- 2 days ago
Olamide Olowe is the CEO and co-founder of Topicals, a skincare company transforming the way people feel about skin through effective products and mental health advocacy. She is also the youngest Black woman ever to raise more than $2 million in funding at just age 23. Despite the historic milestone, funding for Black founders, and especially Black women founders, is systemically more difficult and presents challenges most non-Black entrepreneurs do not always need to consider in their pitch. Join us as Aolowe shares insights into navigating building an effective business plan, shares tips on how to build networks and investor relationships, and what building an inclusive business means for her bottom line.
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00:00Who's ready to talk about money? Okay well this okay cool okay cool so we're
00:10gonna wing it. All right so this is a founder's guide to raising capital. My
00:15name is Olamide Lowe. I'm the founder and CEO of Topicals. We are a skincare brand.
00:21We're a skincare brand transforming the way people feel about skin and we do
00:25that through effective science-backed products and mental health advocacy. So
00:29because I don't have a presentation I'm just gonna go off the top of my head but
00:34a little bit about me. I went to UCLA. I studied political science and I had a
00:42concentration in ethnicity, politics, and race. I also was an entrepreneurship minor
00:47and I was pre-med. I thought I was gonna go to med school, become a dermatologist
00:50until I met the beautiful young lady sitting right in front of me, Rochelle
00:53Dennis. And she saw that I really liked skin and medicine and said it'd be
01:00really cool for us to start a brand called Shea Girl in partnership with
01:03Shea Moisture. And so we started this brand with a couple of other friends and
01:07it was really just about empowering young women. And I spent my time at Shea
01:10Moisture in college for about two years learning how to build a brand for an
01:14underserved consumer. Graduated from UCLA and had this idea for topicals in 2018
01:20and began the really really hard journey to fundraising money. Before I fundraised I
01:28had heard all the headlines around the fact that a lot of black women didn't
01:31raise capital, you know they couldn't raise capital, our businesses weren't
01:35fundable, people didn't want to invest in the businesses that black women were
01:38starting. I'm really excited and proud to say that I am the youngest black woman who
01:43was ever raised, over two million dollars. And I did that in the summer of 2020 so
01:53about two years ago. So a little bit about topicals, we are the fastest growing
01:57skincare brand at Sephora. We sell about one product every single minute this year
02:02and we've donated about $50,000 to different mental health organizations. And we
02:07couldn't have done any of this stuff without our community. Every time people
02:10stop me in the street and they're like, we love topicals. I'm like, who paid you?
02:13Who paid you to say that? Because even I don't believe how quickly we've grown.
02:17But I think that it's just a testament to community and really building with your
02:21community from the ground up. So I'm gonna talk a little bit about fundraising,
02:25the different types of fundraising. I always ask people before I start these
02:29kind of conversations, what is your end goal? What do you really want to do with
02:33your company? Do you want to own it forever? Do you want it to be a company that
02:37you pass down in your family? Is this a company that you're ready to sell? Sell meaning, you know,
02:42sell it to a larger strategic? Sell it to a private equity company? Are you wanting to IPO? Do you want to list your company on the public stock exchange?
02:51I think all of these questions are super important to know. And if the answer to a
02:56lot of the questions around selling, IPO-ing are no, then there are a couple of
03:00funding sources that are for you. So the first two is debt financing. So that's like
03:05loans, that's lines of credit. So basically borrowing money and paying it
03:10back with interest over time. The reason why I say that those are for you if you
03:16are someone who isn't really into selling your company is because you don't have to
03:21sell a piece of your company to access the capital. Another kind of sourcing of
03:25funding like this is revenue share. So that's when you take a loan as well but
03:31instead of it being paid back over in a year or two years, you pay it back as a
03:36percentage of your revenue. So if you make ten dollars, one dollar every month is
03:41given back to the investor or the funder who gave you the money. So instead of you
03:46know that due date of in a year you have to return all the money, you get to
03:50return it back as a portion of your revenue over time. And then the other four
03:55types of funding. There is angel investments, there's venture capital,
04:00there's private equity, and there's also a new kind of funding source called
04:03crowdfunding. These other types of funding are for people who are
04:07interested, excited, and want to bring someone in to own a percentage of their
04:11company. It's someone who really believes in the power of high growth,
04:15growing really really fast. So in these businesses, investors give you anywhere
04:20from five hundred thousand dollars to a hundred million dollars to grow your
04:24company. And so angel funding usually comes from investors that are wealthy.
