Joanna Track's closet used to contain exactly one set of "going-out" clothes. "I had literally one stylish outfit, and any time I had to go to an event, that's what I put on," she says in Rogers & Me. It was 2004, and the self-professed shopaholic had just launched Sweetspot.ca, a Toronto-based website that roots out all things cool and spreads the word to savvy shoppers through daily e-mail newsletters. But even though Track spent her days trend-spotting the sexiest threads, sassiest beauty products and edgiest spas and restaurants, her financial straits made these searches largely a spectator sport. "Here I was, supposedly on top of everything that was cool, and I couldn't buy any of the stuff or go to any of the places," she says.
Then came the phone call. In early 2006, Louise Clements, vice-president of digital properties for Rogers Media, approached Track about opportunities between Sweetspot and Rogers's digital publications. The conversation soon turned to the prospect of Rogers taking a stake in Sweetspot.
It's a good day for any small business when a corporate giant takes notice and wants to buy in—but it can also be a very scary proposition: How do you maintain control over what you've created, often at great personal cost, while keeping the investor satisfied?
Joanna Track was online earlier to discuss how she navigated the difficult task of sealing the deal while standing up firmly for her and her company's best interests.
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Rasha Mourtada, globeandmail.com: Welcome, Joanna, and thanks for being with us today. You sold a stake of your company, Sweetspot.ca, to Rogers back in 2006. What's your advice to other entrepreneurs on taking on a large corporate investor? Why do it? And what should they be wary of?
Joanna Track: Hi Rasha, it's a pleasure to be involved in this discussion. I would advise anyone who is considering taking on a large corporate investor to do their homework! Learn about the company, the people, other deals they've recently been involved with. Speak to people on the other side of those deals to get their perspective on how it is to work with them. Also, be very upfront from the start. If you want to work from home, tell them. If you expect them to have a certain involvement, tell them. It is better to get it all out in the open before you sign on the dotted line.
Why do it? I think people do it for various reasons....money, security, support. I think they are all valid. For me, the capital infusion was important, but more importantly, I wanted to take Sweetspot to the next level and get broader awareness across the company. While I'm confident I could have achieved this on my own in the long run, it was much faster and more effective with Rogers' fuelling that engine. It also allowed me to focus on other areas of the business.
I think any small business owner should be wary if the offer is too good to be true, or if there is any ambiguity in how the deal will work in either the short and/or long term. If what they are offering you significantly surpasses what you're expecting, you need to take a close look to ensure there is no "catch." And you don't want any ambiguity with respect to goals and expectations in the near and far term...you need to know where you stand now and in the future.
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