Nate Checketts had just closed the biggest deal of his career, bringing a major private equity investor into his apparel brand Rhone. He was feeling pretty good.
Then he spoke with a friend who'd closed a similar deal.
"Yeah," said the friend, "I've got two years, and if I don't do my job, they'll replace me." Oh, wow, Nate thought to himself. What did I just do? Investments can be game-changing for companies, of course. They provide the capital to take risks, innovate, boost marketing, and more. But when a founder raises money, the goals of their company change: They must now build toward a big exit, so their investors get a return on their investment.
What if a founder has other priorities, other hopes? Could they ever regain control? Eventually, those questions began to weigh on Nate (Rhone's CEO), as well as his brother and cofounder, Ben Checketts (Rhone's creative director). What if we want to be different? the brothers wondered. Could they ever grow on their timeline, thinking more about long-term (and maybe even lifetime) investments?
To do that, the Checketts brothers came to realize, they'd need to buy out their private equity partner. But who even does that? And how?
In July 2022, nearly five years after taking the private equity money, they figured it out. News quickly spread among startup founders, and many started calling the Checketts brothers to ask how they did it. These founders had been asking themselves similar questions, wondering how to rewrite the playbook on growth and funding. Maybe there was a different way to grow a business-one where fundraising doesn't lead to soon losing control?
"In theory, nothing changed for us," says Nate, who is now talking about the deal publicly for the first time. "But really, it's the mindset: Everything has changed."
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