CFW SPOTLIGHT: A CONVERSATION WITH MARIE KLOOR, CO-FOUNDER & CEO OF HYDRA STUDIOS
Marie Kloor and a former Goldman Sachs colleague, Dan Nielsen co-founded Hydra Studios as a “home-away-from-home” where New Yorker’s can exercise, meditate or recharge their human batteries- amenities typically limited to employees of larger companies. Last month they announced their $3.8 million funding round, and are opening their flagship studio at 120 Wall Street this week. We spoke with Marie about her personal career story, learnings along the way, and advice she has for other founders hoping to follow in her footsteps.
I started my career at Goldman Sachs in a back office operations role supporting private wealth management clients. It was a great place to learn about finance and Fortune 500 companies and cut my teeth. After about two years, I wanted to get more into a revenue-generating role, so I transitioned to covering large insurance companies on an institutional sales team— which played to my natural sales and customer relationship management abilities. I worked with incredible people and was held to high standards, and it came with a bunch of big company benefits. That said, after five years, I realized that the core mission wasn’t aligned with what I wanted to be doing with my life. I wanted to focus my passion, energy and skills on something I cared about. It took me a while to realize I was going to leave, and when I did, I had the most anxiety I’ve ever had. It was like leaving this warm blanket.
One of the best pieces of advice I got was to just start interviewing and putting myself out there; take conversations for all kinds of roles, even if they’re not necessarily the roles you want. The conversations help move you through an internal process of learning what’s out there. I talked to so many different companies, went on many interviews, reached out to people on Linkedin whose position I’d want in ten years and made personal connections.
Because I was in sales at Goldman, I thought sales was an obvious functional area for me. That said, I realized that a lot of those roles weren’t as creative as I’d like, and I found that business development or partnerships roles could play more to my strengths. I also realized that I needed to be involved in earlier stage companies to get positions that were really impacting a company’s revenue strategy. And I really wanted to tie it back to some of my own personal interests.
After about a year, I ended up at News Deeply, a company that was focused on reporting through single-topic news sites on a per-topic basis. I was brought in to help monetize it; so I was able to combine a partnerships role with a company mission I really cared about. News Deeply was my first foray into startups, which are a different world: you just don’t have the support- there’s no tech support, no one booking your travel; you’re creating your own play books, your own spreadsheets; you’re writing the book from scratch, and you have to make it up as you go. You have failures, and I definitely had failures. There was a female CEO, Lara Setrakian— this was the first time i’d ever worked for a woman, and I believe that this contributed to my having more confidence and feeling empowered to be more mission-driven. The gender balance was invigorating.
Watching the female founder of News Deeply gave me the confidence to go out on my own. Hydra Studios was inspired by some of the amenities I had access to at Goldman--I realized that people at smaller companies didn’t have access to those same amenities. I wanted to democratize these benefits. Starting the company was a huge risk, but I had gotten more comfortable being uncomfortable, more comfortable with uncertainty. And I’d seen the fundraising process first-hand.
When we started, we gave ourselves one year. It’s always going to take longer than you think, so it’s good to give yourself a realistic timeline and a financial goal to measure yourself against. Having watched the News Deeply founder constantly selling and evangelizing, I realized I needed to be able to walk into any meeting and be able to clearly share our vision, even though we’d never done it before.
Experience in finance gave me a template for how a Fortune 500 company operates, and that was a blueprint for me in our business. We’ve always had a very professional playbook with buttoned up financial models. We also learned what was not particularly useful which allowed us to focus on what was, like making sure sure our pitch deck was perfect.
I had to learn the VC fundraising scene from scratch. People would always say, “Oh, you’re a first-time founder.” There’s definitely a first-time founder tax. My cofounder and I set aside a small amount from our savings for living expenses during this year. It took us about 9 months to raise our first seed fund. You have to sell the vision and get comfortable with being turned down. We were pitching constantly for months and finally got one investor who offered us terms. The reality is that the majority of startups don’t have a lot of options for capital, and they have to take the term sheet offered.
I went to a lot of networking events, asked panelists questions, followed up with short emails, asking for two minutes of their time. And cold outreach on Linkedin works! I reached out to other early stage founders in my industry. I found that having sales experience was so helpful as a founder: sales and raising money are the same. It’s all about creating a pipeline, perfecting your pitch, following up, and warm intros. Warm intros are always best. And even if an investor said no, I’d follow up with, “That’s totally fine, who else can you introduce me to?”
The most valuable resource for me were other founders that took time to guide me and share their experiences. Which is why paying it forward is so important to me. Today, I work with other first-time founders, reviewing their materials, walking them through the steps, and then introducing them to investors.
Advice for female founders:
What type of capital is right for my business?
Friends/Family, Angel Investors, Venture Capital all have a place.
This is a matter of figuring out how much capital you need to get your product off the ground. If you can raise it from friends/family, do that first! A lot of times though, you need angel investors--they are great to go to for advice. They often turn into advisors of your business. Finally, VCs. They are the large ones, funding from beginning through to exit. We proved the concept through friends/family round, and that helped us get angel round.
Trends in funding:
When we started, everyone was looking for the next WeWork! Certainly times have changed. We’ve been lucky to have investors that have stuck with us through ups and downs, and now through Covid. And while tech-enabled has become essential because of Covid, there are plenty of investors that focus on products outside of technology, which, for us, was key to go after.
What I learned:
Get a good start-up lawyer: there’s a lot of great lawyers out there, but you need a START-UP lawyer. They know investors, they know terms sheets.
Create a pipeline: simple pipeline for all of your investors, run it as a sales pipeline. By the end of the process, you’ll always be impressed by how many people you’ve spoken to.
Warm intros always: (see above), look for opportunities to get those warm intros. Anyone who can’t help directly can still likely provide warm intros.
Know your targets: we wasted a lot of time pitching only to technology VC firms. We should have known who we were pitching to and who our likely audience would be. Your time is valuable.
Don't waste time on the wrong investors: see above!
Other founders are the best resource.
Fundraising Myths:
The entire process should take three months. For us, it took 9! If it doesn’t happen in a few months, it’s ok, keep going.
You’ll get a lot of term sheets to go through. Sometimes you only get one, and you have to go with it.
You have to have paying customers to get funding. There are VC’s that invest in pre-revenue start-ups, seek those out.
You have to set a minimum investment size. You don’t! You can take investments of all sizes. Everything helps and matters.
During Covid:
Things change constantly. Founding a company is an iterative process. For us, we launched our first studio in 2019, everything was great, then Covid hit. And while it was a huge challenge, we saw it as an opportunity to examine how wellness will look in the future. We’ve transitioned from more communal wellness to more private. We’ve had to pivot our business by listening to clients and really responding to the market.
Plans for 2021 include expanding Hydra’s footprint into multifamily developments and health care centers, as well as investing further into its experiential retail platform. Female founders looking to start their own companies can reach Marie Kloor at: Marie@hydranewyork.com.