Angel Investors: the Beauty Industry
A quick break from high tech today:
Finding angel investors with beauty industry domain knowledge is tricky if you're a beauty start up trying to build a line of products. Building up your launch line, including creating "comps" for pitching to major retailers, can be done relatively cheaply. If you want to work with a brand strategist, or "beauty futurologist" to increase your chances of a quick major channel partner, add another $150 - 250K to your budget. Jeanne Recckio is the one who gets the most press, and who inspires me. I am following her example and trying to become a law futurologist. So far, no takers at that price, though.)
I also tell my clients to take a look at those in their supply chain for cash. Some designers, contract manufacturers and others might be willing to invest if they believe you are likely to get early pick up by Sephora, Ulta or QVC. There also are a number of small-business loans aimed at women-owned businesses (even better if you can locate your business in a historically-underutilized business zone, or HUB).
Bottom line: you can bootstrap to get to a launch line, and there are a few other options available to increase your cushion. But beauty is a network business in many ways - who you know really can lead you to great formulators, designers and even send you "product flow" (ideas for new products) if you're lucky. If you have an idea that's big, or that needs smart money, it never hurts to look far. (Also, the more clinical your product line, the more cash you're going to need. You need to spend a bit more to be cosmeceutical.)
In Toronto, I always start by point to Inter-Act Management, an investment group started by Vic Casale, the original chemist for MAC Cosmetics. The group is very low profile, but early bets include CoverFx, a company originally focussed on makeup solutions for burn victims and others with significant scarring. Businesses like this have found a wider niche with the proliferation of HDTV, which makes everyone look hideous, even with standard tv makeup. Another great beauty story here in town, based not just on great marketing and design.
Back to our regularly scheduled programming.
Finding angel investors with beauty industry domain knowledge is tricky if you're a beauty start up trying to build a line of products. Building up your launch line, including creating "comps" for pitching to major retailers, can be done relatively cheaply. If you want to work with a brand strategist, or "beauty futurologist" to increase your chances of a quick major channel partner, add another $150 - 250K to your budget. Jeanne Recckio is the one who gets the most press, and who inspires me. I am following her example and trying to become a law futurologist. So far, no takers at that price, though.)
I also tell my clients to take a look at those in their supply chain for cash. Some designers, contract manufacturers and others might be willing to invest if they believe you are likely to get early pick up by Sephora, Ulta or QVC. There also are a number of small-business loans aimed at women-owned businesses (even better if you can locate your business in a historically-underutilized business zone, or HUB).
Bottom line: you can bootstrap to get to a launch line, and there are a few other options available to increase your cushion. But beauty is a network business in many ways - who you know really can lead you to great formulators, designers and even send you "product flow" (ideas for new products) if you're lucky. If you have an idea that's big, or that needs smart money, it never hurts to look far. (Also, the more clinical your product line, the more cash you're going to need. You need to spend a bit more to be cosmeceutical.)
In Toronto, I always start by point to Inter-Act Management, an investment group started by Vic Casale, the original chemist for MAC Cosmetics. The group is very low profile, but early bets include CoverFx, a company originally focussed on makeup solutions for burn victims and others with significant scarring. Businesses like this have found a wider niche with the proliferation of HDTV, which makes everyone look hideous, even with standard tv makeup. Another great beauty story here in town, based not just on great marketing and design.
Back to our regularly scheduled programming.
posted by Suzanne Dingwall Williams at
10:48 AM
5 Comments:
Dear Suzie:
Great blog today regarding the beauty industry. Being the founder of both SALON TV and BEAUTY TV, I've seen several successful beauty company start ups over the past 15 years.
Best regards,
Rob E. Angelino, Founder & CEO
BEAUTY TV, "The World's First Beauty TV Network"
Interesting article. I want to run my own business, but I'm a little shy of having enough capital. An angel investor would be great and very beneficial. I'd like to buy a business instead of starting one from scratch, but I haven't had any luck looking for the right one. Do you have any suggestions? Thanks.
@Amy -- Before you look into Angel investors (because it can be very complicated), I suggest looking into your local small business group. They might be able to direct you to regular lenders and such.
I also suggest checking out BizTrader.com, which is this online global marketplace where you can invest in, buy, and sell a business. There is even a find a lender section, and that would be very useful. You'd be able to do two things at once. Check it out and good luck!
Great article!
Do you have the contact info to Inter-Act Management? I looked at their web page and none of their links were live (from my browser). If you don't want to post it, you can email me at adventurelogix@gmail.com. Thanks so much!
Venture Law, It is surprising you mention Recckio with esteem. In my opinion her reputation is less than stellar in the industry and would be concerned if a company used her. Been in the beauty industry on highest level for years and firmly believe beauty consultants = waste of time and resources.
Post a Comment
Subscribe to Post Comments [Atom]
Links to this post:
Create a Link
<< Home