How do you buy back your company from unaligned investors?

Episode 91 - Melinda Nicci Transcription Jason Kirby (00:00.185) Everyone, welcome back to the show. Today we have Mel Nicci with us, founder and CEO of Body Group Collective. Sorry, Body Collective Group. Mel, welcome to the show. Melinda (00:30.36) Thank you. Great to be here. Jason Kirby (00:30.737) You know, you and I met at a, think it was a founders pledge event over the holidays and was fascinated by your background of one billion app that's impacted millions of women, but also kind of your unique structure of how you've kind of bought and shares back from your investors. And that's really what I want to talk about today. But before we dive into the meat of the topic, can you tell the audience a little bit about body collective group and what you guys are up to? Melinda (00:59.864) Sure, so the vision was always to create the most kind of comprehensive companion and help for women going through different periods of their life. Jason Kirby (01:00.986) you Melinda (01:10.766) and help them to optimize their health. So give them science-backed, evidence-based information, guidance, that is really relevant to them. So, know, high on the efficacy, making sure that whatever they get is super relevant to them and they've got actionable things that they can do to maximize and optimize their health and wellness. So one of the things that kind of literally, you know, sparked this idea was that most of the health and wellness apps are based on men's data and that only became something after 1994 where women's data had to be taken into consideration for any drug trials. So historically it wasn't a thing to measure women's data and as we know women have very different makeup in terms of their hormonal makeup and how that changes across their life. And even every single 24 hours, it's different. So really, what I wanted to do was look at women specifically and help them to optimize their health at every single stage. And that's, yeah, so that's what we started with. Six million just recently, yeah. So since we started Jason Kirby (02:24.815) And how many women have you impacted today? Melinda (02:32.014) In 2016, we launched the business. We've had over 6 million women sign up on the platform, which is pretty cool. Jason Kirby (02:42.065) That's pretty cool. And it's predominantly a mobile app. That's the predominant user experience. Melinda (02:48.502) Yeah, so that's an interesting thing because we had an iOS app to start off with and then we launched an Android app. And then actually there was kind of a drawback towards the web. So we put some content on the web and put a paywall behind it. And what we do on the web is sell. these specific courses. So it could be a nutrition course for pregnancy or post pregnancy or a 12 week survival guide postpartum and things like that. There are much more kind of a sort of beginning, middle and end and takes away the stress of the subscription. So that kind of happened post pandemic. We all think people were scared because a lot of people were taking out a bunch of subscriptions during the pandemic and you know, things were adding up. So, so we stripped some of that back and created these from our existing knowledge and also our content and we put together these packages and they sell actually really well. So we've got a mixture of those kinds of offerings and then the pure premium subscription in the apps. Jason Kirby (06:31.441) So you've been running the business for several years now. I think you originally started in 2014, 2016. was it? Melinda (06:35.576) Okay. Melinda (06:47.278) Yeah, so we formed the business in 2015. End of 2015, we got our first sort of small angel check and then we took some funding in 2016. And our first app we bought out in 2017. So we actually started with an email newsletter that, yeah, so I didn't really know what I wanted to build. We were trying to figure out, you know, what was. you know, what was the most important thing that people wanted to know? So we just put some ads on Facebook at the time, which was at the time we could actually say, are you pregnant? Which was really interesting. Now we can't say the And it was just one word, pregnant with a question mark and a link to sign up to an email newsletter. Jason Kirby (07:25.167) Yeah. Yeah. Melinda (07:35.502) which we hadn't built yet. So we had to then spend time. So within a very short amount of time, we had 500,000 women sign up for this email newsletter. Yeah, so the promise was get daily insights into the growth of your baby and also we'll help you live better by giving you fitness tips, nutrition and mental health and, know, ways to cope with the whole pregnancy journey. And then suddenly we had 500,000 women and we hadn't written anything yet. So it's been weeks, you know, writing these newsletters and then we launched in the beginning of 2016. And then we built an app based off the learnings and the data that we got from that. So we could see what people were responding to, what articles were being read, what was being clicked through back to our website. So we had a pretty good idea at that point of what people wanted to know. And then we built an app and it was awful. It was terrible. It was so embarrassing and it just didn't work. So we scrapped it and then built another one and a lot of learnings there obviously. And then we launched that beginning of 2018 with a premium subscription. And that was a feature we actually started making money. Jason Kirby (09:02.865) So walk us through, you mentioned you raised a little bit of angel money. Walk us through the kind of fundraising journey. You know, when you decided to raise money, how much you raised, uh, and at each step of the way, kind of what were some of the milestones you were