In a counterintuitive move, The Laundress hired a banker recommended by their acquirer, Unilever. The logic was that large corporations prefer negotiating with known, tough entities, and this banker had a proven track record of extracting maximum value for founders.
Founders should be wary of earn-out clauses. Acquirers can impose layers of pointless processes and overhead costs, tanking the profitability of a successful business and making it impossible for the founder to ever receive their earn-out payment.
Instead of a formal M&A process, Unilever's initial contact was an executive visiting The Laundress's retail store and questioning staff. This unprofessional start was a red flag, foreshadowing the chaotic post-acquisition integration and lack of process that followed.
The Laundress founder argues that celebrating multiple VC rounds is misguided. While seen as a "badge of honor," it means giving away control and equity. By bootstrapping, she retained majority ownership, contrasting the "sexy" VC narrative with the financial reality of keeping your company.
The most critical contractual failure in The Laundress's sale to Unilever was the absence of a detailed transition plan. A vague clause to "keep doing what you do" created an ambiguous power vacuum, leading to operational chaos and the brand's post-acquisition implosion.
Gwen Whiting bootstrapped her company with $250k in credit card debt. She found card APRs were more favorable than the high-interest small business loans marketed to women at the time, making strategic debt rollover a viable, albeit risky, funding path.