From Bowling Green, Kentucky (an hour outside of Nashville, TN), entrepreneur April Foster built an empire in Inked Brands. The crafter-turned-tech-founder helps influencers grow their business in authentic ways through e-commerce, transitioning into this side of the business seamlessly after major success with a scrapbook business (she has shipped over 300,000 kits!).
Foster saw the influencers she worked with (think bloggers, crafters, etc. with big social media followings) have trouble monetizing their brand. Now the direct-to-consumer retailer creates a seamless e-commerce experience by using the influencer’s brand to develop products that fit their audience — DIY blog with scrapbook products or food blogs with monthly cooking kits — and help them increase their revenue by up to six figures a year. It’s a relatively untapped market — and 86 percent of women turn to social media before buying a product or service.
Last week Atlanta-based BIP Capital led a $4M Series A round to help Inked Brands grow its staff and roster of influencer clients. “Inked represents the ideal blend of a lifestyle brand business opportunity that’s also a cutting-edge, innovative SaaS solution. The creativity and technology of the platform allow for more individuals to pursue entrepreneurial ventures,” says Cres Ferrell, vice president at BIP Capital.
Here, Foster lets us dive a little deeper into her business and shares more about growing her startup (currently at 90+ employees) to help influencers monetize in a new way.
How do you hope to leverage your Series A funds?
We bootstrapped the company for a good while before we raised money. Not that it was the right thing to do, but it enable us to attract the attention of some large funds and get us high quality investors because of that.
The main reason why we did the raise is because we weren’t able to add as many influencers as there was demand for our product. We definitely are planning to use the funds and have used some of them already to become more operationally sound so that we can execute, instead of just a handful of brands, on tens if not hundreds of brands at scale. There’s an upfront cost in bringing the brands on and so that’s one of the things that capital helps with.
We want to function seamlessly because, again, these are amazing brands that we’re doing and we don’t want to mess it up. So we need, on our end, to be incredibly efficient with how we onboard and take care of our influencers and their brands and be able to make money as quickly as possible.
How does the process of onboarding these influencers work?
Most of these influencers want to create a product line. They generally know what their audience wants, know what’s missing in the marketplace that services that audience, and want to create it — they just don’t know how. They also want the opportunity to have a direct relationship with their followers as their customers, instead of being dictated when and how they can speak to them by third party sites like Facebook and Instagram and YouTube.
First, they indicate an interest in coming on our platform. We decide, by running them through our analytics tool, how likely their followers will be to become a customer and be willing to pay money for products that they create. Then, they’re onboarded onto our platform.
We basically do all the heavy lifting. They come to us with product ideas, usually a mix, and we look at their audience. Then we figure out what that audience is already buying and what content they’re reacting the strongest to. That usually informs what we make for the influencer.
A good example is what we have coming out this year with Kelly from Studio DIY. She’s known for these really cute Halloween costumes. Last year we did a pre-downloadable pattern to make your own pineapple hat and that got several thousand downloads. We already know that the interest is there for a pineapple hat and so all we have to do is go out and make the pineapple hat at a price point that her audience will accept.
What’s your revenue model?
It’s a pure profit sharing with the influencers. We’re putting up all the cash and upfront cost to the business so they don’t come cash out on anything. We truly consider it not a legal partnership, but a partnership in many ways because if they don’t make money, we don’t make money.
One of the most rewarding things about what we do is we enable other people, mostly women, to have and create their own product line and create a lasting revenue stream for them. It’s not a one-time post and get a couple of thousand dollars. They’re really building an asset along with monetizing their calling.
What are some lessons that you’ve learned as a founder that could help other entrepreneurs?
I think communication is really key. As the organization grows, your communication style has to evolve as well. It’s gone from being a couple, maybe three people in a room, to over 60 people in our office plus remote workers. Communication style can include remote versus in-office and then also based on the number of people, how we effectively communicate and how the leadership team gets communication back to their folks.
That just has continued to evolve and change and it’s not in any way near perfect, but I don’t think that I was as aware of that as early as I should have been. I would love for somebody to have hit me over the head with that — how important communication is and the different styles.
What are your thoughts on growing your company in the Southeast and any benefits or challenges that you’ve encountered so far?
I think any challenge is outweighed by an equally awesome benefit. One is, by and large, it’s cost-effective to grow your company in the Southeast. We’ve made our fair share of mistakes, but thankfully, they haven’t been incredibly costly.
One thing that’s very difficult about growing in the Southeast is that at least for where we are right now, there’s not a startup ecosystem here and there’s not an entrepreneurship ecosystem in Kentucky or even really in the Nashville area, which is where I consider us to be because we’re just about 40 minutes north of Nashville. So, that is incredibly difficult to not have those connections and to not know how it’s done. When we set out to raise money, there was no one to lean on.
We were very fortunate to be connected with some folks out in LA where we got their attention because we had revenue. We got bumped to the top of the list and I got amazing meetings with fantastic, fantastic people. A lot of the startup community is comprised of people raising money on nothing.