A CEO talks about how she went from zero to a million in revenue in one year—and what it takes to get financing for your own company.
By Sara Moll
Guest blogger Sarah Moll is a sommelier and the founder and CEO of VIN Social, a virtual events company focused on wining and dining corporate clients around the world. Her company has been funded by Founders First Capital Partners as well as other sources and she shares her insights.
Before starting VIN Social, I worked in the fashion industry. I got a degree in fashion design, grew up in the Midwest, moved to New York City, worked for a decade in this really challenging and very fast-paced industry, which was incredibly valuable for the business foundation and experience. But after about a decade, I had supreme burnout and I had a pretty obvious entrepreneurial itch. I grew up with two entrepreneurial parents who had small businesses my whole life. And I think it was sort of my destiny.
So through an exploratory period, I found my way to wine because it was a subject of interest, but also because I saw an industry that was pretty antiquated, and had a lot of room for disruption and transformation. Obviously that is very enticing to someone who has an entrepreneurial mindset, right? So, we spent many years planning. There was a lot of foundation. My husband and I bootstrapped VIN Social and spent many years really as a test kitchen, building the brand, testing, creating a business plan. I really worked as a one-woman show for a long time, helping companies entertain their clients and their teams in New York City.
And then the next evolution of VIN Social was really to go online and create an online store. Our version of a social club meets wine club. And we had all these amazing plans laid going into late 2019, which was going to involve great travel and in-person events. And then, we know what happened, right? Enter COVID. Everything we had been planning essentially got wiped out. But what do founders do? We get scrappy and we harness resilience and flexibility, right? My favorite quote I literally live by is, “The path to success is not a straight line.” So keep that in mind. Perfection is probably not a reality.
So what did we do? We pivoted. I scraped the original business plan and the business itself. Then I reformed VIN Social Corporation because I spotted a real opportunity to sort of be in the right place at the right time. We pivoted very aggressively into the virtual event space and went after companies that I’d worked with in the past and met new companies to help them pivot all of their corporate client entertainment, their “wining and dining,” into the virtual world. We were really sitting at the bleeding edge of this whole new world of virtual events.
Now we’re a full-on virtual events company with the National Alcohol Gifting Fulfillment Network. We’re dedicated to helping companies meet the challenges of relationship building that’s really been created out of this COVID experience, this fast-moving and highly disruptive business environment. So we do sales enablement, client retention, and team building in partnership with companies like Salesforce, Amazon, and Adobe. We develop programs and bring the product and the storytelling of the brand to life in an interactive virtual tasting.
From Q2 of 2020, we exploded. We put one little ad out on LinkedIn and went from zero to over $1 million in revenue in a year. We went from a team of literally one and a half to having to scale and build a team remotely during a pandemic. I definitely got some gray hairs along the way. But what do you do when you’re growing? You need capital. You need capital to support growth. And candidly, the lesson learned from our side is that we waited too long to really bring in a financial pro to help us really get a grip on cash flow, our financials, and making sure that we were growing sustainably, especially in such a high velocity, dynamic, chaotic environment.
Challenges of seeking capital
But when we went out to seek capital, we faced a lot of challenges. For one, we had not been in business very long. The corporation was formed in 2020. So, I had only a few months of business, and we didn’t have enough credit history. There were years of my husband and I bootstrapping our business on our own personal credit. So, our credit wasn’t great.
So what’s the next best founder trait? Resourcefulness. You’ve got to do what you’ve got to do. So, we actively started seeking alternative resources for capital. The first being, not the most ideal but you do what you got to do, is the merchant cash advance (MCA) loans. So very expensive, but very easy to get. And I think when used wisely, it can be a strategic tool, which is what we did. We knew we had plenty of cash coming in and we needed to float some things for our purchasing products, or paying our team, or bringing in a new consultant or something to help us with this wild growth.
Then I realized too that I should probably bring in some actual investors. So, I decided after a lot of trial and error, talking to VCs, talking to angel investors, that given our stage, given our sort of business, we should harness equity crowdfunding. It’s really quite new from a fundraising perspective, just approved by the SEC within the last few years. And there’s lots of companies now that facilitate equity crowd funding rounds. We personally use Wefunder. But the rationale here was that I could raise a friends-and-family round from my community. All the people that love me have been watching me hustle over the years, but do it in a way that was very organized and professionally done so I didn’t end up with, say, 200 people who put 200 bucks in on my cap table. So, I highly recommend that as an alternative route, especially in the early days when you’re looking for that pre-seed or seed capital for growth.
Preserving equity with debt financing
Eventually, we crossed that $1 million mark, and it was very much like a whole new future, and we could start talking to more sophisticated lenders and financiers. And so that’s what we did. We knew we wanted to really preserve equity and not continue to just bring in equity investors. Because we had such positive cashflow and such positive growth, we could start to leverage debt financing.
We learned plenty of lessons throughout this process. Lots of lessons learned through doing, failing, and ultimately succeeding. And I’d say one of the biggest pieces of advice that I have is that you really need to plan ahead. You can’t just be like, “I need financing. I’m going to go get it.” There’s so much foundational work and organization of your financials and storytelling. It’s a lot of work.
Spend money to get money
The biggest piece of advice I have is that you need to be prepared to allocate resources towards fundraising. Not just time resources, but money resources to do it right. This may seem counterintuitive because you’re like, “I’m looking for money because I don’t have money!” Well, you have to invest in a pro to help you. We wasted way too much time and money on free advice, leveraging mentors or family when I should have just gone and hired a pro. It would’ve been swifter and saved me more in the end. So, invest in a fractional CFO. There’s so many amazing services out there. Fractional CPAs, and specifically those that are catered to the startups, catered to the founders, and have pretty founder-friendly pricing structures.
Last but not least, be resilient. Have a plan. Be prepared. And just keep trying. It’s not easy, but the hard work truly does pay off. I think if I had to do anything over again, I would’ve put more attention towards being organized from a financial perspective early on. I would’ve spent the money on the pros earlier versus trying to wing it. And it would’ve saved me a lot of time and nerves.
Interested in learning more about Vin Social? Visit their website VinSocial
Learn more about Revenue-Based Financing FoundersFirstCapitalPartners.com