Three male angel investors demanded that I take down posts of the Women’s March from my company’s Instagram account, or they wanted their money back.
So I gave it back to them.
I’m a small business and giving back this money was not easy. Raising money is tough, and giving back money is almost unheard of. But our company has a mission, which is to be a company for women and a brand for mothers. One of the reasons for starting this business was to start a company that uplifts women, to create a brand that acknowledges the difficult but incredible transition to motherhood, and to support women in any way possible from the way we produce the products to the way we promote them.
The idea that male investors saw four Instagram posts about the Women’s March and that their reaction was to call me and demand that I fall in line, remove all prior posts, and not discuss women’s issues at all going-forward is disappointing and frankly, egregious. When I explained that we are not looking to address the administration, specific policies, or specific people, but instead to focus on women as a force for change, they said they didn’t care. I explained that we have been and would continue to be thoughtful about how to participate in the ongoing dialogue about women without being divisive or political. They insisted, “That’s impossible.” I asked how they thought a company for women could ignore what’s happening with women in our country? They answered that I’m not a company for women; I’m a company for babies. I’m still waiting for my first baby customer.
While the Women’s March is not entirely apolitical, you will find brands both big and small committed to supporting women and their movement to be a force for change. BROOKLYN BORN is far from alone, but rather in good company with brands like Lyft, Thinx, The Wing, Into the Gloss, just to name a few, who have felt compelled to participate in the national dialogue. The irony of three men feeling entitled to make demands of a female business owner about how she approaches communication to her female audience is too weighty to ignore. It’s worth mentioning that the investment from these men did not make them partners in the business, but rather minority investors with a very small ownership — we’re talking less than 1%. It’s worth further noting that this is highly unusual. Angel investors, bound by an investor term sheet typical in the industry, cannot demand money back because they don’t like the direction of the company’s social media strategy.
Their investment had already been in my bank account for many months, so naturally, some of this money had been spent. I decided to offer that their unspent money be returned, over 80% of their investment. I felt this was more than fair, and also lucky (for them!) because I had been frugal and was spending my investor money quite slowly. I was surprised when they were not satisfied with this offer; they wanted ALL of their money back. Lawyers had to get involved. A back-and-forth negotiation became necessary. Fortunately, the law was on my side. Our contract clearly stated that I was under no obligation to return their money, and I was doing so out of goodwill. They could take the money I was offering, they could attempt to litigate which would likely not go their way, or they could walk away and allow me to keep the money. It was clear they didn’t want to do the latter. Ultimately, they took back the money I was offering, and we have parted ways. I am relieved to have them out of my business.
I have a few takeaways from this experience for anyone that runs their own business and is faced with a similar issue, whether it’s a bad investor, a bad partner, or a difficult employee.
1. When you know it’s right, you’ll sleep at night
I did not lose sleep over the decision to return this money. I did not want people like this involved in my business. And I certainly was not going to capitulate to their requests. When would their unreasonable demands stop? Likely never. There are so many things that have caused sleepless nights while starting this business, but this wasn’t one of them. I felt certain about the right thing to do in this situation, and it made it easier.
This should be obvious. And this is the type of advice that if I had read a year ago, I would have thought, “Yeah, that’s obvious, and you have to be an idiot not to know that.” But knowing something is the right thing to do and actually doing it are very different. Fundraising is really hard, and when someone offers you money, your instinct is not to ask for references and put them through a vetting process. You want to get the check and get onto the next pitch! There’s more to do and more money to raise. But that was such a mistake, and one that could have been avoided.
I asked many different people for advice in this situation. I wanted to hear what people with more experience and expertise would do if confronted with a predicament like this. I received a lot of different advice, and there were many people who did not agree that I should return the money. Ultimately, hearing a lot of different perspectives helped me make a more informed decision.
It seemed like there was no possible way to turn this awful situation into a positive. But I was surprised when in the process of seeking advice, a journalist from The Ringer said she wanted to tell my story because she was surprised by this behavior and she had a hunch that I wasn’t alone. She ended up publishing an article about my experience with these investors, and I was so touched by the outpouring of support I received as a result. It also made me feel better to know that I was not alone, and that other female founders face similar types of frustrations from male investors. I was glad that I shared my story so that other female founders potentially experiencing something similar would know that they are not alone and that we’re all in this together. Because ultimately, that’s what my company is meant to be about.