In this special two part series Taylor and Richard explore the current state of the ecommerce fundraising environment from two distinct points of view. In this first episode we talk with a founder, Dave Charne of Fyrn, who’s currently working on raising a bridge round for his DTC furniture brand Fyrn. Dave provides a view into what the experience has been like at this moment versus his previous round a year ago.
Next week we’ll speak with Jason Bornstein of Forerunner Ventures on the view from the other side.
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[00:00:00] Intro Ad: This episode of the E-Commerce Playbook Podcast is brought to you by Wayflyer. Their revenue-based financing is faster and more flexible than traditional funding options, allowing you to get approved within hours and have cash in your account within days. You can learn more at wayflyer.com or with a link in the show notes.
[00:00:16] Taylor: Okay, today there is no Richard, but there is a special guest that is joining me for today's podcast. The last few weeks I've been thinking that we have covered a couple of really important topics about this moment. One we covered, some of the M&A activity through our own failed acquisition at Bamboo Earth.
We talked a little bit about some of the debt markets and what we've seen there, and I've been thinking about a third part of the capital ecosystem of e-commerce. And that has to do with the equity markets, those that are out fundraising on the equity side. And so we're gonna do a two part, special set of episodes here to look at those markets from two different points of view.
One we're gonna bring in, and that's who we have with us today. A founder that is currently in the process of fundraising in the middle of this market, and then next we're gonna be speaking with an investor who is currently writing checks in this market and to get their points of view of what they're seeing, what the experience has been like.
And really this is just an excuse for me to hang out with a couple of good friends. The first of which is Dave Charne, my man, the CEO and founder of Fyrn co-founder. Is that the right? I wanna make sure I give credit to the whole squad there, but of Fyrn. Dave, it's a pleasure to have you here.
[00:01:28] Dave: Thanks for having me on. Taylor. Excited for the conversation, excited about the topic living and breathing it every day so, yeah, it's gonna be fun to chop it up.
[00:01:36] Taylor: There are probably few people that I have spent more time on Zoom with than Dave because the way that we met was throughout Covid.
We started an online poker group where we spent, probably like four hours every Wednesday night on a Zoom playing poker with a bunch of strangers for over a year and a half and have become really good friends. And Dave is someone I have a ton of respect for, and upfront disclosure, I am personally an investor in Fyrn and a big believer in what they are up to.
So that out of the box and upfront for everybody to know, but more than that, I am a believer in Dave, the human and the business and what they're up to, Dave, why don't you, rather than me doing it a disservice. Tell us about Fyrn what you have going on.
[00:02:19] Dave: Yeah, absolutely. Fyrn is a, vertically integrated manufacturer of furniture. We are marrying old world craftsmanship with modern innovation to bring high quality products at scale to residential and commercial environments. And we're not that young a business , we've been around for a little while and we did a long R&D development process around some patented hardware and proprietary manufacturing to bring us sort of systems-based solution to the furniture industry.
[00:02:45] Taylor: So one of the things I wanna break apart all of that that you just went through for us, but when I think about e-commerce, like one of the things that is a reality is that when there are mechanisms for building businesses, that are really effective, they tend to become ruts. Like they become a, way to build a thing and everybody does the thing.
And Facebook ads and drive a business and sort of flash production and make it quick. And maybe the quality's not great, but we're gonna market the hell out of it has certainly been a signature identity of a lot of brands built in the last few years. And so what I'm always fascinated by is, what is the massive deviation from that rut?
And I think that's part of what Fyrn is. So can you say a little bit about, cause the history of the product which we see behind you, for those of you that are on video here, tell us a little bit about where it comes from when you say, the R&D process is long, like e-commerce is, oh, like eight months. What'd you spend? How long did it take? What do you actually mean when you say that?
[00:03:42] Dave: Yeah, I think it's a great question and like to answer it properly I'll take a step back. You said earlier I have a co-founder, his name is Ross Broden.
And he's a fourth generation craftsman, his whole family has been building and in manufacturing forever. And and Ross grew up under the tutelage of his grandfather and his grandfather ran production for the oldest American production chair company called the Hitchcock Chair Company.
