She Owns It
Portraits of women entrepreneurs.
Sara Krulwich/The New York TimesCarissa Reiniger
At the end of our last post, Carissa Reiniger, founder of Silver Lining Limited, was out of cash and about to miss payroll. Buying herself another few months, Ms. Reiniger told the other members of the business group, she managed to negotiate a $250,000 convertible note with a friend.
“So, the same thing you were doing before,” said Alexandra Mayzler, a group member who founded Thinking Caps Tutoring. Ms. Mayzler was referring to Ms. Reiniger’s past practice of borrowing from friends and family at high interest rates and then borrowing from others to pay them back.
“No, it was a smart deal — not a promissory note with a crazy high interest,” said Ms. Reiniger. The note, she said, was convertible to equity. In June, she raised an additional $100,000 by selling royalties on future sales of Silver Lining’s software to 20 people who each paid $5,000.
“It’s creative,” said Susan Parker, the group member who owns the dress manufacturer BariJay.
Ms. Reiniger agreed and said she had also cut costs in every possible way: “We haven’t spent money on anything that we haven’t had to.” She said Silver Lining’s operating costs, including software development, had been covered by the convertible note, royalty sales, revenue of $350,000 and personal money, including some from the sale of her condominium in Canada. She also went without salary for several months.
The software — the Silver Lining Action Plan, or SLAP — went on sale in October, and Ms. Reiniger said she had 120 customers within three weeks. On the product’s site, Ms. Reiniger appears in a video, outlining the basics of the plan. SLAP, she explains, is a five-step system that helps owners clarify their visions for their businesses, set one-year financial goals, determine their ideal client, create a 12-month program with quarterly goals, and, finally, execute the program. The software is intended for businesses with revenues from $100,000 to $2 million. The product’s motto is, “Every small business owner needs a SLAP!”
The software sells for a monthly subscription of $99. Plans with additional support are available for monthly rates of $500 and $2,500. “In theory, this whole scheme that I’ve had will pay off,” she added.
But she’s still saddled with about $145,000 in old debt. Additionally, she said, Silver Lining’s accounts payable list is up to about $35,000 — money owed to creditors, including former employees and vendors. Ms. Reiniger said she is repaying the money she owes some and trying to hammer out payment plans with the rest (some of Ms. Reiniger’s creditors dispute that she intends to repay them).
“That’s not bad, considering,” said Ms. Parker.
“Right,” said Ms. Reiniger. “I’m actually pretty proud of where we are right now. We’ve paid off a ton of debt and done amazing things with very little money.” But still, she said, “I’m skating this very fine line between having it under control and not having it under control.”
Ms. Reiniger said she was trying to decide whether to sell some equity or to maintain full ownership and control. Assuming she could find an investor, the first option could help pay off her debt more quickly. She said that while investors have shown preliminary interest in Silver Lining, she recognizes that that doesn’t necessarily translate into writing a check and putting it into her bank account. Without financing, she said, she could “totally right the ship” within six months. “I think the end result is the same. It’s just about timing and ease of getting there,” she said.
Ms. Reiniger said she felt she had come too far to give up any control of Silver Lining. “I’m almost done with this battle,” she said. “Why stop when I own 100 percent of my company?” On the other hand, she said, the notion of paying everyone back sooner — including some vocal detractors who could cause bad publicity when she least needs it — is appealing.
Ms. Parker asked why Ms. Reiniger was so sure she could pay everyone back within six months.
“We’re not talking about millions of dollars,” she said. Silver Lining, she added, has a detailed financial model that enables her to predict conversion rates. And because the company has been in business since 2005, it has a large database and network of prospective customers.
“Sales are not a mystery to me,” Ms. Reiniger said.
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Article source: http://feeds.nytimes.com/click.phdo?i=ea7cb0b68bae3da10c6554d36137c386
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