How I raised $1.7M in a pre-seed from Sequoia for my future of retail startup – Selene Cruz
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How I raised $1.7M in a pre-seed from Sequoia for my future of retail startup – Selene CruzFeatured
Posted in:Office HoursStartups
Hi I’m the CEO and founder of Re:store. Re:store brings your favorite online brands into the real world. We just raised 1.7 million in a pre-seed round lead by Sequoia and South Park Commons and we’ll be launching our first retail store soon in Union Square, San Francisco with more than 60 direct to consumer brands. You can read more about my journey so far here. I'm also an early Leap member!Prior to Re:store, I was the CEO and Founder of DTC brand Archer Brighton and I have an undergraduate degree from University of Pennsylvania.Ask me anything about my fundraising process, my vision for the future of retail, or something else!
ashie·Nov 12, 2018ashie·Nov 12, 2018I was curious to learn what were the three metrics you used to illustrate growth before approaching investors. What was the time scale/duration of that graph - ie weekly/monthly/yearly for x (number of weeks/mnths/years) Also did you approach investors before you achieved this and had to go back to the drawing board?Lastly would you be willing to share your pitch deck with sensitive information omitted
selene·Nov 15, 2018selene·Nov 15, 2018Hi Ashie! Thanks for your question.I'm in the physical retail space so a bit hard to show early traction aka we had no graphs. What I did instead is try to show demand before fundraising. I contactedbrands that I thought might be interested and built a waitlist of 500 brands. I jumped on the phone with almost 200 of them and build our pricing/ offerings (PS. I'm super awkward on the phone :D). I found a location that was perfect and negotiated a deal with the landlord. Then, I curated brands from our waitlist and pre-sold them with LOIs. Of course, we wouldn't be in SF without some tech so I mocked up a brand dashboard and scouted a team that could help build this in the future. A lot of this has changed since we fundraised but I think the key for us was to show a clear road map on what we would do with the money + as much proof of concept as possible. It also always helps to have a story behind what you're building. What makes you the right person to lead this company? What's your unfair advantage?
ashie·Nov 15, 2018ashie·Nov 15, 2018Thanks Selena thats very helpful! So there is a glimmer of hope for companies building a physical product (Space I'm in)
selene·Nov 27, 2018selene·Nov 27, 2018Woo :)
Congrats on achieving your fundraising goal, and so excited for your upcoming launch! You had a few things working against you from the investor perspective including being a solo female founder, being pre-launch/pre-revenue and hence untested, going into brick and mortar rather than tech etc. How did you provide proof points to validate your idea and get investors on board? What kinds of early traction or data were you able to provide to get investors interested? I'm launching a D2C brand https://www.kinn-home.com/ so I'm rooting for you!
Thanks for reaching out Sari! I'll email you directly.
Love your branding! When are you launching? Answered question above that was similar. Let me know if there's anything you'd like me to dig deeper into. For the most part- try to prove as much as possible before taking money. Having run a D2C brand beforehand, there's so much you can do nowadays without funding- a website, pre-sells, media or partnerships like Re:store :P that can help get you early traction and negotiate better and faster later.
Thanks Selene! We plan on launching early next year. We're raising capital to pay for some of the initial inventory plus build out our website which will include a personalized curation experience. At this point, we have traction data for our previous brick & mortar efforts branded as Kettle & Brine: https://www.bonappetit.com/city-guides/austin/venue/kettle-and-brineI will definitely have to look into Re:store as I'm holding off on going brick & mortar again soon!
Best of luck!
I'm the Co-Founder and CEO of The Well, a community and social club for Black women at work. We aim to create physical and virtual spaces for ambitious Black women creatives, entrepreneurs and 9-to-5ers to connect + collaborate with a TRIBE of like-minded women and build valuable social capital in the process. How did you decide how much you wanted to raise for your pre-seed round? How do you plan on using the funding? And did you find the pace where you wanted to launch your store before you started raising, or did you provide estimates/budget to investors during your fundraise and then set out to find a space that met that budget after you secured capital?
