Don't undersell yourself (especially as a female entrepreneur)!
Advice from Erin Patinkin, Co-Founder of Ovenly
Ovenly is an award-winning bakery based in New York City. They are known for thoughtfully melding sweet and savory with a touch of spice as well as innovative flavor combinations like currant-rosemary scones and black caraway-chocolate shortbread. They also have classics like their Brooklyn blackout cake. You can find their full array of unique treats at the Urban Space Vanderbilt as well as at their locations throughout Brooklyn.
1. Don't undersell yourself as a female entrepreneur.
Listen to "How I Built This" with the WeWork guy (Miguel McKelvey). Someone asked him in the beginning what his valuation was, and he had no company and no money. He said something like 48 Billion dollars, and he got the investment at that amount! Women, including myself, tend to undersell the valuation and the value of their company. That is something I did, and that was one of my regrettable points at the beginning. Our first round was friends and family, and unfortunately, some were sharks that we took the investment from. I tried to fight for a higher valuation. They convinced me basically that I knew nothing. I worked in nonprofit. I was an arts educator. They convinced my Co-Founder, Agatha Kulaga, and I who was a social worker that there was absolutely no way that anyone would consider a valuation higher. Looking back, obviously, that was not true. I could have said 20 Billion dollars if I wanted to. You can say anything you want at the beginning. And, I should have come from the perspective of what am I willing to give up. Not what someone is willing to give me. That said, those were the only people who were willing to give me any money. So, you have to do what you have to do to start. But try to start at a higher point because you can never go back. Don't undervalue yourself.
2. Don't choose a lawyer that doesn't understand your sector. Make sure you go with the right legal counsel.
I actually had a good lawyer at the beginning. He was previously a corporate lawyer who started working with entrepreneurs. He really didn't provide us the right protections in our operating agreement. I should have found someone who did food and retail deals. Once you have an operating agreement, at some point you have to go back to your original agreement and professionalize it and make changes. Often with friends and family, their feelings get hurt. They don't understand why. Even if you think your lawyer is good, try to find someone who specializes in the industry that you are in. I think this is very important. Also, you want to choose someone who does a lot of investment deals.
3. Don't say yes to everything.
I think this goes against common advice, but don't say yes to everything. In the beginning, we said yes to everything: savory catering, events, specialized cakes for people, and so on because we just wanted to be able to build the business. And, it didn't serve out best interests. We were kind of unfocused because for the first couple of years we didn't know what to call ourselves. Are we a creative kitchen, are we a bakery? So, I think it is better to say this is what we are and distill the idea down to a few things. Say yes to what fits that idea. That said, you also have to be ready to pivot. Sometimes you have to say yes to an opportunity because it is really great. Overall, you should focus on what you are doing. You need to become experts in one thing. Then you can add on or even better, you can distill more. We are still refining the concept, so it becomes easier. I have a mentor named Will Rosenzweig who is an investor and a professor. He is always saying distill the idea, distill it! Something that was a real moment for us was when we asked ourselves what are we doing? Are we a retail bakery, are we a wholesale bakery, a CPG? What are we? What are we raising money on? We kept saying that we are all those things. At that point, we kind of were all those things. And you know what, our revenues were not as good, we were not focused. We realized we love hospitality; we love front of house; we love interacting with customers. We have this one really successful store. We are going to be a retail, customer-facing bakery! And ever since then, that is what we have done. We have this wholesale piece which is very prominent in the bakery world, but that is not the part of the business we are expanding. And as soon as we said we are growing our retail side, we knew this is what we were going to specialize in. People said, "Great, okay here is some money." You seem wishy-washy if you say we are all of those different things. Once you distill your idea down, you can say here are the numbers, here is what I want to do. You gain confidence from being defined in your idea.
4. Don't choose a social mission for the sake of having one.
Choose something that is meaningful to you. My background is in social justice/arts programming. Agatha was a social worker. She worked with veterans with health and addiction issues. We had a client who was a Golden Sachs guy turned social worker. He works for Getting Out and Staying Out. They work with formerly incarcerated young men. Agatha and I asked ourselves, are we just selling cookies? We didn't just want to spit out a product. The business was lacking a part that we needed. If every single company said I am going to provide economic opportunities for people who have previously been denied them, we would live in a different world. For us, we want to leave the world in a better place from where we started.