Susan Feldman explains why her profitable company took venture capital anyway. The business was cash-strapped despite being profitable, unable to hire consistently or scale. Four months in, inbound investor interest signaled the market was ready for faster growth, so she and her co-founder traded equity to accelerate.
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This is fascinating. You then decided to go out and get venture capital funding. Why? Why did you not just decide to keep this a private business and just keep growing it based on reinvesting the profits?
Yeah. So it's a very tough decision. I mean, when I say that we were cash flow positive and profitable, we were also incredibly under-resourced. So literally, We would wait till the end of every month to see how much money we made to see if we could hire another person. So at the end of that first 6 months, I think we were 9 people in total doing all of that. That was kind of crazy. So we knew we needed to do something to— Scale. Yeah, to scale the business. And it was a really tough decision. I mean, this happened, I'd say about 4 months into it, we started getting a lot of inbound requests from the venture community. And when you start off and it's your own money in the beginning, in the beginning, then all of a sudden saying, okay, well, I understand the positive. This is gonna be smart money coming in and it's gonna help us scale and we think this is now gonna be a really big thing. Where in the beginning, Ali and I were worried about whether it would work or not. Now we knew it was gonna work and how big could it actually be versus, okay, we're gonna keep this like a nice lifestyle business and go along. It was a lot of conversations about it and giving up a percentage of the company to the investors and things like that. We ultimately decided we felt we really were on to something big and that taking the money and the investment was the right thing to do to scale the business.
