You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

Jen Batchelor knows a thing or two about pitching to investors. Since launching Kin, a beverage company that’s reinventing booze-free imbibing with potent blends of adaptogens, nootropics, and botanicals, the founder has raised over $5 million in funding from venture capital firms, such as Refactor Capital, Canaan (which has also backed startups by the likes of Bird, Cuyana, Instacart, and The RealReal), and Fifty Years. But before she started fundraising, she went the self-funded route—for two crucial reasons.

“I really didn’t want to launch this business—or waste other people’s money trying—until I knew our approach to [producing an alternative to alcohol that preserves the positive effects of having a drink] was something that, one, was a sustainable solution and, two, was something the world actually wanted,” Batchelor tells Create & Cultivate. It’s an approach that involved a longer timeline—and a bit of bootstrapping—but it’s safe to say it paid off in the end. “We gave ourselves 12 months to develop a minimum viable product and beta-taste it to over 3,500 people. It ended up taking nine months to make up our minds and then two seconds for our first investors to say, ‘Yes.’”

Ahead, we chat with Batchelor about how she took her business from a self-funded startup to a venture-capital-backed company, including the money mistakes she’s made along the way and her best advice for founders on partnering with the right investors.

Take us back to the beginning. What was the lightbulb moment for Kin? What inspired you to launch your business and pursue this path?  

Well, as there usually are with honest assessments of the self, it took multiple lightbulbs to get me to wake up. In fact, it took about the tenth one to finally push me from fear to faith. Ultimately, I noticed that after college, my friends and I never really slowed down our alcohol consumption, we just bought more expensive booze—which we thought elevated or justified our drinking somehow. As wellness became a bigger part of our collective routines and we all got smarter about our careers and fertility goals, we realized even the most expensive champagne couldn’t save us from the precious time (and collagen) alcohol was robbing us of every week, no matter how much OJ was in it! When I started going through the scientific research and assessing all the things I was potentially compromising in my life even with just a few drinks a week, the most surprising of them all was my cognitive ability. My brain was my instrument and my time was a currency in the age of freelancing and entrepreneurship, so it finally got to the point where I had to admit that the costs of my social habits were too great a debt to bear while going after my dream goals.

You self-funded Kin for the first year, but you've since brought on investors such as Refactor Capital, Canaan, and Fifty Years. Why did you pursue a self-funded strategy initially, and why have you sought out investors over time? Would you recommend that route to new entrepreneurs today?

I really didn’t want to launch this business—or waste other people’s money trying—until I knew our approach to solving the problem itself was something that 1) was a sustainable solution (it worked and would continue to work in the future) and 2) was something the world actually wanted. We gave ourselves 12 months to develop a minimum viable product and beta-taste it to 3500+ people. It ended up taking nine months to make up our minds and then two seconds for our first investors to say, “Yes.” We knew they were the right folks because they were focused on the future of food and understood we were in this to truly disrupt the 10,000-year-old (read: dated) tradition of drinking ethanol for funsies. The same way they knew the meat industry was unstainable for the planet, they knew ethanol was unsustainable for the people. It was an instant match. 

What advice can you share for entrepreneurs on partnering with the right investors? What do investors need to bring to the table other than just money? 

This is an important question so I’ll try to do it more than lip service. You really need to know your business and what it needs to be successful in this immediate stage in order to pick great investors for a particular round of financing. It’s like putting a fantasy football team or a great outfit together. You wouldn’t pick your favorite bikini, pair it with your favorite gown and your favorite sneakers and call that date night chic. Start with the intention, know the audience you are trying to serve (a.k.a your best customer now, that may change down the line so spend time doing the research), and then go after investors that can help you reach that customer, help you land that next critical hire, help you troubleshoot potential challenges for the relevant season in your business journey, etc, etc. With all the capital available in the world right now, this is much easier to do than it sounds. Be choosy! The best investors will get the mission and be ready to pull up their sleeves to hustle right alongside you when you really need the support. Whenever possible, bring on a couple of investors that have been owner/operators in companies with growth trajectories and exits you’d like to follow or who have built cultures you admire. 

Since launching Kin in 2018, you’ve raised over $5 million in funding from venture capital firms—no doubt you’ve learned a lot along the way. What are three crucial elements everyone should include in a pitch deck when raising money and why? 

Your pitch deck will evolve for every season of fundraising you enter. At the onset, it’s important to remember that everyone has an idea worth funding. The question is why are you and this idea a match? What is it that makes you uniquely suited to reach a certain audience?  I’ll tell you from experience, it’s not enough to just be “the first” to market. Though it can help with angel funding to be a first-mover, it won’t always get the bigger deals done. You must have a unique strength and competency and a strategy for growth. Secondly, you’ll need a three-year plan to woo the best investors—they need to see a path to profitability even if a lot of it is based on hypotheticals. Third, show any evidence of traction and do it well. Again, social proof around an MVP is going to drive the kind of confidence in you as THE person to lead this concept to success. Confidence gets checks signed. Know your shit.

Where do you think is the most important area for a business owner to focus their financial energy and why? 

If I had two dollars, I would spend it on people and customers every time. $1 on my team and $1 learning what makes my guest (customer) tick. 

What was your first big expense as a business owner and how should small business owners prepare for that now? 

