Lee Greene, former founder and CEO of WearAway and current creator & host of the Stairway to CEO podcast talks about making the pivot from startups to airwaves. We also spoke about the acquisition of WearAway and the company got to that point.
Lee's LinkedIn: https://www.linkedin.com/in/leegreene/
GRIN, the company that acquired WearAway: https://grin.co/
Stairway to CEO podcast: http://stairwaytoceo.com/
Let's get started and today's a guest speaker we have Lee green founder of where we, that was acquired in 2019 by green.
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And currently Lee is advisory board member at reveal and host of future commerce podcast by the way people. If you have not heard it before definitely check it in just searching. But, I mean.
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Just search and spy Fi, future commerce and I'm pretty sure you're ready to see. Yeah. Fair way to SEO. Right? I forgot that part of it. I'm pretty sure if he just search future commerce. It's still gonna pop up right?
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Future commerce is they have their own podcast and then stairway to is a separate podcast, but we are partners.
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Nice all right. We're going to touch onto that subject layer on speaking of subjects that we're going to cover in this episode. We're going to cover the acquisition of where we, how did this? How did they pivot?
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Because they did pivot and also we're going to touch on to being an investor before being a founder and vice versa. So, Lee, let's kick it off by here, giving us some background on yourself and on where wait.
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Sure, so a little bit about myself, I grew up in Delaware. I lived in New York for many, many years working in the fashion industry.
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I moved to Los Angeles where I became an associate launch pad, which is a top technology accelerator for startups. Um, uh, that's really where I got my startup gonna want and I realized, I'm an entrepreneur, just like these awesome folks in our portfolio.
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I want to be just like them and I launched my own company. So I did, I started wear away, um, wear away. It was an online marketplace that connects brands to influencers. We did have a little bit of pivot there.
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So happy to discuss that in a little bit we were acquired in 2019 by grin and green is an influencer marketing SAS company. So, is there for a little bit and now I'm on my own with my podcast, which has been really fun.
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I interview founders and about their journeys and building companies. And I'm an investor at Venture Partners and I advise startups.
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Nice and this is really cool. So, 1st question is actually about moving to at least why do you decide to move to Los Angeles?
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You know, at the time they had a huge growing potential of tech startups. I saw a lot of things happening in L. A. that wasn't really happening in New York at the time.
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I think rent the runway was kind of considered the only E, commerce, you know, up and coming huge company at the time in New York whereas in L. A. we were seeing all kinds of subscription model companies launching a lot of different E, commerce.
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Brands just was super. Interesting. I had come out here a few times already. I had friends here and who doesn't love sunny California.
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100%, he is definitely lead place for you to be continuously advertise it as the C to move to. If you're a founder, because it's close to San Francisco if you want to visit some investors, but at the same time as much better than San Francisco.
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So, yeah, move totally easier started founder, but 1st question is okay. Nevermind, 2nd, question is about being an investor before being a founder.
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So you used to be a board member off women in venture and associate, as you mentioned at before you start where we can you tell us more about what you have learned there and would you recommend other aspiring founders?
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1st, trying themselves as investors.
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Yeah, I mean, the accelerator models very different obviously than working at a VC fund, but it was an incredible experience, and definitely inspired me to become an entrepreneur and be on the operating side of things.
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And it was awesome seeing, you know, how other founders pitch their companies hear the feedback from the investors in those pitches.
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So, you know, I think being on the operating side of an accelerator, and being on the investment side is definitely a great experience to kind of understand the world of venture capital, whether or not you want to be an entrepreneur or not. It really can help you get some great insights there.
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Absolutely, so, will you recommend founders taking their time researching this market trying to understand a little bit more actually trying to get into 1 of those companies because, I mean, gain into lounge badly is pretty hard, because it's a pretty big firm right? It's well known and only specifically.
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So, would you recommend founders taking quite a few hours of their time to spend to trying to get into those organizations or do you think there are there ways to learn this stuff?
