Grandma knew best when it came to Marci Hotsenpiller’s first foray into entrepreneurship.
The founder of Ritual Nordic Spa has fond memories of spending time with family and friends at her grandmother’s sauna, near Bala, on Lake Muskoka in Ontario. Those special times were the spark for Ms. Hotsenpiller to launch her urban spa in downtown Victoria.
“I started noticing urban sauna houses popping up in several American cities – Portland, San Francisco, Brooklyn; I found five in Seattle,” says Ms. Hotsenpiller.
A visit to Le Scandinave Spa in downtown Montreal convinced her that her vision of a spa, one that combines indoor and outdoor spaces, could flourish in a city environment. Channelling her Finnish heritage into the process, she aimed to pair functional and sleek Scandinavian design with accessible wellness experiences.
With her concept fleshed out, Ms. Hotsenpiller began the process of building her business. As a former internationally ranked skier with a multi-decade career as a communications executive and consultant for public infrastructure projects in Western Canada, Ms. Hotsenpiller felt she had many of the prerequisite skills to start her business. But her biggest hurdle? Financing.
“I approached three major banks – and met with men. All said no,” says Ms. Hotsenpiller, who was told that her business plan didn’t measure up with the banks’ decision-makers across the country. “Apparently [lenders in] Toronto thought my venture was too risky.”
Advice, connections and early-stage funding
Ms. Hotsenpiller decided she needed more insight into why her business pitch wasn’t an attractive investment. She approached a colleague she knew from the Women’s Equity Lab (WEL).
Launched in 2017 in Victoria, WEL was founded by 23 partners (including Ms. Hotsenpiller, one of the original members) and is committed to investing in women-led businesses. With four chapters across Canada (and more coming soon), WEL members not only provide capital to the companies they invest in, but also act as “advisers, connectors and champions” of the entrepreneurs they support.
Ms. Hotsenpiller says the idea behind WEL was to “change the conversation and change the statistics about women investing in companies.” (A 2019 report from Highline Beta initiative Female Funders found that only 15 per cent of partners in Canadian VC firms are women.)
“Education was a big part of year one, to change the landscape of investing,” she adds.
Connections are also a big part of the WEL philosophy. That informal conversation Ms. Hotsenpiller had with her WEL colleague led her to more opportunities to secure funding for her own venture. She had three meetings with three new financial institutions – meeting with all women executives this time around – which resulted in three offers for funding.
It was a welcome development, but the offers also brought challenges related to Ms. Hotsenpiller’s own personal risk tolerance.
“I had to explore and expand my comfort level about borrowing and debt,” said Ms. Hotsenpiller, who realized during the process how family attitudes toward loans and debt can have a major impact on entrepreneurs.
She recalls a WEL presentation, and a statistic (about U.S. businesses) that stuck in her mind: Although women start businesses at twice the rate of men, only two per cent of those businesses exceeded profits of $1-million per year.
“What happened to all those businesses?” she says. “It takes so much energy to start a business, why not aim high?”
Ms. Hotsenpiller took the financing and made her business idea a reality.
Kristina Stanley is another entrepreneur who has benefitted from the WEL philosophy.
She came up with her business concept when writing her first novel. Even after completing her first draft, the revision process seemed daunting. Partnering with her husband Mathew Stanley, she created Fictionary, AI-based software to simplify the editing process.
Ms. Stanley met with Stephanie Andrew, CFO and partner at Cindicates, a Victoria-based VC fund and another one of WEL’s founding partners. Ms. Stanley says that meeting was invaluable to Fictionary’s launch.
“I knew right away that [WEL] was a great fit to be Fictionary investors,” Ms. Stanley says. “Stephanie [had great] enthusiasm for the content creator space.”
WEL invested in Fictionary pre-seed round, enabling the fledgling company to bring Fictionary StoryTeller, software designed for fiction writers, to the marketplace.
“Working with a group of women boosted my confidence in leading a technology company,” Ms. Stanley says. “WEL gave us early advice on how to garner information from our customers to understand them better.”
As for Ms. Hotsenpiller, her business has been steadily growing after Ritual’s opening in February, with a portion of the revenue going to local charities to improve the lives of women and children. She says her background in sport has helped her weather the strains of entrepreneurship.
“It’s a marathon, which is a good analogy for this long process,” she says.
She has welcomed financial supporters to the spa, and even former doubters too.
“All the women who wanted to finance me have been here, and one of the men who turned me down came to the spa with his wife,” she says. “He loved it.”
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