Interview With Lee Mayer, Havenly Cofounder + CEO
Havenly, an online interior design company, recently completed a series C funding round of $32M bringing the company’s total funding to date to $57.8M. The funding round will specifically support the launch of a private-label collection of home products and fuel a hiring push with plans for 75 to 80 new roles in the next year.
Lee Mayer, Havenly Cofounder + CEO talks with Carrie about what it’s really like to raise $32M and the intricacies of doing so as a Woman.
CD: How did you come to the decision you needed to Raise as well as landing on $32m? What was the analytical process of coming to these decisions and approximately how long did it take?
LM: We always knew we needed to raise to ensure that we continued to deliver the quality of product that we wanted to deliver. We wanted to hire new people, a great engineering team, and generally upgrade all parts of our experience - all of which takes money! As far as the amount, we went to the market with a range based on what we thought we needed to spend to get us to a certain level or revenues and profits - 30M was at the top end of what we thought we needed. We put together a model based on our historical data that basically helped us to understand the time, resources and cash necessary to get there. We ended up taking a little bit more because there was a lot of interest (thank goodness), but also what I've found, is you always end up spending more than you think you will, so it's nice to have some extra cushion.
CD: Once you decided on the raise amount, where did you start?
LM: Well, you always start by pulling together a cohesive pitch. Luckily, we'd done the work around what we needed and how we intended to use the funding, so that part was easy - but we also had to put together the pitch for why we're a good bet. Then we went on the road - I always start by meeting with people I already know. Who were the investors I'd already had relationships with, or had been talking to? I emailed all of them, set up meetings, gave them my pitch, and then iterated based on their feedback.
CD: Most challenging/stressful part about Raising? Any aspect different Raising as a Woman?
LM: The fact that you don't know what's going to happen!!! That's so challenging. If I knew that at the end of the nonstop travel and long days that I'd definitely get a term sheet that I'd be happy with, I'd have been less stressed. But the reality is you're depending on external subjective assumptions, and so even though we had a lot of confidence around the business, it was tough to think that even despite our best efforts there was a chance we wouldn't be successful.
I think raising as a woman is different, and it's borne out in the data. Women raise less money, at worse terms, for analogous businesses than their male counterparts. I read a Harvard Business School study that found that investors, even well meaning ones, automatically look for reasons a woman's business wouldn't work, in a way that they don't with their male led prospective portfolio companies. That being said, it's important for me to at least attempt to forget about all of that when fundraising - regardless of the circumstances, I'm responsible for getting it done, and feeling like I'm at a disadvantage doesn't really win me any brownie points in the process, nor does it help me with my confidence, and confidence is so necessary to keep going through the process!
CD: Anything you enjoy about Raising or something that surprised you in a good way?
I actually really like diving into the details of the business with a group of people that are very smart about growth businesses. You get great perspective, you learn to think on your feet, and you contemplate ideas that you may not have thought of prior to that meeting. In fact, fundraising meetings, if we didn't have the stress of not knowing the ultimate outcome, can be pretty fun. It's such a luxury to talk high level strategy about Havenly with really intelligent people that have seen a broad variety of businesses succeed and fail - I don't get that in my day to day life.
CD: Top advice for entrepreneurs considering Raising.
LM: I see way too many entrepreneurs default to fundraising for equity capital. I always suggest you take a really hard look at your business model, and if it supports or needs equity financing. There are so many alternative sources of capital/growth fuel out there - whether debt financing, small business loans, bootstrapping, or even traditional franchise models.
If you decide to ultimately raise, know your business cold - expect the errant question, and be really open to feedback. Fundraising is often a great source of strategic help for your business. Also, remember that fundraising is hard for most people, and it's supposed to be -particularly in the early days, you're typically a very risky business, and you're asking individuals or funds for millions of dollars without a proven track record. Keep that perspective, and it'll help you avoid dejection when you inevitably face some pitfalls.
CD: Funding will support the launch of a private-label collection of home products titled Cove Goods- approximately 50 SKUS. Which item(s) are you most excited about?
Oh dear, what am I NOT excited about. I immediately got all of the pillows for my newly renovated basement, bought a couple of throws, because they're so versatile and can add a lovely touch to any room.
CD: Did you take any time off after completing the Round?!
LM: Fun fact: we closed our first (and majority) tranche of the fundraising the Tuesday following my wedding. My husband was a good sport, though, so we flew back from our wedding weekend to get things closed. I did take a little bit of time to go to Mexico in late August - but we're still waiting to go on our honeymoon and keep putting it off. The crazy part is you actually feel inordinate pressure after a fundraise. The reality is, you just took on more responsibility, and raised the stakes, and you want to make sure you don't lose time to get your next steps planned. But we'll definitely take a honeymoon - probably in January - our planning for 2020 will be complete, we'll have filled a lot of our open roles, and we'll have a decent war chest in the bank.