This is a company that started in 1818 and had a hundred year run of success, and then almost went out in the great depression and his grandfather and a few folks brought it back. And for 50 years, from the 1930s to the 1980s, they did, 80,000 units a year of chairs. And you know what Ross really heard through that process of growing up under his grandfather was these big challenges.
And they're still the same challenges in furniture. How do we store fully assembled items? How do we move these things around the country today, around the world? How do we service them once they're out in the world? And so Ross was a high-end. Furniture maker, custom furniture maker and cabinetry guy.
And he thought I want to come up with a product, solution that solves a lot of those problems is, accessible at scale. And, mistakenly thought that would take six months to develop some way to produce products that could solve for that. After three plus years, we ended up with a patented system of hardware that is both internally as well as externally. The most recognizable element of the furniture and it's joinery it's where where furniture fails most is in the joints. It allows for us to make a super high quality piece of furniture.
That also breaks down flat and can move around the world quite easily. And Ross developed this system with those problems in mind, and the real challenge was how do you find out whether or not products that you build today are gonna last generations? If you're really building something that is unique and is it gonna really serve?
both the residential and the commercial market in a way that's differentiated. And so we then spent a sort of period of time putting these in restaurants, the probably the highest traffic place that you could beat the crap out of furniture. And that's exactly what happened was it got beat up in, a serious way in these commercial environments.
And what we learned was two things. One, the product really does hold up, it's an incredible product that, serves that market well. But two, this is pre-site people were turning this product over, and trying to figure out who made it and where they could buy it for their homes. And that really led into a sort of different way to bring the product to market and to understand that these could be discovery platforms for the product.
What I'll say, I'm going long here, but just to, put this in the context of the furniture industry the furniture industry is one that hasn't really changed that much over the last 50 years, let's call it, since offshore production started happening, and because of that, you have these sort of like moments that have had impacts, like mid-century modern furniture.
Charles and Ray Eames introduced materials that allowed for high quality furniture to go to the masses, that was a big innovation, it's still really prevalent today. The air on chair was an innovation that happened 30 years ago. There was about functionality and office seating, and they sell a million of those, a year, and it really matters.
But in the last 30 years, there hasn't been deep innovation. And so what Fyrn is about is a system solution to those problems where, you start with a white space in designing products that make the manufacturing asset light that make the distribution simpler, that make the service of those products long term better.
And in turn, you create better economics for your business and your investors, best in class margins, you create a better customer experience where folks can actually, make good choices. And then in the long run, you're solving for this sort of problem where 12 million tons of furniture goes to landfill every year, and how do you create products that don't get thrown away?
[00:07:08] Taylor: Yeah, so two of my customers both started in 1947. One was 47 brand, the hat that I'm wearing, the other was Igloo coolers. And when I meet with those brands, the distinction between what a heritage story of in 1947, my great-grandfather, had the only light since the peril shop outside of, Fenway Park and was the sole provider of Red Sox gear that became this brand and for 70 years.
And now the team story that sits on Yaki way outside of Fen Park is 47. Brand has become, like you can't compete with that as a startup. Like you can't recreate legacy, and so there's always something so unique about that.
Same thing with Igloo coolers. One of the things that they always talk about when they tried to go D2C, which was a new exercise for them, was that they had this advantage that in every garage in America, there's an Igloo cooler already. And so there's this story that we're familiar with, this idea of the experience that we've had with this object in some way.
And so that to me is always like, okay, there's a trigger here. But my initial hesitation, Dave, was furniture, for e-commerce, what are we doing here? we have this metric we like to call value to weight ratio and there seems to break it in a way that also requires a bunch of capital intensive investment on the production side.
Tough cash conversion cycles, potentially long lead times. How does Fyrn and uniquely address those things in a way that makes it unique? And how does that sort of also contextualize what we're gonna talk about now and how you think about capitalizing a business that is very different in the way that you're approaching it?
