Katherine Hague co-founder of ShopLocket was a prodigious fundraiser in the two years from idea to exit. Hague describes some of the landmines to avoid when raising outside capital and why she still has one regret about the sale to PCH.
Hague’s story had a happy ending, but it still serves as a cautionary tale. When I asked Hague what she would do differently next time, she said she would try to self-fund more of her growth. You can minimize your equity dilution as you grow if you have a positive cash flow cycle, something we’ll create together during an exercise called The Valuation Teeter Totter in Module 10 of The Value Builder System™. Complete Module 1 now by getting your Value Builder Score.
Katherine Hague is a serial entrepreneur, investor, and the founder of Female Funders, an online destination dedicated to inspiring and educating the next generation of female angel investors. She is the author of O’Reilly’s upcoming book, Funded: The Entrepreneur’s Guide to Raising Your First Round. Prior to leading Female Funders, Hague founded ShopLocket – acquired in 2014 by PCH. Hague was recently named one of the Women to Watch in Wearables and has been named one of Canada’s Top 100 Most Powerful Women. She has been quoted in the New York Times on fashion tech and was recently interviewed for the Oprah Winfrey Network. Find Hague online at katherinehague.com or @KatherineHague.
Some Highlights Of The Show
2:06: “We wanted people to embed products on any website… We were one of the first people [to do it].”
2:40: “Our Trojan Horse was that we were able to do pre-orders.”
5:10: “I knew the founder of Shopify… I started to develop Shopify themes… I started to hack around Shopify; I had to brand out and start building something on my own.”
7:30: Friends investing at $10,000 to a million-dollar series A.
10:20: “I knew [selling] was the likely outcome.”
13:00: “Having gone through it before, I’d be in a different negotiating position. I think I would know what terms are standard, which investors I wanted to work with…”
13:40: Click to Tweet: “Talking standard terms, participating preferred shares and vesting with @KatherineHague.”
16:30: Click to Tweet: Know what’s in that term sheet and be willing to walk away.”
19:07: “Oftentimes investors have a lot of things they can veto…”
22:07: “[Now] revenue is a much, much more important number to investors. It’s really just a shift in the funding ecosystem.”
24:27: “After we got the money we were like, Oh, sh*t, now we need to make this work.”
25:42: “We pivoted our entire sales funnel… What they needed was a pre-order solution and that’s what we became.”
28:17: Perfect timing.
29:05: “Very quickly conversations around strategy and maybe them investing evolved into an acquisition conversation.”
30:05 “We were running out of money; we had been about 18 months on the million.”
31:40: “There were all these things about this opportunity that just seemed to make sense. Financially it made sense. As a young entrepreneur this was going to be an incredible success that I could then springboard the rest of my entrepreneurial career on.”
33:50: “So we had two weeks to close the entire deal.”
35:45: Click to Tweet: “It starts to feel surreal and detached from you.” @KatherineHague on #selling.
37:07: “[After that] it took me about a year to get my head out of the company…”
39:50: Why you should hire a professional.
43:15: FemaleFunders.com | KatherineHague.com
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