The first thing we need when starting a business is money. One of the best ways to have that is through investors. But what if the search for that investment is harder than you thought? Do you give up? The founder of Stratia Skincare, Alli Reed, didn’t. Instead, she bootstrapped her business all on her own shoulders without any outside investment. In this episode, she shares her inspiring journey with Elliot Begoun. They dive into her struggles with raising money and processing her emotions when dealing with rejections from investors. Alli also talks about building relationships with consumers, growing the business even in the pandemic, and learning to believe in ourselves. Her entrepreneurial journey was a hard road, yet it didn’t stop her. Join Alli as she further talks about her daily routine, how she handled the challenges, and how we could adjust accordingly when faced with uncertainty, especially in this trying time.

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Bootstrap Entrepreneur: Building A Business Despite Challenges In Raising Money With Alli Reed

We’ve started a new tradition here on the show. We start each episode with a bit of a founder shout-out and talk about some of the amazing founders in the TIG brands’ community. I get to do double duty because I get to talk about a founder and a brand that also happens to be the guest on the show. I’m going to talk about Alli Reed at Stratia. I encourage everybody to check Stratia out. First of all, Stratia and Alli in particular, what amazes me is the way she’s built this incredible relationship with her consumers or shoppers. Not only do they trust the products and use the products, but they trust her.

In skincare, there’s a lot of bullshit, hocus pocus, marketing speak, little truth, little fact and transparency. What Alli’s built is a brand about science, transparency and efficacy. She doesn’t shy away from having that conversation with her team and consumers regularly about what that looks like, what that is and how to do it. She puts herself front and center in it in IG Live and Reddit. She built this community. The other thing Alli’s done is buck the system and it’s changed the norm in this industry by being four years into the business and doing all bootstrap all on her own shoulders without any outside investment. She’s done that by being focused on capital efficiency, on controlling her own manufacturing. It’s a great story, and it’s easy to focus on the positives of that story.

We’re also going to talk about how hard that is, what that looks like and what it means to be a bootstrapped entrepreneur doing this all on your own, what it means to have to wake up every day and decide whether you’re going to wear the hat as the executive, brand ambassador, customer-facing face in this case of the brand, operations head, R&D head or the fundraising head. Doing all of these things on your own can be exhausting. We’ll also talk about how hard it is to raise money and appease both what investors are looking for and what makes sense in the near term in the business. I’m looking forward to this conversation. I’m going to ask Alli to introduce herself and tell you a little bit not only about Stratia and her words but her journey, where she is and how this all started. Alli, thanks for doing this with me. I’m glad you’re willing to come on and share your story. Please share a bit about yourself.

Thank you so much for having me. The Stratia spiel is in the middle of fundraising. I started Stratia a few years ago. I came at it solely from the consumer side. I had never worked in the beauty industry. All I knew was that I loved skincare. I was fascinated by skincare, in particular, for this unique intersection between the Chemistry of a skincare formula and the Biology level of a living organ of your skin. That felt unique to me. In personal care, you can impact the way your Biology functions. I wanted to learn as much as I possibly could. I read dermatology journals, peer-reviewed studies.

I got to a point where I was super well-educated about how skincare is formulated, how the skin works and realized that wasn’t, at the end of the day, helping me shop for skincare. Skincare is hocus pocus. It’s whatever filters through the marketing department that beautiful people in Neutrogena ads are saying. I decided to cut out the middleman. I combined the research I’ve done with my Chemistry background and started formulating my skincare products in my skin. I created formulas that I knew aligned with the research I was reading. I could be sure that the right ingredients, percentages, vehicle formula and everything that needed to be there were there.

I bootstrapped it out of my fairly meager savings. I launched it, expecting it to be a nice little side hustle. It did not stay side hustling for long. For the first three years, we had grown 100% organically word of mouth beyond my control. I was forced to quit my job a year later because I had run out of hours in the day. It was this runaway train from people buying, loving and posting about it on Reddit and Instagram. A couple of years ago, I finally got my feet under me. I started hiring a marketing team. We’re still growing our manufacturing capacity to the point where we can chase some growth of our own. We’re still fully bootstrapped. At this point, that’s not an active choice. I’m trying to fundraise and we’ll get into how difficult that has been. We’re growing quickly and it’s been a journey.

