As a new mom, I’ve been wrestling with the challenge of leading a tech startup while raising a daughter. It turns out I’m in good company. Monica Royer started plotting a retail brand for babies and toddlers while she was at the hospital with her newborn in 2010. Today, she is CEO of Monica + Andy, a company that blends e-commerce with an innovative brick-and-mortar strategy.
After serving with Monica on a panel hosted by Havenly, I felt that entrepreneurs should hear her story. Monica encountered a ton of resistance from the male-dominated venture capital community but turned the obstacles into an advantage.
In her own words, here’s how Monica navigated the VC world to build a winning retail brand in Chicago:
Jayna: Take us through the origins of Monica + Andy. Why did you launch the company?
Monica: First of all, I had no idea what a startup was until 2007. My brother, Andy Dunn, graduated business school and said he was going to launch a men’s online apparel company.” I thought he was going to take a financial job when he finished school. Selling pants online in ‘07 was not the thing to do. His company, Bonobos, was acquired by Walmart this year.
When Andy was growing Bonobos, I was in the pharmaceutical industry. In 2010, on the day I had my daughter, Andy was pacing the halls of the hospital closing a funding round.
Meanwhile, from my hospital bed, I was appalled at the blanket and clothes they gave my baby. The hospital clothes were stained and way too big for her. I started shopping online right away, and I was surprised at what I didn’t find. Children were an afterthought for most major brands.
Bonobos had figured out that good customer service means connecting one-on-one with people, and there was nothing comparable for children. I wanted to do something similar in the baby space. Rather than go back to my previous career, I spent the next three years as a stay-at-home mom incubating the idea. Andy and I bootstrapped through those early years. Once we started selling, we did a proper funding round at the end of 2013.
Jayna: What was the funding experience like for you?
Monica: I didn’t think I was capable of fundraising. My background wasn’t in business, so I felt like I would need someone else to help me fundraise. I might be one of the few people to ever say this, but once I started, fundraising became my favorite part of the job.
I got such a rush from getting people excited enough to invest in the brand. I had great advice from my brother about the importance of vetting investors as much as they vet you.
The tendency for new entrepreneurs is to take whatever money is offered. I never jumped at the money. I wanted to find a good fit.
Jayna: Women-led companies made up roughly five percent of all VC deals in 2016 [according to PitchBook data]. Did you encounter any fundraising difficulties being a woman?
Monica: Yes, but on a positive note, men and women both invested. I have outstanding male mentors and board members who know how to empower a female entrepreneur.
Being a mom seemed to be more of an issue than being a woman. Some investors asked if I planned on having a second child and how that would affect my work schedule. They asked about my “work-life balance.” Was I the primary caregiver for my daughter, or did I have help? My husband had just launched an interior design brand called Interior Define and was fundraising too. Nobody asked him questions about “work-life balance.” I never took capital from investors who did. As soon as I got questions like that, I knew they were the wrong fit.
The other red flag was investors who said, “I’ll refer to my wife on this…” Oh, does your wife make decisions about all the companies you invest in?
There probably was a slight gender bias based on our product. It was a challenge to help VCs understand the millennial mom, the evolution of moms shopping online, and the incredible purchasing power of moms in general. We’re so underserved in the venture community because there’s not that many of us.
Jayna: How do you connect with potential investors?
Monica: I think cold outreach is difficult, so I utilize my network and haven’t fundraised any other way. I’m sure that there’s some dynamite ideas for how to do cold outreach, but I like to contact investors with some type of a recommendation.
In the first round, 80 percent of investors were what I’d call ‘brand angels.’ They had children in our demographic, understood what we were trying to do, and saw that hole in the market.
I think it’s smart to have a teaser about what you’re doing. A one-pager or a great introduction can whet people’s appetites. They need to understand the business but still want to know more – you can’t tell the whole story upfront.
Jayna: If you raised another round, would you do anything differently?
Monica: Not necessarily, but I would be careful about getting overfunded. In my opinion, founders sometimes take too much funding upfront, spend a lot of money to grow, and then have trouble sustaining growth. My advice to people looking for capital now would be to consider evergreen investors in addition to traditional venture capital.
If you find people willing to stick with you for the long run, you won’t feel like you need to chase a valuation. It might mean deciding that you would rather have a big piece of a small pie than a small piece of a big pie.
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