hitting. Melinda (09:16.014) Yeah, so initially I applied to the UK, Innovate UK, and I got a grant for like 25k. And in order to get that grant, I had to have much funding. So I went to quite a lot and bearing in mind my background was I was a sports psychologist. So, and I'd been working at Phillips in a corporate job. in consumer healthcare innovation just previous to wanting to start this business. So I really didn't understand the whole game of fundraising. And so I just immersed myself in as many networking opportunities that I could and went to these like, you know, funding and fundraising dinners and whatever I could get myself invited to and pitch sessions and anything I could basically. And I remember once I ended up going to this dinner and pitching and I was the only woman pitching and eventually got from that dinner introduced to someone who ran a very early stage VC. So I got a small check from an angel to match the funding from the Innovate UK grant. So that was 25k, so I got another 25 and that was 50k. And then I got a first check from the VC. along with some other angels. So the first round was about 100k, which now sounds absolutely ridiculous. At the time in 2016, was, you know, it wasn't, it wasn't nothing. But then I had stopped building the company with that. So that was, that was difficult. And I think Jason Kirby (10:46.948) Yeah. Melinda (11:01.902) You know, at the time we took money from this company who were like a kind of hybrid accelerator slash VC, but they gave us milestone payments. So based on performance and based on what we did, but we also had to spend a lot of the money using their staff to create our product. And you know, in hindsight, that's, you know, we weren't really aligned, right? Because, you know, they wanted us to spend the money with them. They had to pay salaries. I want to choose the best people to create what we needed. And it wasn't necessarily those people. So it was a really difficult dance because they wanted us to use them. I didn't necessarily want to, but they were holding the keys to the next round of funding. So it was so, it was actually quite toxic really, if you think about it. I don't think thankfully those kinds of setups exist anymore, but yeah, was really. No they do. No, don't do it. Step away, step away. Jason Kirby (12:09.487) Yeah, they do. Jason Kirby (12:16.305) Yeah, I see this a lot with founders. You you went through the gauntlet, you try to shake everyone's hand, meet everyone. And, uh, I see a lot of founders go through this and then you get, you get an offer. It's exciting and there's cash on it, but there are certain strings attached. And when those strings attached are tied to spend, um, and or obligation to use certain partners, it becomes, at least in every case that I know where it's not a venture studio. Um, and it's, know, like you're an independent. founder and you work with that investor that has this contingency usually doesn't work out. Now it doesn't mean the business doesn't work out. just usually that relationship is tough. So it's just inherently I've warned founders. It sounds like you're warning founders as well to be very cautious of those relationships just because, and it sounds like it's more of like a dev shop. Was that kind of like their thing was they were doing the tech or were they doing like marketing? everything. Wow. Melinda (13:09.614) everything they were doing. Yeah, the tech product, the product lead, they were doing marketing as well. You know, their marketing guy was just didn't kind of get the brand as well. So I was doing a lot of that. And, and really, like, it stopped me from looking at, you know, who is the best person for this? And that's when you're a founder, and you, you know, I'm not a technologist, I'm a sports psychologist. and I'm a domain expert. I've written many books on pregnancy wellness. I was a trainer, I a nutrition background. So I was really the domain expert and the face and the voice of the brand. What I needed was good technologists and people who really understood how they could bring a great product to market. Some of the marketing was me, but then I started filling the gaps. But it was always the tension between having to spend the money with them where I really realized that there were better ways to spend the money at better places and better people to get. So it was quite tricky. So we ended up getting the two tranches from them, but we didn't take the third tranche, which meant that we only had a few weeks left of money. And it was one of those really stressful situations where I didn't quite know what was going to happen. So that wasn't not fun. So, when they said, you know, we were talking to them and they were like, look, we don't think we're going to give you this tranche. And I was not comfortable taking the money with the restrictions that it came with, because it was clearly not working out for us in terms of the product and the way that the whole studio and their team were. Jason Kirby (14:37.073) So what happened? Melinda (15:03.63) not really understanding the product and not being able to really articulate it properly. So I literally just went on a massive like, you know, like hit the road and found another accelerator, which was part of Telefonica. So it was the wire accelerator and they were running a program of health companies and we managed to get into that. and we got a nice, you know, a chunky bit of money at the time. It was about a hundred K and we thought this is great because, you know, that was all we've got in our first check. So it was kind of about a year later and we went into that accelerator. That was a very, very different experience. We were in their offices. They had people coming in every single week. They gave us coaching, they gave us, you know, there