How do you turn a crisis into a premium acquisition?

Jason Kirby (00:01.761) Hey everyone, welcome back to Fundraising Demystify. Today I have the king of swag, the founder of swag.com. All right. Well, let me start that one. Hey everyone. Welcome back to Fundraising Demystify. Today we have the king of swag, Jeremy Parker with us, who was the founder of swag.com. Welcome to the show, Jeremy. Jeremy Parker (00:11.938) Yeah. Jeremy Parker (00:23.426) Thank you so much for having me. It's great to be here. Jason Kirby (00:25.623) I want to start with some fun topic here. You've seen the startup world, people buying swag. You've covered just about any and all types of swag. What's a wild story of just like where you kind of sat there and was like, this company bought what and how many of it? Jeremy Parker (00:39.774) We have a lot of those. I don't know. I think their mindset is good. We had a client, I can't say, but they were a big gym company and they wanted to reward all of their executives. So they bought really premium, amazing bicycles for every single executive. And for us, it was just like such a cool order. Every bike was, I believe, a little over $400 and 300 of them. And it was like, fully custom, the whole thing was like really custom, beautiful and different types and different designs. And that was a fun project to work on. We had a client who bought cast iron skillets, which I've never seen before. I never thought that somebody would want a cast iron skillet with the company logo on the base of it, but they did, you know, people come up with different ideas to stand out and to really make an impact. And that's what we pitched at swag.com was all about the quality. So. There are the classics, the t-shirts, the notebooks, the pens, the mugs, but some people go a little bit different and it works for them. And so we just want to be the partner to really help them get exactly what they want. Jason Kirby (01:49.379) Bicycles gotta be pretty cool. If I was working for a company that bought me a bicycle, I'd be pretty impressed. I just hope they're profitable companies that are making these decisions and not using venture capital funding to make those decisions. No, thank you for that. So let's talk about swag.com. How did you come up with this idea of building swag.com and what ultimately led you to it? Jeremy Parker (01:59.084) Yeah, I hope so. Jeremy Parker (02:12.716) Yeah, so some of the long story, I'll try to condense it. I was a documentary filmmaker in college. that was my passion. That was my background. And, and I was 19 years old. I made this documentary film called 1 % that won the Vail film festival. And I was on the top of the mountain in Vail, Colorado. And I thought maybe this was going be my career. This would be my life. And I asked myself two questions at the time. It's a really kind of like smack me in the face moment. do I love what I'm doing? Do I truly love it? And am I that good? It was like, it's kind of like question. Like I see this, uh, this future. I'm 18 years old, 19 years old. And I'm thinking, is this going to be my life? Might be a filmmaker. And, um, at that moment I decided no, and I wanted to pursue something else. So I went back to college. I was a junior at Boston university. I had one more year of film. So I had to graduate. I finished. And when I graduated college, I didn't know what to do. I was a, I was an artist. My background was like film. So I thought maybe I can use some of the skills, like telling stories. Filmmaking is all about telling stories and building brands. And maybe I could use that skill set for businesses. And I started my first business out of college called Tees and Tats, horrible name, but it was a high-end t-shirt company. And it sounds easy to start a t-shirt company, but really when you think about it, you're learning how to manufacture it, how to market yourself, how to build an e-commerce site. This is pre Shopify days. Like everything was frankly more difficult. And I launched this t-shirt company and it had some early success, but this was... I don't know if your audience remembers 2007, the recession. So everything was going under and no one wanted high end t-shirts. And so I kind of failed. I guess you could say that my first startup, but I got the bug of like loving to build things and figuring out that, you know, I was good at some things and not great at other things. And I started another business and I started a business with my brother called Tipped Media, another bad name, but we basically partnered up with YouTube stars and major celebrities. and we helped get brands into their YouTube videos. So now it's like the most common thing, product placement, right? Everybody, every celebrity is doing product placement in their videos. But back, you know, 15 years ago when we were starting this, it was very Wild West. No one was doing that. And we would partner up with brands like State Farm, Colgate, Verizon, and get those brands into the YouTube Stars video and make these YouTube Stars millionaires. And then our idea became, well, what if we actually got major celebrities, you know? Jeremy Parker (04:37.762) I don't like throughout names, but like just think about the biggest celebrities in the world. What if we own their rights on their Twitter and Facebook feeds? Now this is still very early. know, Pipple, for example, had 4,000 followers on Twitter and now he has like 40 million. So just show the scale of how early we were and we didn't know any celebrities. So we partner up with a guy named Jesse Itzler, who your audience might know, founder of Marquee Jet, private jet companies, Zico Coco in the water, owner of Atlanta Hawks. Jason Kirby (05:00.717) Yep. Jeremy Parker (05:06.814) and we started buying the rights to different major celebrities Twitter. We basically own their Twitter and Facebook feeds so early. So if you combine this YouTube idea of building these relationships with brands and putting into YouTube videos, and now the major celebrities that we own getting brands and putting into YouTube videos, it was a really exciting thing to kind of own. And we were thinking at that time to start like a Groupon like idea where you could go to a guy like he wasn't a partner, but like Bron James, for example. And you say to LeBron, give me your 100 favorite products. Like what you truly enjoy, what you truly love. And let's say he says, I love Lay's potato chips. And then we go to Lay's and say, LeBron James really, truly loves you. Can you do a deal with LeBron where he would post it to his social media fans? And then every time somebody buys a bag of Lay's, he would split it with you. Kind of like a Groupon like deal, but promoted