[00:08:42] Dave: Yeah, it's a great question. So I think there's a lot of pieces in what you just said and I think, at the heart of it I wanna pull those apart, right? So, first of all, I think that furniture is a category that a lot of folks view as uninvestible because of what you said, right?
It's capital intensive, you have to store tons of inventory, you have to then, sell that inventory and touch it a million times and moving it is so difficult. For us, this is where you think about a system solution, like you think about the fact that these products were designed in a way where, if I had you in my workshop, I would take you to a wall and I would show you 10 chairs hanging on the wall, just like you see behind me.
And in that same space, when we see parts and pieces that make up those chairs, we can fit a thousand chairs on a wall, that size in component parts and pieces and the components that we've, designed this system of furniture around, actually work across all the different products that we make. And so when we make inventory investments, we make them in an incredibly efficient way.
And we often don't have to buy that inventory till we've already had those orders placed because the lead times, while shorter than most of the industry allow for us to very quickly turn raw materials into furniture, domestically and then move that furniture short distance to the customers that we're serving here.
So we have capital light model on the manufacturing side, we have a distribution model where you're not paying to ship air, you're not seeing tons of that furniture show up damaged. The number of folks I've talked to in the last two years who, they've bought a couch or they bought an item and it showed up and it was damaged, then they waited another eight weeks and it was damaged again.
And on the third try they got it right. If you think about the cost for the con for the company on that side, it's incredible, right? And forget about the consumer experience being bad. The thing about Fyrn is that we're building a multi-channel business. I mentioned earlier these sort of organic discovery and these restaurants that was happening, so we don't think of e-commerce is the only way that we distribute the furniture.
Most of our sales are actually coming through architects and designers who are installing this furniture in beautiful spaces, in whatever channel that they're happening. Sometimes the furniture's taken a stop at the place where it's gonna be assembled and then made that last mile delivery.
But on the home side where almost 60% of the business now is residential and is directly to those consumers we're able to, if you think about it on a relative basis, relative to other furniture, we're substantially more efficient, right? So you start Taylor with a high quality product that's built efficiently, which gives you a really great starting margin structure.
You deliver that product on a better set of terms, timeline, ability for return with zero cost to the consumer flat so that you're not paying for air, they get one item, if you're gonna buy eight chairs, you get one item, you decide if it's perfect. If it is, we'll send you the next seven, but you don't have eight items to send back.
And we've built these sort of systems in the process of buying that give consumers the opportunity to make choices they're confident in. And if you're confident, you might invest more in a higher quality thing. And then we stand behind the products in a way that allows people to invest a few more dollars than they would in another case.
So we offer to buy that furniture back into perpetuity because we know that it'll stand up. And if we do buy it back, , we sell it on a secondary market that we own, that we have a platform for called The Annex. The annex is where people who don't want to pay as much for a brand new item can get an item that's, had a prior life or is a return or a sample.
And so building in these systems that give us a better economic model on the business side and a better consumer experience allows us to cut through some of the traditional challenges in furniture.
[00:12:02] Taylor: So I'm gonna read you something cause, when I think about investing in e-commerce, there's this debated by whether or not venture capital is useful, or investment dollars are useful as an e-commerce premise.
And I think a lot of what I've seen is that if the core use of funds is to fuel the growth of, let's say, customer acquisition, like venture dollars in exchange for equity is the wrong capital mechanism for that. It doesn't make any sense because the idea that you would be raising money to fuel the sort of core operating growth lever, if that's not cash positive, if it's not already generating incremental cash, how is external cash injected into that premise going to work?
And so there's a lot of people right now questioning whether venture into E-com is a good idea. So Dave Re Cook, who's the president of Bamboo Earth, he put out this tweet the other day. I don't know if you saw this, Dave, but I'm gonna read it to you. And I think this illustrates to me why Fyrn in my mind, was a good investment.
Cause I agree with Dave wholeheartedly. So I'm gonna read this and you tell me what you think about this, okay. So he says, the recent macro environment has brought on a lot of talk about the virtues of bootstrapping and operating lean and profitable. I think that is largely the right approach for most consumer brands.
