Trying to get VC funding is a lot like dating, Michelle Madhok says. "No one ever rejects you. After you go on a certain number of 'dates,' you start to realize they aren't going to commit."
Madhok is the founder of New York-based SheFinds.com and MomFinds.com, online publications that help women shop the web for the latest beauty and style finds. She bootstrapped SheFinds.com in 2004 with $250 and followed up with MomFinds.com. She has one full-time editor, one part-time editor and 20 freelancers. "We've done great; we're making half a million in revenue a year," she says. "But to grow, we need energy behind us."
Madhok wants $1.5 million to improve both sites and expand into other areas, beginning with BrideFinds.com. Her goal is to take the concept to $30 million in annual revenue and then sell it. She is exploring angel funding as well as venture capital, but believes that venture capital will bring her the connections she needs to take her company to the next level.
Madhok has "dated" four VC firms so far. "With most of these, we go four or five times. We go for breakfast or drinks; it's always an interesting conversation."
However, she says, many men don't understand her concept. "Men are focused on widgets and technology," she says. "One investor asked me, 'What's the patented technology?' Women, on the other hand, 'get it in their gut.' "
Louise Wannier is CEO and co-founder of Pasadena-based MyShape, an online fashion retailer that does have patent-pending technology and uses it to match clothing to a woman's measurements, body shape, and fashion and fit preferences. Like Madhok, however, she says it's been difficult convincing men that her site is a worthwhile investment. Yet she raised $2.2 million in angel capital to start MyShape. And last summer, she received Series B venture capital funding from Draper Fisher Jurvetson. Her angel and VC funding now totals about $10 million.
Wannier credits several invaluable contacts for her success. "You have to be tireless about getting to the people who know what you need to know," Wannier says. "I think you have to communicate with everyone."
In addition, she's a CPA with a financial background and a serial entrepreneur with a proven track record at Gemstar, Enfish and the Swedish company Skillware/Interaktiv Video.
Maryssa D'Angelo has given up on securing funding. D'Angelo designed the Magic Sheet, which removes grime from cookware without scrubbing. A year ago, the Southern Californian put her business plan in place, got her team together and started researching VC companies on behalf of her firm, Magic Products LLC. What she learned is that VC firms are reluctant to fund first-stage companies.
Instead, she got interest from more than one scammer, who requested money upfront. She and a team member even flew to Florida to talk with a company that expressed interest in her product. "We met with them at noon," she says. "We sat down, and they started explaining where we had to pay." D'Angelo walked out of the session and flew home.
She is now making headway on her own. "I've got product made and packaged without one dime from investors," she says. Her manufacturing firm and her logo designer have said, "When you get paid, we'll get paid." And that might not be far off. D'Angelo says she's working out deals with multiple bakeries and has her sights set on additional commercial and consumer outlets.
Harleen Kahlon has received angel funding for DamselsInSuccess.com, a New York-based site that features content, a social network and a job board for professional women. Now she's trying to energize her company with venture funding.
Kahlon believes that a lot of venture capitalists see an opportunity in the women's space on the internet, but they don't understand it. She says, "The site I've built has three components: a job board, a social network and original content. The content is there because it helps women connect with the site, and it brings them back. VCs say, 'get rid of the content.' "
Kahlon walked away from one offer of $500,000. "I was close to closing," she says, "but they were frustrated that I wanted to spend $3,000 a month on content."
Kahlon has learned much in the past few months. "My financials are a lot more detailed. I am better at defending my assumptions. I have multiple scenarios depending on the size of the investment. Ups and down aside, I've learned so much about my company from going through this process," she says.