through social influencers. And we ended up selling that company to the guy. Bob Sillerman's publicly traded companies. was very early on. It was about seven months after we launched. We built the company, got a lot of these celebrity contracts, and then flipped it to Bob Sillerman's company. Then after that, I had a failure, a three-year failure. I started a social media company called Vouch. It was like a social networking app, democratizing Oprah's favorite things for everybody. So you could vouch for your favorite stuff, see what your friends vouch for, and like discover new things. I spent about three years doing that and it didn't work and I raised a lot of money for that and it ultimately failed. Close to six million, I believe at the time. So it was significant. It was the most we've ever raised or I've ever raised at that point. And then after you have a failure, and to me that was a lot, we took family and friends money, we lost investors money, people I didn't really know that well. It's a horrible feeling. And I came up with swag right after that because my mindset was I Jason Kirby (06:37.763) How much did you raise for that? Jeremy Parker (07:02.21) had that experience with building something and it didn't work. And I spent three years building something, it just didn't work. And the model was designed that it had to get really scale for it to ultimately work. Like social media is the hardest business type of start. And I thought, I just want to start something that is, I'm going to make money from day one. It doesn't have to be the biggest idea. I could just start selling something. It's a physical product. I'm going to make money. And I just went all in on swag.com when I was 30 years old. This was in 2016. And I had a key insight when we were starting. I didn't know all the, you know, what exactly to build. Like every entrepreneur, have an idea and then you obviously pivot a lot and you change. But at the time I was 30 years old, so I was going on dates a lot. And a lot of the girls that I would meet, honestly, were these like office managers. You know, they were working at companies and they were buying swag and they were, and I was thinking to myself, the person who buys swag today, is so much younger than they probably were in the past. Like they used to be a 40, 50 year old office manager. Now this is a much younger person. If I had to get my mindset into the mind of a young person when they're given this budget for $10,000 of their company money, what's going to make them decide to choose one company over another company? And I started going down this rabbit hole and I started, know, me and my co-founder Josh at the time, we were calling hundreds of marketing teams and office managers and different people who we think at the company would be in charge of buying swag. And frankly, even in the beginning, idea initially was let's go after the marketing teams because they have the biggest budget, right? Like if could be a 10 person company, but you could be buying millions of dollars with the swag, technically, if there's an ROI. So let's go for the marketing teams because it doesn't matter how big of a company they are, employee count wise. Yeah. Jason Kirby (08:48.291) I just want to pause you for a second. This all came from going on dates like bubble dates or Tinder dates that you're going on and these girls are like complaining about their job. You're like, that's an opportunity. Jeremy Parker (08:52.492) No, it was a combination. Jeremy Parker (08:59.532) Yeah, no, was, was that it was just talking. was, you know, I 30 years old. had friends who were younger. I was just, even my friends who were 30 who were in charge of this role of buying swag, or they knew like who the, I asked them, who's the person at your company who buys swag? Now there's so many things that I learned, you know, in hindsight. Now I'm thinking I just had an accident. We'll get to that. And I'm thinking about what I'm going to do next. And I'm thinking, well, what was amazing about the swag industry that I could, you do again, like what aspects of it were so amazing. And honestly, all the things I write down, we could get to this. I didn't have any insight of that when we started. Like only in hindsight, it's like, my God, that's an amazing thing. Like, for example, Swag, when somebody comes to buy Swag, they have an in-hand date already in mind. It's not like a long sales process. It's like they have to buy something. They're either going to buy it from us or you buy from somewhere else. But they have an event coming up. They have, they have to buy it. That's an, that's an unbelievable thing. Swag, don't have to make it until somebody pays for it. So it's a crazy business where somebody pays you upfront and then you pay from the suppliers to actually produce it. And that could come, you know, net 30, net 60. So the cashflow is unbelievable. It's a business that literally every person I talk to, knows somebody is the person at the company who buys swag or knows somebody or works at a company that buys swag. So literally every conversation, everyday life, it just leads to this conversation. Fourth thing, it's the most fragmented industry. There's 20,000 people in the industry that sell swag. That seems overwhelming to entrepreneurs. Why would I ever start a swag company? But that's an opportunity. If there's 20,000, clearly there's a model. Clearly there needs to be some automation or streamlining of that business. So there was just so many things that frankly I didn't even know when I started. All I knew in the very beginning was there's probably the person who buys swag is a little bit older. This is all I knew honestly, was a little bit older and now they seem to be younger. And that mindset is different. Maybe they want to buy online. Maybe they don't want to talk to anybody. Maybe they want to focus on the quality aspect and not necessarily about counting pennies. So all these things just went into my brain of what could possibly be different if it's a younger buyer versus an older buyer. And then I started doing all the calls and had conversations and I realized that that theory was correct. I was wrong about the marketing teams. That was my initial idea going after the marketing teams. But after speaking to them, I realized everyone goes after the marketing teams. How am I, is swag.com going to cut through the noise? Jeremy Parker (11:21.92) And it was really the office manager at the company who had the keys because they didn't buy it thousands of pieces. They bought a hundred pieces or 10 pieces or five pieces they bought for their company. But if they're buying it, they're giving it out to their employees. And