February 28th 2024.
When I first founded Uncle Nearest Premium Whiskey in 2017, little did I know that it would become the most-awarded Bourbon in the world for the next five years. And before our Nearest Green Distillery became the 7th most visited and fastest-growing distillery globally, I was faced with the enormous task of raising capital to bring my vision to life. As you can imagine, venturing into the world of spirits was no small feat, and every venture capital firm, private equity company, celebrity, and athlete that I pitched to initially turned down the opportunity.
The story of Uncle Nearest is closely intertwined with that of Jack Daniel's, one of the most iconic American spirit brands in history. However, despite this connection, Jack Daniel's and its parent company, with a whopping $30 billion valuation, have never held a stake in Uncle Nearest. To potential investors, this lack of financial ties could have been seen as a risk, as it could mean that we were competing with this industry giant, even as a startup. This concern led many investors to pass on the opportunity, making the journey to raise capital even more challenging.
In the spirits industry, particularly in terms of Black entrepreneurship, the road to success has always been an uphill battle. Before Uncle Nearest, no Black-founded spirit brand had achieved success, making us the first and only Black-owned brand in this sector. Not only that, but I am also the sole Black individual with a controlling interest in the company, highlighting the groundbreaking nature of our journey and the barriers that we have had to overcome in an industry where such success stories have been non-existent.
Raising capital is often the most daunting challenge for Black or woman-owned startups, and my experience with Uncle Nearest was no exception. In the early days, I had limited knowledge about fundraising, and my professional network was not extensive. On top of that, I had to navigate trademark opposition and lead in an industry where female leadership was not the norm. But despite these challenges and without access to the influential 'rooms' that are often considered crucial for success, I never doubted my leadership abilities or the potential of our brand. I remained determined to overcome every obstacle that came my way.
To bring Uncle Nearest to where it is today, I needed to raise a whopping $225 million to build a company valued at over $1 billion. On top of that, we needed an additional $50 million to develop our 423-acre Nearest Green Distillery and $30 million to purchase and renovate the historic Domaine Saint Martin in Cognac, France, the namesake of the region where all Cognac must be produced. This required dispelling seven pervasive myths that hindered our ability to raise capital. One of the most common misconceptions was that obtaining significant investments for startups like ours was an insurmountable hurdle. But my unwavering belief in my leadership, my life partner and team, and our vision for the company kept me going and helped me overcome every obstacle.
In the early days, my husband, Keith Weaver, played a crucial role in helping us secure our first round of funding of $3 million. His former boss, who believed in our vision, was instrumental in this success. But we knew that this amount could only take us so far, and we would need to raise more capital within our first year. The lessons and experience gained from that initial round of fundraising were crucial in shaping our approach for all subsequent rounds.
As we continued to raise capital, we noticed a concerning trend in the venture capital industry. The amount of capital being invested in Black founders by venture capitalist firms had dropped to a mere 1% in 2022, down from 1.3% the previous year. And by the third quarter of 2023, it had plummeted even further to just 0.13% of the total capital. This was a mere $39.7 million out of $29.9 billion, as reported by TechCrunch. It was disheartening to see so many brilliant Black entrepreneurs sitting on the sidelines, assuming that they could not raise the capital needed to bring their ideas to life.
I understand that most founders are not willing to share their "secret sauce," but I am not like most founders. From the early days of this venture, I have been acutely aware that my success came at a price, and that price is pulling others up the ladder with me. I am committed to sharing my experiences and lessons learned in real-time, so that others can enter the doors that I am opening today, not 20 years from now.
To raise the capital needed to grow our business, I had to debunk seven myths that hindered our ability to secure investments:
Myth 1: Significant Investments Must Come from Venture Capital or Private Equity Firms
A common belief in the world of business financing is that major investments primarily come from venture capital or private equity firms. However, my experience with Uncle Nearest challenges this notion. When we first started, every VC and PE firm that we approached turned us down. But since then, I have steered clear of pitching to or accepting investments from these firms.
Instead, we have found substantial support from family offices. For instance, a family office belonging to a multibillionaire invested a whopping $15 million in Uncle Nearest. These investments are not only significant in terms of size, but they also come with a strategic approach. They aim to own 2% of a company and support the founder's vision without seeking a board seat. We have also received investments from several other family offices, totaling over $20 million, and they have been incredibly active in the secondary market.
This experience, which is just one of many in our company's history, shows that while venture capital and private equity are common sources of funding, they are not the only options. Family offices can provide equally substantial support, and in some cases, they may even be a better fit, as their investment approach is more aligned with the founder's vision and values.
Myth 2: You Must Have a Strong Network to Raise Capital
Having a strong network is undoubtedly essential when it comes to connecting with ultra-wealthy individuals. However, the investor landscape is much more diverse. In the United States alone, there are around 23 million millionaires actively seeking investment opportunities, and they can be found everywhere.
In the early days of Uncle Nearest, I took a grassroots approach to building and financing our brand. I attended major spirits events, ran our booth, mingled at festivals, and introduced people to Uncle Nearest. By being hands-on and actively engaging with potential investors, I was able to build relationships and even secure investment offers.
