Good Decisions About Funding Builds Strong Companies
By Sonia Guzman, founder, Carson Life, Inc.
I’ve made thousands of important decisions in the 10 years since I founded Carson Life, Inc., the company that’s experienced explosive growth as a provider of natural health and beauty products focused on the Hispanic market. But none of those decisions, I recognize now, has been more important than the ones involving the sources of capital to finance the rapid expansion of Carson Life. Because of the decisions I made over the past decade, I’m now in a strong position as I meet with a steady stream of investors who are interested in buying a piece or all of Carson Life.
In Carson Life, investors see a Latina-owned company that’s serving Hispanics, the fastest-growing market in the United States. They see a company with a strong retail presence in 12,000 stores across the nation; a company selected by Walmart for 1,500 coveted end-cap positions during Hispanic Heritage Month. (Target, meanwhile, selected us for 279 end caps). They see a Spanish-first company that advertises almost exclusively in Spanish and provides Spanish-first customer service. They see a lean company, one with only 10 employees and a strong outsourced team that’s built an enviable cadre of top influencers in social media.
When they come to meet with me, however, those investors quickly learn that they’re not looking at a company that’s dealing from a position of weakness. Our capital structure, in combination with continued profitability even as we double our revenues from year to year, provides us with a strong position to build our future on our own terms.
I launched Carson Life in 2014 with my heart. I’d built a successful career with multi-national brands, and I was working as a top international sales executive for CNN when I was injured in a vehicle accident. After that accident, I realized I want to make a difference in the world, meeting the needs of underserved consumers.
I’d won a business plan competition at Babson College, the famed school for entrepreneurs, and I thought I knew how to build a business. I was right about building the business. I recognized that Latina consumers were a dramatically underserved health and beauty market, especially with the growing interest in organic and natural ingredients. Within a few months after its launch, Carson Life’s products were in dozens of stores, then hundreds of stores. Consumers were seeking out our website (carsonlife.com), and orders were pouring in.
All those orders required capital. I’d launched Carson Life with my personal savings and the financial support of some family and friends. I never worried about losing my savings. I expected success; I didn’t expect this level of success.
Soon, I found myself with the equivalent of two full-time jobs. I was managing Carson Life and I was raising capital to support growth. It’s not easy to raise money, especially for Latinas. Between that initial startup funding, a $1.5 million seed round from early investors and a first-round funding with a maximum of $10 million, I’m sure that my company has raised as much venture money as just about any Latina-owned business in America.
Those early investors provided important support. They stepped up when Carson Life required funding to fulfill rapidly growing orders. They believed in our mission; they recognized our potential and they treated us fairly. In return, we made sure we didn’t let them down.
Carson Life delivered profitability. We’ve been profitable since 2019 and continued our profitable growth even through the COVID-19 pandemic. A profitable company isn’t forced to accept onerous terms from investors just to stay in business. At first, I focused on growing revenue. Now, I focus even harder on profitability.
Carson Life just completed an even-larger financing. This time, we worked with Decathlon Capital Partners, a provider of revenue-based financing. We’ll use the fresh capital to fuel further growth—including Carson Life’s second brand family, Eva+Avo haircare. We’ll be winning more shelf space and building the direct-to-consumer business that currently accounts for 13% of our sales.
Decathlon Capital Partners didn’t receive any equity in Carson Life in exchange for the financing. Instead, Carson Life will simply repay the financing through a percentage of its sales each month. That’s critically important to me. I’ve had meetings recently with investors who offered to put $30 million into the company in exchange for a 30% ownership. I’m not willing to give up that much. As Carson Life grows, I want to control as much of the company as possible. I’ve worked hard; I want to control my future and reap the rewards I’ve earned.
It was important, too, that Decathlon Capital Partners provided a streamlined decision-making process. Carson Life needs to move quickly to take advantage of opportunities, and time we might spend waiting for decisions from slow-moving financial partners would cost us. I want them, too, to be in a strong position to enjoy the rewards of their success.
Nearly everyone recognizes that the Hispanic market is the new powerhouse in American commerce. Success in this market demands more than great products and hard work. Careful consideration of financing alternatives is equally important.
Sonia Guzman is the CEO and founder of Carson Life, a natural health and beauty products company specifically geared towards the Hispanic community. Guzman founded Carson life in 2013 after a successful career in digital sales and marketing at companies like CNN and Time Warner.
About Decathlon Capital Partners
Decathlon Capital Partners provides growth capital for companies that are seeking alternatives to traditional equity investment. Through the use of highly customized royalty-based growth credit solutions, Decathlon provides long-term growth capital without the dilution, loss of control and operational overhead that often comes with equity-based funding. With offices in Palo Alto and Park City, Decathlon is the largest revenue-based funding investor in the U.S. and is active across a wide range of sectors. Learn more at www.decathloncapital.com.
If you are looking for capital to accelerate your growth, we would love to talk.
DECATHLON INVESTMENT CRITERIA
Operating history of at least two years
Annual revenues between $4 million and $100 million
Annual growth rate of 10% or more
Attractive gross margins
Experienced management team
North America-based operations
Near-term visibility to cashflow-positive status