now every employee has powered by swag.com and the inner label of the t-shirt or swag.com on the, you know, the bottom of it, of a mug. It's basically introducing swag.com to all these other divisions that could buy swag. So it's like our Trojan horse to get in. So. Jason Kirby (11:49.859) No, I think it's fascinating how you kind of took that, one arbitrage point of, know, like there's a disconnect here in terms of, cause I, remember I've been buying swag since 2008 and it was always a pretty crappy experience. I, you know, I remember you guys, ended up buying from you guys, think in 2018, I think, or 2019 as a customer. Uh, and then again, into 2020 and a couple other times. So it's nice to have you on the show. Uh, but, um, when it came to the scale. So you found this problem and of course hindsight reflect back and you kind of know what the drivers were, but the ultimate grins to 40 million in sales and sold it to what customing, which I believe is probably one of the biggest in the space. How did you take it to 40 million? Like what was, what was the secret sauce that was in what 2016 to 21, 2021, 2022, pretty rapid growth rate. What was your, what would you account for that success? Jeremy Parker (12:42.028) Yeah. Yep. Jeremy Parker (12:48.142) Yeah, so in the early days, 2016, we had no tech platform. It was just me and my co-founder. We were working out of a WeWork, several offices before WeWork, I have this, you know, this apartment building, pool room and all these different things. We were traveling salesmen. So our early days, was all just about trying to make sales. wasn't about the revenue, it was about learning. So that was like 2016 was who are the customer? Let's talk to as many customers as possible. Let's frankly show up at their office. And the worst I can say is get lost. And we did that. went to, we were in our WeWork building. And because we were a member of WeWork, we had the ability to walk up and down the hallways of all the WeWorks. We just went in, we had a pass, and we would knock on doors and people would say, not interested, not the right time, okay. But eventually somebody would have a conversation with us and we would either learn a lot from those conversations or we would make a sale. And we were just like these traveling salespeople. And our first year we did 350,000 of sales, which to us, people, was pretty amazing. No platform, a swag.com, coming soon landing page. Now, before I continue with the revenue, I want to just say one thing, why we got swag.com and why it was so important to us. The key insight also early on was you could be showing somebody an ad of a pair of shoes on Facebook in January and it's an impulse purchase. They'll buy those pair of shoes, right? Or a t-shirt or jeans. If you show an ad of swag, you have to find the person at the exact moment when they want to buy thousands of dollars worth of swag for their company. It's not like the odds that you're going to get person exactly at the right time is very unlikely. So we want to get people, whenever they see our ad, and then remember the swag.com name, you know, seven months later and then go directly to their browser. So we want to turn these offline conversations to online purchasing. That was the mindset. Like you see it, you forget about it. Seven months later, you start talking with your coworker about swag and then it triggers, swag.com, let's go back into it. And that actually worked. What'd say? Yeah, exactly. It worked. So we bought this domain name and frankly, in the early days, we didn't have any money to buy this name. We worked at a deal with the owner. Jason Kirby (14:34.007) Worked on us. I said worked on us. Jeremy Parker (14:45.1) where we would license it. And that was very early. I didn't even know. And now it's very common. But at the time, it was we thought we were making it up. We licensed the name and we gave the person a little bit of equity in the company. And then what happened is worse comes to worse, the person gets their domain name back. Plus, they got the payments for the time that we we rented it. And best case, they got they got the amount of rent. We also ended up paying the full price of what we agreed on pre negotiation. And they were able to keep equity in a growing company. So it was like this win-win where the worst case, the guy gets his domain name back and some money for the monthly rent. So we get this domain, we start making sales, second year, 2017, we launched the first version of our e-commerce site. Now this was a lot, honestly, 500 plus conversations with the potential buyer. So when we were building stuff, 90 % of the stuff we built, it was like we knew it was gonna work because it was being told to us exactly what the problems were and how to solve it. And we use these people as like a soundboard. It was like 10 % new ideas that we threw against the wall. And frankly, those 10 % of new ideas, some of it worked, some of it didn't work. But the 90%, we felt so confident that we're spending money developing, it's going to work because we had these conversations. So 2017, we launched the first version of the site. We went from 350,000 to 1.1 million. Keep learning to 3 million. Keep learning to 7 million. Every year was doubling. We got into COVID. COVID hit 2020 and we had to pivot. Obviously, as you can imagine, there's no trade shows, there's no events, there's no reason to frankly buy swag. No one's in the office, what's the reason? So our whole industry dropped off a cliff, even our sales. We were going from like the exact numbers, 800,000 a month at the time to like 50,000. was like March, April and May were like hovering 40, 50,000, it was nothing. And obviously we had a big team at this point and we pivoted really fast and really quickly. We were very lucky. And we noticed that if everyone's working from remote, everyone's disconnected, everyone's feeling that. Let's pivot and become like the remote first company and how to engage your remote employees even when no one's in the office. So really try to build out this platform where you could buy swag on our site, we'll warehouse it, and then they can individually distribute swag to all their remote employees. And we built out this robust platform for individual distribution. And after that, Jeremy Parker (17:04.502) our sales went from 7 million to 15 million. It scaled up because no one else had that. Everyone needed it. And we were frankly the only game in town to be able to do this remote distribution. And then that kept scaling to 30 million. Then we got sold to Custom Ink. So I guess the short answer is we learned a lot from our customers, built the right things, were obsessed with the product, like