A Top Investor Shares Her Best Business Advice
A Top Investor Shares Her Best Business Advice

A Top Investor Shares Her Best Business Advice

Anna Sweeting is an entrepreneur, investor, CEO and financial leader – as well as the founder of The Equity Studio, which offers funding and strategic advice to businesses across the beauty, wellness and lifestyle space. Recently, model and entrepreneur Rosie Huntington-Whiteley also joined the venture to launch a principal investment vehicle that will support brands in the US, UK and Europe with revenues between $3 million and $20 million. Here, we sat down with Anna to find out more about The Equity Studio, her own personal journey into the world of private equity and what she looks for in a compelling business proposal.

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I’ve dedicated the last decade to investing in consumer brands across the beauty, wellness and lifestyle space. The Equity Studio is very much just a continuation of this – it’s my third investment fund. I became an investor very organically, and by virtue of being an operator first. First, I qualified as a chartered accountant. Then I became CFO of a boutique bank and later a hedge fund. Next, I transitioned into the consumer world as a chief executive of the luxury brand LINLEY, leading its eventual sale. It was then that it became clear to me that there was not a lot of investors out there with hands-on experience of building and operating brands, which is what led me to create my own funds – to invest in these opportunities.

I knew I had a unique perspective – both within the industry but also just being a young woman who didn’t come from the world of private equity. I didn't come with any preconceptions of how growth investments should be structured. That guided me back then, and I would say it still guides me now. I really just set out to provide the right financing environment in which companies could thrive, and to meet entrepreneurs where I felt they needed to be met.

The consumer landscape has undergone a serious transformation in the last five years. The pandemic was such an accelerator, but also a disruptor. There’s been more change in the last five years than maybe in the last 50. But while tech and culture have both sprinted ahead, the investment sector is still moving in slow motion. If you look at the sectors I target, you have younger females and creators dominating consumption and social commerce, and that represents a huge opportunity. But I've been one of only a few to turn it into an investment strategy.

Rosie and I have known each other for a long time. But it became clear very quickly that we share a passion for brands and brand building. Through my investments over the years and her many collaborations and building her own brand, we've engaged in extensive discussions about various companies, including what makes a successful founder and business in this changing landscape. Our perspectives are different but highly complementary, so we knew it would be very impactful to unite and leverage our collective knowledge and capabilities.

Investors make up a FRACTION OF THE GLOBAL POPULATION, but they are positioned to make decisions that can SHAPE THE TRAJECTORY OF THE GLOBAL ECONOMY.

The Equity Studio’s mission is to redefine the investment landscape. Historically, there's been a very traditional path to becoming an investor and to supporting brands, and I do think we're pioneers in changing this. We have a dedicated focus on partnering with growth stage brands across beauty, wellness, and lifestyle. These are businesses typically in the early to mid-stages of their development, with revenues ranging from $3 million upwards to $20 million across the UK, Europe and the US. We’re focused on partnering with companies that will benefit from the strategic support of The Equity Studio to scale to the next level.

Founders in this space need investors that believe in their operating principles. Investors make up a fraction of the global population, but they are positioned to make decisions that can shape the trajectory of the global economy. I believe very deeply in the ability of investment to move society as a whole. Wherever you allocate money, you're having impact and driving what the future looks like. When you hold the right values at the core, this can be so powerful – and it’s probably the best description of my own personal mission.

We really live and breathe the sectors we’re focused on. A lot of our process is rooted in this complete immersion and internal expertise which is combined with systematic market research and analysis of shifts in consumer behaviour. We are in constant and dynamic conversation with retailers, as well as other key strategics and industry players to be in tune with their insights, both qualitative and quantitative. Then, we start to validate whether a brand or business could be aligned with what we’re seeing. 

When it comes to investment selection, we start to layer on more specific filter. We have a  multifaceted evaluation process but I can share some of the key principles that drive our investment decisions. We start with the financial and growth profile, so we're really looking at the fundamental components of the P&L and the balance sheet. We want to know that the brands are well positioned in their respective category. We also really tune into the context of that specific category – be it skincare, haircare, colour cosmetics etc. We start to ask, does the business model work with reference to what we know about that category? Does the business have solid infrastructure and processes? Is there the potential to scale? We also dive very early into customer metrics and we’re very guided by community. It's such a buzzword, but we’re really looking at businesses that are defined by their customer community. Do they have passionate followers who want to be part of what the brand represents? We believe this is the way to transcend the idea that this is simply another product in an already noisy space. 

If a brand has become a meaningful part of the way that consumers live, this really can set them apart. We look at retention metrics and, at loyalty. We're looking at how often people come back to the business, whether they become advocates for the brand and you can see this in exceptionally high referrals and in the efficiency of customer acquisition. I could go on because it really is very multifaceted, but we want to know what defines the success of a business long term.

Another crucial element is transparency and retailing responsibly – it’s no longer a choice. It’s a fundamental requirement. We’re always looking for brands, no matter what stage, that have demonstrated thoughtfulness about where they are. What are their ESG priorities? Where are they on that scale, is it an ongoing continuum? What are the steps they’ve taken to move the organisation in a certain direction? Consumers can really feel it, and you’ll see it in the numbers later. 

