First-time entrepreneur Michelle White created a company with big potential. The next step is to bring in an experienced management team and raise venture capital
It's a classic dilemma. A first-time entrepreneur creates a thriving company from scratch with the potential to be The Next Big Thing, but her investors thinks she needs an experienced CEO and management team to take it there. They also bet future investors will want to see seasoned leaders in place. To make this happen, the first step, traditionally, is to forge a succession plan that keeps the company's momentum going and doesn't disrupt the culture the founder labored to create. This is one big challenge facing Michelle White, the founder of Leland, Mich.-based Michelle's Miracle, which makes a dietary supplement from tart cherries. White thinks her $800,000, four-person company, with its 2,200-plus regular customers who enthuse about the cherry concentrate's health properties, relieving arthritis and providing better sleep, could quickly become a $100 million company (think POM Wonderful) if it landed the capital necessary to hire a dream team to complement her existing team.
White is the founder of one of the women-led companies participating in venture catalyst Springboard Enterprises' latest venture capital forum, AllThingsLifeSciences. The forum, which kicks off on Sept. 30 in Madison, Wisc., is part of a mentorship program designed to improve women entrepreneurs' chances of securing equity investment. The forum pairs early-stage entrepreneurs with teams of experienced coaches who help them prepare to pitch their companies to a crowd of equity investors. (Last year's forum was limited to women-led companies in the media industry; this year's focuses on the life sciences.)
BusinessWeek is tracking a few of the companies at various stages in the coaching process. Michelle's Miracle is the first in the series.
The entrepreneur: Michelle White, 44, is the founder and president of Michelle's Miracle. She stumbled onto the idea of building a business to commercialize the health properties of tart cherry concentrate while working at a fruit processing plant as an office assistant. After doing research about the health properties of the fruit, she launched the company in 2001. Three of her four employees have been with her since its inception. The team has managed to create a market, get national distribution, and now sells in over 300 stores. A year and a half ago, White decided to look for equity capital. She landed an investment from an angel group earlier this year and is preparing to secure another by yearend. She's also seeking venture capital.
Her challenge: White wants to put together an experienced management team of individuals who have been successful in the consumer packaged-goods industry. She wants to raise venture money to hire a controller/vice-president of operations, a CEO, a vice-president of marketing, a vice-president of sales, and more sales people. Her challenge is to communicate this succession and management expansion to potential investors.
Says Michelle: "We've proven the demand and the market, and we've proven revenues, now we just need people to take it by the horns and roll with it. I know what the potential of this company is, but I also know I don't have the experience to do it. So as far as letting go of that control—I'm O.K. with that. I want to see the success of the company and if that happens whether I took or someone else—it doesn't matter.
"When we started the capital raise, the biggest question was, are you willing to let go of control? I'm more than happy to do so because I just want to see the success of the company and do what I love to do. Being buried under spreadsheets is not something that excites me in the slightest.
http://www.businessweek.com/smallbiz/content/sep2009/sb20090929_350040.htm
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