It’s no secret that fashion isn’t my strong
suit. In fact, I have as much interest in it as watching paint dry. So
when Anna Walsh walked into the Tank to spruik her clothing business, I braced
myself for an unfamiliar ride.
Anna started Bodypeace Bamboo Clothing six years ago which makes a
range of eco-friendly apparel from shirts to dresses and even jeans.
For years she ran boutiques that dabbled mainly in cotton but in an
effort to “go green” the Byron Bay native began researching different materials
and realised that cotton actually uses more chemicals than any other crop.
She was seeking $90,000 for a 15% stake, valuing her business at
$600,000.
And why should we invest in her company? Her big pitch was that because
bamboo was good for the planet.
She wasn’t clear how the funds would help and would defer to the investor
for advice.
This was early in the piece and I was sceptical that it was a viable
business, although the products were good quality. Anna didn’t do herself any
favours when she couldn’t answer a simple but important question: what’s your
revenue?
I was quite surprised. When pitching your business for investment, you
have to get your numbers down pat: profit, loss, sales, margins – the basics of
any business.
To her credit Anna later redeemed herself and revealed that the
business had registered revenues of $1.7 million, was up 83% every year and
making $150,000 in net profit.
Perhaps her temporary blackout was a result of first time jitters in
the Tank but those figures really impressed me.
When asked if she wanted to have run a big business or save the world,
Anna replied with “both”. She openly stood by her convictions despite being
grilled by potential investors.
That’s a good lesson for entrepreneurs – if you don’t believe in what
you’re doing or what you can achieve, why should I invest in you?
Anna surprised me yet again when she somewhat rejected my $90,000 for
25% offer, saying she felt her business was undervalued at $600,000.
She held her ground and that really impressed me. It’s important to
know what you’re worth and not let anyone devalue you or your business.
I revised my offer to give her exactly what she wanted, followed by
Janine Allis’s $90,000 for 20% proposition. Anna wanted both Sharks in the mix
and we settled on $180,000 for 30% in total ($90,000 for 15% each).
What did we learn from Anna? A solid business with good returns coupled
with unwavering faith in your enterprise will surely whet the appetite of
potential investors.
(Ph: 07 4982 3444)
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