However, it's worth noting the, exceptions. This is when I do think VC is a fit. Venture capital is best used on capital expenses that provide sustainable competitive advantages. A capital expense is something where the full cost has incurred now, but the value of the asset is realized over a long period of time.
Debt mechanisms are ill-suited for early stage CapEx and consumer brand. VC, on the other hand, is well suited for it. High risk is very sub subjective to evaluate high returns on capital and early stage uses for CapEx that can create sustainable advantage. R&D, product development, regulatory hurdles, capital equipment or tooling large MOQ requirements.
Core businesses use case includes software development. And so the case that he's making is that the reason an e-commerce branch should be raising money, and if I'm a venture capitalist, I'm leery of anybody coming to me, with this idea that it's growth in marketing and I'm gonna use your money because if that's not generating me a positive ROIC right now, why do you need my cash to go solve that problem?
But what I love about Fyrn is that, and maybe you can talk about where and how and the facility is, I believe the cash created now and used in that capital expenditure mechanism creates and sustains this moat that drives the value capture into the future. And that's what I want to be doing with my dollars if I provide them to a founder. So one, do you agree with the sentiment that Dave shared and how does Fyrn fit within that?
[00:14:39] Dave: I think it's an interesting tweet. And I think it's an interesting perspective from a couple of reasons. One is what I think recent history has shown us when it comes to venture, and this will be a great question for the part two of this series.
Yeah, I'm saying what I see. I think venture and consumer, for the most part, this is a generalization. There's always exceptions, has looked for exactly the opposite of what that suggest. Like we've seen, what they've sought out.
And I think that it's a herd mentality within venture in a lot of cases. But we've seen, show me a dollar in, gets me a dollar 50 out and I'll give you infinite dollars so that you can grow this business really fast. And it usually works if you have the right, it works to grow a business very fast.
It doesn't necessarily work for a sustainable. Long-term success story of a brand. And that's where you get these sort of GMO brands especially if you have a commoditized product. And now what you're really selling is how effective am I at getting a consumer to buy something and acquiring customers in a rapid way, in a math equation, that works for me at least today.
And that often works for the early stage investors in those companies, you find some, sometimes a liquidity event and an outcome that actually works for those investors. So I think it's important that we won. We understand, what's the motivation and what's the goal of the investment and at what timeframe?
And then two, is that the best thing for the business, long term or for the founder or the person taking that capital? I actually think in a lot of cases, particularly when it comes to physical goods venture has shied away from those categories because they don't wanna make capital investments in long term R&D even if the upside is massive, if you're successful, because the, if you're successful, is really hard to determine.
It's really hard to know, even with a great idea, are you gonna be the one who makes the impact on the category that's defining that category in a way that then is a huge return? Often my way of thinking about an investment, and I think venture would probably be not that different, is if this is successful, is there a huge and outsized return available to me?
Or people who are, most likely to deliver that return? And is there something unique about who's bringing this sort of business forward that makes them, likely to be successful. While I want to believe that tweet, it might even be intuitively correct. It's not the way that I've seen the world operate for.
[00:16:47] Taylor: Okay, but this is what I wanna challenge, is that I think in my supposition is that the return profile on that investment thesis is gonna end up turning out to be really poor, the one that you just described, because, and I think in many ways that's a venture investor confusing themselves for a hedge fund manager or something where they're looking for some annualized return on an algorithmic view of dollar in dollar out investing, which is never the intended premise of venture to begin with.
And so I think that there was this mania around. The perceived ROIC and what you could do to capture market in this capital efficient way, and then all of a sudden you'd have all this leverage down the line about what it would sort of margin expansion as efficiencies get created.
Turns out the exact opposite was true, like CAC, deteriorated in ways the models never showed. And the LTV numbers were substantially overstated and you end up with Peloton. But my thing is I think that the actual truth, like if we get back to the core thesis, I think Dave's like he's right.
