Startup Money Made Easy by Maria Aspan
Author:Maria Aspan
Language: eng
Format: epub
Publisher: AMACOM
Published: 2019-01-04T00:00:00+00:00
The Scramble of Salad Days
Jonathan Neman stumbled into his future when he moved into his freshman-year college dorm. Nicolas Jammet, the child of high-end restaurateurs, moved in next door at Georgetown’s Harbin Hall. By the end of their college years, Jammet would become Neman’s cofounder. A few days later, on the first day of class, Neman met Nathaniel Ru, who would become the third cofounder of the healthy salad empire now known as Sweetgreen.
By the end of their senior year, the three friends were opening the first Sweetgreen in a tiny Georgetown space. The company’s early days were a lesson in managing expectations, Neman told me on an episode of Inc. Uncensored podcast:
“When we first opened, we actually thought it was going to be straight to major cities. We went to LA, started looking at real estate; went to New York, started looking at real estate; we thought, within a few years, we’d have one or two locations in every major city,” he recalled. “The smartest thing we ever did was to not do that. . . . For us, the restraint and the focus was something we talked a lot about. We opened the first almost-twenty restaurants in the DC area.”12
Today, Sweetgreen has $135 million in high-profile venture backing, but Neman says the first several years of fundraising were a struggle, every time. At the beginning, the three cofounders opened the first store with $300,000.
“I call it a Kickstarter before there was Kickstarter. There were forty-five investors and $300,000,” Neman says:
Most checks were around $5,000. Our biggest check was $20,000. We were talking to hundreds of people. It was the gauntlet of starting something. You had to believe in it so much that you were willing to take other people’s money to do it. . . . And for us, raising money from other people from the beginning created this accountability, and wanting to do things the right way. . . .
[Raising money] the second time around, it got a lot harder, because then it was 2008 and 2009, and the world fell apart. And so then it got really, really difficult. At the time we were fundraising one restaurant; we were opening our second and third restaurant, both in DC, and it was really challenging to raise that money. It ended up being a combination of small-business loans, credit cards, some investors, we owed our contractor money so he became an investor for the money we owed him—it was very, very complicated. And it was kind of like that for the first twenty restaurants.
We kind of funded it slow and steady, really until we had that proof of concept and opened in Boston and New York, where we felt we had a brand built bigger than the business, and had a vision built for where we could go from there. And at that point is where we felt comfortable raising more money, and significant capital. That was the first time we took any sort of venture capital money. At that point it was $22 million.
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