BUT WHERE DID YOU GET THE MONEY?
If you’ve been following Freck for at least a couple months, you probably saw “How I Launched a Cosmetic Company from Scratch.” If you haven’t, checked it out if you are interested in what it’s like/ how to launch a beauty brand like this faux freckle cosmetic line! It’s everything I wish I had known when I conceptualized & launched Freck.
A week or two after it was published, Des & I were out in Echo Park and we ran into our incredible chemist, Brianne. She mentioned that she read the post, but at the end of it had one very important question: “how did you get the money!?”. When she asked, I whipped my head around so fast that I nearly broke my neck. How could I leave out SUCH an important part of the faux freckle cosmetic story? Then I thought about it.. duh. When I was an intern at a major online magazine I asked a girl (who had graduated from intern to assistant) how much she made and she told me that she could get fired for telling me. We (women especially) often shy away from disclosing how much we make, and that’s convenient for them (those who benefit from the wage gap). If we don’t talk about what we make, then we aren’t as aware of unequal pay for equal work. So, get comfortable talking about wages, fundraising, and finance cause I plan to start doing a lot more of it. It empowers me to hear other women’s road to financial success, and I think the louder we are on this issue- the quicker we will see change. But also idgaf if you don’t agree, cause it’s women in business & feminist gainz IMO.
Back to where I got the money. The short story is that I raised a TINY round (barely enough to make some product), bought back my investors after 9 months & since then have been on my own as the sole owner. But I have a feeling you want the juicy details..
THE TEA IS HOT
For this part of the story, I’m going to change some names & breeze over the story a bit cause I don’t want anyone to get cranktank with me. Rewind to when Freck Yourself first surfaced and went viral as the first faux freckle cosmetic company (Jimmy Kimmel, MTV, Teen Vouge, Marie Claire, etc). I ran a Kickstarter campaign that didn’t fund because our goal was a quarter million dollars. From that, a man named Devin reached out saying that he thought I had a great idea and that he wanted to manage me in bringing Freck to market. I wasn’t really sure what this meant but at the time, Devin was one of the only people who gave a single shit about Freck. At that point his interest in the project was one of the main reasons I kept going, it felt good to be held accountable.
I spent six months or so meeting with him and walking him through new product ideas & how to finally bring this faux freckle cosmetic company to the market. He introduced me to the lab I now work with and helped me look over contracts before I got into deals. Sounds like a great person to have on your team, right?
Once I had the new Freck product all figured out and ready to go, it came to the point where I’m like, “ok but I need $20k to make the initial product, build the website, and so on”. Now, imagine some girl walks up to you and says that they have an idea for a product that went kinda viral, but there is NO data that this product will succeed and there is nothing else like it on the market to compare to. I personally don’t think I’d take that bet. It was a hard sell.
I reached out to my Uncle Hank who owns a very successful Venture Capitalist firm, but he’s super busy and wasn’t getting back to me at all. So I took that as a pass. At the same time, Devin starts telling me about his brother, James, who is super eager to get into cosmetics/ beauty since he had the opportunity to invest early with Beauty Blender, but he passed on the deal. (Yikes) Devin said, James has never approached him about investing in one of his projects, but that James is super interested in helping get Freck off the ground. So we all set a time to meet at a country club in Woodland Hills or something.
I remember walking into that meeting in 2016, I was way out of my comfort zone, kinda shaky, and hella nervous. I told James about Freck and the journey I had been on so far. I told him that there were 8k people waiting to buy the product and that even if 10% actually converted to sales I’d be in a good position to launch. It was the most informal joke of a pitch that you could imagine- but at this point I had no data, just a hunch & a finished product. I also had no idea what I was doing starting my own business at this point (I still don’t, but I think I get a little wiser every day). I get a call from Devin immediately after I leave saying that James will give me $15k to launch Freck, but that he wants 10% of the faux freckle cosmetic company. 10 percent.I get on the phone with Hank (my uncle) and Melissa, both of whom say that you give away 10% for $150k minimum. At the same time, no one was going to give me $15k without a proper business pitch. I called Devin to tell him I would do it for 15k for 5% but James said no deal. 10% or nothing. Devin (who is extremely persuasive and comes from a background in managing actors) said to me “do you want to be in business, or not?”. So against all the advice of my friends & loved ones, I did it.
