Raise Hell

This is the verbatim account of a former client of mine at Pitch Gym - a successful serial entrepreneur who famously appeared on a big TV show where people pitch their innovations. I interviewed h- about h- subsequent venture capital raise - the one that I helped h- on. It didn't go to plan. I thought h- story was extraordinary, and h- response to adversity revealed h- character in an admirable way. With h- permission I recorded our interview. I transcribed it, and redacted revealing details. Then I recorded it in my own voice. What you’re about to hear is an audio portrait. You can read the transcription below if you prefer. Tell me if you dig this audio portrait and I might make some more.

“When I started the raise, which is when you and I first talked, all was well, right?

Like, my business was good.

I had just hit a pretty decent growth patch.

We had our best year - our first year we hit $2 million.

We hit $2 million that year, and we were projecting 100% growth.

And so, when I started the raise, I kind of half assed it.

Other than, you know, the deck, which I thought was great.

We ended up raising like [$200,000] and change, right?

We wanted to raise a million plus.

And in a way, it's probably a good thing we didn’t.

I'll take you through the journey of what happened.

So we bought inventory into 100% growth. I borrowed the money going into, you know, into what we thought was 100% growth.

And then - you know about iOS 14, right?

Do not track.

It really hurt companies that look like me, right? Anybody who was direct to consumer.

You couldn't get good metrics on what was working, what wasn't working.

So, all of our metrics were in the shitter at that point, not good.

And so, instead of being the 100% growth, we were down 70%.

At some point, like before [REDACTED Big Sales DAY] - it’s our second biggest time of the year - I raised our prices by like 50%.

I'm like, “I may never sell another one of these things, but if I do, I'm not gonna lose money doing it.”

The agencies were like “oh, we’ll be fine.” And [REDACTED Big Sales DAY] came and went.

We were not fine.

Let's say I fired everybody.

And the raise was also hampered by iOS 14 because a lot of the way that [REDACTED Investment Platform] gets investors is through advertising.

And so it was a really bad confluence of events and time.

But I did need that money, that $200K plus that we raised.

I did need it to bridge me through.

And, you know, I basically, through [REDACTED Big Sales SEASON], got real lean, fired almost everybody, kept on my like email agency and I brought back an old paid media agency.

“Bottom line is” I said to them, “I owe on a couple of lines and things because we're 70% down.” And interest rates were going up, like it was a bad, like confluence of events.

And the crazy thing is at that at that 50% higher price point, we ended up having by far our like best [Big Sales SEASON].

And in the meantime, during that time, I started talking to this company that ended up acquiring me.

It's relevant because they ended up putting up a little bit of capital - which I ended up not needing - to buy ads, right?

Because, you know, as ads start performing, the money comes right in.

So it wasn’t the end of the world.

So I got to these guys through [a relative], right? My [relative] works with them, is like “look, you should talk to these guys.”

I sent them the deck.

It did help.

I think I took out some slides and some, you know, I edited to maybe made it a little bit more relevant for them.

But it did help in that we came across very professionally.

They knew about the raise.

You know, I was very upfront about it.

I was a little triggered by the whole raise, and I'll explain why.

You know, I was really in a bad way, I actually never had this experience, I was really worried and like not eating, it was bad.

But it was a rough [year].

I had a really rough like four months or so where I was like five months maybe, where I was just, and I am not a… I'm like a… you don't know me, but I'm very upbeat, like to have fun, positive, nothing really bothers me that much.

I was in a bad place, and I'd never had that before.

Like my friends are going out on a boat, my [REDACTED]’s like, “let's go.” Whatever, I can't even imagine being on a boat, and I can't get off if I want to get off.

But bottom line is I got to the other side.

And I spoke to those guys.

We ended up doing a deal.

The reason I did a deal - these guys are like a billion plus dollar company.

They do hundreds and millions of dollars a year in [REDACTED BIG BOX STORE].

Their deal with me was kind of interesting because they were able to get my cost of goods down by over 50%.

They bought the company, not a lot of cash, bought the inventory and I still run it.

I still have a lot of upside.

Last year, thanks to all of this, we grew by 200%.

This year, we're projecting, we're projecting 100, but it looks like, it'll be more like, we're hoping for 200, but it'll probably be 100% to 150% growth.

I paid back every investor.

I took it out of my own money.

On my look.

This happened really fast.

It was a crazy time.

I don't owe anybody anything.

And so that's kind of the story of like where we were, and are, and like now we're in a real good place.

Obviously now I don't have to worry.

Yeah, I don't have to worry.

Everybody’s got their own story.

Like, my story had a happy ending.

There's plenty that don’t.

My story sort of isn't typical because I didn't raise really, I sold and I didn't sell into a big windfall, but I sold knowing that this company was a really good company and that they were able to buy better than I could and handle some of the stuff I never wanted to handle.

It's such a win-win.

They're thrilled.

Everyone's story's different.

I know plenty of people who had big windfall.

I know plenty of people who sold just to get out.

And for me, I like having the skin in the game on the upside.

So, my goal is to keep building, you know.”

H-, my former Pitch Gym client and entrepreneur.