Amazing Krystal! I'm so excited for The Well! Financial models FTW. I looked into how much I needed for operations + hires + get me to my next milestone + extra for pivots. That being said, I'm a believer of raising less (keeps you & your future hires hungry) and doing as much as possible DYI in the early days. Originally I planned to raise $500k but was advice to give myself extra runway so landed at $1M. Then, closed a bit higher because I wanted to let in strategic investors. I found our original location on Craigslist and visited a ton of spots. Decided on one location that financially/aesthetically made sense and fundraised on that. We did end up changing the location to fit in more brands but good problem to have. Wishing you all the luck!
Thanks for the reply, Selene! It's definitely helpful to see some of the steps you've taken and why. And I'm happy to share more about The Well anytime :D
Great! Any time :)
Congratulations!!!! Looking forward to checking it out.
It can be hard to know when to move on and try something new. How did you decide when to shift your focus from Archer Brighton to Re:store?
I started Archer Brighton when I was in college and it was my first 'real job'. We got insanely lucky that we were profitable early on and decided to go full-time. I didn't really have the opportunity to think what I wanted my business to be like or who I wanted to be. It was tough to have a business that was growing but at the same time feeling that my passion/talent was not reaching full potential. Re:store is everything I care about, I'm good at, and I hope for in the future. My background is in community organizing, I've been fascinated by small businesses my entire life, and I really really love operations and helping great people/products reach their full potential. Once I trialed the concept, there was no going back lol. I wake up every morning so excited about our concept, our future impact, and our brands. You can't fake that and it will keep you going when times are tough.
Just dropping in to say that I also have a community organizing background! It's a great foundation for startups (IMHO :)
Amazing & agreed!
I read that Audrey Gelman of The Wing advised you how to convince tech investors to back - and not undervalue - companies with a focus on the physical world. Just wondering how you persuaded them to do so, and what aspect of your pitch you think was particularly persuasive?
Great question @jacinta! I never showed my deck before a meeting. I really wanted the first meeting to be a conversation about our space + future opportunities. I think when you're able to have an honest conversation about what you're trying to accomplish and how you imagine it can change your industry- it's easier for people to understand that a physical play will look different from a purely tech play. That being said, the future of any industry will incorporate a bit of tech. For Re:store- physical space is our entry but not our long term vision.
I am beginning my fundraising process and am interested in any tips/strategies you have pertaining to:1) If there was one specific thing you implemented into your pitch/pitch deck that you saw gave you an uptick in your success, what was it?2) What did you make sure to know/have on hand about your company when you made it to an intro meeting with a VC? (I have my first official meeting on Wednesday and want to make sure I'm fully prepared!)And not pertaining directly to VCs:If you have advisors/mentors for your business, how did you go about recruiting them? I have my eye on a couple of people who I think I could greatly benefit from, but I want to make sure I approach them correctly.
Congratulations on the first official meeting, Netta! Rooting for you!
Thanks Krystal!!!!
Hi Netta,A bit late but hopefully still helpful :) 1) Every company is different but I strongly recommend using docsend to track how people interact with your deck. For my business- I did notice more people looking into the tech/ what's our unfair advantage/big vision section. This was helpful because I would follow-up with investors with defense points on whatever it was that they were interested in.2) Fingers crossed it went well! For me- it was not being afraid to tell my story - who I am, why I'm going to kick ass and my big vision for my space. Other than that, showing deep expertise into your industry- who are the key players, why is now the right moment for what you're building, market size, financial model.. aka you should definitely know your numbers! 3) Female founder office hours was incredible for this! They connected me with Audrey from The Wing and other incredible CEOs. On my own, I was also about to connect with leaders I admired simply by asking.. I LinkedIn's the COO of Sephora, asked for an intro to the first Tory Burch investor/ real estate powerhouse William Macklowe, and cold emailed Mark Cuban. People DO respond if you have a good message ;).
