Honey, We Need to Talk About Investors.
The smart founder’s guide to raising capital without losing your brand, your integrity, or your mind.
So you’ve built a brand, had some success, and you’re ready to scale to the next level, but you’re tight on capital.
You have two sources to investigate:
Venture capitalists (VCs) invest in high-growth, early-stage startups, usually taking minority stakes. They focus on long-term growth.
Private equity (PE) investors target mature, established companies, often buying a controlling interest (50-100%) to improve operations and profitability. PE firms focus on short-term optimization and a quick exit.
Before you sign anything, let’s have a conversation your accountant won’t have with you, but I will.
Raising capital can be transformative. It can also be the beginning of the end - not because the money was bad, but because the relationship was. Here’s what you need to know before that wire transfer lands at your bank.
More Money = More Problems
Let’s start with the obvious thing nobody wants to say out loud: you don’t need as much money as they’re offering.
Private equity and venture capital firms operate at scale. Their business model depends on deploying substantial capital and generating returns that justify their investment. That means they’re often incentivized to write bigger checks than your business actually needs because bigger checks create bigger ownership stakes, bigger oversight roles, and more pressure on you to grow faster to give them back their money - with interest.
The Rule:
Only take what you can deploy strategically to actually scale your business. Capital you can’t put to work efficiently becomes dead weight — or worse, pressure to spend unwisely just to look like you’re growing. Overfunding a brand in the beauty space is a well-worn path to inflated overhead, misaligned retail expansion, and a Founder/CEO who spends more time in investor calls than in product development.
Ask yourself: What specific initiatives will this capital fund? What does success look like in 18 months? Can you articulate a clear, credible use-of-funds story?
If your answer is “we’ll figure it out,” you’re not ready to take the money.
Values Alignment Is Not a Soft Skill, It’s a Survival Skill.
Here’s where founders get burned the most, and it’s almost never talked about in funding announcements: Does the investor’s values align with your brand’s DNA and planned evolution?
Investors are not a monolith. Some genuinely want to build great brands. They understand the beauty industry, they respect creative vision, and they know that rushing a product into mass retail before it’s ready can permanently damage a brand’s equity. These investors exist. They are wonderful. They are also a minority.
The majority of institutional investors — particularly in PE — are primarily interested in a return on their investment within a defined window, usually three to seven years.
They are not there to fall in love with your packaging or to protect your brand story. They are there to grow revenue, maximize EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and position the business for a sale or IPO. PERIOD.
That’s not a character flaw. It’s their job. But it may not align with your brand vision.
Before you take a single dollar, do your homework.
Look at their portfolio.
Talk to founders they’ve backed before - not the ones on their website, the ones they don’t use in their marketing.
Ask what happened when growth targets weren’t met.
Ask what the conversation looked like when a founder wanted to slow down a project to ensure they launch a high-quality, stable product.
Ask if they’ve ever pushed a brand into a channel or retail partnership the founder was uncomfortable with.
The answers to those questions will tell you everything.
Treat It Like a Marriage, Not a Mortgage.
Here’s the analogy I keep coming back to: taking on an investor is less like a business loan and more like getting married. You don’t just get the money - you get a relationship that comes with opinions, expectations, and often complications that require compromise.
And just like a marriage, the early courtship is when everyone is on their best behavior. The investor is attentive, enthusiastic, and full of big promises about what they can bring to the table beyond capital — distribution relationships, operational expertise, and marketing support. Some of it is real. Some of it is theater.
The question isn’t how they treat you when things are going well. It’s how they treat you when a launch underperforms, when a key retailer pulls back, or when the market shifts and your growth trajectory takes an unexpected detour. Structure your relationship accordingly.
Get the hard conversations in writing before the deal closes:
What happens if growth targets aren’t met?
Who has approval authority over key hires, product decisions, and retail partners?
What does the exit process look like, and who drives it?
These aren’t adversarial questions — they’re professional ones. Any investor worth working with will respect you more for asking them.
And do not - I cannot stress this enough - do not treat the capital injection as a finish line. It’s a starting line. The relationship begins the moment the wire transfer clears, and it requires the same intentionality, communication, and mutual respect as any long-term partnership.
Exits…
This is the part that nobody talks about at the funding celebration dinner, and it’s maybe the most important thing I’ll say here.
The beauty industry has a complicated relationship with investors. There’s a pervasive narrative that selling a stake in your brand to a VC or PE represents capitulation. That if you really believed in what you built and were serious about its growth, you wouldn’t “sell out”. That a founder with integrity would never invite some conglomerate to absorb their creation.
That narrative is unfair, and frankly, unrealistic.
Some of the most influential brands in beauty history were founded, built, funded by investors, scaled, and sold. An exit isn’t a surrender. It’s a chapter closing.
What matters is that you built something real. Something with integrity. Something that genuinely served your customer, pushed the industry forward, or changed the conversation in your category. If what you built wasn’t worthwhile, you wouldn’t have attracted investors or a buyer.
The measure of what you built is based on the quality and values you baked into the brand before stepping into an investment or sale negotiation.
You can be proud of what you built, no matter how you end your participation.
#MyTwoCents
Founders who navigate investor relationships successfully are the ones who go in with clear eyes, ask hard questions, and hold on to their values even when pressure to meet quarterly sales goals builds.
Capital is a tool, not a lottery ticket. Only take what you can deploy. Only partner with people whose definition of “success” is similar to yours. Treat the investor relationship with the same respect and intentionality you’d give any long-term business partnership — because that’s exactly what it is.
And if the chapter closes? Hold your head up. The work was real. The impact was real. That doesn’t disappear when the brand does.
I’d love to hear your thoughts and discuss in the comments below.
Kevin James Bennett is the publisher of In My Kit®. He is an Emmy Award-winning makeup artist, cosmetic developer, industry expert, and educator.
Learn more at www.kjbennett.com