were so many mentors that we could access. And I think, I don't think I would be, I would have the company I have now if it wasn't for that cohort of people. So it wasn't so much the mentors, but the staff of WARA was so supportive. They would make us come and pitch on a Friday afternoon. I mean, who wants to pitch on a Friday afternoon? Every single Friday we had to show up. and pitch and in front of everybody, in front of all the companies, everyone who worked there. But, you know, I was able to at any moment in time, stand up and pitch my company. And it was they wouldn't tell us before we stood up if it was one minute, three minutes or five minutes. So we'd have to tailor our pitch with the clock ticking in the corner. It was really stressful. was really stressful. But I'm can pitch now anytime. You can just say pitch and I'll just go straight into a pitch. Yeah, it was really good practice. And I think that the most important thing, I think, and the most impactful experience of that whole accelerator were all the other founders, because we were all doing something, you know, at the same time. So we were all in different industries, obviously all tech, but doing different things. But we were all facing similar challenges. Jason Kirby (16:59.739) Good luck. Melinda (17:24.544) And that was incredible to be part of that kind of cohort. Jason Kirby (17:29.819) So that's the accelerator journey. You raised a couple hundred K at this point. Did you go on to raise additional capital? Melinda (17:38.67) Yeah, so after the accelerator, it was about four months, I raised about 8, 900 from VC. Two early stage VCs actually. So that was in sort of the end of, it was like 2018. So in all in all, we had raised about 1.2 at that point with some of the angel checks and also a bit of grant funding as well. So we got some grant funding. I think I got another 50K from Innovate UK. And yeah, and then we really launched the app and started to monetize. And then at the end of... So the middle of 2019 we raised an additional 1.4. as kind of a sort of late seed and that was the last time we raised. Jason Kirby (18:50.257) So I guess what was your traction at when you raised that 1.4 in 2019? Melinda (18:57.806) We were at a million, say 1.2 ARR in 2018 into 2019 and then the pandemic arrived and that was another step change. what was really, oh for better, was, yeah, yeah, yeah, it was glory days, seriously. Jason Kirby (19:16.485) For better or for worse? Yeah, I'd imagine it'd be much better, yeah. Melinda (19:25.422) So we, it was interesting because obviously nobody knew what was going to happen. So we heard from the government, we're going into lockdown. And so I was looking at sort of our metrics. And at that point we used to do a lot of sort of advertising on Instagram, Facebook. So really through those main things and then a bit of Google AdWords, a bit of PPC. And I started to see that the CAC was going down and down because nobody else was advertising. So I just called up our agents and I said, right, let's just pump it. Let's just see what happens. And so we just started pumping it every day. We were watching it and nobody else was advertising. So our CAC went really, really low. And we had the... most important thing at the time, which was the safe place for women to come and get information. And there were all these scary stories all over the internet about how if you get COVID when you're pregnant and you know, the baby's going to be deformed. mean, there was like scary stories everywhere. So we had on our team a full time member of staff who was just doing the research. So she would come out with research that was coming out of wherever she could find it, mainly the US. And I was doing Instagram Lives every single day with maybe 10,000 people coming onto them. It was insane. It was literally insane. it was just weird. People were so hungry for information. But then we were also ready. We had the platform, we had the content. we had this really amazing kind of comprehensive app that would help women to take them all of these stages. But at the time we only had for pregnancy. So it was purely a nine month journey that we were selling. And then as soon as the pandemic started, we just went into like, you know, worked as fast as we could and we brought out the conception product. So that is you'd want to conceive Melinda (21:40.514) will help you to be healthier and sort of track your cycle and understand what nutrition you need and your physical fitness and your mental health. So we brought that out and launched that. And then at the same time, we were researching the postpartum one and we brought that out shortly afterwards as well. So we were working against the clock to bring out these products to help women because everybody was so desperate for information. So it was wild, it was crazy times. And we were like raking in the cash. Jason Kirby (22:18.321) That's awesome. It's rare that we hear businesses actually make money. It's always burned money. And so, you you have cash, businesses growing. you know, recently, you as we were catching up in person, not too long ago, you kind of mentioned this strategy to basically buy back, you know, shares from your investors. Can you walk like this is what I think is absolutely fascinating. It's like, I want to hear the thought process. Okay. You have this explosive growth. You know, things are going well. What happens between that moment and the decision to talk to investors about buying their shares out and reclaiming ownership of your company versus say, go raise another round or sell a company. Melinda (23:03.854) So we were approached by VC in 2021 and they were really keen to come on board and we got term sheet from them and everything was great. And at the last moment, they changed