CurlMix Raises $1.2M After Rejecting ‘Shark Tank’ Offer
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CurlMix founders Kim and Tim Lewis aren’t newbies to the startup game. Founded in 2015, CurlMix started as a do-it-yourself (DIY) subscription box, then later turned into a natural hair care line featuring their then best-selling product, Pure Flaxseed Gel.
“I was seven months pregnant at the time, in my kitchen working on a recipe for flaxseed gel,” Kim said.
The founder revamped CurlMix into a brand that natural hair care customers would see as a necessity instead of a one-time DIY project.
“We were getting ready to close the business because we didn’t really grow in our second year,” Kim said.
After consulting their advisor, Kim and Tim decided to bottle their best-selling subscription box and launch it to customers via pre-order. Within hours of announcing the release of the new and improved product, the company’s sales exceeded the success it had seen in its two years since launch.
“I figured out how to make a batch of 60, but I was like, ‘I’m not going to make a batch and then try to sell it because I know that sometimes things don’t work out or sometimes people don’t actually want it,’– so you’re stuck with all this inventory. So I was like, ‘I’m going to produce pre-orders and if people really want it they’ll buy it before it exists,’ and so we ended up selling hundreds in a matter of hours,” Kim said.
Being one of the first flaxseed gel providers on the market, CurlMix went from $3,000 in sales during January of 2018 to $1 million in sales at the end of the year. With the brand doing numbers and successfully moving products, Kim and Tim Lewis knew they had the sauce. When the opportunity to appear on “Shark Tank” presented itself, the couple was already validated in the worthiness of CurlMix.
“We had a conversation the night before the show. We watched previous episodes of people who had walked away or who didn’t get a deal or whatever — and we were like, ‘What would we go home and regret that we took?'” Kim said. “We didn’t want to give up 15 percent of our company if they offer anything over 15 percent, it’s an absolute no — doesn’t matter how much they’re giving us.”
The founders stuck to their decision and rejected Canadian investor Robert Herjavec’s $400,000 offer for 20 percent of the CurlMix brand. Kim explained how the duo had to consider future funding rounds in their decision to reject the Shark’s offer.
“We thought we would have to raise again. We were like, ‘If we had to raise more money on top of the 15 percent, we’re going to be down to like less than 50 percent ownership of the company after another round, and we are not trying to go that route a lot of founders go,’” Kim said.
It didn’t take long for the forward-thinking decision to pay off for CurlMix. Shortly after the show aired in March, the founders raised $1.2 million for 10 percent of the brand.
“The company is valued at $12 million, but the round that we raised is only 10 percent, so it wasn’t a traditional 20 percent round that most founders end up having to do for $1 million,” Kim said.
As a Black founder, Kim understands the roadblocks associated with the startup funding process. Kim explained that Herjavec admitted not knowing about the natural hair industry and was not willing to provide any help to the company in exchange for 20 percent of CurlMix.
“I knew that this would be our issue if we were to ever raise money — the person with the money doesn’t know our market. I knew I was going to have to had proven it already,” she added, speaking of CurlMix’s $1.2 million funding round. “I couldn’t come pre-revenue with just an idea saying, ‘Hey, give me this valuation.’ There’s no way I would have gotten an investment. We have to be successful, then ask for money.”
This piece originally published on October 30, 2019.