investor and we vetted the list, we checked all the names, everything looked fine.

Speaker 4:

There was this one investor who's just asking what would definitely invest-ery type questions, but kept on going on and on and like sucking the oxygen out of the room, not letting anyone else ask questions, but they were legitimate, like questions investors would ask really detailed and we were answering them and as the call went on, I just felt really uncomfortable. Anyway, sort of tried to then move the conversation on to other investors to ask questions and at the end. I just asked my team. My marketing manager said look, just something felt a bit wrong and she said that it was someone else had signed up under a false name and it was one of our biggest competitors, coo had signed up under a false name, come into our webinar with the camera switched off, with a fake name account and got all of this information out of us. So that was really like.

Speaker 4:

In fact, just even talking about it now is quite triggering, because it was, you know. So, I think, cautionary tale with crowdfunding, is it? Sadly, there are other businesses out there for whom they see it as an opportunity to kind of try and steal and march on your business. I don't know, emily, if you've ever experienced anything like that. I was pretty surprised by it, but maybe it's quite commonplace.

Speaker 2:

I mean I guess, I mean I sort of assumed that we I mean my investor, the crowd investor updates are very, you know, it's kind of public domain with a little bit, and then I let people know vanilla vanilla, and then I let people individually if they come back with questions. So yeah, I mean absolutely be aware of that for sure. Yeah.

Speaker 1:

Well, one of the next questions I was going to ask from the audience is what are the pros and cons of CrowdCube for companies considering going down that route? So all the crowdfunding route, should we say, rather than crowdfunding?

Speaker 4:

The platforms are all so bad.

Speaker 1:

The platforms are available exactly Well, actually one other platform is available. And so what? Maybe let's turn to the pros. So for crowdfunding model, that clearly is a con and something that we should all be aware of. Those are listening right now. But yeah, let's sing some of its praises what have been some of the best parts of it for you. Maybe Nicky could kick us off.

Speaker 4:

Yeah, look, it was a really actually other than that was a really really positive experience. It's hard work, it is like running a that's a con, nick, we're talking about pros.

Speaker 2:

Sorry, sorry, sorry, that's kind of that. It's not easy to get, because that's the thing that shouts in your mind.

Speaker 4:

Yeah, it's really hard work Everyone's like. The pros are. You can drive really good engagement. You can do lots of good storytelling.

Speaker 4:

I really enjoyed the process of commissioning our crowdfund video with the videographers that we work with years and actually that was great evergreen content that we produced that we've used in other contexts. It was just it was a really nice process to bring the whole team together to engage in that process. It just kind of gave everyone a bit of a lift. It was kind of like doing a big multi-channel campaign for the business, about the business, so great sort of team and partner engagement, and then some of our lead investors got involved with it, so it really sort of galvanized everyone. I think that was a pro, a positive. The results were pretty good, I think, given the market. We're happy with where we got to. So it was, in the end it was definitely paid off as something to do. And, yeah, we've now got the sort of I think was it 500 individual retail investors, which is the really powerful brand ambassadors, like Emily was saying earlier. So I think those are all pros.

Speaker 1:

Emily, any other pros?

Speaker 2:

Yeah, I think the brand ambassador piece, I mean, I think the other thing, I everything Nick said, I think that was sort of covered it. I think I just had one thing, which is probably that you know if you have one investor or a few that are making up what the 500 make up in terms of that, their relative power, you know, versus you know, you as a founding team or founding shareholders, you know, in some ways having lots of small investors in terms of decision making and control can be better than having, sort of you know, a couple of more powerful investors. So there's also that element as well. But obviously there's more management and there's a lot of work and all the things that can get done. That contrary. But yeah, I'd say that is, that is a, that is a pro.

Speaker 4:

Good yeah, you're right, I mean.

Speaker 2:

Pro and con.

Speaker 1:

So another question coming in what was the? What were you initially trying to achieve via your fundraising route? And kind of what were you? What was the first thing you were spending the money on? What was it? What was it? How is it Baltering your business?

Speaker 2:

Can I just say con before we go on to that, caroline, just to say I pour Nick, I cut them off. On the cons, I think it is important to say because I think there is quite a few red flags. Like Nick, yeah, I'll let Nick talk about how much work is, but I think also I'm a little bit wary of the space in that, you know, for the, for the crowd and the people are investing. I think there's a perception that there's probably more vetting than there is and the things are put up that are a little bit more checked by the platform that they are. So you know you don't want to be involved in the next PPI. So I would say you know that.

Speaker 2:

You know if there's ever any sort of issues around crowdfunding, who knows what the future might hold on gets looked into. I think being really careful to hold records of everything that you've backed up, everything that you know, obviously if you've got institutional investors involved, great, because then you've got that as an anchor and you've put all the information you know together and so on, but as a business, just being super responsible, super ethical, you know, keeping records of everything, maintaining that and so on, I think that's just something I would flag. I think there is a potential. I mean, the regulation may evolve, so I just kind of wanted to flag that. And the other big piece is the is the you know how much work it is and also making sure that perhaps they're, you know, under one entity on the cap table. I think Crowdcube have changed that, now that they are they?

Speaker 4:

do they wrap them all up under one nominee? And actually on that as well, to Emily's point about lots of retail investors versus bigger investors the bigger investors obviously don't like having. They're like oh, your cap table is going to be so messy with all these companies. They're really like not up for it, really so, but, and then kind of for fairly predictable reasons. But I think, yeah, no real cons to add to. I think I think that the technology, the crowdfunding technology, like it's still not as good as it could be like interaction with the platform. I was a bit like not massively impressed by how technically progressive it was.

