Most entrepreneurs will tell you that if you’re starting out in business, you have to be ready to strap in for quite the ride. We look at the stories of two start-up entrepreneurs who prove that there’s nothing straightforward on the road to achieving your ambitions.
One company embraces hypnotherapy for wellness, the other embraces healthier local meat produce: two start-up businesses that have very different missions, but reflect a common experience among entrepreneurs striving to turn their passions into a commercially viable reality.
The Clementine app was started by CEO Kim Palmer with the aim of bringing proven hypnotherapy techniques to women suffering from insomnia, anxiety and loss of confidence. As someone who knows the painful experience of a breakdown due to severe burnout, Kim saw a significant mental need that was not being met – particularly for women who live their lives feeling overwhelmed and stressed by a lack of sleep and repetitively negative thoughts.
“Six years ago, I had a breakdown,” she explains. “My world went from being very big to very small overnight, and I had panic attacks for some years. Hypnotherapy helped me regain the confidence to get out again.
“I didn’t really start Clementine as a business – it was more of a side-hustle or passion project. But my whole experience was a gift.”
By his own admission, Marc Lafleur had a few false starts with some app ideas before forming truLOCAL – dedicated to delivering high-quality, locally-sourced beef, chicken and pork. As he explains: “In Canada, it isn't as easy as other places in the world. So, we wanted to make sure that people can shop with producers and suppliers within their province without having to get imported products.
“Before truLOCAL, one early idea I’d had was to create an online platform for people to access the sharing economy. So the idea would be that if someone needed their house painted, or if someone needed help moving a couch, they can post online and say, ‘hey, I need someone to come in, walk my dog for $20 bucks.’ But we wanted to put it into a niche market, which was colleges and universities. So, although we did that for a year or so, that ended up failing as well.”
truLOCAL was ultimately the culmination of a lot of trial and error, he adds – something he wouldn’t have achieved without those early lessons.
Learning to work on the business
There’s always a point in the entrepreneurial journey where the person needs to commit to the mission to see it through or watch it stagnate – even fail.
Marc echoes this dilemma, saying: “I really started wondering why we were getting early traction with these businesses, but they were never really taking off to the next level. It soon became pretty obvious that I was always treating it as a part-time hobby, like it was nights and weekends. I still had a full-time job. I said to myself, ‘If I’m going to be successful as a founder, I need to quit my job and go all in’. And that's when truLOCAL was born.”
For Kim, she and her husband had emptied their bank accounts to get Clementine off the ground, but she hit a wall with progress.
“There was only so far I could get with it by tinkering around in my spare time,” Kim reflects. “Even though we got traction with 50,000 women in the community, it didn't have that energy behind it. There came a point when I had to say, ‘now's the time, Kim’.”
The ‘minority’ factor
Attention for both businesses naturally turned to securing the funding required to validate the work they had put in. But how much did the challenge of being a female or ethnic minority entrepreneur, play a part in their search for backing?
“I found it really unhelpful, to be honest, because I'm quite a sensitive person,” says Kim. “And because I put all my money into it, I felt on the back-foot the entire time. I put myself under a lot more pressure, because I had those [targets] in my head. If I could do it again, I would have used [my gender] in a different way.”
Marc feels that minorities are better suited to go into business, “because we're used to being told ‘no’ all the time. We can take on the challenges of entrepreneurship better than anybody who's ever been given a silver spoon.” And those challenges are universal in any case, he argues. “Being an entrepreneur means being a professional problem solver. One day you’re getting [metaphorically] punched in the face, or told ‘no’ to something, or dealing with some fire. The sooner you realise that, the easier your journey will be.”
Securing much-needed funding is of course a big positive in any business’s growth. But the pitching experience has taught both entrepreneurs how they would approach offers and rejection now.
truLOCAL has since been acquired by a company for $16.7m. It makes Marc think of their early direction, “When we were going out and looking to do, say, a 10% deal for $100,000, or any of the deals that we had rejected the entire way through this acquisition, this partnership never would have happened. Those rejections forced us to grow the business in different ways, which worked out. Then – by the time VCs were knocking – our valuation had risen, and we were in a position to actually say no.”
It's very important to understand where your funding is coming from, he adds, because different stages of business require different funding needs. Some companies thrive on funding without the need for VC backing, because the core talent is already in place to get backing by a business angel.
“At the beginning,” says Kim, “I would have literally just taken the money straightaway, because I was so stressed and wanted to be paid a salary!” But her advisor taught her how to be patient and reflect before jumping on any deal. “And he was right, because actually, we'd undervalued the company massively, even at that very early stage.”
Marc was fortunate in that he had business angels who were completely hands-off. “We didn’t really need the help, we just needed the funds. They trusted us and allowed us to make mistakes because they knew we could get back on our feet. If they had been too overbearing, it might have derailed the mission. And because it’s such a hyper-competitive market, we could have lost time fumbling around on things.”
“I want to start a business!”
Both Marc and Kim are constantly asked for advice as entrepreneurs. Their respective roller-coaster journeys have led them to recognise that the vital ingredients of thick skin and meticulous planning will stand any new starters in good stead.
“You need to think about what you want, how much money you want and what you need it for,” says Kim. “There aren’t just VCs out there; there are angels, crowdfunding, even a friends-and-family round, which I had never even thought of doing. There’s also so much grant funding out there to explore.”
Marc agrees, saying that you should keep your head, because when you’re in the thick of things, you tend not to think logically when money is at stake.
“I always get the question ‘how did you find these angels?’. All you need to do is find one rich person out of 1,000 pitches! If they say no, appreciate their time and ask who among their friends might be willing to talk to you. Because it’s connections that bring the possibilities.”
Top 5 tips for raising funds
- Be resilient, be determined. The journey to securing funds is littered with a lot of “no”s along the way, so it makes sense to explore where you will get the best strike rate for your sector or specialism.
- Be prepared to relinquish some control. If the funding is high value, a VC firm may want to influence the direction of the business. You need to weigh the passion you hold for your ‘creation’ up against the benefits of commercially astute and hands-on investors.
- Open your eyes to all available funding routes. Not all investments are VC-based; you can make use of many support grants and crowdfunding strategies, too.
- Exploit your special circumstances. If you are a female entrepreneur or from a community underrepresented in business, there are investors dedicated to supporting your mission.
- Don’t obsess on what you’ve built up; have a clear mission for your future. All investors will prefer to hear the detail on your forward plans for the business, more than your history.
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