SN 1 EP 4

Finding the Right Funding

Feat. Kim Lewis, co-founder of CurlMix

Kim recently made history by allowing her customers and her community to invest in and own shares of CurlMix.

She raised $5M in two months, which is only fitting since the community is at the heart of every decision Kim makes.

Kim Lewis is the CEO and co-founder of CurlMix, a clean beauty brand for curly hair. Kim and Tim, her husband and co-founder, operate a manufacturing facility in Chicago, where they employ a full-time staff of 30+ minorities and women.

They appeared on the 10th season of Shark Tank where they turned down a deal from Robert Herjavec who offered $400K for 20% of their company. 

Following their episode, CurlMix became one of less than 40 Black, women-owned companies to raise over $1M in venture capital funding; specifically, raising a seed round of $1.4 million, led by former LinkedIn CEO, Jeff Weiner.

On this episode

Kim talks with Katie and Jenny about:

  • The first investor check she ever received
  • How she turned a Shark Tank appearance into more investor meetings
  • Her advice on finding the funding for your business

Top takeaways

Editor’s Note: We’ve edited and condensed the questions and answers slightly for clarity.

Before you reached the $1M mark for your business, had you received any outside investment?

I was in incubators where I was learning how to fundraise. The first one I went to was a women in STEM incubator in Chicago, where they put us in front of investors. 

I thought, “This is going to take forever. I’m a Black woman.” 

Women get less than 3% of venture capital funding and Black women get less than .006%1, so I figured it wasn’t going to be the best use of my time. 

But I met Arlan Hamilton from Backstage Capital, and she wrote us our first check before we hit that $1M mark. She basically said, “I like you guys. I want to invest in you. I have a $25,000 check.” 

In the scheme of the billions that go to venture capital, $25,000 isn’t a lot. But my husband and I had invested so much of our own money by the time we got to $25,000 that it felt like it was $50,000 or $100,000—we knew exactly what to do with it, and that helped catapult us to $1M in revenue.

When Arlan wrote me that check, I cried because I realized someone believed in me, and it was the most money I’d ever seen in my business bank account.

How did you get to the next stage in your business after Shark Tank?

After we filmed Shark Tank, it didn’t air right away, but I really geared up my investing and fundraising efforts.

I realized the episode would make CurlMix popular and it was going to help me fundraise, so I started getting in touch with VCs more often. 

I collected the information for different investors in Chicago and cold emailed them with my biggest wins, biggest challenges, revenue, and projections for the next month.

Then I found out the Shark Tank episode was going to air the next year in March, and I knew it was time to hustle because I didn’t have the inventory for the kind of growth that was coming.

I didn’t want to miss the opportunity of all that press to my website, so I started calling all those contacts I had made in the last year saying, “I’m going to be on Shark Tank and I need funding. I need a couple hundred thousand dollars for inventory.” 

I talked to Arlan, and she said, “I have someone who I think might do the deal, but he’s a quick yes or no. You have to be fast.”  So I got on the phone with him, and he made a decision in five minutes. 

At this point, I had done 20 to 50 pitch competitions and presented my business to the Sharks, so I was a whip at my numbers—I knew my business frontwards, backwards, inside, and out. 

He said he’d do 2.5x times current revenue, so he did a deal for a 100K convertible note to get me to that next level and brought on his partner, Jeff Weiner.

Then our Shark Tank episode aired and it did really well. Jeff saw the episode and said, “Those Sharks are nuts. They should’ve given her a deal.” So he called me and ended up investing $1.2M into the company. 

And once they were in, there were a bunch of people who came in and wanted to be on the deal, too.

How can other founders figure out what the right type of funding is for their business?

Everybody’s path is different. But let’s say, for example, we IPO with CurlMix and I do something else. 

I’m going to raise venture capital because you can go bigger, faster. So if you want to exit your business and you want to either IPO or sell your company for hundreds of millions of dollars, my recommendation is to raise venture capital.

If you want to own 100% of your business—you don’t want anybody else telling you what to do and you don’t want to have to consider what anyone else thinks or how they’re going to feel—then don’t raise venture capital. 

If you’re okay with being a bit smaller, if you don’t need to get to more than $10M in revenue and just want to make six or seven figures for yourself on a beach in Tahiti somewhere, you don’t need venture capital. 

But if you’re trying to go really big quickly, then you probably want to raise money.

Sources:

1 “The number of Black female founders who have raised more than $1 million has nearly tripled since 2018” Fortune.com