For those reading, give them a sense of the size of the business. You can do that in customers, dollars or whatever you feel comfortable doing.

Stratia is four years old in 2021. I got feedback that said, “Four years old and your trailing 12-month is $2.5 million. That’s pretty slow growth.” I was like, “We’re five years old. It’s even slower than you think.” That’s about our size, trailing 12-month of 2.5 million.

We had a conversation with some people and one of the things I said in terms of my assessment is that, “If you were to say that seems slow and growth, first of all, it’s not in this space.” It’s not when you’re, at this point, completely digitally native but also bootstrapped. You made a conscious decision to meter your own growth because you did it through your cashflow that the business was creating and it gave you a lot of freedom. You then get to a point where you’ve reached this in-between stage where you’re ready to take the next big step but you can’t make that next big step without bringing some growth capital in. You recognized that and decided to embark upon the joys of fundraising right at a stage of the business, trailing 12-month of $2.5 million where candidly, you’re right in-between being too small for some of the funds who’ve moved up the market and meeting the input that funds bring. Share a little bit with people what you have done, learned and how much fun you’re not having trying to raise money for the business.

I started the active fundraising journey. We’ve been profitable since our second month and we have such a strong customer retention rate and all these great numbers. I naively thought, “People will be clamoring to get on board because it’s so uncommon for a beauty or a CPG company to be profitable from the beginning and then maintain profitability.” That has not been the case. At this point, I’m up to about 50 rejections. Especially being a solo founder, this is something that I feel gestated and brought into being out of thin air. Those rejections feel extremely personal. It’s hard not to take that personally.

On the outside, it is as our awkward tween phase. We’re too big for our friends and family around. I have my own issues with the idea of friends and family around. I hope you have the right friends and family who can give you a lot of money but also too small for most institutional investors who seem to be like $10 million revenue is the level at which it becomes worth it to invest for them. There’s also an element of no one wants to be the first money in. There’s a big risk in being the first one to say, “This company is going to be profitable.” No one wants to take a risk and then be wrong. It’s easier when other people have already taken that leap and then you can be like, “We were all wrong together.” I have a list of about twenty investors who have requested to be my first call the next time I’m raising money but nobody wants to be the first.

You said naively that you thought people would be clamoring. I’m going to tell you that I don’t think that was naive. In some of the research we’ve done, the average investor sees and has conversations with roughly 400 potential investments for everyone they make. The odd suck in terms of rejection. Everyone who’s trying to raise money is going to get a lot more noes than they will have yeses. You only need a couple of yeses so remember that.

I will tell you candidly that it’s been surprising to me because it’s rare in this business for a company to survive five years, completely bootstrapped to be cashflow positive and profitable since the second month of its existence. To have been able to build a tribe like you’ve been able to build out of almost evangelical followers, be capital efficient and control your own manufacturing and have a pipeline of innovation. I anticipated and still do those investors will see this for the opportunity that it is. I do think it is somewhat that first money in. It’s a challenge I’ve seen with more than a few companies that have bootstrapped for longer than most. It almost makes it harder for them to raise money at this size. For whatever reason, there’s this Psychology and belief around first money.

I’m going to do a call out to all my investor friends. Get your shit in gear. This is something that has some real opportunity. I want to talk about rejection. I want to talk about something you said because it’s important. I don’t care how much we try to talk about it or you try self-talk around it but it’s hard to untether yourself from your business because you built this. It’s important to you and reflects upon you. When you hear, “No. You’re not here too early. Your growth isn’t what we expected it to be in terms of speed,” and all the reasons it’s hard not to take it personally. It’s been hard on you. Share how it’s made you feel and where you are in terms of digesting that sense.

