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Nov. 30, 2020

Artem Mashkov on why some founders shouldn't raise money and advice for founders in the retail industry

Artem Mashkov on why some founders shouldn't raise money and advice for founders in the retail industry

We had the pleasure of sitting down with Artem Mashkov to pick his brain for a while. He provided us and our listeners with invaluable business advice.


Some background on Artem:

For the uninitiated, Artem is the COO of SwagUp and the founder and president of Intelligent Ventures. Artem comes from humble beginnings, he is a Russian immigrant, who grew up on welfare. Moreover, he was unable to go to college because he was unable to submit the right paperwork. Fortunately, his mom was willing to lend him her life savings so he could buy into a retail business. Artems’ retail business was so successful that he was able to pay his mom back in seven months. Furthermore, he used the cash flow from his business to invest in other businesses.  Artem got involved with SwagUp (then called StartUp Swag) when he was looking at businesses to invest in. He met the founder, Michael Martocci and was quite impressed with him and the business. As a result, he was keen to invest in SwagUp. However, Michael told him that the business was doing well and did not need investment. Although SwagUp did not need investment Michael also wanted to work with Artem and as a result offered Artem a job at SwagUp.  

 

Artem’s Advice to entrepreneurs in the retail industry:

Artem suggests that founders in the retail industry should not try to control every little thing and should not be afraid of short term pain, for long term gain. Moreover, he advises that retail founders should try to find great people and delegate tasks to them, so the founder can focus on the big picture.



Why founders should not raise money from investors and what to do instead:

Artem believes that founders in the retail industry should not raise money from investors because he believes there are better ways to fund a retail startup. First of all he believes that founders in any space should live below their means, work extremely hard, and put most of their money into their business. Moreover, he advises that founders should build their credit by paying off their credit cards and by requesting their credit cards to increase. Artem says that doing this will allow an individual to use balance transfer, when one utilizes balance transfer, one could have a 30,000 credit limit and take that money and put it into one’s account and for 18 months you don’t have to pay it back. During those 18 months you can use that money to fund your business. This is  exactly what Artem did to fund his first retail business. He kept on paying his balance transfers, then taking them out again, in order to fund his business. Once he built out his store, Artem then went to the bank and took out a line of credit against his inventory and account receivables and used that money to open up more locations. This way he did not have to give up as much equity. In essence, Artem used credit card balance transfers to build out his first store. Then he used his first store’s inventory and account receivables to take out a line of credit from a bank, in order to open more stores. If you are a founder in the retail space this is a shrewd strategy that you should consider.

 

 Artem on COVID’S silver linings:

Artem advises that recessions, like the one we are in, are the perfect time to acquire good talent. He thinks this is the case, because when unemployment is high, top performers are more willing to take a paycut in order to secure employment. Moreover, Artem finds that it is also easier to secure a good deal on a store or office lease during a recession, because there is less demand.

 

Artem’s advice on getting more customers:

Artem suggests that companies like SwagUp should not go and pitch directly to the CEO of a business, but instead should go after the HR departments. The reasoning behind this is because HR departments have credit cards they could use to buy things like swag, without much approval from the CEO and other higher ups. This strategy will also help get individuals inside companies to champion your product and will lead to bigger purchases and will also lead to more business from word of mouth.. Artem calls this strategy land and expand.  

 

What he looks for when investing:

Artem does not care much for good ideas, instead he looks for businesses that have people who know the space, people who he feels can execute on the idea, and businesses that he feels have a good, resilient, and honest team.Moreover, he also has a fondness for companies that are data driven.Additionally, he also looks for people who can take criticism and turn it into a strength by using it learn, grow, and pivot. Right now, during the COVID -19 crisis Artem is looking for companies whose business is  COVID agnostic or  businesses that have a realistic COVID plan.


This Blog Post was written by : Luis Bravo

    




If you would like to learn more about Artem’s endless well of business knowledge you can follow him on Twitter:  @Artem_Mashkov, Instagram :@artemmashkov, LinkedIn: Artem Mashkov. Moreover, you can also contact Artem if you are looking for work, because his retail and hospitality businesses are currently hiring. Additionally, SwagUp is also hiring. Finally, you can also reach out to Artem if you need some free business advice and mentorship. The only thing he asks is to do your research on him and to come prepared with the relevant information about your business.