some of the terms of the term sheets. So that was gonna be a 3 million raise. And then our existing investors were gonna follow on and... It kind of all fell apart at the last moment because one of their LPs wanted to change some of the trajectory of the company and not really, you know, kind of so much the terms of the deal, but actually what we were actually going to be doing. And I wasn't comfortable with that. And it kind of spooked me a little bit because our, some of our existing investors had changed their thesis. So I didn't want to be in the middle of another thesis change where we were no longer. to the fund. And so one of our first investors, they had a thesis of, you know, backing consumer businesses who were selling content or e-commerce. And then they sort of changed and they said, well, we're not backing those anymore. We're backing something that's kind of more deep tech. And then we were no longer relevant to the fund. And they didn't want to back us anymore because their thesis had changed. So I kind of was a little bit sensitive to that. change in sort of like focus. So we decided not to go for it. And actually it was a blessing in disguise because shortly after that the CEO left of that fund. And I think, you know, there was a lot of stuff that was going down and I'm so glad that I was able to kind of sense that that might be happening. And then we didn't do it. But having said that, then how much time you put into fundraising and going through the due diligence and the discussions and everything, was just such a lot, obviously a time drain. And then we were thinking this is kind of like in 2021, end of 2021, we're still making a lot of money, we're still very profitable. Melinda (25:21.89) And I just thought, you know, there's a whole other market that we haven't served here and we can actually double our TAM if we go for women and we create something for women postpartum, post postpartum, which is kind of going into the perimenopause and menopause. And I had been going through a little bit of the perimenopausal symptoms at that time. And I thought, you know, we're searching for something again. nothing out there. So we developed that. So then in 2021 and 2022, we developed MBODY, which was our second product based off of the learnings that we had from baby to body, what worked for women. And then we built this entire content play with a bunch of symptom trackers and a whole comprehensive way for women to track and monitor their perimenopausal symptoms and actually get help and lifestyle advice. And that was kind of the new thing that was emerging at the time. And, you know, our existing investors were very happy about it. Everybody was, you know, fully behind it. Board was behind it. And then in 2022, we were approached by two firms to acquire us. And we went into a very long protracted due diligence process. where we were actually partnering with the one firm, but we had this, you know, very strict NDA that they were actually wanting to acquire us. They'd spent a huge amount of money on looking at how the brands work together and how we were going to go to market. And, you know, I even had like my contract of what they wanted me to do. So it was, it was pretty, we were very far down the line. We've got the term sheets. And then at the last moment, the one company, had a change in their senior kind of person in charge of the &A. And so everything was put on hold. And then the other company who's also had given us a term sheet. So we were kind of now going between them both and figuring out which is the best route for us. They were based in the UK and that's when the government changed and Liz Truss came into. Melinda (27:48.692) into number 10 and it was really unstable. So there was a mini budget that was a complete and utter disaster. So everything literally stopped at that point because you know anything that can spook anyone especially in an &A process is not a good thing. So that was a big blow and I'd been for months doing this due diligence. So then we were going into 2023 and it was not a good year for fundraising. Jason Kirby (28:25.541) Nope. Everything kind of fell off a Melinda (28:29.358) Yeah, massive falling off a cliff. And so, one of our main investors who really was, you know, had like the majority share of the business apart from me, they sold their entire portfolio to another company. So they kind of just wrapped it up and sort of handed it over to another firm who were then owning. So they bought this job lot of companies and they didn't even know what we did. So we now had a new investor with 20 % of our company who didn't understand anything about the business. And, you know, they then reached out, we tried to get to know them, and they were just not fans. They didn't see, they didn't understand, they weren't getting behind it. It was really difficult to kind of bring them on board and try and build a relationship with them when they hadn't invested in us. So it was really unfortunate. And then one of our other VCs also did the same thing. So they had 10 % of the business and they also sold their entire business and the entire portfolio to another company. So now I've got 30 % of the company of the cab table that is owned by new firms who weren't necessarily brought in to our vision. Jason Kirby (30:03.985) I've heard of like partner switching. Like I know fun, these transactions happen, but to kind of have it on the show, this conversation is something that was the first, there's the actual whole fund being sold, which for the audience, you know, from a perspective of why these transactions happen, it's basically GPs getting off the 10 year bandwagon of holding onto these entities and selling off the, at a discount to a firm that wants to go forward with managing that. And for