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The Inside Story Behind P&G’s Acquisition of Tula Skincare

In 2013, Dan Reich and his partners founded TULA, a digitally native, probiotics-infused skincare line.

Reich bootstrapped TULA to around $10 million in annual revenue when he realized he needed to replace himself as CEO.


The company thrived under professional management, and by 2022, TULA had achieved revenue of over $100 million and received an acquisition offer from Procter & Gamble.


In this episode, you’ll learn how to:

  • Know when to fire yourself as CEO.

  • Uncover fresh opportunities in stagnant markets.

  • Safeguard your idea from corporate giants.

  • Use convertible debt to finance your business.

  • Choose an acquirer that aligns with your company’s vision.

  • Understand the dual role partners play in shaping your brand’s value.

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More About Dan Reich

Dan Reich is a serial entrepreneur, investor, and writer with a history of building companies since his teenage years. His notable ventures include TULA Skincare (acquired by Proctor & Gamble), Troops.ai (acquired by Salesforce), DIBS Beauty, and Spinback (acquired by Buddy Media, then Salesforce).


In addition to his professional accomplishments, he is a dedicated spouse and parent of two. Outside of work, he enjoys attending New York Giants games, golfing, watching TV, listening to music, and volunteering for rescue operations in Mount Snow, Vermont. Passionate about people, friends, and family, Dan is also committed to philanthropy and investing in future generations.


Definitions

Letter of Intent (LOI): A letter of intent (LOI) is a document declaring the preliminary commitment of one party to do business with another. The letter outlines the chief terms of a prospective deal. Commonly used in major business transactions, LOIs are similar in content to term sheets. One major difference between the two, though, is that LOIs are presented in letter formats, while term sheets are listicle in nature. Source.


Earn-out: Earnout or earn-out refers to a pricing structure in mergers and acquisitions where the sellers must “earn” part of the purchase price based on the performance of the business following the acquisition. Source.


Due-Diligence: Due diligence is an investigation, audit, or review performed to confirm facts or details of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party. Source.


Venture Debt: Venture debt is a type of debt financing obtained by early-stage companies and startups. This type of debt financing is typically used as a complementary method to equity venture financing. Venture debt can be provided by both banks specializing in venture lending and non-bank lenders. Source.


Net promoter score (NPS) is a widely used market research metric that is based on a single survey question asking respondents to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague. The NPS is a proprietary instrument developed by Fred Reichheld, who owns the registered NPS trademark in conjunction with Bain & Company and Satmetrix. Its popularity and broad use have been attributed to its simplicity and transparent methodology. Source.


Convertible Note: A convertible note is a way for seed investors to invest in a startup that isn’t ready for valuation. They start asshort-term debtand are converted into equity in the issuing company. Investors loan money to the startup and are repaid with equity in the company rather than principal and interest. The convertible note is automatically changed into equity once a specific milestone has been reached, usually when the company is officially valued for later investments. Source.


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