Preemadonna’s $5.6 million overall seed funding was led by Halogen Ventures alongside Version One Ventures, the Amazon Alexa Fund, Two Small Fish, Garage Capital, SOSV, Shrug Capital, Telescopic Ventures, Catapult VC, Cleo Capital, and a host of incredible entrepreneurs including Tara Bosch, the founder of SmartSweets; Markus Frind, the founder of Plenty of Fish; Helen Greiner, cofounder of iRobot, Charles Huang, co-founder of Guitar Hero; the Spanx by Sara Blakely Fund, a Donor-Advised Fund at Rockefeller Philanthropy Advisors, and more angel investors.
It has been an unpredictable and rewarding journey, and as we gear up to launch Nailbot, I want to take the opportunity to share my lessons learned fundraising for hardware start-up Preemadonna.
For context, Preemadonna’s flagship product is Nailbot, a connected, at-home manicure device that instantly prints art on your nails with our specialized polish and primers. You connect your smartphone to Nailbot via our mobile app, select any photo, emoji, or design, and then Nailbot will print art on your nail in one pass. It is a very quick process that only takes 5 seconds! We are building a full product category of Nailbots that seamlessly decorate nails with art and polish.
Powering Creativity in Beauty
Our mission at Preemadonna is to power creative expression in beauty. We have a company motto that we “make magic happen,” and we incorporate that playful experience in our products. We do this in three main ways:
1. We build affordable and accessible at-home smart hardware (Nailbot) that decorates fingernails. The hardware is accompanied by a mobile art marketplace that complements the Nailbot printing experience where users can create, share, and eventually sell their designs.
2. Our community is primarily composed of Gen Z young women who are the heaviest users of DIY nail cosmetics. Nailbot is not only a beauty tool but also a gateway for STEAM engagement as our community designs digital art and learns how Nailbot was made. We have a unique and privileged opportunity to engage and co-create with these dynamic cultural agents who are makers, artists, hackers, and coders.
3. We picked “nail” as our first creativity category because it is playful, artistic, and social. Our product and platform vision is to build and power interactive creative printers and robots that extend beyond the $15 billion nail industry to other maker markets like henna, tattoo, and craft.
Folks are congratulating us on raising the round and we are incredibly humbled and appreciative. The truth is that our funding story is one that is common amongst many hardware founders that raise seed capital, made all the more challenging by being female and a person of color. We raised capital over several years to build Nailbot. Each check was hard fought and generally required rounds of diligence.
Here are five things that we did to build and capitalize a consumer beauty hardware product.
1. Adapt: We didn’t raise one “big” VC round. Many traditional venture capitalists on Sandhill found it difficult to understand a vision for a consumer beauty hardware product in part because they are typically focused on software. Despite some investors’ positive feedback that their wives or daughters would be customers, many couldn’t build conviction to invest because they were worried about capital efficiency or our ability to execute such a big bold vision. So, we adapted. We started to change our style of pitching: showing what we’ve been able to accomplish with little capital and the organic communities we are building around Nailbot. If you can’t convince someone to give you the $5 million at once, should you give up? Or should you find an alternate way? We found an alternate way.
2. Raise in Tranches for Product Progress: With each capital infusion, we’ve made steady progress on our hardware and software development through each stage of NPI. We’ve maintained a lean team, and each tranche of capital went to specific builds (i.e., our EVT builds known as MVP, POC1, POC2, Alpha 1.0, Alpha 1.5, Beta 1.0, Beta 1.5). While we built our bare bones Nailbot MVP with virtually no outside capital and tested and iterated on each build on users, the reality is that subsequent hardware development is capital intensive and is unlikely to be funded solely with preorders or crowdfunding. So, if you do not have the full amount to plan the full NPI process with, then raise and build for a specific milestone.
3. Find & Mobilize a Village: I started my professional career after college in politics as a fundraiser and political organizer. I learned that it takes both a grassroots approach coupled with larger institutional funding to get a campaign funded and candidate elected. As a founder, I took a similar approach to our capital raises. Our path has been paved with checks from accelerators, pre-seed and seed funds, over 60 individual investors, and from the power of the crowd.