04:29So they talked about Russell Westbrook coming onto the panel. He could be an
04:34angel investor because he's made his money through basketball and he can now
04:37invest that money into your company. There is venture capitalists. So that's
04:41what a lot of people think about and that's the type of money that I've raised. So
04:45venture capital is when someone comes and invests money into your
04:48business. Typically that's when you have a little bit of traction and they're
04:51owning between ten and twenty percent of your business in the first round. I
04:55know a lot of people get really scared like ten to twenty percent owned by
04:58somebody else, but you want to choose your investor that's going to be really
05:01helpful to you. So this person should open up networks, they should help you
05:05really get access to the vendors or the customers or the influencers you
05:09really want to talk to. The other source of funding is private equity that's
05:13typically for later stage businesses. So if you're doing north of ten, fifteen
05:17million dollars, you'll go look for a private equity company. I know a lot of
05:21talk in the industry, we've been talking a lot about private equity firms and I
05:24know recently people have been talking a lot about Kim Kardashian and how she's
05:29getting into private equity or how different investors, different
05:32celebrities are getting into private equity. And private equity really is about
05:35owning a chunk of a company once they're about to sell, about to IPO. And the
05:40last one is around crowdfunding. So crowdfunding is a really
05:43revolutionary way to fund your business. Everybody in this room can be an
05:47investor on a crowdfunding platform. So you would list your campaign on websites
05:51like Republic or Seed Invest and people can actually put a minimum of a hundred
05:56dollars into your company. There has been a lot of amazing black owned brands
05:59like Curlmix that have done this most recently. And so in that case, if you invest
06:04in a business like Curlmix and Curlmix sells for a hundred million dollars, you may be
06:08able to get a percentage of that money of their sale because you own a small
06:12percentage of the company. And so I think it's really important to pause here and
06:17really understand that wealth is really built with building companies and
06:22selling them. I think we have such a really bad taboo in our community around
06:26selling businesses and we have to, have to, have to understand how you become
06:30wealthy and how you then use that wealth to reinvest back in the community. I think
06:35New Voices Fund is a really, really great example of that. New Voices Fund has
06:39funded a lot of businesses in our community that we love and they
06:42wouldn't exist today without New Voices, without the fact that Shea Moisture had
06:47that capital after that company was sold to reinvest into other black women and
06:51men because a lot of other people aren't investing in us. So I think it's
06:54really important for us to understand how wealth really works, how we reinvest back
06:58in our community. I think it's really important for everyone to keep that in mind. So I'm
07:04just going to go through the checklist of a perfect pitch. I really do wish my
07:08slides worked, but I'll share them with you after. So people at home can see. Okay,
07:13cool. I actually put the slides in there that I pitched investors with where I
07:17raised $2 million. So watch this after so you can see the slides that I used to
07:24actually pitch investors. So I think the perfect pitch consists of a couple of
07:28different things. I think so many times people forget to tell people what the
07:31problem is. They forget to tell people how to quantify it. So in Topical's case,
07:36we talked about the fact that one in four people in America lives with a chronic
07:40skin condition. And so a lot of people didn't understand how many people had
07:43this problem, how much money they were spending. And so I think it's super
07:47important to be able to lay that out to an investor because they really need to
07:50get their head around why you're creating this business. Most investors are
07:54generalist, which means that they have no idea about your specific industry. You have to
07:59come in and tell a story and get them really keyed in to your category and what
08:03you're building. I think the next thing you want to have in your pitch is the
08:06solution. You want to say why you're the solution. You want to talk through why your
08:10product is going to solve all the problems that you say that this customer
08:14has. The next is market positioning that I think is super, super important. A lot of
08:19people forget to put this part into their pitch. Market positioning is really
08:23trying to get the customer or trying to get the investor to understand where it is that you sit in the
08:29market, right? The current landscape. If I'm a skincare brand and I'm saying, you know, we're
08:33revolutionary, we're going to come in and change the game, investors are going to say that doesn't
08:37make any sense because there's a hundred skincare brands. There's a thousand skincare brands.