really obsessed with the product to make sure it was exactly right. That's one part. The second part is we figured out what traction channels work for us at different times. Early days we had no money. Me and Josh were traveling salesmen. That's all we had. That was our first year. The second year we made a little bit of So then we started investing in Google Ads, right? Because Google brings you a lot of customers, but it's not necessarily the most optimized and we're maybe overpaying. But then we got more customers in the door. Then we started figuring out, well, SEO makes more sense for us. So we actually only focused on one traction channel exclusively per period of time. was like only sales in the first year, only Google the second year, and only SEO in the third year. And then once we kind of met, like, understood each of those different driving factors, then we kind of combined forces and allowed it all to work in the fourth year and the fifth year and then adding new partnerships, things that you couldn't necessarily do in the beginning. No one's going to want to partner with us until they felt confident with us. So we just really kind of kept adding new traction channels to allow us to grow. Jason Kirby (18:19.939) Yeah, I think this is an incredibly valuable point for all founders to hyper focus on a single channel. And like, um, I see too many founders, especially in like their pitch decks of their pre seed and seed, like they put their go to market strategy of like, know, SEO, pay per click, you know, social media and they're like, oh yeah, you're going to accomplish all of those successfully in your first year, first time trying to market. And I think what you guys, what you just described there of that hyper focus one channel, get to a certain amount of revenue, validate it, and then before you graduate to the next one is advice I would give to any founder that is in that kind of zero to one stage. So when it came to deciding when to raise money, because ultimately raise a little over 3 million over the course of your business, which to get to 40 million in sales is like phenomenal, especially for a business, which you of talked on the cashflow management side, which I think probably enabled you not to have to raise as much as say a tech company would. But What trigger, like when did you raise money? Why did you raise money? And kind of what was your strategy for raising money? Jeremy Parker (19:24.598) Yeah, so I think I made a mistake here and I'll, you know, people have different strategies and obviously there's different businesses that make sense to raise for. I found myself raising for the wrong reasons. And what I mean by that is as an entrepreneur and as a, I've had some previous successes, as I mentioned before, I sold the company and I've had some previous failures, frankly, more failures than successes before swag.com. It's a very lonely game to be an entrepreneur. Even with the co-founder, it's a lonely game because most people don't think you have a real job, frankly, until they start to see it be super successful. So you're kind of working in this weird phase of like, is this ever going to work unless you really surround yourself with fellow entrepreneurs? Which I have some friends who are entrepreneurs, but you're in a world where it's not real until it's real. So you start to look for outside validation. I think I did that for myself. And how do most entrepreneurs try to get this outside validation? You get press or you get a VC fund to believe in you. And I honestly believe that I think I probably raised money because that was what I thought you're supposed to do versus what we actually needed. We didn't need that much money. You know, even 3.8 million that we raised. It's a lot for me that maybe not doesn't seem like a lot for some of your audience. There's different amounts, but I probably could have built this into what we did for 500,000. If I'm being honest, if I really, if I, never really needed the money in the early days, was about, we might want to grow a little faster and this or that. Let's raise some. But then the ultimate we raised it, we just added, it was more of like a safety net versus actually using it for driving growth. And I would say for myself, the next time I ever start a business, and I'm sure I will, I'm only gonna raise money if I really know the use for it. Like if I could take that money and put it directly to driving the business. Jason Kirby (21:09.911) Well, let me, let me interject there with like the safety blanket methodology. Like, do you feel you would have made decisions differently? Do you think you would have maybe have hired differently or been less aggressive on certain marketing, despite you not actually using the money, but knowing that it was there, did it change your, do you feel it changed your psychology at all? Jeremy Parker (21:29.006) Honestly, no, and that's the problem. Like I really didn't, you know, in the early days we had, I'm trying to think of that exact timeline. was me and my co-friend, Josh, the first year, the second year we hired our first employee. We only had about five employees and we were doing over $3 million in sales. And as I mentioned earlier, the cashflow of the business was great. We collected money upfront. was an e-commerce. So people, Facebook would go to our website and pay $10,000 on a credit card and we would collect that. And then our suppliers didn't need us to pay. So we ordered from suppliers, they printed it and they drop shipped it directly to Facebook. That was kind of our model. were the middleman and we curated the best products, the best vendors. And that was kind of the heavy lifting to make sure it's quality. But we didn't owe our vendors for 45, 60 days many times. So we had insane cashflow. never were like, we were as aggressive as we want it to be because we had all this money upfront. That's just how the model worked. And some of these orders, it could be a hundred thousand dollar order on the credit Our average order size was $4,000. That's a crazy amount. In our industry, the average size is $700. That's the average in the industry. Our average order size was $4,000. It was so much larger, and they were paying upfront, which is not necessarily common in our industry. The model made so much sense because who we're going after, the premium nature of our products, it was really high quality, it was curated, it was more honestly, was quote unquote safety blanket, but we never really touched it. I never even changed. I was always aggressive. And by the way, maybe if I raised a lot more money, I would have been way more aggressive. And that's maybe people getting traps. If you raise a lot of