We were approached by a representative for The Angel Shave Club late last year to gauge our interest in purchasing their business. We entertained having a discussion with the guy who contacted us, but after some cursory due diligence, we figured out pretty quickly that it was not the right deal for us. Unfortunately for the Angel Shave Club, they recently announced that they went out of business.
In another article “What Happened To The Wet Shave Club” we outlined our opinion on why the old Wet Shave Club went out of business. In this article we will give our opinion on what happened to The Angel Shave Club. Why do we think it failed?
On its face, this is not a fair statement. There are obvious differences between The Dollar Shave Club and The Angel Shave Club. The reason we make this generalization is because we believe this is probably what the VC thought when they stumbled upon the business. Consider this.
As a small business ourselves, The Wet Shaving Club understands the temptation offered by the possibility of a large cash infusion from venture capital that could “jump-start” things, and hit the “fast forward button” on our business plans. However, we have also witnessed plenty of these cash infusions go south quickly with many companies, in many industries.
Therefore, when we read past articles about The Angel Shave Club, and how they partnered with a venture capital firm that was going to “accelerate” their business, it did not take much imagination to figure out why they were knocking on our door trying to sell the business approximately seven months later.
We actually feel bad for the founder. It seems (from prior reviews and articles) that she had built a decent business with a loyal following, that was not only making decent money, but was serving a cause near to her heart.
But then, in early 2019, it is reported that she partnered with a VC firm and that they were going to help her “re-brand” and possibly “double sales” in 2019. Before the year was over, The Angel Shave Club was out of business.
In our opinion, albeit a biased one, if The Angel Shave Club had stayed the course and continued its slow growth model, it would still be around today. But we know, the lure of the smart guys in suites from the VC firms waving around large sums of money and promising “exponential growth” is pretty hard to resist.
I can hear the pitch now. “Let us help you ideate on how we can synergize in your ecosystem and blah blah blah blah… and sales will double this year”.
Unfortunately, keeping the “soul” of the business is not a priority for them.
We cannot state this as fact, because we do not have any inside information, however our guess is that the founder of Angel Shave Club partnered with this VC firm with all the best intentions, but quickly found out that contrary to her hopes and dreams, the golden goose was more like a vulture.