It has been hard. I don’t know why but it’s the cumulative effect of all of this rejection of trying to not get your hopes up but getting your hopes up and then getting rejected. Especially for me, one of the reasons that I have loved building this business by myself is that no one else gets to decide whether or not I’m successful. In my career prior to that, other people have to decide if you’re worthy of a promotion or being hired. I feel like I often get underestimated. There’s an element of it that I’m a fairly soft-spoken woman, certainly less soft-spoken now than I was years ago. I do tend to have not taken it seriously in my career. Being able to start this company where I’m like, “Don’t take me seriously. I’m still going to succeed.” Other people’s judgment of me doesn’t get to dictate what my career path is and now, all of a sudden, it does.

I am living and dying by other people’s judgment and I hate every second of it because there’s that cognitive dissonance of like, “I know the company can succeed because it is succeeding,” yet you still don’t believe that it’s a worthy investment. The cumulative effect of that over and over every day. I’m not a person who fakes it easily. That’s why I built a company on radical transparency because I don’t know anything else. Trying to go into pitch meetings, faking enthusiasm or like, “This is going to go somewhere,” when deep in my heart I’m like, “Let it end. I’m going to walk into the ocean.” It feels counter to the way I like to live my life. From an investor point of view, if someone comes in and they’re like, “Screw this. I’m out.” I’m not going to invest in that person. Trying to manage all of these emotions, anger, resentment, sadness and grief all at once has been exhausting.

The reason I wanted to put Alli’s voice to this is because the other element of this is that you often feel like you’re the only one going through it or, “It’s something I’m doing. It’s something my business isn’t doing,” because that’s all you see. When I have the fortune or misfortune, depending on perspective, I’ve seen this as far more common than the exception. You’re inviting investors to say, “Tell me without any filters how pretty or ugly my baby is.” That is vulnerable. The majority of the time, people are going to point to the flaws, warts and not to the points of beauty. Investors are working hard to be better at that. They do try on calls to make sure to acknowledge the success and so forth. Still, what we tend to walk away with is what we hear, which is only the negative. That’s human nature.

The other thing I wanted to call out in this is something you said that is important and that is you built this business. You did it so that you could make the decisions. That sense of true freedom is when you’re free to make both the good decisions and the bad ones. You’re free to make mistakes and make the things that feel right intuitively. When you bring investors in, two things happen. One, they’re immediately judging all of those decisions, so you feel judged, I would imagine. Secondly, if they do become investors, you have other people who will gladly weigh in with their thoughts.

Before I ask my question, I’ll add a little dose of reality. I don’t care what we do in our professional lives. I don’t care if you’re a highly successful multimillionaire entrepreneur or somebody starting or working in a corporate cubicle. At the end of the day, we all answer to somebody. That feeling of complete autonomy is an illusion because even before any of this, the real person that you work for is the person using the product. You know that and do that every day. They’re the ones that have an ultimate say. Trying to keep the ultimate say and keep everything in focus around the shoppers and the people that you serve is hard. What I want to ask you is, when you hear from investors or get that “rejection” what are you hearing from them the most?

Part of the frustrating thing is that it can be hard to hear the warts and bruises of it. In my experience, they are telling me how beautiful my baby is, it’s perfect and, “What an amazing baby you’ve made.” “No, thank you.” That’s the feedback I’m getting for the most part. The majority of the feedback has been, “You’re a little too small for us.” In terms of actual feedback, it’s been sparse. A lot of it I’ve had to get from you, Elliot. There is that first money issue that they don’t want to take a risk. I’ve been pushing to try to find out, “Do they not have faith in me as a founder? Do they not believe in the industry? Do they not understand direct consumer?” It’s always a little bit of all of the above. I almost wish that I could get some of those words and feedback because then I can adjust accordingly.

We’re going to bring some investors on the show to talk a little bit about how they’re looking at that investment portfolio and what’s going on. There are some realities around fund economics for everybody. We’re talking about institutional funds. The fund economics or the way funds work is that there’s a certain amount of work that they have to do to deploy money. That work includes the upfront work of the due diligence and all of that. It includes the actual transaction of the investment, also the management and involvement in trying to do what they can to have that investment succeed and getting involved whether that’s a board member, an advisor bringing in resources, the investors you want. You want investors who can bring support beyond the capital.