money, you start doing a lot of different things and you're less focused. So I think by us raising 3.8 million, it wasn't that much. And frankly, and I said to you before the call, it was really about 2.6 million, the whole business. And then COVID hit and we raised 1.2 million in kind of a, that was really probably the only time we should have raised because it was very, we went from 800,000 to like 50,000 a month in sales. It was crazy and I didn't want to fire my team. I mean, that's what we being told. We were told by everybody around us, you got to cut costs, you got to fire your team, you got to let people go, you got to do all these things. And I always felt that COVID was a short time thing. It wasn't like a forever thing. And I didn't want to kind of destroy my whole company at that time, just to have to rebuild it. So me and my co-founder cut our salaries to basically nothing. We asked all the employees to kind of cut their salaries in half, but they will make it up to them once we hit a rabbit. Jeremy Parker (23:55.726) I want to avoid firing anybody if we could. And we raised 1.2 million just if this ended being up longer than people thought, we would be okay. And luckily when we sold the company, we had over 1.2 million still in the bank. we raised in 2020, we sold November of 2021. We still had that amount of money still in the bank. So we never actually probably even touched that money. But that probably was the only time where it gave me some flexibility to make decisions without having to be fearful of going. Jason Kirby (24:25.205) It's so important to one, the fact that you act that quick to recognize the problem, the situation. But what it came to raising that money, was that an insider round from the people that invested in you previously? Did you go out and find new investors? How did you go about sourcing that? Jeremy Parker (24:35.746) Yeah, both. was by far the most stressful period of my life at the time. My wife, I was married at this time. My wife was pregnant. We just left New York City, which was obviously terrifying to be in New York City during COVID. We're living in my parents' house. I saw this business that we scaled to 7,000,000, 100 % growth from 2016. I thought we were on a rocket ship and then it looks like it's about to crash down. It was insanely depressing and scary, frankly. and I was calling everybody, honestly, every insider, you know, most of our current investors did not, they were nervous also, and I don't blame them. not like saying I'm like, everyone was nervous. No one knew what was going on. So we probably raised half of that from current investors. and half of it from completely new people. And we gave a ridiculous price. the, price at the time was when we did 7 million in revenue, I think we raised it at 14 million valuation. That was like the previous round. We just, or three million, we raised that at 14 million valuation. We doubled to seven million and we raised the 18 million valuation. So we only went up, it wasn't a down round. We went up from 14 to 18, but if COVID didn't exist, we would have probably raised like a 30 million plus at that point. And we just needed the money in. are okay with that, losing ourselves. It was more about like a security at that point. Jason Kirby (25:55.843) No, smart decision making. And I also respect that, you you understand the multiples in your industry and, you know, kind of understood the industry you're in. I've talked to so many founders that are like, we're doubling. We should deserve like SaaS like valuations. And I was like, nah, not the case. But I would say with your competitiveness or say competitive edge plus growth rate and to have an outstanding exit, not too much later. Let's go ahead and switch that. Let's switch to the custom ink journey. So how did Jeremy Parker (26:07.4) Mm-hmm. Mm-hmm. Jason Kirby (26:25.656) How did that come about? Did they knock on your door? Did you run a process? Did you hire bankers? What was your process? Jeremy Parker (26:32.886) Yeah, we weren't actually looking to sell at all. And I think oftentimes that allows you to actually get the deal over the finish line because it's the most stressful process trying to sell a business. It's like two jobs. Like you're still keeping the business running and you need it to grow because if any slowdown, it's going to make them pull back. And the other time you can't really tell people on your team because you want people to get their hopes up or start not focusing. So you really have to keep in a very small circle on who you tell and you're dealing with that process of diligence and negotiating all the different stuff. With Custom Ink, our first interaction with them was, I believe, February, end of February of 2020. This is literally three weeks before COVID. And somebody, I had a friend of mine reach out to me and say, hey, I want to put you in touch with somebody at Custom Ink. I know you're not looking to sell, but just to be in contact with them. You know, like who knows what could lead, right? They're a big player in their industry. They probably have heard of you at this point. It's probably good to just start conversations. Maybe there's a partnership. It wasn't about acquisition at all at that point. And we met with them and we had like an hour conversation and it was great. And they actually invited us down to their office to continue discussion. But it was never about acquisition. It was just about getting to know each other as people in this industry. And the time we were supposed to go was when COVID like, you know, started. So they called us back up and said, hey guys, obviously COVID is happening. Look, we just delayed this for a little bit. No one knew how long it would take. And they just put this meeting on pause. And we said, okay, we just forget about it. Let's focus on our business. And then our business went off a cliff and it was horrible. I didn't even think about custom make at that point. I was thinking about how to survive, how to raise some money, how to get through it. In October of that same year, they reached back out to us out of the blue. We didn't speak to them for seven months or so. I can't do it in public math, but several months from that moment and they said, well, how are you guys doing? I guess like a quick check-in, like how are you guys doing? How do you guys survive this? And at that point we pivoted really hard to individual distribution and our 7 million in the previous year. We were on pace to do over 10 million. We ended up the year at 15 million, but we were on pace at that point in October. like our November and December were crazy. And we said, we're doing great. We're up this year. And the whole