Joanna Jensen, 51, is the founder and chairman of Childs Farm, a baby and children’s toiletry brand. She started the business in 2010 and it has secured £2.6 million of external investment. Its sales hit £17.4 million in 2020 and last year Jensen also launched an adult brand called Farmologie.
Our investor pulled out four days before the deal was to be signed
It was March 2014. In June of that year we would be going into Waitrose and Boots, and our 20-episode cartoon was going live on the Turner television network. This was a big, big time for us and it all needed to be funded. I was also in the middle of a divorce; we’d sold our house and I couldn’t find anywhere for me and the girls to live. Everything was happening at the same time.
An investor approached me through one of our retailers. They had a history of privately investing in a number of well-known brands and we were well below their usual investment criteria but I was told “We can do this.”
As you build up to do a private equity investment you are investing a huge amount of money in legal fees, advisory fees, and on accountants. It amounted to about £60,000. In hindsight the terms were pretty criminal but I just didn’t know where that next penny was coming from. And I trusted this guy, I believed what he said.
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I couldn’t get any answers to begin with
All I can assume is the investment committee said: “What are you doing, this is not within our criteria?” which is why they pulled out at such short notice. I got a phone call from the other partner saying “We’re not going to do it” as the guy I’d been dealing with was apparently too busy to take a call. I jumped straight on a train to London and went to their offices and said: “I need to speak to you, you owe me this.”
We got on a call with one of the retailers we were due to launch with in June and the investor said to them: “I’m just letting you know we’re pulling out. Joanna doesn’t have a penny so I’m not sure if you’re going to want the brand to launch in June.”
I left that meeting and I was literally hyperventilating. I didn’t know what I was going to do. I phoned my manufacturer, Tom Allsworth [co-founder] of Revolution Beauty, and he was on a plane about to leave for Chicago. He said: “Joanna, I’m going to be on this plane for ten hours. You have my word I’m going to back you on everything you need. You will be able to go into the retailers, you will be able to do this cartoon. I am going to fund whatever you need. Now go home and have a drink.”
Good people restored my faith in humanity
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Tom turned it all around at a moment when I’d lost complete faith and I was sitting there thinking my world was collapsing and wondering how long we could live in the car. I owed money all over the place and I would tell people “I can’t pay you yet” and they said “But you will. We believe in you and we believe in this brand. We will support you.”
It made me realise [investors] will manipulate and say what they need to [strengthen] their own position. I learnt to follow my gut. My gut was saying that there was something not quite right, I felt like I was compromising. But I felt I didn’t have a choice. I felt desperate and I probably appeared desperate.
I remember having meetings where my lawyers were very calm and professional and his were very sensationalist and attacking. That should’ve been a red flag.
It all worked out in the end
In the summer of that same year, 2014, Andrew Leek, whom I refer to as my business partner (he owns just over 20 per cent), came in and brought not only additional money but also expertise from his background in both private equity and as a former MD of Complan [the nutritional supplement business].
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I met him through an agency which introduced angel investors and businesses that were in distress. The experience could not have been more different. The day after I’d moved into my new house Andrew came over and we sat and chatted. It felt like coming home.
Within a couple of weeks, he said “I want to do this and to show you how much I want to do this I’m going to put £100,000 in your bank account right now.” In the end he brought in five or six investors with him but he’s also brought in his knowledge and his calmness. He’s a total gent.
Since then the business has gone from strength to strength
We’ve grown very quickly but because of our [low] price point we’ve got to sell a lot of products. When we entered Boots and Waitrose in 2014, Johnson & Johnson had a 31.8 per cent market share of the baby and child toiletries category. They now have 13.2 per cent. Childs Farm has 15 per cent and is the market leader.
We’ve been unprofitable for the past couple of years because we’ve reinvested everything. You reach this inflexion point where you just need to look at say, “What can we do to supersize what we’re doing?” And for us that’s reinvesting for growth, investing in Farmologie, our new brand for mums and parents, and looking for international expansion.
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Joanna Jensen was talking to Hannah Prevett, deputy editor of The Times Enterprise Network
https://www.thetimes.com/article/what-i-learnt-about-timing-h6jqtd7wn