Is that what venture dollars should help to do, is get you over barriers to entry that others can't replicate so that you have a sustained long-term advantage, and that comes with the underlying product and infrastructure that I think Fyrn to me, brings to the table is that like you have a system with dollars deployed into it, that on the other side of those dollars is a thing that becomes very difficult to mimic.
[00:18:03] Dave: So like I find this to be a fascinating topic for a bunch of reasons, right? Yeah. I do think it's applicable to me. I'll give you a couple of examples of where I think what we're discussing has been, we've seen it in the world and we've seen great success when, actual time and dollars are invested.
And then I'll talk to you about how it relates to fear and in my opinion. So, I don't think you have to look further than probably the most well known company today and Tesla. Elon had to, he came in, and we don't have to talk about the founders story there, but like when Elon was driving for that company to be successful, there wasn't a huge amount of support and people saying, hey, I really want to get behind a deep, long-term investment in developing an electric vehicle that's gonna revolutionize the way that the car industry works.
But when you look at it like he self-funded a huge amount of that, the government self-funded, funded a huge amount of that. And what we saw was someone saying, hey, I'm gonna build cars in America, vertically integrated manufacturing. I'm going to sell those cars in a way that's completely different than what we've seen.
I'm not gonna go to the dealership model immediately. I'm gonna build elements of that car, internally with the batteries. I'm gonna generate the components that matter most. And I'm gonna let the car be the marketing vehicle, for itself. I'm not gonna invest in marketing at all.
And it's wildly successful and the whole auto industry is chasing it now. For decades, it was incrementally better miles per gallon on largely commodity products with a brand that sits at the front in a little, on the back. And I think like he revolutionized that industry because he was willing to put dollars behind an R&D process that actually looked to change the industry.
Now as I think about fear and, I truly think Fyrn can be the Tesla of the furniture industry and there, and the thing that I think is actually most compelling about Fyrn in this moment is we've already done the hard capital intensive part of, we've self-funded the R&D process to the patented hardware we've designed and built, 30 plus machines that make scale manufacturing of highly crafted pieces, really simple for anyone, not someone who has 10 years of woodworking experience.
And that part of the equation is done. The facility sits there, 40,000 square feet in Reno, ready to be filled with units. We've already seen the product in the market, be blessed by some of the best architects and designers in the world. It has amazing traction in the Bay area. When I think about what we need for capital, like it's a unique opportunity to step in with asymmetric risk if we're successful, if we can be the, Tesla of the furniture industry, it's gonna be category defining and a massive win, a multi-billion dollar opportunity.
And what we need now is, more products so that we have a larger bullseye for people to say, I'm interested in participating with that brand. We need to replicate the barrier success in multiple markets, and we need to build awareness. We need people to know that this product exists outside of, our customer base today.
But I believe that we are, already past that point where traditional VC would've probably said, Hey, if that's many, many years of r and d and product development and manufacturing development, it's maybe not the right investment for us.
[00:20:58] Taylor: Yeah, and I really think that what happened was, VC as being so software centric for so long where there was this sort of playbook related to the performance metrics that sort of compounded over time that you could draw the graph and understand the user acquisition over retention equals this certain value.
And if you put money into that, the thing takes a ton of market and goes really, really fast and you win. The difference though is that. One of the many differences is I think about that many of the attributes that we would define, like the hyper-efficient CAP, gross margin, if you were to do the like playbook of things, LTV, CAC looks really great on this.
Is that very under considered in that? Is that the deterioration of those numbers has to do with the barrier to the replication of them. So what I have seen is that in many cases what happens is the fact that those numbers exist in the mechanism that they do are actually a signal that everyone can deteriorate them and still make money, which collapses the category entirely, almost.
And so the whole thing degrades because you're talking about digital real estate, like search engine results page that are auction based, that all the profits eventually get competed away, and it creates this deterioration of the core value. So the existence of the marginal value capture is room for competition.
There's almost no barrier to production, there's no patent, there's nothing, and the whole thing deteriorates down to zero. And so that's different than software in those ways, right? Where there's, this software has this very inherent viral loop that can be built into the product that can't be built into physical goods in the same way.