Written by Fawn Weaver
When I first embarked on the journey of creating Uncle Nearest Premium Whiskey in 2017, little did I know that it would one day become the world's most-awarded Bourbon for five consecutive years. The journey has been nothing short of remarkable, with the growth of our company and the success of our distillery - Nearest Green Distillery, which is now the 7th most visited and fastest-growing distillery in the world.
But before we could achieve all of this, there was one monumental task that stood in our way - raising capital. As you can imagine, a project of this scale required a significant amount of funding. And while Uncle Nearest was not lacking in potential, it was not an easy feat to convince venture capital, private equity firms, celebrities, or well-known athletes to invest in our vision.
One of the reasons why this was such a daunting task was because of our connection to Jack Daniel's, one of the most prominent American spirit brands in history. Despite this connection, we were not backed by Jack Daniel's or its $30 billion parent company. To potential investors, this may have seemed like a disadvantage, as we could be seen as a competitor to this industry giant. And on top of that, the spirits industry has always been a challenging landscape, especially for Black entrepreneurs. Before Uncle Nearest, there had never been a successful Black-founded spirit brand. We were breaking barriers and defying the odds.
Raising capital for a Black or woman-owned startup is no easy feat. And my journey with Uncle Nearest was no exception. In the early days, my knowledge of fundraising was limited, and my network was small. On top of that, I had to navigate trademark opposition and lead in an industry that was not accustomed to female leadership. But through it all, my determination and belief in my leadership and our brand never wavered. I was determined to overcome every obstacle in my way.
In order to grow Uncle Nearest into a billion-dollar company, we needed to raise a staggering $225 million. This included funds for the development of our 423-acre Nearest Green Distillery, the purchase and renovation of the historic Domaine Saint Martin in Cognac, France, and the acquisition of the largest Grande Champagne Vineyard in the region. This required dispelling seven pervasive myths that stood in our way. Many believed that it was impossible for a Black or woman-owned startup to raise that kind of capital. But with unwavering belief in my leadership, my team, and our vision, we were able to prove them wrong.
Thanks to the connections of my husband, Keith Weaver, we were able to raise $3 million in our Seed Series round. But we knew that this would only take us so far. We needed to raise more capital within our first year. And we were able to do so, thanks to the support and belief of investors who were referred to us by other investors. This was a key lesson that I learned throughout my fundraising journey - that there are no lone investors. Over 95% of our investors were referred by someone else. And with the help of our "Sixth Man" - a coalition of enthusiastic investors - we were able to secure over 170 investors by the end of 2022.
In 2022, I noticed a concerning trend in the venture capital industry - the amount of capital being invested in Black founders was decreasing. By 2023, it had dropped to a mere 0.13% of the total capital. I knew that many Black entrepreneurs with brilliant ideas were being held back because of the lack of funding available to them. And that's when I realized that I had a responsibility to share my knowledge and experiences with others, to help them break down the barriers that I had faced.
Throughout my journey with Uncle Nearest, I have had to debunk seven myths about raising capital:
Myth 1: Significant Investments Must Come from Venture Capital or Private Equity Firms
While venture capital and private equity firms are common sources of funding for businesses, they are not the only options. In fact, in our early days, we found more support from family offices - including a multibillionaire's family office that invested $15 million in Uncle Nearest. They were more aligned with our vision and values, making them a valuable and sometimes preferable alternative.
Myth 2: You Must Have a Strong Network to Raise Capital
While a strong network is helpful in connecting with potential investors, the investor landscape is much more diverse. In the United States alone, there are nearly 23 million millionaires actively seeking investment opportunities. By attending events and engaging with people, I was able to build a grassroots network of supporters who believed in our brand and vision.
Myth 3: Raising Capital is an Insurmountable Hurdle for Black or Woman-Owned Startups
Despite the challenges and barriers that exist for Black and woman-owned startups, it is not an insurmountable hurdle. With determination, belief in oneself, and the support of others, it is possible to raise the capital needed to achieve success.
Myth 4: Investors Only Care About the Numbers
While numbers are important, investors also care about the founder's vision, values, and leadership. With Uncle Nearest, we were able to attract investors who were passionate about our brand and believed in our vision.
Myth 5: You Must Have a Unique Idea to Attract Investment
While a unique idea can certainly help in attracting investment, it is not the only factor. Investors also look for strong leadership, a clear vision, and a viable business model.
Myth 6: It's All About Who You Know
While having connections can be beneficial, it is not the only way to secure investments. With a compelling story and a strong business plan, it is possible to attract investors who may not have a personal connection to you.
Myth 7: You Must Keep Your "Secret Sauce" to Yourself
As a founder, it can be tempting to keep your business strategies and ideas to yourself. But by sharing my experiences and lessons learned, I hope to inspire and empower other entrepreneurs to achieve success.
Through my journey with Uncle Nearest, I have learned that raising capital is not easy, especially for Black or woman-owned startups. But with determination, perseverance, and a strong belief in oneself, it is possible to overcome the barriers and achieve success. And I am committed to sharing my knowledge and experiences with others, to help them achieve their dreams and break down the barriers that hold them back.
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