What funds are recognizing right or wrong is the size of the funds has grown, which is great for this industry. It speaks to what this industry has been able to accomplish. Funds have gotten bigger but that means fund economics are such that to write a check of let’s say, $1 million or $2 million takes as much work and as much effort as to write a check for $10 million or $20 million. Money funds are having to wait longer until brands are more mature and can absorb that fund. You got caught in that a bit too in looking at your fundraising, whether you raise a pre-seed or seed in a smaller amount. You then had some early investors say, “We like what you’re doing but we would want to write bigger checks.” In some respects, you got swept away into that too because that’s the fund economic standpoint. Share a bit about that decision point and what that meant for you.

I’ve never raised money before. The only money I’ve ever had to spend on the company was the first $3,000 that I put into it and then putting profits back into it. I’ve worked with Elliot before the fundraiser on figuring out the exact amount of money that would be the right amount to grow our acquisition without blowing out our efficiencies and I wouldn’t give up too much equity upfront. People are saying, “I’d rather write you a check three times that size.” It’s hard not to get stars in your eyes over that. That would also mean giving up such a huge percent of the company. It would mean, “How do I even spend that much money? Is there a way to do that while still keeping the core of the company strong?” To be honest, those days feel so far removed. It’s hard to tap back into what that felt like. It was confusing and hypothetical. I had such a hard time translating what that would be like if it happened.

In some ways, it was a disservice to you because they did start. Some of those did talk to you and then you start talking to more people about checks that side. It’s hard. Your perspective on this is important. One of the things you and I’ve talked about is equity crowdfunding. You have an interesting perspective there as you look to evaluate because there are some brands that are having some good success. Others have spent a lot of hard-fought effort for little result. I’d love for you to share your perspective and thought process around that as it stands.

My perspective on it is always changing. This is not necessarily how I will feel about it in the future. When I started fundraising, the idea was not to bring in money because being profitable, we don’t need it. It would be nice and we can grow faster. A big part of it was also the institutional experience that the CPG space who knows direct-to-consumer can provide an advisory capacity. They have connections in the industry. They can help me figure out expansions into retail, overseas and all those things that I have no experience with. Crowdfunding has never had a major appeal to me because it would be completely sacrificing that advisory capacity.

Another reason I’ve been hesitant to do it is that I am the face of Stratia. When someone places their first order with Stratia, the next day, they get an email. It’s an automatic email but it comes from my email. The replies go to me saying, “Thank you so much. Here’s my story. Ask me any questions you have.” I get a lot of people asking me, “How can I put together a skincare routine for me? Why did you put this ingredient in?” A lot of my day is managing that stuff. That’s important for the brand we’ve built, being transparent and accessible to people. If someone for a fairly small investment or a part-owner of Stratia that they are an actual stakeholder, I do worry about the amount of time, mental and emotional energy I would have to give to people who feel entitled to my time. Any investor is entitled to my time but spreading that out over 10,000 people rather than 10 feels scary to me.

Those are all interesting reasons and perspectives. Certainly, you do miss out when you do equity crowdfunding potentially on finding those investors who can add institutional wisdom, help and experience. I do think they’ve solved a bit of you having to be answerable to thousands. It is a challenge. There’s one other question about raising money. You said that you have some feelings for friends and family. Share a little bit about that perspective. I’ll share a little bit about my perspective on that too.

My background pre all this stuff was in the nonprofit space. I’m passionate about social justice and anti-oppression work. This fundraising thing, I’d never been on the other side of it and never seen behind the curtain. Seeing how common the friend and family round is and how common the story is that, “This person started their own company and built it from nothing other than $300,000 from their dad.” It seems to exclude such a huge swath of people who could be amazing entrepreneurs.

It’s called friends and family round because the expectation is that you have friends and family who can give you a significant amount of money sight unseen without the level of due diligence that a fund would require. They have tens or hundreds of thousands of dollars to play around with. I’ve been resistant to that idea. Even though I know it’s called friends and family, it can certainly be any number of people who you are not personally related to. It’s one of those things that is a self-perpetuating cycle of success begets success. It disrupts the idea that entrepreneurship can be a meritocracy. I am fundamentally uncomfortable with that. I would much rather raise money based on the strength of the company I’ve built rather than the strength of my genetic line to generational wealth.

