Spring 2019 - Inside Outdoor Magazine

Inside Outdoor | SPRING 2019 36 F lylow is a classic suc- cess story. The com- pany was started by two college friends, Greg Steen (pictured left) and Dan Abrams (right), who wanted to build a pair of ski pants that would enable them to spend a considerable amount of time trekking through the backcountry. As the story goes, the company took off and grew into a trusted brand with a loyal customer base. So, when it came time to secure financing, it was critical for Steen and Abrams to obtain it in a way that wouldn’t change the heart and soul of the organization. We spoke with Abrams, who is president of the company, to learn more about how Flylow went about this process. Inside Outdoor: What was the financial challenge facing your business? Dan Abrams: We’re an inventory- heavy brand. So every year that our business grew, we faced more challeng- es. The biggest challenge was how to grow a company at a compound annual growth rate (CAGR) of 35 percent with a net revenue below 20 percent. The num- bers didn’t add up. We needed to find way to grow our company while absorb- ing our annual increases in inventory. IO: How did you proceed? DA: When you’re growing at such a high CAGR, you want to retain as much equity as possible. This holds true in any business. So the first choice would be to get traditional fi- nancing. The second, if you can’t se- cure enough in traditional financing, is to look for alternative financing, which for us is friends and family. Third would be an equity raise. Fortunately, we were able to se- cure traditional financing using a local bank. In order to collateralize a line of credit or a loan using a bank, we needed a financial provider that would understand the ebb and flow of our cash flow cycle. Being a winter brand, 95 percent of our revenue is gener- ated in the fourth quarter. We had to find a financial provider that would be creative in how they collateralized our debt, and we found that with the Colorado Business Bank, which now is part of the Bank of Okla- homa. As a local bank, and with people that understand the ski industry, they were able to partially collateralize our loan based on inventory deposits. It takes us nine months to produce garments. But we’re putting the deposit down on those garments in December, Financing Flylow BrandWatch By Gerald Baldino How Flylow’s founders funded growth while maintaining control of their vision