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Customer Appreciation

In need of funds for growth, an entrepreneur looks to those who know his products best.

Since 1995, Andrew Zenoff has given birth to Zenoff Products and DayOne, two San Francisco companies that cater to expectant and new parents.

It wasn't easy, though: Zenoff says that finding money for expansion was one of the hardest tasks of entrepreneurship. Even with strong profits from his flagship store, angel investors and VCs saw too much risk in his unusual retail concept, which mixes education, community and commerce.

"The outside investor community wanted more proof," says Zenoff, 42. "So who better to go to [for funding] than people who have the proof: my customers?" He sent offers to 60 customers and was able to close 28 investors in 30 days. With such committed customers, Zenoff's corporate babies are growing up fast. DayOne currently has two locations, a third in planning at press time, and hopes of 50 more over the next five years. Zenoff projects combined sales of nearly $10 million for 2007.

This story appears in the March 2007 issue of Entrepreneur. Subscribe »