You don’t want to build your business because of privilege. That’s important to voice because there’s a vast majority of people who are capable entrepreneurs or wannabe entrepreneurs who don’t have a bevy of friends and family who meet the accredited investor threshold. In fact, 99% of founders in the US wouldn’t. I have a few things to say about that. First of all, I don’t think it should be friends and family round. It should be called a believers’ round. Anybody has the ability to go out and find true believers.

There are numerous types of angels out there. There are what I would call professional angels or industry angels, people that are regular investors in early-stage businesses in an industry or the same industry. They do, know and they bring it. Those are hard to come by the level of rejections probably even greater because they are not doing this full-time. They’re using their own money, so they’re making even fewer investments. The next set of angels are the true believers, the people that believe in your journey and what you’re doing. Every founder has access to true believers. True believers can be early customers, people who are in the industry before and have had success, friends and family, new friends and networking. The degree of networking that you do is important to you. Building your true believers’ network.

There are two other points I want to make on this. One is to be prepared that the vast majority of those people, true believers who are friends and family who aren’t professional investors or routine investors in this space don’t understand the space. They will often judge your business based on their vision and understanding of business in general. Many of these people who meet that accredited investor threshold are dealing with mature businesses who’ve been around, have cashflow statements that look a certain way and P&L statements who have certain EBITDA percentages.

The vast majority of early-stage brands, even like yours Alli that are positive and profitable at the early stages, still don’t look like mature businesses and therefore often get judged, so you have to be prepared to educate them as well. The last thing is that you’re unlikely to get a lot of meaningful input or advice from them. Recruiting your own true believers is important. I’m going to change subjects for the time that we have left. I posted to our community a short video. What I’m seeing and hearing is that oddly, 2021 is turning out to be harder in many aspects of the business for founders than 2020. Although 2020 was a shit show. There’s no other way to call it. There was a lot of upheaval and unknowns.

For whatever reason, most of the founders I talked to found ways. There was enough of a COVID bump in certain aspects of their business. There was enough rallying of people around founders so they didn’t feel alone and there was hope at the end. We’re at the pseudo-end of this pandemic and all of that pent-up hope is not manifesting as quickly as people would think. Brands like you Alli are not getting the funding that you would think you would get based on the merits of an investable proposition. That’s my opinion.

Brands aren’t experiencing the growth, not getting the yeses, retailers and getting resets happening quickly enough. eCommerce has flattened out a bit. They’re not seeing the same growth and many are seeing some construction. All of these things plus coming off of a weird year where all of you as founders were in almost fight or flight mindset for eighteen straight months. I’m going to be blunt, broken, exhausted, tired, emotionally spent, wondering, “Why the hell I’m doing this?” It sucks for you. I hate seeing that. I wish I could physically go up and hug every one of you and tell you that you’re going to get through it.

I want to use some time here to talk about that. Alli, I’m describing some of the ways that you’re struggling through and feeling. You’ve been kind enough to offer to put a voice to this, share what that is and invite this conversation in to start talking about this. It’s hugely important. Before I ask some of these questions, no veneer, no silver lining, where are you at mentally? What are you struggling with? Share openly what’s going on in your brain.

I was on the phone with Elliot weeping and ready to post, “Stratia for sale,” on the Facebook Marketplace. I’m burnt out. It is much too soft a word. If the pandemic was a tornado, we’re all battening down the hatches. We were holding on for dear life and it’s in the survival of getting through this tornado. The tornado passes and our whole city is leveled. Everyone’s like, “Back to work.” That’s not how it works. We’re processing all of this trauma, grief and fear that we’ve been living with and internalizing. Also, things are different now. The pandemic isn’t even over yet but things are starting to get back to normal. I was like, “It’ll be like it was in February 2020.” It isn’t.