We invest in both male and female-led businesses. But where we do definitely have a unique perspective is that we are female led ourselves. The board is dominated by females, which is unusual in the investment world. But in the sectors that we invest, purchasing decisions are dominated by women – more than 75% of consumption in beauty, wellness, and lifestyle is driven by females – and yet less than 5% of people controlling investment decisions globally are women. So, it's really important because it affects what gets funded. Last year less than 2% of global venture capital went to female-founded businesses. It means people are missing out on wealth creation, so I would say that's what really drives us forward. It gives us a real competitive advantage.

To stand out to an investor, you should be able to demonstrate that you know your consumer inside out. In terms of presentation style, I’d say there isn’t a set template. You should be yourself and let your passion and mastery of your domain come through. You need to be confident in your ability to execute and be able to explain how this is supported as you scale,  but no one has all the answers. I do believe openness when presenting can indicate a lot about the internal culture of the business and how continuous improvement is being approached. 

Before you present to an investor, ask yourself whether you're ready. You need to be open to collaborating, growing and learning together. If you're not, it will come across. Sometimes founders can want capital, but they don't want the support and partnership. Not everyone’s ready for this kind of investment and that's okay. There's no right or wrong. But if you really do want investors to contribute to the success of the venture, you should be letting that come across. A practical tip, too: it's common for founders to pitch hard but you should always leave enough time for yourself. It’s so important to know who you're going into business with, and you must ask questions. There are practical things like how the investor makes their decisions and how long that timeline might be, but you also have to determine whether you both hold the same, shared values.

I have always had and still have a founder-first approach. They're really the driving force and really do know their customer intimately. The founders and their team are the backbone of the entire operation. We want driven, skilled entrepreneurs; we want them to have focus, you want them to be agile. This is where resilience comes from. As an investor I’ve seen that people who are very introspective and understand their strengths and weaknesses tend to have a greater chance of leading and then later, scaling a business. Early mistakes can be costly, so you need people who aren’t afraid to ask for help. Authenticity and vulnerability are so underrated.

To be successful as a brand, you need to be guided by the consumer in everything that you do. And it's the same for us as an investor. If you look at what I've invested in, the common thread is always that the brands are meeting the customers where they want to be met. Yes, you need to have geographical reach and the ability to distribute through different channels, but if you don't have that authenticity, inclusivity and transparency at the core, you're not going to get that far. 

As investors, we act as TRUE PARTNERS TO THE BUSINESSES. We're constantly reaching within our network for EXPERTISE THAT WE CHANNEL INTO THE COMPANIES and direct it very intentionally.

A good example is my investment in luxury resale platform Vestiaire Collective. It’s radical in terms of its transparency. It’s the first resale platform to become a B Corp and it was a real pioneer in the fast fashion ban and collective impact reporting. I have a haircare brand in the portfolio called Gisou. The core ingredient in the product range is honey and the founder comes from a six- generation beekeeping family. The bees, their health and their impact on the environment is always kept at the forefront. I've also got an investment in a baby care brand called Joone. It was the first diaper brand to ever publish its toxicology results, and it actually prompted a lot of legacy brands to do the same.

As investors, we act as true partners to the businesses. We prioritise candour in the founder- investor relationship because we believe that's how companies and their teams should operate. Our approach is grounded in our strategic ecosystem of partners and talent; and we're constantly reaching within our strategic community for expertise that we channel into the companies. We personalise it, and direct it very intentionally to support the businesses. We sit on the boards of portfolio companies to accelerate business plans, always  through this thoughtful way of doing things.

Due diligence is a process that can often be misconstrued as only checking what can go wrong. But first and foremost, we see it as a process to confirm our shared objectives with the founders and validate that both parties believe in the strategy that we're putting forward together. It’s about defining initial action plans for the investment as well. Yes, the capital is really important, but we do believe that support in scaling is crucial. 

Of course we  are also looking deeply at the business plan, and the financials and the infrastructure. Intellectual property is also a priority. We want to know how tuned in the team are operationally, in terms of what it takes to continue driving the business. Overall it’s a very positive process. Ultimately, we want to understand what we could achieve together, and that includes a potential exit together too.

Founders will often have very different aspirations when it comes to an exit. So, it’s our role to triangulate that with what we know to be true of the market, what the big conglomerates are getting excited by and then we either agree or disagree on whether the partnership makes sense. Our sectors are defined more than ever by dynamic M&A (mergers and acquisitions) activity, so there is a lot of opportunity.

At the end of the day, with any potential investment we need to see clear differentiation, along with proven revenue and defined demand for the product. Founders, you should seek  to show those early moats you've created, whether it's from a product perspective, a community perspective, a data perspective or a supply chain perspective. To stay in the game long term, it's crucial for brands to have thought these foundational elements through.

In terms of other overarching trends in consumer investing, we've seen a real flight of capital from the consumer category. The funding for the sector is down over 80% versus its peak in 2021, which on the surface could feel problematic, but I see it as a positive. While all the generalist funds have moved out, what you now have left is the specialist investors who deeply understand the space. They're the ones who should be guiding consumer founders and the ones they should be partnering with. Together, there's really an opportunity to outperform the market. So what I would say to brand founders in closing – if you’re guided by what’s going on in the market and your consumer, you will succeed.

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