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I think if you're a 1st,
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there's a lot of amazing accelerators that can be extremely helpful,
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whether it helps you with them,
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which are obviously,
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very valuable introductions to investors,
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which is super helpful when you're a news founder and you don't know anyone they also help you with understanding just how to put together a pitch deck or just all these things that,
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as a new 1st time founder it can just be really,
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really helpful to have that support.
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I think as a 2nd, time founder, you probably don't need an accelerator. Those 2nd time founders definitely go that route but, yeah, if you're starting a business for the 1st time, I mean, supporting yourself having a supportive.
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A group of people around you to build a business is always very helpful. So yes, I think accelerators can be really great.
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100% yes, accelerators Ventures use both of those are very good and by the way, there are quite a few salaries that don't take any equity. And also, for example, there is.
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Start Curry. Great start red, green, green, 110 greed. 110. that's the company it's government sponsored and they're great and they don't take any equity. So.
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Check it out. Maybe there is 1 in your seat just like, great 110 and the late or if there is not moved away. All right now let's talk about where wait. So, you've pivoted where we can tell us a little bit more about that when that happened. And mainly why.
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Or so there was a pivot early on. We started actually as a peer to peer platform for women to rent from each other's closets nearby. So that was kind of a major pivot going from peer to peer to B2. B.
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so most of the time, mainly we were a B2 B online marketplace most of our customers were rental houses and brands on 1 side of the marketplace.
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And then we had stylists and custom designers that were working on major film and TV shows shooting for major campaigns. Commercials like, Maybelline, so it's very industry focused.
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It was B2 B and the reason for that pivot was I basically discovered a 6Billion dollar industry that was completely run off line. So that was very exciting.
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We got to an accelerator in New York called Labs, so that was really helpful and propelling that B2 B model. And then, as we started to grow there, we realized there was a huge boom of influencer marketing that was happening.
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A lot of our brands started requesting social media influencers as, you know, how many influencers do you have on your platform?
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And we're like, why did we have the editor of this magazine and the costume designer for this major TV show can feature your products and they were really interested in social media. So we started to test that out.
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And that ended up becoming 70% of our business influencers, borrowing, clothing and accessories from brands on the platform. So your business always evolves into things.
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I think you don't you can never really predict, depending on the market.
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Higher percent absolutely. Next question is about actually, you know.
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More of like, dangers of pivoting, I think, or dangers of.
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I forgot just horrible day for me to run the podcast keep reading words but the question is about.
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Not losing your focus basically, so 1 of the major advisors that founders who had exits before investors who are successful investors, they give the same exact advice. Now, just being focused on your final goal.
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And when you're trying a different business model, when you're trying a different approach, different customer segment, basically trying to make those small testing pivots, don't you think you lose a lot of that focus on? Do you think it's actually worth spending your time to try this to try that to try this again?
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Instead of just focusing on 1 thing.
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and I think there's a difference between shifting focus and trying to do too much to too soon,
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but I think for us,
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the market really shifted and if we weren't going to go on the new wave of how things were being done,
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we would be the dinosaur left in the dark you definitely want to make sure that you're following the trend of the world in the market,
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rather than staying.
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So stuck to a certain focus just because that's initially what you've set out to do things can change. And so, for us, that was this huge boom of influencer marketing, which led to our acquisition. So we did the right thing.
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100% and yeah, that thing it's still growing. I think. I mean, I don't think I know it for sure. It's still growing. So great move. It worked out. Great for you at the end. So good job there. Let's talk about the major topic of the entire podcast.
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Which is fund raising so do you raise any money for where.
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Absolutely, can you can you tell us a little bit more about that experience to be raised to where the process of.
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Who do you raise it from et cetera? We had quite a few investors we had based Ventures, which is an awesome fund in the San Francisco area. Um.
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You're really drilling me now, because like, so long, I feel like, but, um, New York Venture Partners, they're amazing investors.
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So, we were really lucky to have a bunch of funds as well as a very seasoned entrepreneurs that were angel investors, um, industry experts as well as well as our accelerators, too. So, Labs as well.
