I Turned Down a $7 Million Deal After a Shocking Conversation With the Investor. My 'No' Led to a Surprise Email and $100 Million Exit. Sarah Dusek, co-founder and CEO of travel company Few and Far, learned an important lesson when venture capital negotiations fell apart.

This as-told-to essay is based on a conversation with Cape Town, South Africa-based BIZ Experiences and investor Sarah Dusek. Dusek is the co-founder of venture capital firm Enygma Ventures, co-founder and CEO of travel company Few and Far, and author of Thinking Bigger: A Pitch-Deck Formula for Women Who Want to Change the World. She is also co-founder and former CEO of travel company Under Canvas, which sold for $100 million in 2018.

^{Image Credit: Courtesy of Few and Far. Sarah Dusek.}

I'm from the UK originally, but I spent my early 20s in Africa working for aid agencies. When I met my husband, who's from Montana, I went [there] for the first time and was struck by the big, wide open, vast spaces there: It reminded me of an African safari experience and being out in the wilderness in the bush and seeing lots of wildlife.

It sparked an idea of reimagining the safari experience for an American audience, recreating an old-fashioned safari concept but modernizing it. The glamping industry didn't exist at that time, so we really kind of pioneered the glamping industry in the U.S. We wanted to create access to this beautiful wilderness without doing development that was harmful and permanent. The goal was to create a light footprint and be sustainable. We called the business Under Canvas.

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We opened our first camp in Yellowstone in 2012. I had no idea if people would pay hotel room prices for staying in a tent. It just wasn't proven at that point. But we quickly realized there was so much demand to be out in nature and for it to be comfortable, with warm beds and hot showers. I remember sitting on my bed in my camper at the time, which was on site, and thinking we could create these camps all over the country.

"We were pioneering an industry that didn't really exist yet: We needed to raise capital."

Of course, we had to figure out how to afford to scale. We bootstrapped for a long time and plowed every cent back into the business. It was tough and slow; we couldn't grow as fast as we wanted. Three or four years in, we realized that if we didn't raise capital, we wouldn't be able to capitalize on the opportunity before other people did. We were the market leader, pioneering an industry that didn't really exist yet: We needed to raise capital.

At the time, I didn't really understand how venture capital works; I didn't understand what was required or the metrics that investors were looking for, but then I had a chance encounter with a VC who came and stayed at one of our camps. She emailed afterward to say what a fabulous time she'd had with her family, and she encouraged us to raise money and scale. That was around 2015.

It was really tricky trying to find the right investors, many of whom were interested in tech and real estate at the time, but after about 18 months, I was finally introduced to this one particular firm backing travel concepts. They were intrigued, and I was overjoyed with relief — finally, after being told "no" so many times, someone was interested in helping us develop the business.

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I soon realized that investors can be a category all of their own; there's a reason the show is called Shark Tank.

I found the process distasteful and shocking a lot of the time, but I started to understand, Okay, I get what you're looking for. I get the return you're trying to achieve, and here's how I have to fit into your box to try and get funded. When we finally got a term sheet, I was relieved because we were perilously running out of money. But the term sheet is really predatory. At the time, I had nothing to reference, so I didn't reject it immediately.

"I realized he wasn't on my side."

I tried to have our lawyers negotiate, and then I tried to negotiate, and this went on for a while. We signed the term sheet, and I was like, Well, I can't turn down this $7 million deal. We needed the cash to grow and to survive. The terms were for 3x preference, which is extremely high, and valued the company really, really low — even though we were EBITDA positive, which is almost unheard of for early-stage companies, and doing $6-$7 million in revenue.

I kept hoping it would work out. The deal was in full motion when I called the investor and said, "I'm calling to let you know that there's a problem." We were trying to open another new site and would have been in the middle of closing a new piece of real estate that we were acquiring, but the owner didn't show. So I told the investor about the hiccup, expecting to hear, "Okay, that's not great, but what do you need?" Instead, I got, "Well, that's very bad for you. That looks really bad for you, and if you don't fix it, that's the end for you."

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I realized he wasn't on my side. I sat on it for a few days, and then I called him and said, "I just don't think this is going to work. We're not on the same page." Then he said he'd blacklist me in the VC world, and I suddenly thought, Oh gosh, if I wasn't sure before, I am really sure now.

"Money at any cost isn't the answer."

It was a massive lesson for me: Money at any cost isn't the answer. Saying yes to a deal when people's values don't resonate with your own, and you're not on the same side, is a massive red flag. I had to go back to my staff and tell them I'd pulled the plug. I just burst into tears, which of course, normally you wouldn't do. But I couldn't contain the disappointment.

But I remember saying to my team, "This helps us solidify our values. It helps us get really clear about how we want to do business and who we want to do business with. And if we can't align on those things, then it's better to not do it at all." My team was amazing; they picked me up and helped me get back out there again.

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Then, out of the blue, a couple of weeks later, I got an email from an investment firm that helped small businesses raise capital. I don't normally reply to cold emails, but I sent a flippant reply back and said, "Well, what do you think you can do?" Then I realized they had infinitely wider, deeper networks than I had, and ultimately, the firm found us an amazing private equity firm that did a debt and equity deal with us. Within about six months, we raised $15 million, not $7 million.

We did a smaller amount of equity and a larger amount of debt. It validated my decision to turn down the other deal. It also brought people to the table, which helped us secure our $100 million exit within a couple of years. I stayed on as CEO for just over a year after the exit. Then I tackled my next venture. We started a small venture capital fund called Enygma Ventures and came back to Africa to help women fund and scale their businesses.

"We have to build businesses that are regenerative."

BIZ Experiencess are the builders of our world. We are the people who are going to build what tomorrow looks like, so it's up to us to be thoughtful about what tomorrow looks like. That's our power, and that's why it matters so much that women get capital — so that we all have a seat at the table. If only a certain segment of society can fulfill their dreams, we're all poorer for it.

I liken being an investor to being a grandparent: It's fun and great sitting on the sidelines, but it's not quite the same as getting your teeth into something, solving a problem and making things happen.

Sustainability has been first and foremost for me, but over the last few years, I've started to realize that sustainability isn't enough — we have to build businesses that are regenerative. They need to give back, create impact and help solve some of the world's biggest problems. I was thinking about how we could help solve our CO2 problem and build something valuable and impactful for the environment. So it inspired yet another idea for a travel company — to do carbon-free travel, developing carbon projects at the same time as developing five-star eco lodging.

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Now, with Few and Far, we think of ourselves as a climate slash travel company, not just a travel company. Each project that we develop will also have a significant carbon project alongside it. We're reimagining creating safari experiences again while investing in ourselves through restoring and regenerating degraded areas of wilderness.

The recurring theme for me through all of it is really being led by your values, using those as your north star to guide you and enable you to build the kind of company you envision. That's ultimately what makes something very valuable, whether that's impactful value or financial value. It's that sense of creating something authentic, true and connected. When BIZ Experiencess are solving problems they really, really care about, you can tell, and the businesses they build matter. They solve problems and change the world.

This article is part of our ongoing Women BIZ Experiences® series highlighting the stories, challenges and triumphs of running a business as a woman.