I had also gone into the survival mode of I was doing all the manufacturing myself. 2 to 3 days a week, I would get up at 5:00, go into the office, manufacture by myself for seven hours, go home and work from my home office. I do that every day for 1.5-year because we were in a global crisis. You have to get through it. I didn’t give myself time to process. It was survival. It was the bottom tier of Maslow’s Hierarchy and now I’m out of it. I do not want to do one more goddamn thing for this company. It has taken so much of me. To be feeling all of that, along with continued rejections, especially from people saying, “This is impressive. I can’t believe you’ve done all this. This is amazing. No, thank you.” It’s beyond demoralizing.

First of all, I appreciate and admire your willingness to share that because it’s a vulnerable thing to share and be able to say what you said, which was, “I was at my wit’s end.” You’ll be back there again unfortunately. It’s not unusual for me to take calls from weeping founders. It’s not anything unique to Alli. That’s why I want to talk about it. That’s why I wanted to bring it up here because you have all chosen something super hard. You have to not only do all the elements of running the business and doing all the things that are necessary to build a successful business but you have to be able to get people to believe, subscribe to that and come on board. They all carry their own paradigms and views of things. It’s daunting and difficult.

There are days when you’re facing cash cliffs and everybody’s telling you the same thing, “We love your business. That’s great but you need more assets before we can lend you money,” you need money to get more assets. “You need to get bigger until we can invest in an equity position in you, but you need money to get bigger,” or a retailer would be saying, “You need more traction. We need to see you in more stores before we get there,” but you need more stores to have an opportunity before you can do it. This world is filled with these conundrums that are daunting.

You articulated beautifully what this new dawn looks like. We’ve been in our tornado cellars. We’ve emerged. Everybody is trying to put on the game face like their business is usual, yet their surroundings are leveled and devastated. Nothing’s the same and everything’s different. It’s going to take time to rebuild and process. That is what’s going on. That is why it’s important to be focused on everything that you can do from capital efficiency.

It’s also important to acknowledge that the ramp of growth that hockey-stick-trajectory bullshit that we talk about for every brand. We have to change that understanding and slow that growth down. That’s the reality of the marketplace. When a well-meaning investor says to you, “Being a $2.5 million trailing 12 after 4 or 5 years seems a slow arc of growth.” You can say, “You try it with your own money. I’m being smart and I know that’s right.” How are you doing this? You said you have to process and deal with it. What are you doing to try to do that? What is working and not working?

I’ve got a lot more examples of what’s not working than what is. I’m open to suggestions. My focus is less on things that are working for the business because the business is doing fine. I’ve got a good team that I’ve put together. It’s in crisis mode of making sure that I’m personally capable of going to work. For me, I found hard exercise makes such a huge difference. Not going for a walk but running up hills. It works out a lot of that anger and fear that built up in my body and getting acupuncture. I’m going to therapy every week. All that stuff is me putting on my oxygen mask. That stuff is working, being able to walk away for a few hours if I need to.

This sounds incredibly depressing but let me clarify it. Letting go of hope. Not being hopeless but not clinging to the idea of like, “This pitch meeting I bet is going to be the one.” Getting caught in that cycle of hope and devastation has broken me. This is an analogy I use in many aspects of my life. When you are going on a long-distance bike ride, I have found that when I’m climbing up a mountain, if I look at the top of the mountain, I can immediately feel all the strength drained from my body because I can see how much farther I have to go.

The only way I can get up a mountain on a bike is by looking 3-feet in front of my front tire and finding a speed that I can hold on to forever. I’m going up this hill forever. All of a sudden, I’m there. I’m trying to find a way to do that with this fundraising process, this growth stage, with every part of the business of making sure that what I’m doing, I’m not looking toward the end goal. What I’m doing is something that I can sustain. If it’s not then ease back. If it is, then that’s my activity for now. It’s not outcome-oriented. It’s what I’m doing.

It reminded me of a humorous story. I used to do a bike race every year called the Triple Bypass. It started in Evergreen, Colorado. We did Juniper, Loveland and Vail Pass. The first year I did it, I was on Vail pass. I thought, “I can’t do it. I’m not going to make it.” It started with all that self-talk. I’ve got so much further the ride. I started crying. That was it. I was done. The next thing I know, somebody alongside me is grabbing my bike handle. I was like, “Why? What are you doing?” He goes, “Are you okay? You crossed the finish line. You’re done. You can stop.” I was unaware of the journey that I was on and where I was and myself. That’s the one thing that I want to comment on.