People was the first big expense—and still is. Get smart about your org strategy and the incentives you’re going to need to get the right people in the right seats early. Think about things like benefits and stock options before you hire your founding team. Get that squared away and you won’t need to revisit this in year two when you should be focused on scaling. Katrina Lake from StitchFix has a great blueprint for this in terms of hiring your A-team early.

What are your top three largest expenses every month? 

People, shipping, and people.

Do you pay yourself, and if so, how did you know what to pay yourself?

Yes. I came into this with a co-founder so we just took the typical founder salary of one founder/CEO and divvied it up based on responsibilities. This didn’t happen till we raised some money, though—before then, the goal was to get to “ramen money”—and now I have a board so it’s evolved into a collaborative effort of incentive setting based on growth and OPEX management goals. 

Would you recommend other small business owners pay themselves? 

This is a highly individual question based on what gets you up in the morning and what you need to stay creative. If you’re bootstrapping to get your dream off the ground, stay as lean as possible for as long as possible. Stay hungry. Once you have investors though, you start to realize you work for them as much as you work for yourself, so get yourself paid and live in a way that supports your best sleep. No investor wants to see a founder they believe in stressed AF about how they’re going to pay their electricity bill while trying to change the world. 

Did you hire an accountant? Who helped you with the financial decisions and setup?  

Yes, I had an accounting service from day one and now have an accounting team supporting my head of finance. 

What apps or software are you using for finances? What’s worked for you? 

Brex is pretty sweet for managing expenses and empowering departments to do what they need to do.

What are some of the tools you use to stay on top of your business financials? What do you recommend for small business owners on a budget? 

We run a pretty classic system at Kin. Excel, QuickBooks, and Gusto get us where we need to be on budget management, AP, and people expenses. It also forces upon us a checks-and-balances system that keeps us on our A-game. That said, as a mostly e-comm-driven company that handles the production complexities of our own manufacturing, a stellar inventory management system is also non-negotiable. We just onboarded to Cin7 which is supposed to make this process more centralized and automated but I’ll have to keep you posted on that one as it is still new for us! 

How did you know you were ready to hire and what advice can you share on preparing for this stage of your business? 

We only hired after we raised money. At that point, the plan was set and we knew we had to get troops in the air and on the ground building and spreading the gospel of Kin as soon as possible. Luckily, the first wave of folks were friends, smart ones, many of whom are still with me today so it wasn’t a hard decision for me to bring them on board, having all the faith and confidence that we could get to where we needed to go collectively. The bigger leap of faith was on them—why should they follow me when they could be working anywhere in the world? Eternally grateful to each of them for leading with faith and jumping in with excitement. The world would be a much boozier, less blissful place without them. 

The key with hiring was securing the folks I wanted to work on Kin versus the ones I thought should be working on Kin. Such a subtle difference but the latter hiring decisions, I have found, to be subliminally based on fear. “I should bring on this expert from this big brand because that’s probably smart to do no matter how much they cost” versus “I’m dying to get this person on my team, maybe I can’t put a finger on why but I know their background, talent, core values, and gusto around the mission will yield more than their title suggests.” In short, do your diligence but follow your intuition in the end. Then lead them. 

Do you think women should talk about money and business more? 

Definitely. Guys talk about this stuff all the time, it’s like a sport. Because of that, they win at it, a lot. I think building your financial acumen is a great way to eliminate black box challenges and be truly fearless in steering your business. 

Do you have a financial mentor? Do you think business owners need one? 

I have a CEO coach and a management mentor. The latter is someone who has built (and scaled) a culture I admire. Both impact how I think about financial priorities, but I would say the most influential people in my sphere impacting Kin’s financial destiny on the regular is my head of finance and my lead investor. I rely on one to read between the line items of today—how are we trending day-to-day, week-to-week, what can we cut, where can we more efficient? And the other to help me think about structuring the business for the next level of growth. 

What money mistakes have you made and learned from along the way? 

Most all of my money mistakes have been people-based. This is why “hire slow, fire fast” is one of the most prolific adages of modern entrepreneurship. One dollar in the wrong pocket is not only painful for the bottom line but costly to team morale and productivity. It’s not just exposure in terms of salary, having the wrong person in the wrong seat affects the output of the entire business, especially during earlier stages. 

What is your best piece of financial advice for new entrepreneurs? 

I’m a big believer in raising a hair less than you think you need. Just because someone is willing to sign over a check for $10 million, if you only need $3, take $2.5 million. Trust me, it will make you a stronger, more creative leader and you’ll leave yourself less exposed to micromanaging or dilution of vision (not to mention, equity!). Otherwise, don’t waste money on consultants and expensive research firms unless the output is a direct input or prerequisite for the product you are building. Even then I would wait. You are the magic sauce, you don’t need to spend $100K for someone to tell you that you know your brand better than anyone. To whit, whatever freelancers you do end up hiring watch for the ye olde SCOPE CREEP! It can eat any small business alive, so please iron out your contracts in advance. 

Anything else to add? 

Don’t forget that money is purely an exchange of energy. You don’t want to fear it lest it dominate you just as you don’t want to squander it lest it rob you of opportunities. Get cozy with your relationship to money as a whole (what are your limiting beliefs around money? what are your traumas? insecurities? identify black box knowledge areas) so you can work with it in your business life in a fluid and empowering way. Protect your energy but don’t let money rule every decision. You got this.

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