In the early days, we participated in accelerators that shaped who we are today. We lived in Shenzhen, China, as part of SOSV’s HAX Hardware Accelerator, and that chapter in our company continues to pay off as we work through manufacturing, tooling, and supply chain logistics. We were part of the Founders Factory accelerator, which introduced us to new investors and beauty conglomerates. During this time, we also initiated early product and equity crowdfunding campaigns with our MVP Prototypes to engage our audience and find our first 1,000 paying customers. We are excited to continue shipping our pilot production Nailbots to our backers and engaging them as we grow the business.
We pitched hundreds of angel and smaller seed funds—many of them multiple times before they said yes. While building a large investor base takes up precious time, it has network-effect advantages. For example, we have built a strong network of angels that we can turn to for manufacturing, supply chain, or customer acquisition questions. Also, since many of our angel investors are self-made entrepreneurs that have built their own businesses and billion-dollar consumer product categories from the ground up (often without any outside capital), that pushes Preemadonna to be capital efficient and creative while funding inventory and product development.
Ultimately, we found investors that believed in us, the immediate problem we were solving, and our bigger vision. These key investors also happened to be predominantly female. Incredible women have powered Preemadonna over and over again, from Jesse Draper (Halogen Ventures) and Angela Tran (Version One), to the numerous female angels and preseed/seed funds led by women who believed the Nailbot would be a truly transformative product.
4. Consider Unconventional Pitches: We entered numerous pitches—to win cash, meet others in our industry, and engage with potential partners or investors. I’m listing a few for other entrepreneurs who think their participation in pitch events may not add up to much. It did for us!
- The Women Founders Represent event by AllRaise and the Amazon Alexa Fund fueled Amazon Alexa Fund’s investment in Preemadonna.
- Embedded Vision Alliance, Best Product Using Computer Vision Audience Winner. We won a cash prize and met several computer vision specialists to help us with fingernail detection.
- Silicon Valley Forum Women in Tech Festival, VC & Audience Winner. We met new investors and won laptops that we still use today!
- FounderMade’s Future of Beauty Winner. The NYC-based event introduced me to beauty connections and individual angels that invested in Preemadonna.
- TechCrunch Disrupt Battlefield, Finalist. Making it to the finals at the Battlefield helped us go from obscurity to getting the attention of early customers and accelerators like Founders Factory.
- Meet The Drapers, Finalist. Our appearance on Meet The Drapers reconnected us with Halogen Ventures led by Jesse Draper, and led to a separate investment from Tim Draper’s Draper Associates Investments, LLC.
- MIT Solve Challenge. While we didn’t win the challenge, one of the judges from Upstart Co-Lab and Rockefeller Philanthropy Advisors loved our application. We were able to secure additional angel investment through her introductions.
5. Believe in Yourself: I’ve overcome “impostor syndrome” many times on this journey. I’ve had to dig deep to focus on our purpose and mission even through all the nos, failure, and a draining bank account. My advice to other entrepreneurs that are starting out is to believe in yourself. Your mental mindset is one of the biggest competitive advantages that you have as an entrepreneur. Rejection from investors can feel debilitating—I know, having pitched over a thousand investors! Conveying delays in your product timeline to both your investors and crowdfunding backers also takes a toll on your self-confidence. Focus on the positive, learn from your mistakes, and keep going. There is always a bright side. For example, we secured funding from patient investors, which gave us room to experiment with market positioning and incorporate customer feedback into Nailbot’s product experience.
What’s Next? The Market Is Primed for Nailbot.
It has been an incredible journey bringing Nailbot to life, and we are at an inflection point. COVID-19 has brought distinct manufacturing and operational challenges, but also accelerated the demand for at-home experiences especially relating to DIY nails and beauty. In fact, the nail category had an 18% sales spike in 2020, which is expected to continue into 2022. Nail topped the mass market beauty categories for overall percentage growth last year.
Timing is right for our at-home Nailbot beauty and creativity experiences, and we are excited to be months away from our e-commerce launch!
Photo: via Nailbot