you to be stuck with. A complete shift in market dynamics from what was popular in 2019 that got you funding to now what's happening in 2022, 2023. Like it's a completely different market dynamic, different thesis, and to have a brand new relationship. Not even a new partner at a firm you got to build a relationship with, but a whole new firm that doesn't know you. That's a, that is painful. I guess when that happened, when did you start seeing the writing on the wall? And when, how did you come up with the idea of, you know, buying them out? Was it just pure pain of. Melinda (30:50.902) Yeah. Jason Kirby (31:02.705) How do I get rid of these guys or? Melinda (31:03.756) Yeah, it wasn't a fun story. So I was still really positive. I'm just a very positive person naturally, but also I'm a founder, right? So you have to be, otherwise you can't get through a day, nevermind a year or 10 years. So I could see that the markets were changing and that AI was on the horizon. And actually this is a fun little fact. Our very first deck that I made in 2015 had a little avatar that was based on algorithms and machine learning, essentially an AI wellness coach, but in different terminology. And that was on the very first deck that I created because that was the ultimate vision. And I'd didn't quite understand how we were going to make that or do that. And it was kind of shelved because it wasn't really possible. We didn't quite have the data, but then I just looked at sort of where technology was going, how AI was coming up. And, you know, I'm like all over that stuff. And I'm like, I love, I love, you know, looking at technology and using little bits. And, and as I said, I'm not. I'm CTO and I'm not a coder, but I know how to use things and I kind of have a very strong instinct of what people can do with technology. So I said to my team, I think we've got, you know, sort of eight years of data here. How much data do we have? We looked at the data and we had nearly 60,000 pieces of content between videos, texts, recipes, everything. We also knew what people wanted, what was working for them, what wasn't. And now we have these two apps with women sort of from conception, pregnancy, postpartum, perimenopause and the menopause, which really spans like a big chunk of people's adult lives. So I thought, you know, if we could bring out an AI wellness coach based off of the data that we have, you know, this could be a whole nother route to market and a whole nother product that we could create and possibly, you know, Melinda (33:22.478) put into the apps, but then also potentially, you know, sell separately. So it would be like a third product. And when I started having conversations with potential customers, I realized that actually the white labeling and the AI was really a different product and it needed to be in a different entity in order to maximize it. When you've got an app that you're selling direct to consumer and through sort of like employee wellness schemes and things like that, it's still really only one route to market is direct to consumer and your channels might be a little bit different. But the AI, the vision for the AI was that this was going to be the one place you could have a profile, your health profile that would follow you throughout your life. And then we had a lot of interest from sort of healthcare, insurers. sort of women's health companies to white label the AI. So I came up with this plan, spoke to our lawyers and developed a way, know, kind of like a structure of how we could spin out this AI and put it into a new entity. And the new entity would then be able to commercialize that. So we worked this all out. We spoke, I spoke to the board. They were all very, very happy with it. And what we were going to do is take the original cap table and shrink that down and give all of our existing investors pro rata in the new company and they would have to top up at a very discounted rate and they would be able to kind of get, you know, quite like a substantial amount of the new company. Everybody was very happy about it. Everybody had agreed verbally. And so I sent out the term sheet and everybody said, yes, it was all signed except our biggest shareholder. the 20 % owners who then came back and said, we're vetoing this deal because they had veto rights. Melinda (35:21.644) So I was stuck and I'd also lined up new investors for the new company, which was called Bella. And obviously I couldn't take that money because I didn't know if I'd be able to spin out the IP and it was all getting very, very messy. Anyway, what unfortunately happened was they dragged me through a kind of process of negotiating with me on what they thought was a fair amount to charge me. to sign this deal. So initially started at quite a substantial amount of money. And I obviously said no and went back and forth. And the board was involved, lawyers involved, and we were trying to get to the bottom of why they were doing this, which we really didn't understand. And then eventually I was so worn down by this whole process that I just said to them, okay, you need to be out. This is not helping me, it's not helping the business. And so I can't do anything unless you're gone. And they came back and said, okay, you can pay us what we paid, which was more than a million pounds. Jason Kirby (36:39.921) Melinda (36:40.91) and I offered them a thousand. Jason Kirby (36:44.879) A thousand dollar, a thousand quid to buy them out. I like, see your million and I counter you with that. Melinda (36:53.038) Well, I was, you know, I just thought, well, I don't have that. Obviously I don't have the million dollars, million pounds to buy them out. And the company didn't have a million pounds to buy them out either. Like the company needed money in order to grow and scale. You