The $1 million boostrappers

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Alissa Leinonen didn’t think her business would last a year, let alone break $1 million in revenue.

Gourmondo started in 1996 as a four-table lunch spot in Pike Place Market, sandwiched between a tattoo parlor and a cobbler. On a good day they made $60.

“I was grinding on this thing for eight or nine years before I hit the first million,” Leinonen said.

Gourmondo is now the largest woman-owned corporate catering and box-lunch company that’s based in Seattle.

The company is among the 1.7 percent of women-owned companies to surpass $1 million in revenue, according to analysis from an American Express-commissioned report. Conditions for women entrepreneurs to thrive in the U.S. lag compared to conditions for men, and access to capital remains one of the key challenges.

Because access to capital was Leinonen’s biggest challenge, she grew the business slowly and methodically.

Leinonen maxed out her credit card, refinanced her Jeep, and scraped together favors and lines of credit from Pike Place Market vendors. A business partner cashed out retirement savings. Together they had $8,000.

Two years in and after paying off her credit card, Gourmondo secured its first line of credit for $50,000 through Costco, and in 2010, the Small Business Administration backed a $100,000 loan.

“Banks didn’t want to lend to me, especially without much collateral, but the SBA helped us to get to the next level,” Leinonen said.

Companies founded entirely by women receive fewer and smaller loans, private investments and lines of credit. As a result, larger expenses such as the purchase of a commercial oven can be unmanageable.

Investors look for “patterns of things that have been successful in the past that will be successful in the future,” Integris Software founder and CEO Kristina Bergman said.

“The biggest challenge women and minorities face is because they’ve traditionally been locked out of these opportunities, there aren’t a lot of patterns that exist that fit them,” said Bergman, a former principal at Bellevue-based venture capital firm Ignition Partners.

All-women founded companies in Washington state received just 1.2 percent of venture capital funding invested in the state in 2017, according to data from PitchBook Inc.

They received 14.5 percent of Small Business Administration-backed loans in 2017, according to SBA data, which showed the average SBA-backed loan to women entrepreneurs was $468,590 last year, up from $314,720 five years ago.

Bootstrapping and self-funding, friends, family and credit cards are how many women entrepreneurs in Washington state make it happen.

Bramble Berry CEO and owner Anne-Marie Faiola, for example, relied on credit cards and an SBA loan to get her company off the ground. Bramble Berry had revenue of $18 million last year.

Kathy Craft-Reich, CEO and owner of Craft Architects, made a $10,000 personal investment, shared office space and used her home computer. Craft Architects had $5.2 million in revenue in 2017.

Leslie Feinzaig, CEO and founder of the Female Founders Alliance, said addressing institutional biases and actively creating opportunities for women can help close the financing gap. The alliance’s mission is to build a community that supports women who work together to succeed and create an investable pattern of success among female-founded, female-led startups.

Because they’ve been told no so many times, Feinzaig said women entrepreneurs are often the scrappiest, most creative and resourceful people — characteristics investors should be looking for.

That was true of Leinonen, whose relationships with vendors and distributors kept her company afloat when the cash wasn’t there to cover bills.

“The one fabulous thing of starting with nothing is you’re thoughtful and you’re humble,” Leinonen said. “You will course-correct to find a way to get the company to survive. When you’re well-funded, you can finance mistakes or visions that aren’t giving you the results that prove that they make sense.”

Reaching $1 million in revenue was “a surreal moment,” Leinonen said.

“I had very little money to start a business, and my company was completely self-funded,” Leinonen said. “I was competing against large food operators with big marketing budgets and fleets of branded delivery vehicles.”

Gourmondo transitioned over the years from delivering dinnertime meal kits to catering corporate lunches. The company had about $11.2 million in revenue last year and about 250 employees.

Leinonen is considering seeking investors for an East Coast expansion.

“I’ve been cautious about the amount of debt I’ve taken on,” she said. “After 20 years, I own my company outright — every crummy vehicle, every pot and pan. It feels good to me.”

Through ebbs and flows, she carries one piece of advice.

“The money comes and goes,” she said. “If the money’s not there, the only thing that keeps you going is if you see the value in what you’re doing.”

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Published by

Melissa Crowe

I’m Melissa: an adventure-seeking, story-telling, internet-loving journalist. I work in Seattle. You can find my work in the Puget Sound Business Journal where I use data to tell stories about the people, businesses and industries driving Washington state’s economy.

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