Lily Kanter, co-founder of Serena & Lily, explains how the company produced its initial product catalog without existing manufacturing infrastructure.
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A private equity firm demanded controlling interest in exchange for 17% equity
“They're asking for a controlling interest in your company for a 17% of your equity, you know.”
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A 2X participating preferred term blocked Serena & Lily from raising capital
“One of our other major investor on Sandhill Road came up with the capital. They actually put the money into the company on top of our cap stack, on top of the capital chart, At a very heavy duty preference of a two X preferred participating, very gnarly securi…”
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Maveron told Serena & Lily they wouldn't even fund Starbucks in 2008
“In fact, Maveron, who was, you know, came from the money of Starbucks, they told us that if Starbucks had walked in their door right now, they wouldn't fund them.”
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Mandatory employment contracts saved founders from board-forced company sale
“Listen, we, the board could have voted to sell the company because they had enough votes around the table that were incentivized to sell the company.
The problem is that the acquisitions were requiring us to sign three year employment contracts.”
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Founders used an 'oversold' pretext to secure 50% deposits from wholesale buyers
“So, we're like, hey, why don't we call all of them? And let them know that we are in an oversold situation with our initial production, and if they would like to guarantee their order, they would have to provide us a 50% deposit on their order. And the oversol…”
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Serena & Lily direct-to-consumer revenue doubled annually to $20M in year three
“The first year we were direct-to-consumer, we did five million dollars.
The second year we were in direct-to-consumer, we did ten million.
It doubled.
That third year we were in direct to consumer, it went to twenty million.
Like, we had a five, 10, 20 sprint.”