And so the new customer acquisition mechanisms are all competed over in a way that destructive. And so if I'm investing in consumer product, I think exactly what you're describing is what people have to think about, they have to go to what creates long-term leverage with capital to capture value.
And I think that's gonna be in my thesis is that you're gonna see a return to that. But my next question is, what has the market's response been? Now there's a macroeconomic environment, and this is the second time you've raised in this moment now, what are you experiencing? How much of that is macroeconomic? How much of that is, what do we do with e-commerce and how are people responding to you?
[00:23:11] Dave: Yeah, I think actually your last question and this question are pretty related. In my opinion, in times that are boom times, commodity products that don't need that, much as you wanna say, barrier to entry or, strong differentiation.
All of the rising tide lifts all boats. And you see, an easy ability to raise capital, you see an easy ability to, be successful even if your product is not that special. I think when we get to the lean times when we're in challenged environments, macro environments or consumer environments, this is where we separate, the best companies and the best products from the commodity products that don't really have a reason to exist in many cases.
If you give any company hundreds of millions of dollars to spin out marketing, like they're gonna sell a lot of product. And the question then becomes, do those customers come back time and time again to buy more product? or is it a one and done because hey, yes, you got me to buy the product, but nothing was that special about the product and therefore I'm gonna move on to the next company that's incentivizing me to buy the product that's, or targeting right. Correctly with the ad.
And so, I think in this market on the consumer side what we're gonna see is those companies who are truly differentiated, who are executing well with products that are not just commodity products and do create value for their consumer, are gonna be successful.
And on the capital raising side, I think that this environment is more discerning. I think that in many cases, we've moved on from the FOMO investment, right? It's not who's on the cap table? Who's the lead investor? I don't need to see anything? It's not gonna work that way.
You're gonna have to be willing and able to tell deeper stories for you to support the rationale for why these businesses should matter and should exist. And I think that diligence process will be a bit longer. It will be more of an in-depth conversation and you'll have to have a model that is more than just, a concept or an idea that you could spin up really quickly, because I think that we've both seen this idea of a CAC based investment get torn down.
But we've also seen that in an environment like this, liquidity is precious, and while professional investors need to allocate it, they're gonna be more thoughtful about who they allocated to and why, and that's the experience. For a company like ours, like I actually think that may benefit us because we have a very deep and long story to tell about what's differentiated about this company and about this product. And getting someone to take the time and the willingness to hear that and to dive in a little deeper gives us the opportunity to really get more traction versus less.
[00:25:34] Taylor: So lemme ask you has the investor then reoriented what they're asking, what they're looking for? Or is your experience, they wanted this CAC and now they just want a better CAC. Is it just I wanted you to be growing faster with better LTV, CAC or are they really, have the questions changed from the last time you, what has been the actual interaction experience?
[00:25:53] Dave: Yeah, so I'll say this. We have always thought, I have taken the approach that I don't want to raise entirely speculatively. I want to have certain problems figured out before I go to the world and look for capital. And that may have been a mistake historically or may not.
But I think, when I look back at when we raised, not that long ago, it was really about, let's get the infrastructure in place to support growth, which we need a facility that is, substantially larger for more throughput that allows us to bring new products to market, that allows us to hire a team who's gonna, for the first time ever really market this in a deliberate way.
Up until then, we had traded entirely on the products. Amazing. And people tell other people, and, I'm out there hustling to get clients. That raise was largely, a network based raise. It was largely about affluent angels and strategic folks within the industry who said, I see this and I believe in it.
And in some cases it was people who might have been more software investors who are like, hey, I love physical things that look amazing, I want a piece of this. I sat in those chairs at the restaurant, it was incredible.
This time through, we're looking for the investor base to be moving from just affluent angels to family offices and venture capital, that's either, sustainably minded or category specific. And so the conversation based on who the investor is has changed, but also based on the environment.
