Manhattan jewellery startup AUrate New York raised $US2.63 million in a seed funding round, The Wall Street Journal reported.
Speaking with Business Insider, its founders Sophie Kahn and Bouchra Ezzahraoui said that one of their earliest choices for the business made a big difference in their ability to raise money: creating a product and establishing proof of concept before asking for funds.
Before founding AUrate in 2014, Kahn was working at Marc Jacobs after a stint at The Boston Consulting Group, and Ezzahraoui was an interest rate volatility trader at Goldman Sachs. They had met in 2009 as Princeton students, two of only a handful of women pursuing masters in finance degrees.
Inspired by the name-brand gold ring turning Kahn’s finger green, the friends decided to start AUrate New York, a jewellery company that would provide affordable, ethically sourced, high-quality gold.
The duo spent 2014 setting up the company, taking classes at New York’s Parsons School of Design and laying the groundwork for their business, then used 2015 as their test year. Would people buy their jewellery? Could they run a successful pop-up shop? “We’re very rational,” Kahn previously told Business Insider. “It has to work.”
When the company began, it was completely self-funded through the founders’ savings and and through family and friends. In a recent conversation with Business Insider, Ezzahraoui said taking charge of their cash flow was key, and is advice she’d give any other entrepreneur. “A lot of people get cash-strapped, and it’s hard to go to investors if you have zero control of your cash flow,” she said. “It’s OK to be bootstrapped, but we allocated our cash to put our product on top of everything else. For me, that big-picture budget and cash flow management is key to every new startup trying to take a gamble on whatever they’re doing.”
“We had a certain amount of revenue we wanted to show,” Kahn told Business Insider. “It’s different from other startups — we had the proof of concept, then raised money.” Once they reached their revenue target and could show that to potential investors, she said, “it was very easy to raise money.”
“We made sure that our product proved itself,” said Ezzahraoui. “A lot of people have ideas, but at the end of the day products that make it have proven demand.”
AUrate also didn’t look for funding until Ezzahraoui left her day job at Goldman in March. “Any early stage investors, when they look at a company, look at the product and the team,” said Ezzahraoui. “We checked the boxes for product and for team, so it was easier to pitch people once we were both full-time.”
Today, the founders say that their company, a primarily e-commerce operation based in a 15-person Soho office, earns seven figures of top line sales revenue.
They plan to use their initial round of funding to open more brick and mortar stores, to establish their brand on both US coasts, and to further their giving efforts — currently, the company donates a book to a child in need for each piece of jewellery purchased.
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