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Nice nice. Nice. And how were you making the decisions on who to raise mind from? So, a lot of people in those, especially working with influencers are trying to raise from the influencers themselves. You tried that approach, you try to raise money from someone famous, or where you're like. Okay, that's most likely.
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Not again workout. So we're just going to move on to traditional investors.
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Yeah, I mean, we had, um, you know, rituals though as an investor and so that was kind of a, an influencer form but, um, at the time it really wasn't, you know, that was the very beginning of influencer marketing.
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So, it was a totally different time than today where you have tick tock, influencers, investing and startups, like, just started happening.
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So, back when I was in, um, fundraising, that wasn't really a thing and, um, that wasn't really something that we were completely focused on, you know, we were focused on having investors that knew how to help us build a successful marketplace.
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Right and yeah, I mean, they heard the news that some influencers just launched the big funds they're doing our rolling funds called anti fund. So that's it's pretty exciting to watch. I'm curious to see how it plays out. If they measure success I'll be.
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Kind of shocking up some people spend their life slurring this stuff and some people are just like, I'll go from take out to investing, starts looking forward to seeing the results. I'm actually pretty sure they're gonna work out because I'm pretty sure they know the market somewhat.
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Well, right now, let's move on and talk about.
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Fundraising just a little more looking back at the experience looking back at all the, uh.
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Investors he spoke with all the pitchers you've made, had all the outreaches you've made, what would be the major thing that you changed there?
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I think probably, not to take things as personal as I did the 1st, time founder and when you hear know, and you don't really understand why and investors aren't really clear with you as to why?
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Because they want to kind of hold you via string in case. Something crazy happens and you keep them in mind, they don't want to be missing out on anything you clear answers as to why they're saying now.
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And so now that I know why some of the funds that I pitched there wasn't ever going to be a good fit.
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And instead of kind of saying that, and letting the founder know, you kind of get dragged through the mud quite a bit, and you're left in the dark as to why you're getting so many knows, or what's going on.
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Or they're saying, oh, none of traction or there's always just something, even if it's never going to happen and that that was super frustrating. So, I think, you know, looking back, I wish I didn't take it as personal because it really had nothing to do with me.
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it was probably just the fact that I was building a marketplace and they don't really invest in many marketplaces or they're looking for a certain return multiple that this type of business wouldn't be able to give them compared to another type of technology business or SAS company
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right so I think blaming yourself and not really.
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You know, knowing how to kind of take the rejection sometimes at a nonpersonal way, I think is, uh, definitely big learning as well as having a process in place. So, um, yeah, I think.
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Having a very specific process in place, which is something I advise on a lot now with startup founders, but didn't really do at the time for 1 of the rounds is a definitely a lesson learned. I knew nothing when I was building my business.
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I had to learn everything from scratch, so lots of learnings there.
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Absolutely. Can you tell us a little bit more about that? What do you mean by having a process in place? Or does it does that process look like.
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when you're raising capital,
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you want to raise for 18 months of runway you need at least a year to be operating your business plus another 6 months to fundraise for the next round you need to make sure you have a specific milestones that you expect to hit within those 18 months
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so you're raising and they're saying,
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I'm giving this money to you.
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What can we expect to happen? You have very clear milestones on what that can achieve. You also want to set deadlines for your raise. You don't want to just have this endless. Hey, I'm fundraising till the end of time. You need to say we're raising around.
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We're closing in, let's say, 3 months from now, you set that date and you ask the investor.
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Can you sign in fund by these dates? And so you're kind of getting them all ready to commit to a timeline and some will say, no, we can't. Some will say yes, we can. And then get your answer kind of early on.
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Another thing is, like, it's a numbers game, so just cast a wide net and definitely. Talk to as many investors as you can and be really do your homework know exactly what kind of fund they are ask questions about their fun sized.
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What kind of check they write? What a fund might say? Oh, yeah we invest in the series B.