know, now we have three products and I was going to spin out this new product. had customers waiting, you know, commercial deals waiting to be signed and, and, and executed on. had new investors coming in. So I was just like, this is crazy. Let me just try and get them out of my life. So it turned into not an easy negotiation, but we negotiated. It wasn't a pound, but it wasn't their original million either. And it was something that, you know, I could like borrow money to buy them out with. So we did that. But that process was one of the most difficult things I've ever had to do. Jason Kirby (37:51.825) How'd you buy her the money? Who'd you borrow it from? Melinda (37:54.306) Family. Yeah. Luckily, my brother is a successful entrepreneur and he understood what it meant to get them out. He's in cyber security in the US and we spoke about it and he offered to help me and we bought them out. Jason Kirby (37:55.801) wow, okay. So, tap to... Melinda (38:17.974) And then that sparked a little bit of an idea because now I had 20 % more of the company. And the only way that they would do this deal is if I bought it personally. So they want, they would not do the deal with anyone else. Jason Kirby (38:37.137) These guys are not great to work with. All kinds of. Melinda (38:40.398) No, no, I was forced to and forced to sign a non-disparagement letter so that I could not say anything about this deal and say who they are. In fact, my lawyer had never seen anything like this before. Jason Kirby (39:02.735) Yeah, this is the first for me. definitely seen some bad deals and complicated deals and personality conflicts, but, know, I could put two and two together of a firm that goes out and buys discounted portfolios of venture funds. And they're just there to scrape every penny they can. So I imagine that had something to do with their attitude towards this because maybe they, if it's a million dollars in portfolio value, maybe they bought it for, you know, cents on the dollar or something of that sort. so they're happy to kind of get in. That's a return for them to get their money back. they probably just got really aggressive on that, to make you do it. that just sounds. Melinda (39:44.15) Yeah, so it was an interesting time. It was very, very, very painful mentally for me. And I don't think I've ever been so stressed in my life. And really I did feel like I was kind of backed in a corner, but one day I was walking and the way that I managed to get them to take much less than the million. was I realized they had not kind of been as they hadn't taken up their board seat in the company. And it could be seen in a bigger picture that they were negligent to their LPs. So I kind of send them a very blunt email saying, you know, this has just come to my attention. and left it like that. And then the next day I had a deal that was that I could manage. So it all came to a walk. Got a walk. Jason Kirby (40:45.905) And so... Jason Kirby (40:51.089) Well, at this point, you close the deal. When did it all wrap up? When did you get to say goodbye to those people? Melinda (40:57.358) So that was September 2024. Yeah. Yeah, just over a year. Jason Kirby (41:02.737) Okay. So a little less than a year. So, yeah, it, miserable experience negotiating with people you did not sign up to be equity holders and substantial equity holders, but, uh, you know, life happens, especially in 2023. So I always give kudos to any founders that survive, uh, and have a business to show for it at the end of it. Uh, so now that you've kind of cleaned things up, you have a real business, you have, you know, uh, this new owned a larger percentage of business. And it's great that you have family that can support you in such a transaction. But assuming that this is not the norm for founders listening, being forced to be the person to do the buyout and not allow other money to come in is that's, that's a one of one in my book. Uh, I've never seen that before. Usually it's very common to go out and get new investors to buy out someone and create a deal structure. Uh, that works. So you worked out, you know, if it wasn't your brother, you know, you could have worked out. Melinda (41:50.306) Yeah. Jason Kirby (42:01.433) similar structures with anyone else, potentially in terms of either a loan or equity or whatnot. But yeah, having to be the hook on it for personal. Melinda (42:10.068) Exactly. Yeah, and I thought about everything, you know, I to the other investors, there were, you know, quite a few of them who were potentially going to put a sort of syndicate together. But then because it was had to be me, you know, I had to I had to think differently about that. But then there's I got a taste for this, right. So I thought, well, if this 20 % holder you know, it's kind of lost interest, moved on, whatever. There was a 10 % holder that had a similar thing happen. So they had also sold out to another firm. So I called them up and I said, look, are you ever going to be helping us? Are you ever going to be, you know, and they said, look, no, you're part of fund one. You're the only company that's still standing. All of them have closed from fund one. And I said to them, I tell you what, I will make your life easier so that you never have to do reporting on Fund One again and you can give me the equity back. So we negotiated and I managed to get that equity back as well for a very, very low. No. Jason Kirby (43:25.211) Same price? Like, in terms of what the share value might be as the other guys, or just a completely different deal? Melinda (43:33.026) Different deal, completely different deal. Yeah. Jason Kirby (43:35.205) Well, kudos to you for recognizing the opportunity. And I also like how you started zero negotiations. you know, it's like the, you know, in terms of like, I'll