Sramana Mitra: Did you have the ability to manufacture at a large scale with your design partner and did you have all the shipping and handling set up at that point?
Jodie Fox: Yes, we did have the setup for the shipping and handling of international orders. We didn’t necessarily have the correct manufacturing setup. We were fortunate that we didn’t drive those big sales straight away because we would have messed it up.
Sramana Mitra: How many audience did you get when you ran this campaign without the design site fully thought through? How did you tackle that?
Jodie Fox: I actually don’t have that number. We had 90,000 people enter the competition. Once we sent it, the Wall Street Journal piece went live. It got in front of the right people and it permanently tripled our business.
Sramana Mitra: What did you do on the designer manufacturing side? What provisions did you put in place?
Jodie Fox: At that point in time, we had an 8-week lead time on shoes.
Sramana Mitra: You had all these orders so you went and did deals with the designers and manufacturers in Hong Kong?
Jodie Fox: The deals were already done. It was just a matter of piping the orders through as they came in.
Sramana Mitra: I see. Did they have capacity?
Jodie Fox: Yes, they did.
Sramana Mitra: You worked with one factory or multiple factories?
Jodie Fox: At that point, it was multiple.
Sramana Mitra: You launched the site in October 2009. How did the business ramp? Were you at a million plus by the end of 2010?
Jodie Fox: Before October 2011, we hit multi-million dollar revenue.
Sramana Mitra: What range are we talking about?
Jodie Fox: It was definitely over $3 million.
Sramana Mitra: At that point, you were still bootstrapping?
Jodie Fox: Yes, we bootstrapped the first two and a half years.
Sramana Mitra: At what point did you decide to raise money and why? It sounds like the cash flow requirements were amply met by your customers.
Jodie Fox: I think it depends on what sort of business you’re building. Cash flow being amply met is defined by what you are trying to facilitate within the business. From the outset, we had set out to build a big business. Yes, we had good cash flow but we also wanted to grow a lot faster. Because we had been a finalist for Best Bootstrapped Startup in Crunchie Awards in January 2010, we had gotten a lot of VCs interested.
Sramana Mitra: VCs in Australia?
Jodie Fox: No, in the US. We had a lot of inquiries. We started to build those relationships. We didn’t consider raising funding until part way through 2011. That was when we started to understand the kind of volume of money that we might be able to raise.
Sramana Mitra: In terms of selecting whom to work with as an investor, what was your thinking?
Jodie Fox: We actually turned quite a few term sheets down. It wasn’t for valuation. It was the culture of the people that we were working with and also what they could bring to the table in addition to the money. We looked for people who not only had the cash but also had the brains and connections. We needed people who had the extra pieces that we didn’t have.
Sramana Mitra: Whom did you take money from and how much?
Jodie Fox: It’s a syndicate of investors and we took $3 million.
Sramana Mitra: As a Series A?
Jodie Fox: We’re calling it a pre-seed round. What’s interesting is we’ve raised $10 million today. I would have called that a Series A then but there’s so much debate around what a Series A is today. Our last round was closed in December 2014 with $5.5 million. That is our Series A.