I think that people are looking for businesses that they know can get to a profitable place, in some realistic way, right? It's not just, when you get to infinite scale, then you can figure out how to make this a profitable business, right? You wanna have line of sight to, this is a sustainable business model that has a huge opportunity to really deliver a massive return.
If you're a professional investor, I think you're looking for, huge opportunity for return if it's successful, right? But I think how we define what successful is changing a little bit, and I think the risk taking is changing a little bit more and I think that the process is longer. Which means that the founder has to be positioned differently for how they go about that process.
[00:27:48] Taylor: So if you were to say, okay, let's just assume last round took you X meetings and Y time, are we at two X the number to get there, do you think. If I'm a founder and I'm listening, I'm going, okay, I'm getting ready for a raise, as I think about how long is this gonna take me? How many meetings am I like, what do you think that relationship has been like in terms of the work to get there? Is it, are we at two X are we at 10 X? How much more difficult is this environment in your opinion?
[00:28:13] Dave: Yeah, again, I broke that into like affluent angels and family offices and VCs. And so I think the affluent angel, at the very top of the affluence, it's, they're still writing checks, right? But I think folks who were like, hey, I wanna be angel investing, this looks exciting, there's so many people, doing this well, and I should be one of 'em, right?
Those checks don't exist in this environment, forget about it, that's not happening. I think that, as I've gone to market, our existing investor base believes in this. They already know the story and those folks have come to the table and said, yep, we're in on this raise.
And that's largely who we've tapped so far as we think about January and February, nobody's gonna do anything the next few weeks. I'm really setting up for let's be well positioned for. Those other groups, the family offices and the VCs. And everyone I've spoken to and everything that I've seen in the, early stages of testing the market is, yeah, this is gonna be a longer process.
Like you're gonna be looking to go layers deeper. I can't put a specific timeline on it, but what I can say is that even if you get quickly to a term sheet, the diligence process thereafter is gonna be longer. And you just have to be, I think, prepared for that. One thing that I believe deeply in the fundraising process, and I'm sure there are folks that are just gonna be exceptional at it, and they have the process, they drive it from start to finish, and they're already, they've done this 25 times.
But for a lot of the founders who are out there listening to this, who might be in the, e-commerce world or D2C, sticktuitiveness and just, you have to find your believers, right? And one or two or three of those believers if you are confident in what your value prop is.
If you really have an opportunity to build a business that can have a great return for investors, you need to be able to tell that story succinctly, and then you need to find your believers. And if you do, one or two people can change the trajectory of your business. And I think the last thing I'll say on this is it's really important for me to keep the mindset that, I'm building relationships through this process.
This is an opportunity to get in front of people. And sometimes it's not the investor who will actually write the check this round. A no today can be the yes in the next round. A no today from an investor is actually the introduction that leads to, hey, we're now just, in the driver's seat for being a client.
I've had a hotel brand who said, the owner's not gonna be an investor, but he's like, I wanna source your products for all my new properties.
[00:30:31] Taylor: That's right. What about, are people back in person? Cause your last round was in the middle of Covid. Is that a big difference? Are you back in boardrooms putting on your suit? What's the actual meeting world like these days?
[00:30:46] Dave: Yeah, great question. It's really interesting. I would say I'm still heavily in a Zoom meeting culture for the most part.
But we have this unique aspect to our RAs, and this is something that I've mentioned to you and I think that we may do here in January or February. I've almost never gotten to know when I've been able to show someone the facility and the systems that are behind what is unique in our process.
And why it's different than the rest of the furniture industry. So, Every person who's come in person and seen that has said, yes, I'm in on this, this is amazing. And trying to convey that over, a deck or over a phone call, it's very challenging. So, people are more willing to meet in person.
I'm going to other cities to have conversations with folks and I intend to do that in the new year for sure. . I'm thinking about let's host, I've got a small group of folks who have said, I'd love to come through for an event where I get to see that. And I'd like to bring people to us to see what's really unique and why would you make this decision.
There's something here, it's real, it's not a concept. It's already happening. That's an opportunity in my mind.