offer you zero if you give me everything back or the million versus a thousand. Melinda (43:43.118) the Thanks. Yeah well I think it's interesting because if you go in any higher then you know you that's your that's your anchoring right if you go in really really low you know you can only go up from that so that it's fine and they might go low so I just thought like let me just try something really really low and if they come back and say no we're not negotiating, then you know you're not going to negotiate. But if there's a way to, if they come back and say, that's not enough, then you know that you're in the game and then you can start the negotiation. But if, you know, so it's a very good way to like shake out if there's a negotiation, if there's any movement. And, and also I think, you know, what I did with the second fund was I looked at them strategically. So they have now part of another huge business. This is like fund one of a company that they bought. They focused on something completely different at the moment. They're mainly doing series A and above, huge checks. They were never ever gonna support us. It was just, you know, not, we don't fit their thesis, a bunch of things and they, you know, this was the thing that they just bought. Right, so. Melinda (45:14.154) I, you know, this was a very different negotiation and very different kind of people. And it was, it was really like, you know, very pleasant dealing with them. And, you know, I'm still friends with, you know, the guy, you know, the guy who led the deal right at the beginning and everything's fine. And he knew that, you know, this was actually the right thing to do. And look, they, they'd given us, they were the very first check-in. So they'd given us like, 90. And nine, 90 K. Yeah. And nine years later, that 90 K is not relevant to them. So, yeah. So like, I just looked at the bigger picture strategically where they are, what was going to be a real pain for them is, is keeping reporting on, our company. it was easier for them to just wrap it up and it was an EIS fund. So they would get some relief of that as well. So I just, you know, I put all of those reasons in a document, in an email and I said, look, can we just do this in a really amicable way? And we both walk away and, you know, and everything will be fine. And they were like, yeah, fine. So, you know, our lawyers drew up the terms and we just signed it and they signed the term, the equity over to me again, personally. Jason Kirby (46:17.137) Yeah, the tax benefits, Melinda (46:45.486) Um, and that was it. now I had 65 % of the business. Jason Kirby (46:53.112) That's a win. Melinda (46:54.454) Yeah, but most importantly, I don't have a an investor who has the Vita rights. So in terms of the control, I can pretty much do whatever I want to do. Jason Kirby (47:10.543) You Mel, you went through hell, but you acquire 30 % back of your company into your own book. And you can now have full control to do as you please. You can run as a lifestyle business. You can scale it. can grow, can raise money. and you got rid of two, regardless of how you feel about them, technically toxic, you know, cap table partners and you didn't negotiate your way through that. So that's very impressive. I'm very glad that I. I you on the show to kind of be able to talk through how you thought about this, especially in the negotiation of dealing with the adverse circumstances that you had to kind of expose founders. Like you can have these tough conversations. They are tough. They're not easy. if you, especially you've been in the game for so long, like, you know, if this was year three, probably wouldn't be the case. But, you know, five, six, seven years in, it's a little bit easier to have these dialogues when the funds are. you know, kind of coming to the maturity stage. So good negotiation tactics to pass along and definitely always start with zero. I like that. Melinda (48:18.464) Yeah, definitely. I do that all the time. Just like, well, how's about this amount? And it's just like, well, this is like way off. Like, well, you know, if you like, then we've got a discussion to have. But I think, you know, what I didn't know when I set out, when I first raised money is the game, right? You know, the fun cycles what they Jason Kirby (48:29.499) Come on, we're doing better. Melinda (48:43.426) what a win looks like for them, what's easier for them, what's not easier for them. And so I learned so much about, you know, that whole game of where the VC is coming from. And I think if you're going to have a negotiation or if you're going to have a conversation, understanding your counterparty and what they see as a win is, it just changes the game and changes the whole conversation, right? And making it easier for them to also save face sometimes. Like if you put someone in a corner, Equally, if I'm in a corner and I've got nothing to lose, then I'm going to lash it up. So that's 101 of negotiating. And if everybody wins and everybody's happy, then you've got a good outcome. I think that was a big lesson for me in learning how to negotiate that and also understanding what they wanted to get out of this whole experience and this whole transaction. And you know, like the fun too, the second fun, you know, I've got lovely things to say about them that I didn't have to sign a non-disbaragement letter. You know, and I can see the, you know, the guy who runs it, the CEO, and you know, we can have a drink together and it's fine. So I think, you know, when all is said and done, we operate in a really small ecosystem. So you know, yeah, especially in London, exactly. So keeping, you know, keeping the goodwill, I think is really important. And I always wanted to do that. So, and I always wanted to do right by my investors as well. That's