The seasoned startup advisor will dish out advice to entrepreneurs on everything from finding the right cofounder to raising your first round of startup funding. In our newly launched “Ask A VC” column she’ll also give her thoughts on some of the most topical issues in venture capital as the stories develop.
Her first column is ‘ripped from the headlines’ so to speak. Sian weighs in on the recent acquisition of popular Black-owned brand Walker & Co. to P&G. There were opinions on both sides of the argument on this one. Read on to see where Sian ended up on this one and share your thoughts below.
Recently, it was announced that Bevel has been sold to P&G. There’s been some chatter online about whether or not this was a good move. What’s your take on it?
Let me start off by saying Startups are hard. Anyone who says anything different has lost the plot. I’m not privy to the intricate details of the deal so I’ll try to weigh in.
There has indeed, been lots of chatter regarding the recent sale of Walker & Co. to P&G. I’ve seen posts on both sides of the argument. While there have been multiple reports and speculation regarding how much money was made as a result of the sale, it is unlikely that any of us will really ever know the intimate details of the deal. All that’s left then, is speculation. The intimate details of the deal remain as they should, with the founder and investors. It is true, that at times when a startup is struggling, that investors will push for a sale in an effort to not write down the company and count it as a loss against the portfolio and to recoup some of their investment. According to Crunchbase, Bevel’s parent company Walker & Co raised a total of $33m in four funding rounds. The last of which came in Sept of 2015 during its much-publicized Series B raise. The round included a re-up by Andreeson Horowitz, Upfront Ventures and Collaborative Fund. Walker also raised money from other notable investors such as Magic Johnson and Nasir ‘Nas’ Jones.
Tristan and Walker & Co received lots of publicity because he was one of the few black founders to receive a large amount of VC funding. We were all watching and hoping for the best. Well, some of us were, anyway. That all seemed to give way to the online feuds in IG and Facebook comments about whether he had sold out or ‘secured the bag’ after the acquisition was announced. Everyone, it seems, had an opinion. And you know what they say about opinions.
If, as Recode reported, the sale was somewhere in the $30m area, and Walker & Co. received around $33m in funding according to Crunchbase, then it is safe to assume that this could have been a fire sale. But that doesn’t mean that the deal was all bad. While it is true that founders will spin a story, we have to trust Tristan when he says that Bevel isn’t going anywhere and that the sale to P&G helps to secure the future of Bevel and Walker and Co’s other products. P&G is a 181-year-old company that puts Bevel in a great position if they choose to leverage the company’s marketing and R&D capabilities.
One of the most sobering things that a founder can go through, is the realization that the business isn’t working the way they intended. Despite the struggle and everything you and your staff and investors have done, you still come to the realization that the business isn’t growing. It can be a painful realization. But this is where founders of substance find out what they’re made of. I’ve had to wind down a company that wasn’t thriving. It was one of the most difficult decisions I’ve ever made. But, it definitely fueled my entrepreneurial drive and made me that much wiser with my subsequent ventures.
Only Tristan and his investors really know the intricate details of the acquisition. I seem to recall mentions of ‘sell out’ circulating when Rich Dennis sold Shea Moisture and Lisa Price sold Carol’s Daughter. Both are still around despite the doomsday warnings that the brands would fade away and the products would eventually change and forget their black base.
So, in the end, does it really matter? Sure it does. We want to see one of us win. But it all comes down to how we define a win. We may not have wanted to see an acquisition as the exit of choice for Walker & Co, but just a few weeks ago, Tristan announced a new skin line for Men. So, it seems as though Bevel and Walker & Co. are doing just fine for now.
In the meantime, Tristan has announced, along with the sale, a move to Atlanta. I think this is a win for Atlanta’s burgeoning tech ecosystem and I’m sure that the entrepreneurs there can’t wait to welcome him with open arms. I look forward to seeing what Walker & Co does next.
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Sian Morson is an investor, entrepreneur, and startup advisor. Follow Sian on Twitter @sianmorson
Main Image: via Techies Project