But here’s where it goes sour. Devin says that before they transfer the money, he wants to get his paperwork finalized as well. “Paperwork? What do you mean?” He says that he is owed 10% of the faux freckle cosmetic company. I was like.. “umm, ‘scuse me?”. Up until this point I thought he was just a mentor who wanted to introduce me to people and help me get off the ground. And going forward, any major deals he set up (like getting into Sephora or opening up distribution in Asia) would get him a 10% commission. Imagine- this guy now has me ready to start my business but I’m giving away 20% of my company for $15k. I panicked because Devin seemed to really believe that we had had this agreement the whole time. I’ve gone over this a million times in my head and we didn’t, trust me. So, I agreed to the deal. The skeeziest part of the whole thing is that the agreement stated that he got 10% upon signing. With any respectable deal, a partner earning sweat equity is vested over a term of 4-5 years (Devin would have gotten 2% a year for 5 years). I literally gave 10% of my company to Devin for essentially introducing me to my lab and the promise of working on Freck with me, which even if he didn’t put another ounce of work in he would still have his 10%.
This is hands down the most insane thing I’ve done in my life, because once you give away equity, that’s it. YOU ARE MARRIED TO THESE PEOPLE. You need to trust anyone you get into business with completely, to the point that you would give them the keys to your house, your social security card, copies of your credit cards, let them hold on to your passport indefinitely, everything. They are legally closer to you than your family once the contracts are signed. The trust was completely gone with Devin- about a month after we signed paperwork I realized what I had done, and the resentment was real.
Fast forward. Freck finally launches on March 23rd 2017 and immediately I’m being told everything I’m doing wrong. Not enough email blasts, not enough posts on IG, not cold calling for interviews, not doing my books quick enough etc etc etc. Mind you, while I was launching Freck I was also working a full-time job and consulting social on the side for two companies. The negativity grew to the point that I didn’t even want to open my inbox because I knew I would be greeted by emails from Devin & James about everything I was doing wrong. So I froze, I checked out.
By November, James demanded that I give him his money back. As a general rule of thumb, when you invest in a company it takes 3-5 years to turn a profit. Additionally, when you invest you know there is a very high chance that you won’t get your money back especially if it’s a new product that has never existed before. Funnacily enough, this is exactly what he argued to me when he said that 10% for $15k was reasonable. At the same time, Devin is trying to convince me to just GIVE HIM MY COMPANY. Everything I’ve slaved over, unpaid, for three years. He says that my legacy will live within Freck and that he can bring Freck to Asia and has “huge opportunities for the brand”. In my mind I’m thinking.. if that’s true then why haven’t you already done that as a 10% owner? I say no, obviously.
Court threats ensue, so (with my tail between my legs) I give Hank a call. He offers to donate 4 hours of his lawyer’s time to help me deal with all of this. After a couple calls with my lawyer and many threatening emails from Devin & James, I offer to buy them out for $5k each. They agreed. At this point, that was literally every dollar Freck had. I even had to put a bit in from my savings account, so on January 1st 2018 our bank account was literally $0 with about 500 units of inventory of Freck OG.
I remember a moment where I was sitting in the parking lot outside of my job staring blankly at a concrete wall in front of me. On principal, I wasn’t going to give away my company, and I had to get these guys out of my hair.. but I still didn’t know if I wanted to continue with the project. Freck wasn’t growing, sales had plateaued/ were dropping. How much time can you dedicate to something before you just give up? I felt like a beaten dog about the whole thing, completely out of energy to keep it going. Freck was living off me, and I was out of breath.
I decided at that moment that I was going to give the project six months of my full throttle, go for broke energy; and if we weren’t growing by then I was going to walk away. I said to myself.. “Remi, if you don’t give a shit about Freck, no one is going to give a shit about Freck.” That night (after working 10 hours at my sales job), I reached out to Sarah LouWho about sending her some product. And, the rest is history..
FINAL THOUGHTS
Do I regret it? No. It’s the only way Freck would be where we are today. But let me tell you, this is not an easy way to start a business. There were a lot of fucking tears, regrets & feeling like a failure. Have people on your team who you trust, I can’t stress this enough. And be very careful about who you let into your bed, business-wise.
What do you guys think? Insane? If you have a business I would love to hear about how you raised your seed money/ got off the ground. And, as always, if you’re in a similar position to baby Remi in this post, or if you have questions, reach out to me! I love hearing from the Freck Fam & connecting with you guys. Sound off in the comments or you can reach me directly at remi@getfrecked.com
xo Remi B
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