Selene, Thanks for joining us!This conversation is part of our ongoing series of conversations with women in the community doing great work.As a reminder, Selene may not have time to answer all the questions that are asked, so we'll be sorting questions by popularity (most emojis!) and those that will be valuable to the most people. If you like a question, emoji to help bump it to the top!
Cadran this series is so insightful and helpful. Wishing everyone a wonderful thanksgiving.
^^ yaas!
Thanks so much for arranging this Cadran! Also, big shoutout to everyone that took the time to ask questions :) Excited to share my journey!
Your success helps me believe in my success, too! I'm creating Recollect, a Mindfulness app that reminds us of the right thing at the right time so we feel better right away. If you could go back to yourself at the beginning of your fundraising process and give her advice, what would you tell pre-funded self?
Great question! It would be: nobody cares that you don't have a co-founder. They ONLY care that you WILL do this. Think big, DO big. Don't tame your crazy dream, speak it loudly and enjoy the process- regardless of what happens it will be a great story to share one day :)
Gah, I appreciate that so much, Selene! I'm also a solo founder and am done being self-conscious or apologetic about it. Really appreciate this advice and will be taking it to heart. The tool I'm creating is all about being reminded of the right thing at the right time. And what you just responded with above is exactly the kind of thing I need to be reminded of when I'm going into meetings. So I'm going to manually remind myself of your wisdom until I build the tech that will make it easy peasy! Appreciate you.
So happy to hear Amy! Best wishes in your exciting journey :) You can do this ;)
Thank you for sharing your story and behind-the-scene-process of fundraising. It's really encouraging to hear and witness success firsthand, and as a founder of sustainable fashion recommerce (www.the-sloth.com), I can't wait to see your store IRL! I am curious about your experience applying to FFOH. I haven't applied because I feel like I need more traction. Do you have any tips/advice as to successfully leverage this opportunity? As a first-time, minority solopreneur, I am still working hard to gain traction and show evidence of the proof-of-concept.
Hi Namu!Noooo. Please apply! I don't know the behind the scenes but even before I had a deck/knew entirely I was going to fundraise- I went to their first event. I think you'd find the most success applying, attending their events and getting a vibe on what can be the most helpful next step. I don't know your industry/traction stage but they do everything from deck advise, connecting you with mentors, and sharing your company with investors. You never know if your current traction is just what is needed so don't wait to build relationships <3
Thank you! For some reason, I am just seeing this. I applied last year and did it again just now. Thank you Selene!
I am the founder of a P2P lending platform https://www.loangini.com, from India, looking to raise a pre- seed myself. What helped you in your fundraising round and what did not work out for you? Are there any common myths about fundraising you would like to debunk?
Thanks for your question! It helped me to talk to a lottt of founders before I even started fundraising. It helped to think through if I wanted to raise, how much, and consider potential investors. Creating genuine relationship and not trying to 'skip' through the process is what I recommend. What didn't work for me was pitch events. They were depressing and rarely do they amount to anything (at least not in my experience).
Thank you, Selene. Your advice is helpful.
One of the articles i read noted you as a solo founder - i'm wondering what were your biggest obstacles that you think you might not have otherwise run into (both with building the company and fundraising) as a solo founder and how you were able to overcome those obstacles?
Having a co-founder does make fundraising/building a company way easier. You can move a lot faster, make it 'safer' for investors, and if you find the right person- have a diverse expertise. It also helps a lot during startup rollercoasters- things don't always work out and it's hard to be the only true believer. I think it helped me a lot that I was solo during my first business. I learned how to hire/manage and felt very confident on what type of potential co-founder I was looking for. I'm still open for this person. My advise? you can't stop moving. Your progress will attract the best people for your business and for me it happened that it attracted investors first. I will forever be looking for the people needed to turn Re:store into a legendary startup and you probably will too lol. As your business grows you will make decisions on what to do to help you get there- for me it meant believing I can do this on my own.
I'm the founder of Qeturah.com. We're taking on Shopify/BigCommerce/Etsy to build a one-stop business portal for SMEs in Africa to help them start, grow, and manage a business online. I'm currently raising a seed round of $0.25 million... how do founders like myself outside the US get introductions to US based investors for our round?