industry was down, like significant, like 40 % down and we were up. And I think that was like, wow, that's kind of crazy. So then they started to, I think, change the conversation in like the end of 2020 to more of, you know, maybe you guys could be a good fit for us. Like starting those kinds of conversations. Jeremy Parker (28:56.494) And I was thinking, well, I never thought about selling. We're so early. And frankly, I was just, I was in the survival mode. And now that we survive, we were thriving. I'm like, why would I sell at this point? So we just kept the conversations going. That wasn't really a mindset early 2021. Then something really crazy happened. I think, I don't know if it was like released that somebody mentioned it or just maybe just the timing people were following our journey and realizing that we were growing and this is the time to buy us. There's about eight other companies at the same time who reached out to us. Unprovoked we had no banker. wasn't it was like conversations like big really large companies in our space and adjacent spaces saying hey No, love to come you know have a conversation We think you guys could be a great you know partner with us or acquisition or another one that was maybe the same size as us at the time Asked to merge with us. There's all these kind of different things in the woodworks and kind of ask ourselves like why is it happening right now? Maybe like we're not gonna get this opportunity again where there's so many people who are interested maybe we capitalize on this and And frankly, we were growing over 100 % every single year and I was taking very little salary. My co-founder was taking very low salary. I was having my first kid, my co-founder was third kid at this point. We were so, it was like, maybe it's the right time to sell for the right buyer. And after doing the conversations, we realized that Custom Ink felt like really the right buyer for us, for several reasons. We were focused exclusively on B2B. So at this point we've done 20,000, I mean, now we've done about 20,000 companies that buy from swag.com. At the time it was like 10,000 or so, but it was only B2B. It wasn't consumer at all. And Custom Ink was primarily consumer. They do some B2B, but their business was consumer. They had this entire backend process of printing and manufacturing and the same buying power and same shipping rates. And their feeling is we're not gonna be really competing with each other. It's gonna be such a great partnership where we're going after two different segments, but sharing the same backend. So the cost structure would be the same. And we're gonna be actually able to make a lot more money. And frankly, the people at Custom Ink just felt like people we wanted to work with. They were entrepreneurial. They were very nice. They've avoided a lot of the challenges that we anticipated we were going to have. And so we felt like it was the right decision. In August or so of 2021, they sent us the LOI and then we ended up closing in November. So things do take time. There's a lot of diligence that's involved. And luckily, Jeremy Parker (31:17.626) when we were selling the business, we went from 15 million to over 32 million that year of the sale. So the sales were keeping the pace of what we were presenting and how we were presenting it. So everything kind of just worked perfectly. Jason Kirby (31:31.275) No, it sounds like it's like kind of the best outcome, one best timing ever to, sell, think in the last 20 plus years of 2021 was the best time for anyone to sell, but also just continuing to pump your numbers. And it sounds like given your positioning in the market, probably targeting a lot of tech companies or tech forward type companies that thrived in that time period, your revenues, you know, state skyrocketing, whereas maybe more legacy type customers were struggling. Jeremy Parker (31:58.446) Exactly. It's actually crazy in 2022. This is after the acquisition. know, was a turn like the tech where it was not the best place to be in, in early 2022. As a point like Silicon Valley Bank was one of our biggest customers. They went under in like March of 2022. And they were buying like, a lot of stuff, you know, I mean, Yeti coolers, I mean, unlimited stuff. It was crazy Silicon Valley Bank we have. I still have some Silicon Valley Bank swag in my house as like a relic. But yeah, I it was crazy. So the timing was amazing for us. But I still think it was a very good deal for customing because our business is very strong. It was still growing. It was outperforming the industry. And as a whole, know, whether it's a huge growth every single year, it doesn't always happen. But the world needs swag. Businesses buy swag. It's just they buy for different reasons. And our focus was really just about quality. And it was really from very beginning. You don't want to spend thousands of dollars on something that ends up in the trash. It's not good for the environment, it's not good for a company. So spend a little bit more, but make sure it's premium quality. People actually use it and they'll keep coming back. Jason Kirby (33:06.115) Yeah, I want go back to the custom week. had a couple other people bidding on you and people having conversations with you. And what was the negotiation process? I feel the founders always kind of glaze over this part, but in the reality of when you're in the pits, having that conversation, what was that? What was going through your mind? What could you tell your team? What could you not tell your team? What was that experience? Jeremy Parker (33:28.918) Yeah, I didn't tell my team anything. It was really, I didn't want to distract anybody because just I wasn't really looking to sell fully until we had the price that made sense. Like it was always just like, it was flattering, right? Somebody wants to buy you, it's flattering, but the numbers initially that they were presenting were not the numbers I would ever accept. So it was just more of a, you know, it was interesting and who knows? And I kept saying to them, it doesn't seem like this is going to work, but let's stay in touch. That was it. And I think the best, and it wasn't even negotiating tactic, but I do think the best tactic is to really be willing to walk away. Like have a price in mind. We had a price in mind and we weren't gonna sell for below that. That was it. So any number that was below, even if it sounded like maybe we should come down, maybe we should do it, honestly at that time, we weren't super actively looking to sell. We were profitable. We were growing over 100 % year over year. couldn't really predict that 2021 was going to be the top, right? Like no one can know that. So we didn't