08:41And so for us, while most people in their pitch would put their competitors on the slide, we
08:46actually put ours as a function of psychographics. So we believe more in psychographics than
08:51demographics, right? It was really difficult for me to pitch to an investor that we were going to make a new
08:55product for chronic skin conditions. But what I could pitch to an investor was that there were
08:59people who looked like me, black folks, people with chronic skin conditions who felt really left
09:04out of the industry, right? For us, we've always felt like an afterthought. We'd always felt like an
09:09outsider. And I think that's how we pitched our positioning. And it really made a difference
09:14because I think the way that people understood skincare in the past, they didn't understand, you
09:18know, what Shea Moisture had done for curly hair in terms of bringing products in for different
09:22communities. They didn't really understand, but they started to understand because the money was
09:26big, what Rihanna had done with makeup. And I talked to them about skincare and how we could do
09:31the same thing in skincare if we were inclusive and we were, you know, kept everyone in mind as we
09:36were building. The next thing I think that is really important is for you to have a go-to-market
09:41plan. So a go-to-market plan is how you're going to get awareness. How are people going to find out
09:46about your brand? I think so many of us rely on social media. And while social media is really
09:50great, it's super saturated. So you have to come up with a really interesting way for investors
09:55to be excited, right? How do you show investors that you can build something, how you can be
10:00really scrappy? An example for us is that before we could get product in anyone's hands or test
10:05anything, we built this quiz. And the quiz was called Skin, Sun, and Stars. And it was basically
10:10this quiz where you'd put in your date of birth, your time of birth, and your skin conditions, and we'd send
10:15you a recommendation based on your chart. And a lot of our customers liked that because they loved
10:21horoscopes, but they also were looking for advice about their skin. And so doing that kind of quiz,
10:27we got 10,000 people to sign up before we even launched a single product. And I think you have to show
10:31investors that you're scrappy and you can build even without a full product. You really want to get
10:36into your target market. You really want to ask questions about who your target market is, where do they
10:41shop? Where do they live? I think a lot of people only think about, again, demographics, but I think
10:46getting into the mind of your customer. Is your customer a Soho girl? Is your customer an Upper East
10:52Side girl? Is your customer an LA girl? You know, it's really important to understand the mind of your
10:57customer, not just the age or the demographic. And I think the last thing is how you're going to use the
11:02money. So many people pitch and ask investors for, I need $100,000, I need $500,000, but you have no way
11:09you have no way to show how you're going to use that money. Are you going to use it on hiring? Are
11:14you going to use it on marketing? What are you going to use the spend for? And so I think it's
11:18really important for you to have these things in your checklist. And again, there's a ton of slides
11:23here that are specific to Topical's pitch. But I think in closing, the biggest thing that I want to
11:30leave you all with is a couple of takeaways. So the big takeaways are everyone is always talking about
11:35product, having the best product. But I think good products is table stakes. But I think storytelling
11:40is essential. I think that if you aren't telling a really great story, a captivating story about your
11:46products and why this customer really needs what you're building, you're not going to get anyone
11:51excited. Not only are you not going to get the customer excited, but in the same way that you
11:54market to your customer, you want to make the investors excited as well. You don't have to be
11:59everything to everyone, but you do have to be everything to one. I think we're in the day and age
12:04right now where niching down to a specific customer is really in. You know, brands, larger brands have
12:10to be masked and have to be accessible to everyone. I think it's really important to know exactly who
12:14your customer is and to serve that person wholly, right? Don't just pick one or two things to make
12:19their experience better. Figure out what they're suffering with, not just within the category or
12:24industry that you're in, but overall. I think the other thing, I've said this over and over again during
12:29this presentation, but psychographics over demographics, really get into the mind of your
12:34customer. Again, not just their age or where they live, but really deeply emotionally understanding
12:39your customer. I think one of the other ones also is that in investments, the biggest thing about it
12:46is FOMO, right? Everyone wants you when no one can have you. And so you really want to run a tight
12:51process when you're talking to investors. You want to, it's kind of like dating, right? You got to make it
12:56seem like you got a lot of options because investors are the same. We're all humans, right?
13:00They're the same as men, women, everyone. When you're trying to get at them, it's very much a,
13:05if you know, you know, kind of situation. It's very much a, this person is also talking to me and if
13:11you don't get this deal done in two days, it's not going to happen. So you want to go into these
13:15rooms and you want to talk to these investors like you're doing them a favor. It's not you begging
13:20them for money because our culture leads popular culture. And so there's no begging for money.
13:26It's you get an opportunity to be a part of something that's a rocket ship. You can get
13:29on or get left. So talk to them like that. Don't talk to them like you're begging.
13:35And the last one, last one is about, oh, I always tell everyone when they're fundraising money,
13:43I think people get so excited about fundraising, right? Everyone thinks that's the end destination,
13:48the headline of I raised a million dollars. I did this, that, that, and the other. I always tell
13:52everyone raise with a plan to execute, execute like you'll never raise again. Okay. Because if
13:58you go into it as someone who has a ton of money, you're just going to be wasting it left and right,
14:03have a plan, execute on that plan and act like you'll never raise again. Okay. Don't, don't try
14:09and think that it's going to be a, a well that's untapped because they love us now and they should
14:13love us forever, but they won't always. And so you want to make sure that it's tight. So when you get
14:17that capital, you're able to execute on everything that you want to do. That is all I have for my
14:23presentation.
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