Email from the founder today.
Date: September 6, 2018 at 8:27:58 AM PDT
Subject: Investor Update: Request for help/partner
Unfortunately, I have bad news. We’ve been working all year on raising a Series A or bringing on a large partner to scale manufacturing and cover a cash gap from 2015-2016 (more on this below), and while we had many prospects, nothing has come to fruition. Vaute is now on life support -- we have 45 days left to find a partner or we will need to close the business.
A recap of what brought us here: After the loss we took from expanding to too many categories and employing an expensive leadership and retail team in 2015-2016, I spent 2017 cleaning up our business model and paring back to focus on our profitable outerwear category, e-commerce, and a minimal team. We not only made it through our 2017-2018 fall/winter season but grew our market reach with astounding results in our first paid marketing campaign (up to 8.6 ROI some weeks). We also reached new mainstream markets through NY Magazine, Glamour, PBS, and celebrities like Liam Hemsworth and Edie Falco, yet we had issues increasing production. This meant we had a successful season (we still increased sales from 2017), but couldn’t produce fast enough or at a high enough volume. The demand was there, but I realized that we had a structural issue: without a major manufacturing partner to fund growth and scale operations at our ethical standard, we couldn’t handle the volume of orders that were needed to stay in business.
Until February 2018, I was in discussions for a Series A to get us to the fall/winter 2018 season that sadly fell through. Since then, I’ve been working with a broker to find a partner or buyer. Though we had many promising prospects and were optimistic it was just a matter of choosing the right one, we were not able to close a deal in time to responsibly begin production.
I have done everything I possibly can, but time is running out. Please let me know if you know of a potential manufacturing partner or buyer who could scale at our ethical standard (living wage production). We need to find one by October 15th for us to launch our FW2019 collection or we will be forced to close. To keep costs at a minimum, I stopped taking an income for the last three months while we looked for a partner/buyer, and have been living with my wonderful friends week-to-week while working to find a solution. If we don’t find a partner, however, I will soon need to start looking for a job.
The idea of closing breaks my heart. After launching in 2008 with the mission to create the category of vegan apparel and show that animals do not belong in the fashion equation, my next goal was to break through to the mainstream and make “ethical fashion” a household concept. I’ve invested every fiber of my being into making that happen and I can hardly believe it may be over. At the same time, I’m so grateful for all that we’ve accomplished. Most businesses don’t make it to their second birthday, let alone their tenth (ours is today- actually), and most pioneer companies spend so much effort just breaking ground on a new category or idea, pushing boundaries, and setting up new systems and materials, that they don’t get to then grow into a viable company.
Still, you always think that you will be the exception. I always thought through all the challenges, through all the times we almost didn’t make it (several per season since the beginning, as entrepreneurship goes), that we would keep defying the odds and find a way forward. It may be that instead of being here to become a household name, we were here to create the category of vegan apparel, get animals on the map for ethical fashion, and lay the groundwork for businesses to follow in our footsteps to grow and go mainstream; if it is not us, I am thrilled to pass the baton to those who come after us to keep running as fast as they can to speak up for as many animals as they can, until the day when wearing animals is a thing of the past.
I have dedicated ten years to this mission. I’ve made painful mistakes and it has felt impossible at times, yet it has been an incredible journey; we’ve made a significant social impact, and I have met the most amazing people -- including you. Along with making an impact, I wanted so badly to make you money. I wish I had a different update for you, but if we cannot find a partner, and Vaute is forced to close, please know that your investment saved lives, created jobs, and opened minds and for that, I’m so grateful and also hopeful for the animals in the fashion industry.
1. We are checking what tax deductions can be made for your convertible note, in the case we do close. We will be following up when we have this information.
2. Please let me know if you might have a potential partner or buyer for us.
3. I will update you again around October 15th to let you know what the next steps are.
Sorry again that I do not have better news. I’m grateful to you for joining me on this mission and for everything you do for the animals and humans in this world.
With lots of gratitude.
Vaute · 35 Meadow St Ste 101 · Brooklyn, NY 11206-1759 · USA
Privacy: We won’t share your data, or post to your wall, without your permission.
Already have a Wefunder account? Login
Don't have a Wefunder account? Signup