It’s great to put your head down and look 3-feet in front of you but the risk is you missed the progress that you’re making, the fact that you’re making small accomplishments along the way. You cannot grind this out. This is not something that you can have steadfast, power and resolve to do. It’s important to recognize that this is a super long journey that everyone is on together to some degree. Those elements of self-care, taking time to walk away from the business and knowing when you need to walk away from the business is the single most important investment you’re going to have made or make as an entrepreneur is in yourself.

It’s way more important that you manifest the best version of yourself for the hours that you show up during the day. For some days, that may be ten hours. You can show up for ten hours as a pretty damn good version of yourself. On some days, that may be one hour or none. Something I sucked at until probably in 2020 when I recognized that I had put myself, my self-care and all of those things on the back burner to persevere and push through because that’s what we hear. That grit matters. Being able to put that head down and push through is there. That doesn’t get us there. What gets us there is showing up in the best way.

One of the things that everyone should work on is being okay with walking away and shutting it down for 1 or 2 days. If you build a business that is dependent, you can’t say, “I can’t be here today. I can’t be here for the next few hours. I got to do some things. I got to take care of myself so that I can show up better.” You’re building the wrong business. That’s hard for me. I don’t ever want to let anybody down. I don’t want to ever cancel a call, not be there or not be available. I try hard to know when I’m not at my best and it’s not all the time. What aspect of this business is beating you down the most?

If I could stop fundraising, that would dramatically change my experience. It’s not the rejection that I feel. You pointed out that I am responsible to people. There are people deciding my success, using the product and that’s what I love because they decide, “Does the product work? Do I like it? Do I like the way it is?” That’s what they decide. It’s putting my faith into someone else’s hands. All the time, I think of a scene from Arrested Development where maybe he was caught her way into a job at a film studio. She is reading a stack of scripts to decide whose dreams she gets make come true, whose movie gets to be made. She opens the front page, gets a paper cut and say, “Back to film school, asshole.” I feel like I’m putting the future of the company in the hands of people who are making these potential split-second decisions and get to hold of my entire company and future in their hands. I hate that feeling. Emotionally at least is the thing I’m struggling with the most.

Kelly Perkins of Spinster Sisters is someone who gets everything about what you do. She said, “I feel you so hard on all of this, Alli. We need to have a virtual glass of wine together and commiserate. This is hard at times. Stay strong. We got this.” That’s the other point that I want to make, readers, support each other. I will volunteer us to be the virtual hosts of a roundtable that is focused on founder wellbeing because it’s that important. I’m not talking about a therapy group or trying to have people work through all of their inner child. I’m talking about a group that comes together and says, “Today sucked. I feel vulnerable. This person made me feel like shit.” Whatever that is, be able to put a voice to it because it’s true for every one of you.

I’ve been doing and hearing this every single day with founders for many years, yet many of you try to show up every single day with a smile on your face, playing into the romantic version of entrepreneurship and then wonder why, “It’s only me that feels this way,” when it isn’t. It’s the opposite. That’s why I desperately want to do in this episode is that there’s a lot of wonderful aspects of entrepreneurship. I’m a huge proponent of it. It ultimately is the path to real freedom, real wealth creation, change-making and doing all of those things. The journey in and of itself can be such a great teacher.

The one thing it teaches us better than anything is how fucked up we all are as individuals, all this self-talk and self-narrative. No matter how we try to puff ourselves up, how tethered to our own self-identity, our businesses are what we’re doing, how every scrape and scrap that we go through, every rejection, roadblock and obstacle, we feel it and take it personally. It takes a toll and it’s exhausting. That is the norm, not the exception. Fundraising is probably the single most vulnerable part of the whole thing because you are trying to get people to say, “What you’re doing is great. I’m going to validate it by putting money in.” You then hear, “No.” I don’t know any way to avoid it. It’s gotten harder, less encouraging and more demoralizing as the businesses have gotten bigger and the funds have gotten bigger. I don’t think it’s intentional.