think that frankly, was, you know, it wasn't like a genius of us to know that it was going to be at the top and let's sell. It all happened. It was just, we had a number. We knew what the traditional multiples of the industry were and that's what they were trying to lean on. That's what everyone who reached out to us was trying to lean on. And we knew we weren't the traditional model because I said to them every single time, well, what promo company, what swag company is growing over a hundred percent every year? None. What swag company was growing in COVID? None. Everyone was down. We grew a hundred percent, over a hundred percent. So you can't just treat this like a traditional promo distributor and give us this. It has to be a premium on it. You know, what promo company is able to collect money upfront and then owe vendors 60 days late? It doesn't exist. What promo company is a 4,000 average order size? Everyone else is 500 to 700. Everything about our model was different. So stop trying to treat us like the same. And I think the mindset for us, me and Josh was just, let's just walk away if it's not going to come. And ultimately they came to the price that we could live with. Jason Kirby (35:28.459) And yeah, I think that's like the fact that you held your ground and recognized your core differentiation and called them out on that. And I think that's something that one, you got to build a great company. First and foremost, to have that kind of negotiation, you have to have a great company that's truly differentiated and really in the walk away. But I think the way you approached it and the conversations that you had, it sounds like that ultimately led to having the outcome that you had. And if you had waited six months later, you know. Jeremy Parker (35:56.942) Don't know. But Jason, I want to be very, it wasn't even, it wasn't truly even a negotiation in hindsight. It's a negotiation and it would, it's a, it was just something that like, want to be transparent. was more of a transparency with them. Um, I value them a lot. I think they were great people. They're very smart. They built amazing business. It wasn't like trying to play games. was just, there's no reason to continue the conversation unless it got to, it got to the place where we felt good because we weren't going to sell. And so it wasn't, it was just trying to tell them. Jason Kirby (35:57.603) It would have been a very different. Jeremy Parker (36:26.35) We are different. We know we're different. And this is just what we're willing to do. wasn't. Yeah. No, we had some investors and we had actually one really good investor who was in the promo industry. he was just a good sounding board. He basically said to us, I honestly think, and everyone said this to us, we had a lot of investors who hated the deal, frankly, at the time. Now they liked it. had, honestly, we had investors Jason Kirby (36:31.255) Was it only you and your co-founder at the table or did you have advisors or investors working with you? Jeremy Parker (36:55.886) who were saying to us, they're not gonna approve it. They're not gonna sign it. We think it's a bad deal for you. We think it's a bad deal for us. This could be way more than you're getting. And I always found the people who were so excited, by the way, some of these investors were getting like 20 times their money. So just putting perspective. But what I found is that the investors that were obsessed over the moon were the smaller investors. The investor put 10,000, 50,000, 100,000 in. They were ecstatic. It was like, we're changing their life. I got bottles of wine sent to my house during this process. People were like, this is going to change my family's life. And the investors who had a lot of money, who put in maybe a little bit more, put maybe 400, 500,000 in, they wanted to keep going because to them, making a couple of million doesn't change their life. They're worth tens of millions, hundreds of millions in some cases. So they just want to keep us going. there's different. And I always say when you take money from investors, you really have to be super aligned. Maybe even have conversations like my next company I start, I'm going to be really upfront from the very beginning. This is not going to be a multi-billion dollar business. This is what you should expect at the best case. This is a great outcome. I want to make sure we're aligned so that we don't have the issues. Cause frankly, at the time of selling, it was stressful and it didn't need to be like, this was a great win for everybody. And for me and my co-founder, it became super. I mean, we're already stressed out as the deal going to close. Are we making the right decision internally? had some, we had doubts also, like maybe we are selling too early. When you have a lot of smart people telling you you're selling too early, you start to think maybe you are selling too early. So, but sometimes at end of the day, you have to just go with your gut. That was it. Like it was me and my co-friends got that this was the right price. had people who said that they were obsessed with it. They loved it. So happy. We had people saying this is the worst deal ever. And we had to make the decision that this, we felt like this was the fair price for the time. And we did. felt like it was. fair price, if maybe we were even selling a little short. That's how the mindset worked, but we were okay to live with it. Now in hindsight, it probably was a little high because of the 2021, but no one knows that. And frankly, and I want to say like Custom Ink, was, was, we weren't going to sell unless there was a certain price. And that was it. It wasn't a negotiation. was being upfront and honest and wanting to go into this with like a good partnership. If we're going to do it, I want to feel good about it for both for everybody. Jason Kirby (39:12.139) I think it's really well said. I think it's in our, you know, that, that key piece that you kind of brought up about telling people this is not a billion dollar outcome and being upfront with investors on that front. talked to so many founders, a lot of founders don't realize that, or they don't, they think they have to keep making up a story that has to be a billion dollar outcome to get money. think being honest and upfront and then running your business accordingly, not trying to raise tens of millions for, for your business, but you know, managing the business appropriately to, be less capital hungry. So appreciate you sharing that. Jeremy Parker (39:41.654) And I'll say one thing also, Jason, like every entrepreneur is different, you know, like, and everyone has their own number of what's what like changes their lifestyle. Like you