← Making It with Jon Davids
Making It with Jon Davids
209 - How To Raise LOTS of Money | Drew Green, Indochino (Quick Cut)
00:08:43
Loading summary
Transcript15 lines
- [00:00]
A
This clip of Making it with John Davids features John talking to Drew Green, CEO of Indochino. One of the things you do extraordinarily well, I've never seen anybody do it quite like you, is you raise capital. You raise huge amounts of capital for big ideas. And it's one thing to do that once, but you've done it like 2, 3, 4, you've done it many times. And so can you talk about how you went about, you know, you picked a partner in China, you got that deal done, then you did two or three or four more deals for capital for Indochino. I don't know if there's been any, anything else since then, but what's your process there?
- [00:39]
B
Yeah, I mean, so there is a secret sauce. I can't tell you. No, there is, there is an approach. I'll give you the Indochino example. So when I looked at the business here was this very, very cool regional brand that I believed at the time was solving a problem, right, which was fit. You know, there's nothing worse than buying clothes that don't fit. And I love clothes. And so I really fell in love with that concept of a solution within apparel. But to do it right, the back end, the supply chain, the production, the fabrics, it all has to be perfect and it all has to be scalable, which it was not at the time. And so my idea was, and the idea at any time you're raising capital is you've got to create a triangle of value. And what I mean by a triangle of value is there needs to be value for the investor, there needs to be value obviously for the company, and then there needs to be value for the consumer. And so in that triangle, it was really clear to me that if we could get a production slash, supply chain investor really heavily vested in the company, not only on the, on the capital side, but along with that 30 million came this incredible now 10 year agreement that, that reduced all of our costs, gave me 90 day payment terms and a dozen other things I could list. And so all of a sudden you've almost overnight fixed the P and L. You have to scale it, but you fix the P and L and then you have a balance sheet to go forward and launch into, into retail and really invest in it. And so it's figuring out that triangle of value first, hunkering down. I remember the CFO and I working literally till 10 o' clock every night on this presentation and business plan and, you know, know, really putting it all together and figuring out, okay, how do we Extend our Runway and do all these things. I'll always remember him because, I mean, he was incredible. I think we went to China and Japan, you know, probably 12 times in 10 months, like something like that. And we got it done and without it, the brand wouldn't be here.
- [02:35]
A
I love that triangle of value figuring out. And the three pieces are value to the company, value to the investor, and value to the consumer. And you did that also with. There was a media company involved at some point. I don't know if they're still involved. Can you talk about that deal?
- [02:50]
B
Yeah, for sure. So we've raised from three magnificent strategic partners. Diane Group is our production or what I call our supply side investor. We then the following year did a, a really creative investment with Post Media where they basically pledged $40 million of media and I gave them revenue share on my Canadian business. Now to put that in perspective, my Canadian business is only 20% of my revenue. So I was basically saying, okay, we're going to create a national brand with you. Post Media obviously can only do it in Canada. So they had rev share and then they had a, you know, a little bit of warrants that they still have to this day. And then the third one was Mitsui, which is a company. I just think Mitsui is, is one of the greatest companies in the world. And what I saw there was, you know, at some point they'll be an amazing partner to expand internationally, which we were pretty engaged in doing right before COVID and obviously it pulled that all the way back. And so, yeah, those are our three strategics. We haven't raised capital, you know, priced round since 2018. So what's that? Six years ago.
- [03:56]
A
And is Mitsui one of the. They're a Japanese company, right?
- [04:00]
B
Yeah, yeah, they're. They're what's considered a trading company in Japan.
- [04:05]
A
Can you talk about that? This is one of the five that Buffett invested in.
- [04:08]
B
Yeah, he did really good there, Jonathan.
- [04:10]
A
Yeah, yeah. Warren Buffett famously, I think two years ago put money into the five Japanese trading companies. And so what strategy do they have or what strategic pillar do they have that you think will be useful to Indochino?
- [04:24]
B
Well, I mean, for us specifically, it was the thought around expanding into the Japanese market. You know, it's a 10 million, 10 to 12 million suits a year market. It's a suit culture even to this day. In fact, the largest suit company in the world is, is, is Japanese. And so just saw an expansion opportunity there. And then, you know, we took our time. I got to know Mitsui over probably three years before they made the investment, they offered a lot more than I ended up closing on because we just didn't need that much capital at the time. And, you know, they just. There's just the culture. There is. Is something I admire, and that's, for me, like, anybody I work with, anybody I partner with, and even with investors, like, I want to admire them, you know, and I do. I really admire the culture that. That Mitsui has in the business that they have. It's pretty extraordinary.
- [05:14]
A
This episode is brought to you by my AI Growth Cheat Sheet. Available now at johndavids.com AI if you're a business owner and you're wondering how to use AI to actually grow your business, this is the answer. It's a fully custom AI growth cheat sheet that'll give you the tools you need to grow your business today. Available right now@johndavids.com AI just answer a few questions, wait a few seconds, and you'll have your list of tools, and it's free. Get it right now@johndavids.com AI you've got a style, which is that you don't just want to do big things, but you want to have a lot of fun while you're doing it. You want to travel. You want to be able to rub shoulders with amazing people that you love hanging out with, and that seems almost as important to you. Was that always your kind of work ethic, or did that sort of come later as a luxury? Did you have to sort of grind your teeth first?
- [06:08]
B
It's always been front and center. Right. Like, I just. I believe that it's the experiences that you have, you know, that is the real sort of treasure. Right? I mean, famously, the alchemist talks about the journey as the treasure, and that certainly I subscribe to that. But even in taking it back a step and just really making sure you have full experiences in your life, everything from dreaming big and having big ideas and going and trying to execute them, to being a great father, to traveling all over the world and meeting great people. Yeah, I've been really lucky, right? Like, I've lived all over the world. My kids, you know, have. They're here in Napa following their basketball dreams, and I'm rooting them on and supporting them. And I just believe that, Jonathan, like, as an entrepreneur, we all work really hard. I don't know if anyone works as much as I do. But you can make money. It's gonna happen. But can you enjoy it? And can you have the full Experiences that are gonna define true happiness.
- [07:05]
A
Can you talk? So there's gonna be a lot of people listening and I'm sure everyone's inspired right now. Can you talk about what got you to the point that you were the guy that was asked to to a sign a eight figure contract with Amazon and recruit it to Indochino and you're going to save Africa? What did you do? Briefly, because I'm sure there's 30 years of story you could tell here, but what got you to that point that you were this coveted as an asset?
- [07:33]
B
That's a really good question. I haven't been asked that question before, not in that way. I think I've been really, really fortunate to work with a lot of great people. You know, in my early 20s, the double click experience then being sold to Google was an iconic transaction. And a lot of those people, literally dozens of them, I spoke to one this morning, are still my friends, right? And, and so you build a brand. Here's a way at this. Actually, when you think about entrepreneurialism or being an entrepreneur, everybody thinks it's about starting a company, right? I got to start a company and then I'm an entrepreneur. Well, actually being an entrepreneur is as simple as understanding you're your own brand and you're your own business. And if you manage your life in such a way that you grow your business yourself, education, experiences, great friends and family, you're growing a really successful business. Now, whether that includes one to a hundred startups or it includes no startups and you're a lawyer, you can be an entrepreneur.
- [08:35]
A
Thanks for listening. Get my best stuff to your inbox@johndavid.com or click Talk to you next time.