If the Shoe Fits: Invest in Yourself
by Miki SaxonA Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here
Since 1996 founder/CEO Kevin Plank built Under Armour into a real billion dollar company that went in 2005.
Real because that billion dollars is revenue, i.e., money paid to the company in return for its products.
In other words, sales, as opposed to a great story told to investors so they will fund yet another round raising valuation, but not value.
During his talk at the iConic conference, Plank cited two serious misconceptions rampant among today’s founders.
1. Raising money at high valuations is equivalent to a successful business
2. Going public is a way for founders to cash out and ease up on intensity
His thoughts echo what Salesforce CEO Marc Benioff said at the Fortune Global Forum.
“They are being drawn in by these venture capitalists and private equity to take these huge amounts of money at these huge valuations. They cash out early, they buy these penthouses in the sky and then all of a sudden they’re trapped. They can’t go public because their last valuation would be higher than their public valuation.”
And Benihof sees value in an IPO that has nothing to do with losing intensity.
“Public markets are great for CEOs. You have to answer to the public market. You have to listen. You have to pay attention.”
Plank also offers a solution for cheap capital to fund growth.
“I think that the cheapest capital in the world is probably sitting in your inventory racks or the product you are trying to sell because, No. 1, it doesn’t require a board seat and doesn’t have an opinion to weigh in on what you are trying to do with your business. So use that as your capital. Go sell what you have, and go raise money.”
Granted, it’s a mundane solution, with no glitz and is unlikely to garner headlines in techland, but it works.
Kind of like getting your medical or law degree without student loans.
Image credit: HikingArtist
