The Digital Skeptic: Investors? We Don't Need No Stinkin' Investors
NEW YORK (TheStreet) -- Abe Burmeister has a "happy" holiday message for all you VCs, private equity players -- or anybody else scheming to get paid waving money around in the digital age.
"We prefer not to have investors," he told me over the phone last week. "Ever."
Burmeister is not some antisocial, storm-the-ramparts whiner. Oh, no, he's founder and owner of Outlier, a happening, Brooklyn-based clothing company any investor would dream of owning a piece of.
I first met Burmeister on a trip to Williamsburg I made doing a straight-up business story on how in the world this 37-year-old built a $1.2 million clothing business that designs, sells and makes menswear right here in the five boroughs.We've stayed in touch. And my chats with this young man have led to some dang intriguing insights on what works -- and what doesn't -- in U.S. digital-era investing. No stinkin' plan
Burmeister's big takeaway? Money's just like any other piece of information in this information-soaked age. You can have too much of it. First off, he sees absolutely no need for formal, traditional business planning investors require. "They always ask what your five-year business plan is," Burmeister told me as he described various meetings with bankers, VCs or potential business partners. "My plan is both longer and shorter than that. We want to have a great relationship with our customers." To do that, Burmeister has been a very careful to not expose his growing firm to the strains of getting money from others. "We make something physical and we sell it," he said, and simply saves the difference between what he sells his products for and what they cost to make, then spends some of that on his next designs -- happily avoiding traditional financing options such as inventory factoring, commercial lines of credit or even simple loans. "It makes me really happy that I don't have to deal with these sorts of things," he said. Burmeister is also a fanatic about not tapping into sexy-sounding, digital age sources of funds. "When I talk to my friends and they say they have raised this or that amount of venture capital, I am not jealous," he said. "It's nice to raise that number of millions, but I see the loss of control as being far too important." Why? That's easy. The expectations of these new-age investors is simply out of line with the realities of doing business, he says. "They are more interested in a numbers game than in growing a healthy business for the long haul," he said. Burmeister points out there are no shortage of designer heavies, such as Jil Sander, Helmut Lang and Isaac Mizrahi, who grabbed the outside cash and went on to lose control of not only their brands -- but of their names.
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