Ninety-nine percent of the investors that I know and work with are compassionate, caring people who also hate ending their day, having spent most of it saying no. They go home and feel shitty about that too. That’s why a lot of them try to tell you, “You’re too early. You don’t fit our thesis,” or something along those lines. It would be doing you a bigger service quite frankly if they said, “These are the two elements of the business we don’t feel comfortable with and don’t want to invest in.” You have better knowledge of things that you could potentially look at, do differently or reframe.

You’re going to have to raise money to grow the business. As much as any of us want to say, “Screw it. I’m done. I’m not going to raise. I’m going to bootstrap.” To get your business to a point of significant growth, if that’s what you want and if you want to build a business that you can eventually sell it. For some of you who want to build a lifestyle business and can build a business to a positive EBITDA and live off that EBITDA great. Don’t get on the fundraising hamster wheel.

Even those who do get on the fundraising hamster wheel, you don’t have to do the crazy unicorn. We’re big believers in building tardigrade brands that are nimble, capital-efficient, resilient but you’re going to need to raise. What are you going to do? How can this community help each other so that this isn’t such a demoralizing, exhausting and emotionally tolling process for you? Your answer is the same answer that many will share.

Talking with each other and being genuinely honest about it. One of the things that sometimes feel the most draining and debilitating is the cognitive dissonance of being told, “Your company is amazing. I love everything about it. No, I won’t invest.” Seeing the post on LinkedIn of, “Grind and hustle. You’ll make it.” There’s that honesty of people who are like, “This sucks. This is bad. It’s also happening to me. It’s extremely real. It’s exhausting.” I will take anyone up on that virtual glass of wine. The number one thing I would like is for someone to please give me money. Short of that, with community support, being honest, validating each other, validating our experience, how much this sucks and how hard it is.

I’m going to take up the mantle of trying to create that psychologically safe place to have that conversation and invite people in. We’re going to work on that. I’ve said this to Alli a million times and for a good reason is my level of credibility with her is in the shitter. I’m going to say it again and I’m going to say it publicly now that I truly believe in her and Stratia. That is an immensely investable proposition and that investment will come. That yes will come. Thank you for doing this with me, for being willing to put a voice to this. I’m sure you’re the one. I know and you saw that even from Kelly’s comments that you are amongst many who feel the same way.

This is an important episode. I’m going to be proud to share it. I’m going to be purposeful in sharing this with investors. For the investors reading this, I would ask that you share it with your teams and fellow investors. It’s hugely important. I know that many of you do take that home. I know a few people that I’ve spoken to who are thinking about getting out of the game for the same reason because it’s taken a personal toll on them to say no.

If both sides started talking about that openly and having a conversation about that and there are other ways and things that can be done to help, let’s support each other. Alli, thanks. Check out Alli’s on Instagram. Her Instagram Lives are amazing. Check her on Reddit. Go to their website. Ordering a product is one way to help. Reach out to her directly or me and I will be happy to make that connection. Alli, thanks for joining. I appreciate it.

Thank you so much for having me.

Important Links

• Stratia

• Spinster Sisters

• Instagram – Stratia

About Alli Reed

Driven by her boundless scientific curiosity to figure out skin works and what skincare products actually do, Alli Reed obsessively read dermatology journals. Inspired by a particular study about ceramides, cholesterol, and fatty acids, she decided to start formulating her own skincare and blogged about her findings.

Her initial idea was simple: to create a gentle and effective moisturizer based on this study that worked with the skin to replenish and reinforce it on a biological level. No fragrance, no fillers, just a formula that truly worked.

After a lot of trial and error, Alli perfected the formula for her moisturizer. She shared this initial formulation on her blog and even shipped leftovers from her personal batches to readers who wanted to try it. After some more research and development, this eventually came to be known as Stratia’s best-seller, Liquid Gold.

Fast forward to today, Alli is still researching and testing out new product ideas and is committed to Stratia’s mission of creating simple and effective skincare products.

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