Hi! Qeturah sounds very cool. To be honest, I'm in the Bay Area and wouldn't be the best person to advise on this. Wonder if there's any facebook groups to help? The only semi-related thing I can say is that I have cold-emailed in the past and while not always a win- people do respond (especially targeted angels). It's a hard strategy but I've met many successful founders that have done this as well. Another option could be applying for accelerators? there might be some local or online options like https://foundergym.com.
I was so excited when I read about your story! It is awesome to see women from all backgrounds to thrive. I am a latino founder and my startup is based in Europe. Through our app, we automize interior design: https://www.cozyoapp.com/-I wonder how did you make use of ALL RISE network to help you in your fundraising?-How did you move from mentoring to get 1:1 meeting with different VC’s?-I am part of the program, I have an amazing mentor, however, I am finding hard to build my network in the US from far away. How did you manage to get more intros within the network?-How did you get your meeting with Jess Lee? She must be amazing to work with!-What type of channels and how do you recommend to approach her?Thanks for your time! And I wish you success on your next challenges and to keep hearing more good news about your business.
Q- I wonder how did you make use of ALL RISE network to help you in your fundraising?A- Great question. I attended their first event early on (before I was entirely sure I wanted to fundraise). I also made friends with other female founders- 2 eventually signed up for Re:store. I later connected with Felicia (co-founder of FFOH) and she helped me with early fundraising questions/ deck prep. After that I was game for anything FFOH did. Q- How did you move from mentoring to get 1:1 meeting with different VC’s?A- Not sure the behind the scenes but after I received deck help/ did a couple of mentorship meetings I was asked if I was interested in deal flow (where they pass your deck to matched investors). I said yes and was intro-ed to investors in my space and took meetings. Q- I am part of the program, I have an amazing mentor, however, I am finding hard to build my network in the US from far away. How did you manage to get more intros within the network?A- I'm based in SF so might not be the best person to answer. Aside from FFOH, I grabbed a lot of coffee dates with founders. I would ask them about their fundraising strategy and eventually for intros to investors I knew were interested in my space. I also did some cold-emailing- starting them with a good ol' 'Hi __! Hopefully this cold email warms your heart.' :P Q- How did you get your meeting with Jess Lee? She must be amazing to work with! What type of channels and how do you recommend to approach her?A: I met Jess via FFOH- she is the co-founder & very involved in their events + mentoring! I feel insanely lucky to be working together. I trust her insights as a previous founder in retail + am grateful that she pushes me to dream big. She is a powerhouse that will change this industry and I deeply admire her success + dedication to All Raise. Hopefully when she's killing it on the Midas List, Re:store will be part of it ^_^.
Congratulations Selene!
Thank you Tope!
This AMA is now over. Thanks so much for chatting with us, Selene!
Thanks again for hosting! Love the Leap community ^_^
Congrats! Which round was this and what was your ARR going into the fundraise?
Hi Rosi! This was pre-seed/ pre-revenue.
I'm most curious about your process in securing a space for Re:store. Was the investor route always the plan, or did you consider loans or other financing? In finding a space, did you have any key contacts or hires when you first started, like hiring a leasing agent, for example (or just work directly with the landlords)? As for coworking, I love that you're creating a space that's multi-functional. What role do you see coworking or events taking in conjunction with retail/experiences?
Hi Kira! I wanted to grow into multiple locations quickly so VC funding made the most sense. As far as securing a space, I studied real estate so had a bit of a background but no connections. I negotiated our first location but when we decided to switch spaces we used a realtor (Craigslist can only take you so far). Thank you! We believe the future of retail is more than just a storefront but a shareable space for people + brands to get to know each other + discover together.
There are so many digital brands nowadays, and ones that want to bridge digital to physical. What do you think the right model will be here? Inside malls or standalone spaces? Multi-brand or single brand? Experiential vs. more transactional? What's your take.
I would love to hear your perspective on the future of retail given the global pandemic we're in. Do you have any plans to make changes to your store for the long-term?
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