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."
This story is from the March 2024 edition of Entrepreneur magazine.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the March 2024 edition of Entrepreneur magazine.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
How To Succeed With Gen Z Workers
People often say that younger employees are different. But are they? We asked six business leaders what they've learned, and how their teams thrive.
How To Ask Family For Money
Your friends-and-family fundraising round doesn't have to be scary and awkward. Here's advice from one of the world's leading investors.
Data Breach Drama: When Trust Turns Costly In A Digital Age
Amid data breaches surges, Indian businesses are prone to financial and reputational fallout. Can cyber insurance emerge as a safeguard?
THE TERRAIN TAMER
Spearheading a California-based, Series D SaaS company is no easy feat. It requires a blend of ownership, innovation, and the ability to handle stress. But Anand Jain, co-founder and chief product officer of Clever Tap, finds his calm by escaping to rough terrain whenever he gets the chance-be it India or Colombia.
THE INTELLIGENT READS
Hardika Shah founded Kinara Capital in 2011 with the mission to address the acute credit gap in the micro-small-medium-enterprises (MSME) sector in India, by providing fast and flexible business capital to small business entrepreneurs. Despite operating in highly competitive and tough market of collateral free loans, Kinara Capital has been steadily growing in Hardika's leadership. In conversation with Entrepreneur, Hardika shares insights on her favourite books.
THE CURSE OF GROWING TOO FAST
FAIRE is a platform for small businesses, but it grew big the wrong way-almost becoming a $12 billion wreck. Here's how it fixed the problem, and why you should think twice before skyrocketing.
There's No Perfect Answer
I worked the same job for 19 years. I hated it, but it paid the bills. Then, in 2017, I entertained an exciting but terrifying question: Could I be an entrepreneur? I wasn't sure, so I needed something that felt like a guarantee. I searched for signs that would feel like a big, clear \"yes!\"
Give Yourself the Gift of Time
Happy holidays! Emmy Award-winning tech expert Mario Armstrong has five recs to get more hours in the day.
How to Become a Main Street Millionaire
It started when I bought one little laundromat. Now I have a whole portfolio of small local businesses that bring in tens of millions in revenue a year. Here's why following my playbook could be your ticket to financial freedom-and saving America's local small businesses.
Want to Better Serve Your Clients? Become Them.
As a designer for brands, starting my own product company gave me a dose of humility-and it changed the way I relate to clients.
