FUNDRAISING FOR THE FUTURE: Q & A with Erinn Valencich, StyleRow

FUNDRAISING FOR THE FUTURE

Q & A WITH ERINN VALENCICH |

Founder & CEO of StyleRow. Founder of ERINN V. Furniture & ERINN V. Design Group

Many successful companies are born out of necessity for the service or product they offer. Sometimes though, the solution isn’t obvious and often the hurdles to go from idea to executable platform are insurmountable. This is why Los Angeles-based entrepreneur and award-winning designer, Erinn Valencich, knew there had to be a better way to streamline the interior design business through software. If Uber could change the way people go from place to place, why couldn’t there be a platform bringing much-needed tools and smart technology to the design office? Again, having a solid idea is one thing, developing an entirely new tech platform another, especially when tech isn’t your background. That didn’t dissuade her, it motivated her. Having recently closed a five-million-dollar Series A, after multiple other rounds of funding from major VC’s from LA & Silicon Valley including Halogen Ventures Jesse Draper, Founders Fund Scott Nolan (think Airbnb, Spotify and Lyft), Dollar Shave Club founder Mark Levine, TaskRabbit co-founder and Fuel Capital partner Leah Busque, and Entrada Ventures, StyleRow is well on its way. Having launched designersubscriptions for their Projects software only last December, StyleRow is doing its part to make designers lives so much easier.

You’ve run a very successful interior design firm for 16 plus years, you’re the visionary behind ERINN V., an 80-piece line of luxury furniture handcrafted in California and available at fine to-the-trade showrooms, and you have collaborations with brands such as Baldwin Hardware, Universal Furniture, Ambella Home, Fine Art Handcrafted Lighting and Creative Touch Rugs, along with three-other collections launching next year. Why develop StyleRow?

StyleRow was born out of my 16+ years of experience as you mention. When I came up with the idea, back in 2016, the digital IQ of the design industry was so far behind the times. I was fed up with the paper heavy workflow, and moving data manually from one platform or app to another to another just to get the project done. Tech-forward for years, I know firsthand how hard it was to attempt to streamline my business through software, which wasn’t built for design professionals and always fell short. That’s when I decided to build an operating system for the design industry that pulls it all together. That is what StyleRow does. We have been building software now steadily since 2019.

What were some of your initial challenges?

As an entrepreneur for more than 16 years, I had always been self-funded. In the beginning, I was very hesitant to ask for money. I found someone to help me fundraise, which led to some dead ends, but in the process, I learned how to pitch, create a deck, ask for investment and most importantly, get the word out. I told everyone I knew about what I was doing and asked if they knew anyone who could help. That worked. But it was still a very long, hard road to gain the capital needed to build software and the platform to what it is today.

After a year of getting essentially nowhere, I was fortunate to speak on a panel with Barclay Butera at WestEdge and met his head of media, Laiza Cors. After hearing more about my idea over lunch, she suggested I speak to the guys at the tech start up where her husband worked. While it was a commercial real estate platform I figured, “why not?” I followed up and met with the co-founders of CREXi, a platform that did for commercial real estate what I wanted to do for design. They took a fragmented industry with backwards workflows and created a software allowing commercial realtors to put all their buildings for sale on one platform, while also offering back-office workflow tools for the brokers and realtors to connect. The two guys behind it, Mike DeGiorgio and Erek Benz, are amazing. I remember the moment when they said, “We get asked all the time to help founders, and honestly we don’t have time, but this idea is amazing and we want to help you.” They then completely changed my trajectory of whom I was talking to and what I was doing. They took me under their wing…that was a huge win and changed my path. Erek then came on board full time as our COO in 2019 when we raised our seed round.

What came next?

They connected me with TulaCo, the company that built their platform. I met the co-founder Steve Lackenby, he loved the idea so much he pretty quickly agreed to become my CTO. The TulaCo guys personally invested and started building the platform. I was so fortunate to have met them, as Mike and Erek introduced me to all of their investors in L.A., plugging me right into the tech scene here, which laid the foundation for future meetings in San Francisco. From there it’s been all about iterating, getting the platform to the next level, re-investing in what we’re building, growing the team, and building more awesome software for designers! Our marketplace brands are on the platform to connect with designers and help keep the industry connected. Discovery is a big part of why a designer and brand would be on StyleRow.

What was it like raising your first pre-seed round of $600,000?

It was really hard. I know the design business really, really well. I know what the platform needs to do, and I know the workflows as a designer, a showroom and a vendor because I am all of them. But what I didn’t have was tech experience. I had no experience running a development team or what code looked like, so I knew I needed to stack my team with that experience.

Thankfully having a sharp CTO and smart investors in our early stage—we raised a little bit of money, around $117,000—and started building the product. Five months later, we had a demo that I was able to show potential investors and really demonstrate what I was talking about. At that point, it was a lot of pounding the pavement, leveraging every contact and network possible. It’s massively time-consuming. Fundraising is a full-time job; I talked to at least a hundred people to raise that first round. Even with

my almost two decades of industry expertise, being a woman helming a software company (who hadn’t built one before) in an archaic industry still mailing checks and talking about faxing in forms, many investors weren’t interested because I wasn’t a “technical founder.” Meaning, I wasn’t writing code myself.

How were you able to persevere given that feedback and find investors that got it and you?

Alot of [investors] say, "I love this, but you're TO EARLY FOR ME RIGHT NOW.

COME BACK when you're not just selling an idea; when you have the

product built; YOUR REVENUE; WHEN YOU HAVE your first

customer… I HEARD IT ALL.