why, you know, I didn't spin out the IP and just ignore my original investors, which I know some other founders have done. But I wanted to do right by them. And in trying to do right by them, you know, this whole thing exploded. Jason Kirby (50:12.721) especially in like. Melinda (50:41.826) But as you say, ultimately I now have another 30 % of the company and yeah, can look forward to doing some really interesting things. Anyway, so Bella's out there and we're doing some fun stuff with Bella, our AI, because now it's like, it's an agent and now it's got a name and now, you know, it's a thing. so, but Bella's been around since, since 2023. So we were quite nervous. Jason Kirby (51:09.819) So yeah, so what's next for the company now that you have full autonomy? Melinda (51:16.046) Interestingly, our original plan, which was to white label Bella. So we're in talks with health insurer and some women's health companies. And we will be sort of white labeling Bella as a go to sort of AI health and wellness companion for women. And that's kind of in the works at the moment. And yeah, we'll see. There's some interesting, I think, There's going to be a lot of consolidation in the women's health market in the next year or so. I think there was a bit of an explosion last year of a lot of companies and small kind of point solutions. So I'm predicting, and this is purely just my gut, that there'll be a lot of consolidation in the next year or so. Jason Kirby (52:08.837) Yeah, we have a similar bet here at Thunder. The question is, are you the consolidator or are you consolidator E? Melinda (52:17.294) Good question. I love to connect the dots and build ecosystems. When I was at Philips, that's the project that I worked on when I was at Philips was a platform for all of their different products. The life cycle of the human from cradle to grave and how you can connect them all and you build this. They have their own internal ecosystem. So I would love to do that. I don't know. It depends. It depends on kind of what else is there, what else is out there. But I think there's going to be some consolidation very soon. I'm already being, you know, having calls with people, we're being asked to, I'm getting approached to potentially buy some companies that are sort of struggling to raise and are not profitable or, you know, haven't been able to scale. And I think the game has changed, you know, with AI now, the game's changed, a step change, and it's changing as we speak. So keeping up with that and having products and services that can move with the consumer needs and can adapt. I think that's really, really important. And some of these companies and some of these products will be no longer relevant because of AI. So... I think it's going to be very interesting to see what happens in the balance of 2025. Jason Kirby (53:49.585) Yeah. I'm very bullish on the consolidation future. So Mel, yeah, I'm in the consolidator. We support a of companies that are trying to consolidate. So helping companies with, you know, growth buyout strategies. So companies that are thinking about, how do I grow more than, you know, 30, 50 % a year, you know, growing in organically through acquisition has been something that we've been working on with a couple of companies. Melinda (53:54.914) like no consolidator as well. Jason Kirby (54:18.609) And, you know, sourcing deals, identifying targets, diligence in those targets, and then, you know, recommending the negotiations and the numbers and evaluations, things of that sort. So it's honestly my personal favorite and what I think is the most fun in the market right now. And I think we'll start seeing a lot of kind of these venture orphans either being turning into a venture scale outcome through acquisition or getting acquired through that type of effort. because just so many companies got funded in 2021. They built real businesses, but there's just not enough room for all of them. And there's just so much more economies to scale if you're able to consolidate and get these businesses more profitable through consolidation, especially the ad cost and cat going up. So that's kind of our thesis when we're helping companies. Melinda (55:04.782) Yeah, and I think because the consumer, the consumers have changed as well and what they're prepared to pay for, I think that shifted quite a lot, especially with AI now. So yeah, I think it's going to be a really interesting time with all the consolidation. Jason Kirby (55:09.477) you Jason Kirby (55:17.051) Mm-hmm. Jason Kirby (55:26.395) So Mel, what would be the best way for someone to get in contact with you if they wanted to connect with you or listen more to your story? Melinda (55:33.346) Yeah, so I've actually just launched a sub stack. Yeah, which launches actually this week. I did a keynote a couple of weeks ago and told my story and I was absolutely inundated with hundreds of requests for more information and stuff. So I've been pushed to do this. I've been wanting to do it for a long time. So LinkedIn, always happy to connect with people. Instagram, I talk a lot about Jason Kirby (55:37.455) No, nice. Melinda (56:03.01) building the company on Instagram, it's melinda.nickey. And then also Substack just launched. So I'd love some new subscribers to my Substack and feedback is welcome. Jason Kirby (56:14.757) Well, give us that link and we'll be sure to put in the show notes for you so people can subscribe. Melinda (56:19.79) Great. Jason Kirby (56:21.197) Awesome. Well, Mel, it's been an absolute pleasure having you on the show, sharing your story of what now is a triumph story of overcoming and buying back your business and getting to choose your fate. So thanks for joining us. Melinda (56:32.258) Thank you so much for having me. Jason Kirby (56:34.929) All right, so good.