don't, I mean, some people might think that they need to be a multi billionaire or they need to build a billion, but I'm telling you, you don't like there's so many other outcomes for entrepreneurs. And frankly, I Jason, you're an investor and I'm sure you're a great investor, but just the mentality of an investor is very different than the founder. And you have to realize you're on the same page to an extent, but You're really not in many ways, at least how I felt. And so I had some great investors. I want to put great investors, but these investors are putting $100,000, a million dollars into 20 different companies. Yes, they want you to succeed. Yes, they're rooting for you. Yes, they're going to help you. But if you fail, they're going to have a bad dinner that night. Maybe they'll have a bad weekend. If you're spending seven, eight years on your life and you fail, you're not going to get out of bed for months. You're going to be depressed. It's a different level of scale. This is all you have. This is your life. And this is, yes, it's their life, but they're diversified. You're not frankly diversified. At least that's how I felt. So when it came to the decision of selling, yes, you want to do what's right by the investors. We made a lot of money for a lot of investors. I felt like I cleared that threshold. But at end of the day, as a founder, you should make the right decision for yourself as well. I think there's a balance. Like you want to do right, clearly. You don't want to do a deal that's bad for investors, clearly. But there's a threshold. If you cross, if you do a good deal, if you feel in your bones that you're getting the right price for the deal. and it works for you, then you should be allowed to take that deal. Like it's your life, you put everything into it, it's your business. That's just how I feel with it. Jason Kirby (41:20.065) I don't think he'd be said more beautifully than the way you just said it, because I completely agree. think founders need to recognize that, also give them the take, take the right money when you take the money to know that you have those options on the road. And, know, it's hard to tell how it's down the road. Someone might change your opinion and, you know, combat you in a particular transaction, but, you know, happened with me and selling well, selling a liquids guy to what was supposed to be to Samsung, but because one of our board members got greedy and basically blocked the deal, lost time deal fell apart for. couple other reasons, but that time we lost for him trying to get more money out of a deal against us, behind our back, ended up completely blowing the deal and screwing us and putting us into a hell of a turmoil for a year until we ended up selling to Walmart. So it's important to always get aligned, both with board and investors. So appreciate you sharing that. so, you know, before we, before we wrap up, I just wanted to, you know, to ask you like, are there any parting words for, for founders, that we haven't covered already that you would want to share? Jeremy Parker (42:19.31) Yeah, I I assume your audience is, know, seasoned entrepreneurs, new entrepreneurs, everything all in between. You know, there's a famous quote that says, fear kills more dreams than failure ever could. Right. It's like the mindset of like not doing something. And I think a lot of entrepreneurs I know this from, you know, I'm friends with a lot of people who are entrepreneurs. I'm friends with lot of people who are aspiring entrepreneurs. Everyone has an idea, but not that many people do it. And because they're fearful of what's going to happen. And I always say is When you start a business, you have to have a thesis, you have to have an idea, but that idea, you should be open to changing it. You can't be so set on it. So really what it comes down to is your idea most likely is not the right idea. Ultimately, it changes a million different ways. It goes in million different directions. So just start, I say with that mindset, being really okay to getting feedback, really okay to change your opinion. It doesn't mean you're failing. It means you're succeeding. The more you fail, the quicker you fail, the more you succeed. And I've seen that across the board, you know. When we sold swag, all my friends said, wow, I can't believe it happened so fast. And yes, in the scheme of things from starting in 2016 to selling in 2021 seems fast. But I started when I was 22 years old. I sold when I was 36, my other businesses, and I've had some failures and successes along the journey. Entrepreneurship is a lifetime sport. So the business that you're in today might not be the business that's going to make you, right? But it might teach you something that will make you be better the next time. And that business might not make you, but that's going teach you something. The best thing you could do is just learn every single time and don't walk away being like blaming other people or blaming time of like we were launching the right time or too early. Maybe those are the cases, but maybe there was something that you learned that you would do differently next time. And for me, every time I do something, I want to take something that I learned and make myself better. Not, by the way, my next business is not guaranteed to succeed because of all these learnings and because of my success, right? There's ups and downs. But I think I have a better chance of succeeding now because of all the things I've lived through and all the things I've seen. And I know that when something really bad happens at the scale of like a COVID, there is a way to get through. There is a way to pivot. There is a way to figure out a niche and kind of, you know, grow and scale when everyone is cowering and playing in defensive mode. Like maybe that's even the right time to, to, attack. So I don't know. I just think that entrepreneurs go for it. Be okay with learning. Be okay with pivoting. Jeremy Parker (44:44.544) and ultimately you're either gonna win or you're gonna learn. Jason Kirby (44:48.643) Well said, Jeremy. Thank you for being on the show. What would be the best way for people to learn more about you or to reach out to you if they're interested in having a chat with you? Jeremy Parker (44:56.142) Yeah, please reach out to me. My email is actually I used to have an email, Jeremy at swag.com. So easy to say. I still have it for a couple more months, but because I left it in December, but you can reach out to me to Jeremy dot Ian, IAN dot Parker at gmail.com. Love to connect. Reach out to me on LinkedIn, Jeremy Parker. And yeah, thanks so much for having me, Jason. Jason Kirby (45:18.519) That's been a pleasure. Thanks, Jeremy.