I knew it was the right idea. I knew that every designer I spoke to was desperate for a better way to work, so I just had to find the right investors that loved design and got the space and saw the massive opportunity to bring this behemoth industry online.

Every investor has his or her own list of interests. So, the first question I had to figure out was “are they even interested in my space?” If they’re not, they pass. You have to think of it like speed dating. You won’t marry them all, you have to kiss a lot of frogs. But often, it’s not obvious information to find out what they, as investors, are interested in. I don’t know these people, so you end up having to have many phone calls to find out. They have to like you; they have to love your idea and they have to know that you can stick with it and push this baby out into the world. But they also must think that you are solving it the right way and that they believe in your ability to execute and stay focused.

When you closed your first, pre-seed round in June of ’18 tell us a bit about where the product was at this point?

After closing our pre-seed, we went right into building our Product Library which lets designers save product they love in one place, allowing their entire team to access their personal database. We also started building the marketplace side of the site so that we could pull in a brand's catalog and configure products. Early on, we on-boarded 90+ top furniture brands and showrooms. Gina DeWitt, the president of Kneedler Fauchère was (and is) a huge supporter. I presented to heavy hitters, names like— Donghia, Dakota Jackson, Hellman Chang, Quintus, Kravet, Stark, etc. I went in and just told them in simple terms, “This is what I'm building for our industry. Support me, please. Here are all the benefits that you're going to get.” Most of them responded so genuinely, with comments like “Thank you for building this. Someone needed to tackle this mountain—to do it right and to do it for the whole industry.” And for the last many years, it’s continued to evolve. The business model changes, the more we build and learn, we are also trying to help our brand partners succeed as much as we are wanting our designers to succeed. It’s a lot of fun- but also two businesses in one!

How did raising the seed-round of funding in 2019 change from the first round of investor conversations?

I kept a huge Google doc of everyone I'd ever talked to and what they thought, what they said. Are they interested? A lot of them say, “I love this, but you're too early for me right now. Come back when you're not just selling an idea; when you have the product built; when you have your revenue; when you have your first customer.” I heard it all. Every investor has their own restrictions and requirements about what they want to see. I went back to all of them, as ultimately what an investor wants to see is progress.

They want to see that you can build something and you're going to do what you say. The actual percentage of founders who build and garner customers is relatively small. So, for our seed round, I was able to show that 90+ top brands on board and 900 of the country’s top design firms who purchase nearly a billion dollars of product a year are on our wait list and commonly saying, “Thank you for building it. You’re going to change my life.” Now we have over 250 brands, and 40,000 luxury products that can be discovered across 20 categories.RED

Tell us about some of the seed round investors. We understand you secured some pretty big names early on-congrats!

Yes, thank you. I feel so fortunate to have secured L.A. based Jesse Draper of Halogen Ventures as our lead investor in the seed round. She invests exclusively in female founders, and is a big believer in the industry and StyleRow. I'd been courting her for almost two years. Once she was in and leading the round, things moved a lot faster with others willing to give it another look. Next in was Dollar Shave Club co-founder Mark Levine which led to other big names like Scott Nolan, at Founders Fund—one of the biggest venture funds in the world based in San Francisco; Leah Busque, the former CEO and founder of TaskRabbit, and Chris Howard from Fuel Capital. We suddenly went from having about $1.5 million committed to just a few days later, being overcommitted and having to turn investors down. We capped the round at $4 million.

You’ve raised two subsequent rounds of funding- a seed B-$3M in early 2021 and now an additional $5M. Congrats on that!

Thank you. It’s amazing to look back at all the progress we have made as a business. Now our users have over $1 billion worth of products in their projects on the platform. We have some massive names in our marketplace as well- Baker, Eicholtz, Theodore Alexander, Moooi and more. Our goal is to now empower our users with financial transactions on the platform. So instead of using QuickBooks or PayPal for payments, they will be able to collect client funds and send payments to vendors all via StyleRow.

Speaking of, let’s talk a little more about the product itself. How exactly does StyleRow serve to solve the industry’s archaic ways?

Designers end up spending about 80% of their time doing administrative duties, order processing, scheduling and logistics and only 20% on creative. Luxury furnishing brands sell to designers and architects via fax and archaic methods. Sharing products digitally with clients and design teams is difficult and not efficient; there is no e-commerce in highend furnishings either. Purchasing is overly time consuming and so much time is lost tracking things down. My goal was to make technology easy and accessible for the luxury design market and help designers and architects streamline their workflow by creating one platform to do everything they need to do. StyleRow is designed to follow the entire design process—starting with a digital product library that allows designers to save all their favorite items to shop later- moving into budgets and presentations, through sourcing in our trade-only marketplace and sharing product with clients in a beautiful, digital presentation. Our software tracks all the communication and gives designers a mission control from which to run their projects all the way through invoicing and order management

Tell us more about the Projects functionality on StyleRow.

Our Projects tool rolls together the visual reference of a Pinterest board with communication tools, and replaces Excel and Keynote/Power Point. StyleRow lets designers do the entirety of their project in one window, instead of moving data back and forth, back and forth between these other systems. The amount of time lost by repetitively building out the same project in a different format, and then building your budget in Excel and having to go back and forth is a waste of time. In StyleRow, users can access their project and budget data simultaneously. You can also share all the items you’ve curated in an interactive client presentation to track client feedback and comments. No more text chains and late-night emails. Clients tend to use their dashboard to funnel all item-based feedback to their design team. It helps keep everyone on track! Designers can export anything they need in their project to Excel as well, or to Power Point if they like to present that way.