[00:31:44] Taylor: That's so important. When we, raised our round for four by 400 back in, whatever it was seven years ago now, we hated meetings and every time we found ourself in that setting, what ended up happening is like somebody was talking at us and it was this sort of this back and forth thing of like, man, you, they're missing us in this way.
Like we're, this isn't us in this setting, like formal, trying to meet them on their turf. And so what we ended up doing was we had an event and our old office was really cool. It had a basketball court inside of it and. We hosted the this event inside of this basketball court, and we got a bunch of people to come that we wanted to raise money from.
We had a few professional athletes show up. We had a few of our people show up and we did a deck in a presentation like we were pitching, like we were selling to a customer, and we raised all our money in one night. And part of it was just trying to figure out like who are we and what makes us unique and how do you put that on display?
And I think the same thing is true for you. It's like, yeah the facility is it's the reason you're sitting in front of your chairs on the zoom call is because you want people to feel it, to touch it and to experience it. Like you said, I've walked around your facility in San Francisco and it is, it's like, oh this feels magic.
The story comes to life in a way. So I think that's the thing for people to think about is, what do you have to make people feel your story? Because at the end of the day, one of the things I've noticed, especially there's sort of the joke that like. Investments are one on the financials, two on the deck, and three, like the coolest thing you can tell your golfing buddy.
That's like the premise, right? And there's something about the story that's like, even if you lose, I was proud of that one. I think there's something about what you guys do that there's a piece to it there that is really interesting. So I like that, I'm excited to see if that goes somewhere.
[00:33:23] Dave: That last point you made is really interesting. There was a tweet this week from one of the founders at Netflix who said, I've made hundreds of angel investments and I've changed my mentality lately, which is, I'm not even sure I'll be able to make money on these, but I want to know that.
I made choices to support the things that I believed in and wanted to see in the world, even if's they failed. And I think that's a pretty incredible, if you can be in a place where you can make that decision and understand it, that's incredible. It's different than obviously a professional investor's perspective.
I think it's really interesting and I think, as you just said, I would just really echo, know what is unique about your business. know what it is that is your highest and best chance of getting people to see that and in what format, and then figure out how to build that into whatever way you're pitching and sharing your story with the world.
And I think that for us, we have an incredible team, and more and more I've been thinking like, how do I bring my team into this process? Because that is one of our greatest assets and one of our, best chances of being successful in addition to seeing, the facility and seeing the system based stuff.
[00:34:20] Taylor: I love it. Dave, if someone is like, hey, I'm interested in this story, I wanna hear more, where do they reach out? How do they get ahold of you? Do you wanna just drop your bank wire instructions or what do you think is the best way to actually get ahold of you?
[00:34:32] Dave: Yeah. Routing number, bank account.
[00:34:33] Taylor: Yeah exactly.
[00:34:35] Dave: So I'm reachable directly at davefyrn.com, fyrn.com. would love to hear from folks who think our story sounds compelling. On Twitter, I'm at Mad Room and Candle but I don't tweet that often, although I am there, it's how I met you. So, if anyone's listening and wants to hear more about Fyrn I'd love to have that conversation.
And I appreciate you talking to me about this, Taylor. It's really helpful just to get in front of folks and have the conversation and be reminded of the basic steps that are being had and how to stay at it.
[00:35:03] Taylor: Yep. And I think that's it for everybody right now, is stay at it. And it's one of the reasons I believe in you. Dave is one of the most humble dudes you'll ever meet, but I use him a lot for advice on my business. He's led some turnarounds for some of the biggest retail brands you've ever heard, I'll keep those names for his story. You're gonna have to reach out to ask him about the stories, but just a brilliant business mind with a team that is incredibly compelling and a product that is just special. Go check it out, fyrn.com, fyrn.com. And when you order this product, the experience of opening in it and getting to build the chair to participate in a hundred years or 140 years of legacy, of craftsmanship yourself is a fun exercise.
So check it. I'm a believer in the human, I'm a believer in the business, and Dave, thanks for coming by.
[00:35:47] Dave: It's a pleasure, man. Thank you so much.