Keep records up to date and in order — it’s important to establish good internal processes and records from the outset. This helps when you’re ready to raise capital and it also means that if an exit opportunity arises, you are ready to go and won’t need to spend time backtracking. At Rebecca Page, we created a ‘due diligence vault’ as soon as we incorporated. This means that everything of relevance is in one place and it’s easy to provide access to an external party who is assessing the investment or acquisition opportunity.
As a part of our series about “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit, I had the pleasure of interviewing Janine Manning.
Janine Manning is an award-winning, hands-on angel investor with experience in helping to guide, build and grow start-ups and early stage businesses. She is also co-founder of fast-growing start-up Rebecca Page, an online D2C business digitally disrupting the traditional, old-fashioned home-sewing market. A New Zealander, currently based in London, Janine actively backs and mentors’ entrepreneurs from NZ, UK and the US. Janine is a Director of successful ed-tech startup Crimson Education, Stitched and Beanie. As a life-long learner, Janine has recently graduated from the University of Cambridge with a Masters in Social Innovation.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
I’m an accountant by profession and have always enjoyed working in startup and early-stage businesses. About eight years ago, a teenager I knew, Jamie Beaton, was working as an intern at the Ice Angels in New Zealand before heading off to Harvard to study. He said to me that he thought I’d enjoy being an angel investor. I didn’t know that such a group existed, so I went along to an investment evening and then joined. A year later, Jamie returned to New Zealand for the US summer to capital raise for his startup Crimson Education. He asked me to be his lead investor for the Ice Angels and we’ve been working together ever since. Being actively involved at Crimson inspired me to complete a Masters at the University of Cambridge — something I never imagined I would have the opportunity to do. Furthermore, it’s motivated me to dive back into being a co-founder of Rebecca Page, and now Jamie’s one of our investors! He’s 25 now, so helps us with insights into the millennial market.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
It’s not funny, but when I first became a business angel I made the mistake of accepting as fact the word of a founder. I was caught out and this quickly taught me the important lesson of always undertaking proper due diligence when looking at an investment opportunity.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Be a learn it all, not a know it all”.
In the world we are currently living in the only certainty is uncertainty. We need to be open minded to learning new skills and be resilient to be able to adapt to change. I mostly work with people who are younger than me and I am mindful and appreciative of the fact that I can learn as much from them as they can from me.
Ok super. Thank you for all of that. Let’s now shift to the main part of our discussion. Can you tell us a story about how you were able to build a business from scratch, scale and sell it to a bigger firm?
A business partner and I spent pretty much all of the 1990s building a systems integration business. We were growing quickly and over-trading, meaning that it was always difficult to manage cashflow. There weren’t many options to get capital in those days; the banks were unhelpful and I was unaware of any opportunities to secure investment from private individuals or other sources. This meant our only option was to grow organically and reinvest the profits back into the business. We concentrated on building long-term, sustainable relationships with our stakeholders — customers, suppliers and our team. This meant that in 1998, when a US Fortune 500 company asked IBM which UK company they should acquire as a launch pad into Europe, IBM pointed them in our direction. When the due diligence team arrived, everything was in order so there were no obstacles to a smooth sale process. It was good timing for me as I was pregnant with my fourth baby in five years and the sale meant we could return to New Zealand for the children to grow up there.
Based on your experience, can you share with our readers the “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit”. Please give a story or example for each.
Although an exit isn’t generally the primary motivator for most entrepreneurs, it should be on the board agenda for discussion.
- Maintain a list of exit opportunities — build up your networks to develop and support possibilities for exit opportunities. Examples are (a) acquisition by a larger competitor, a business that has synergies or private equity (b) a merger or © an IPO. Take note of exits that occur, both in your industry or sector and more broadly. This will help you to identify possibilities and broaden your list of exit opportunities. At Rebecca Page, we began to engage with several VC’s long before we will seek investment from them. This has provided us with the metrics and track record we need to achieve to get to the next step.
- Keep records up to date and in order — it’s important to establish good internal processes and records from the outset. This helps when you’re ready to raise capital and it also means that if an exit opportunity arises, you are ready to go and won’t need to spend time backtracking. At Rebecca Page, we created a ‘due diligence vault’ as soon as we incorporated. This means that everything of relevance is in one place and it’s easy to provide access to an external party who is assessing the investment or acquisition opportunity.
- Track and record key metrics — articulating your business story with data is powerful. Determine the key metrics for your business and keep track of these on a dashboard. Keeping a close eye on the data will help you to identify trends and patterns. For example, at Rebecca Page we noticed that our sewing pattern sales tracked consistently as a percentage of the size of our community. This reinforced to us the fact that building our community leads to an increase in revenue.
- Build sustainable long-term relationships with key stakeholders — this includes team members, investors, suppliers and professional relationships (e.g. legal and accounting). For many entrepreneurs, it’s a natural thing to be passionate about the hustle and challenge of the startup and early-stage journey. It’s difficult to achieve success as a lone wolf, so being able to depend on people that you’ve built a long-term relationship with removes uncertainty as an entrepreneur moves on from one venture to another. When we started Rebecca Page, we were able to access the help and support that we needed from the long-term relationships that I’ve established over many years.
- Eliminate dependency on founders — at the beginning of a startup journey, founders have to be a jack-of-all-trades. As the company grows it can be difficult to let go and hand over functions and tasks to someone new. It’s important for founders to be mindful of this and to focus on systemizing processes and using technology to maximize efficiency. My co-founder, Rebecca, recognized early on that to achieve fast scale she would need to step back from all the ‘doing’ and to allocate her time to tasks that will ‘make the boat go faster’.
In your experience, is there a difference in approach for building a service based business versus a product based business when you have the intent to eventually sell the business. Can you explain?
In my view, there is very little difference in building a product or service based business — the key in both cases is the potential to scale. Although the key metrics for product and service based businesses are different, the building of a successful business requires the same inputs.
How does one go about the process of finding a buyer?
Ideally, you want the buyer to find you! As I said earlier, it’s important to build networks and long-term relationships. This means that you have people with the right expertise to guide you through the process of identifying and approaching potential acquirers. It’s also helpful if you’re seen to be a thought leader in your industry as this will open doors.
How can one decide if it is better to build a business in order to exit, or if it is better to stick around for the long term and let the company bring in residual income, or if it is better to go public?
Every individual has different motivations and dreams, so there’s no one-size-fits-all answer to this. We also need to remember that there isn’t usually ‘one’ person in a business who decides what to do. If a business is paying decent dividends to the shareholders, then an exit has to be weighed up against the potential return you could get by investing elsewhere, particularly while interest rates are so low. It’s a different story if a founder wants the cash for lifestyle — a big house, a boat and so on.
Can you share a few ways that are used to determine a good selling price for the business?
This is a moving goal post and there are so many variables. There are accepted multiples that can be applied broadly in order to determine a ‘ball-park’ range for valuing a business. If you’ve done your homework, you may have identified a potential acquirer for whom your value will be higher than a standard multiple. For example, I sold a UK business to a Fortune 500 company who were expanding into the EMEA region. The US company had 21 target global customers, and by acquiring us they secured four global customers in one swoop. We were worth more to this company than we were to anyone else on the open market.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
During the pandemic, there’s been a positive move towards more mindful consumerism, and part of this is the rejection of fast fashion in favor of creating your own. I’d like for the joy of home sewing to spread further and become a movement. Spending time on a productive hobby, where you create something using your hands, is therapeutic for the individual and positive for both society and the environment.
How can our readers follow you on social media?
Instagram — rebeccajpage
Thank you so much for joining us. This was very inspirational.