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That's a huge round, you know, and for a preceed.
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Company they might say, oh, it's preceed so they could invest in me. But then if you ask what percentage of your portfolio did you invest at the preceed stage?
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And then they're like, oh, actually, 2% then you realize that your chances are actually so much, slimmer than you think. So, I think, you know, really asking the right questions to investors that can set expectations for yourself. So you don't get so excited.
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I think, you know, a lot of times you can leave a meeting and they're nice to so you're thinking this is great. I'm moving on in the next phase. And then they send you a rejection letter. Hopefully, unless they go, which they can, and you just don't know.
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So you just got to ask the right questions and start early in your raise. Don't raise when you need the money, you need to raise at least 3 to 6 months out.
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Absolutely, yes. Very true. Very true stories. It's.
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Very common for early stage startup founders, you know, to get disappointed real fast. She had lost in the process to raise for attorney and then you're like, being reason for 2 years. But now.
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The company's still there, you know, kind of slowly dying and then they burn out and then I just said, so yes. Great advice. Absolutely. I love it.
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I had another question in mind, but then I forgot it. So let's move on to the next 1. let's talk about the happy ending let's talk about where acquisition, how did you happen? Do you try to get in touch with the acquire yourself, or did just organically happen?
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You know, I have to say, and people might hate hearing this, because I would hate hearing this too. I was really lucky.
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I had a friend we were in an over,
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on the way to a dinner with a mutual angel investor,
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and I was talking to him about my business he was advising and talking to the founders of grand and basically,
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he was like,
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they should acquire your company.
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Okay, I did not expect you to say that, but I'm happy to have a conversation and so he made the connection for us. They happened to be in San Francisco at the same time.
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We were for the same conference, and I met them the next day and we totally hit it off. So it was very bizarre situation, which I don't think normally happens.
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I did talk to a few other companies, and at the end of the day, Greg was really felt like the best fit at the time.
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I mean, the more founders who sold their companies, I interviewed the more I see the common trait there. Every single acquisition is just weird that I've seen.
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Couple of cases where it's normal, where it was planned, where it happened, because the founders were like, okay, soon we're gonna get acquired whenever we're going to work towards it all other cases super, completely. Absolutely random.
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if your founder be ready for this stuff,
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moving on talking to talking about what's going on now,
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where you're working on,
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do you do some start investing yourself as an angel to advice startups and what we're working on now?
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Can you tell us a little more about the podcast as well?
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Sure, yeah, so the podcast, like we said before, it's called steroids, I interview founders and CEOs about their journeys and building their companies starting from their childhood.
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I think it's pretty interesting to kind of find out how people why they are the way they are, and how they got to. So, it's a lot of storytelling from way back in the early childhood days to where they are now really been enjoying that.
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We've had some incredible brands and on the show and yeah, I love advising startups.
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I've learned a lot in my journey of building where away everything from a, to Z and so I really love helping founders from anything.
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Visiting strategy to business development, connect to customers, marketing influencer, marketing whatever them with is something I really enjoy.
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Nice great. And yeah, I'll make sure to leave a link to that test in the descriptions episode.
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So people, if you're interested in more of this storytelling or other than, you know, focused on the end result, definitely check out that podcast because you're, you're not going to hear it on fundraising radio that's for sure. Different focus.
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That's why we are very much happy to advertise the other 1 right now that we're covered pretty much everything. I think.
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I still didn't remember the question. I want to ask you so it's just as buried in my in my poor memory. So forget about moving on to the very last question of today's episode, which is a call to action. So, would you want to send to do as soon as the app is over?
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I guess check out the podcast, you can go to stairway com.
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Perfect, that's a simple conversation. I like it. I would recommend people check out the description susceptible. Maybe I'll include another link to a story of the acquisition. So if you're trying to figure out how that stuff works, definitely check it out.
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And, of course, the link to podcast is going to be there, and also there's can be a link to Elise Ellington. So, check it out. And as usually have a good date.