Speaker 1:

Yeah, you can imagine yourself. Yeah.

Speaker 4:

Yeah, so, but you know it is a lot of work.

Speaker 1:

It is a lot of work, so tell you what just to wrap up the pros and cons, because it seems quite balanced at the moment. One word answer yes or no. If you were going to do crowdfunding again tomorrow, would you? I would.

Speaker 2:

I wouldn't, I wouldn't, I wouldn't, I wouldn't. But that's because, actually, relating to Nick's point, that okay, where we are in our trajectory, I think the kind of we've already got a lot on the cap table and that complexity, there are issues. I probably wouldn't add to that at this juncture. But would I recommend it to a business in growth phase? Yeah, absolutely, I would. Yeah, 100%.

Speaker 4:

Yeah, exactly, likewise. Like would I do it again, having we just literally closed around? I don't know, I'm on the fence, but am I happy we did it? Yeah, absolutely, and I would recommend it for businesses if it's the appropriate thing for you to do at that stage on your journey, which it might not.

Speaker 1:

So we've had we've not got a lot of time left and we've got a few questions along as the similar vein, which is what were the key areas that you use the investment for to grow in along the business, and why was it like new hires? Was it technology? Was it product? And quite a few of our audience members would like to know what you use the money for. So, yeah, Nick, what was it in your case, or is it?

Speaker 4:

just closed. Yeah, there were two main things that we were raising for in this round. One was our expansion into physical retail. So we've hired a sales team to do that and we're negotiating with some of the big national retailers and, you know, looking to really grow into bring our reasonable packaging products into physical stores, both nationals and independence. And the other one was investing in automation. So our recent refill system is, I would say, semi automated at best. It's still quite. It's definitely beyond bootstrap because we're doing quite big volumes, but it we need to improve and or automation. So that's the another significant investment has been buying in new sort of automated robotics led equipment for our refill center in swing.

Speaker 1:

And well, we're on the topic of technology, because we always love tech on the Retails podcast, you've been doing a lot on the inventory side as well, nick. Isn't that correct? Have you been using some platforms there? Do you want to explain to our audience what you've been up to in that space?

Speaker 4:

Yeah, we've been optimizing a lot. We hold a lot of. You know, we're multi categories so we cover six household categories so we do to have quite complex sort of inventory management stock holdings. So we've invested in inventory. Planner has been one of the technology tools that we're using to, you know, drive further automation and optimization in that area.

Speaker 4:

And one of the things we're looking at the moment is how that syncs with our reasonable packaging, because obviously, unlike a conventional linear business, we actually get materials back and then replan them in as inventory as opposed to virgin stock. So that's another thing that we're doing at the moment.

Speaker 1:

Yeah, complex. It'd be lovely to see how that kind of adapts as you say, it's not a typical business and the solutions out there how that manages for you. So, yeah, that sounds really interesting. Use and Emily, back to you on the key areas of investment. What did you use the money for?

Speaker 2:

So we launched our US facing e-commerce site because we didn't, that was, that was. And then you know the money to kind of market that and grow that and then as a product development, so you know we were quite niche back then. So you know, and lingerie is quite you know the size of fit. You know moving into new categories, new production so, and there was sort of people and tech as part of that, but predominantly, predominantly for those two things.

Speaker 1:

So again, let's try and keep the answers a bit short because we're close, we're short on time, but I want to get through as many of these questions as possible because they're coming in thick and fast. And outside of angel and crowdfunding, did you consider any other fundraising models for your business? Who'd like to pick up those ones? Because I think those are the two areas we've covered the most, I mean.

Speaker 2:

I think I said earlier. You know I looked at sort of institutional money without, without that much look debt. You know we had some. You know we couldn't easily get. You know it's always this ironic thing, so I'll be short. But you know it's easy to get. It's easy to get money and factoring etc. Once you're profitable and you don't need it as much. But it's quite hard, you know. So there were quite limited options.

Speaker 1:

Nick.

Speaker 4:

Yeah, yeah, I would agree with that. We've looked at a range of different sort of debt financing factoring style options and they just they don't stack up in terms of sort of the value add. But other than that, look, I would just say that there's just as there's 100 different ways to build a business, there aren't 100 different places you can raise investment, but there's a whole bunch of different strategies or combinations of funding opportunities that you could, that you could bring together. Again, you just got to work really, really hard to identify what they are and make sure they're the right fit for you and there's some great tips over this past hour.

Speaker 1:

Thank you both so much for sharing. I really, really hope it's helpful for our audience. As this is a peak season series, I can't let you go without sharing one. Let's just stick to one, because we're a bit short on time your top tip to share with our audience to boost sales this holiday season. What's your one takeaway as experts in your field, emily? What would you share?

Speaker 2:

I'd probably say don't forget brand. I think we're going to go into quite a tough environment post Christmas and I think you know, tempting as it is to sort of funnel everything into performance, I think you know making sure you invest in brand for when things might get a bit tougher post holiday is a wise thing to do.

Speaker 1:

And Nick.

Speaker 4:

Don't fall into the trap of, like aggressive discounting and try and find what your difference is during a sales window, like what makes you different to all the gazillion of other businesses that are splashing all the bells and whistles at that time. And yeah, part of that is brand, part of that is great content, part of that is differentiation.

Speaker 1:

Oh, both of you. Thank you so much. I feel like we could have gone on for another hour. A huge thank you for both of your insights and to our audience for tuning in as well. Thank you for all your questions and I really hope you got loads out of this session. Until next time. Thank you all so much and goodbye.