Michele Romanow is the picture of success, but her entrepreneurial journey started much the same as many other’s — experimentation, a dash of failure, and a whole lot of no’s.
A serial entrepreneur, Michele started six companies before her 35th birthday. Today, she is a “Dragon” on CBC’s hit show Dragons’ Den and the co-founder and president of Clearco, the largest e-commerce investor in the world. She recently wrote a piece for Canadian Business to share how, through perseverance and hard work, she was able to build a career that has exceeded her wildest expectations, and how she’s helping others do the same through Clearco.
“The most challenging aspect of being an entrepreneur is that you hear “no” every day… At the same time, being an entrepreneur is the most rewarding career imaginable because you really have the opportunity to make an impact,” Michele writes.
From Engineer to Entrepreneur
Michele attended Queen’s University to pursue engineering at the request of her parents. But, by second year, she said, she knew she was better at building businesses than bridges.
When the engineering faculty opened a new building, Michele put together a proposal to include a sustainable coffee shop. Her goal was to create a business that was 100% environmentally sustainable, and the university backed it. It took three years to raise money, get approval, and build it out, but in 2006, she opened the Tea Room.
Everything was biodegradable — they had giant composters with red wiggler worms that could eat 10x their body mass to turn everything into compost. Michele and her team were doing things that were totally new in that space, and 13 years later, it’s still up and running and a student-led business.
In her fourth year, Michele met her business partner, Anatoliy Melnichuk. He sat beside her in class and after discovering that she was preparing for a business plan competition, came to the next class armed with a slew of pitches. Together, they built Michele’s next business — a caviar fishery.
From Caviar to Dragons’ Den
The worldwide caviar supply was down 90% because of overfishing in the Caspian Sea. Michele’s goal was to create a commercial supply chain. They secured $100,000 in funding, drove to New Brunswick and hired people to catch sturgeon while she cold-called restaurants to sell the caviar. It was grueling work, she wrote, but initial sales were good.
Within four months, the economic recession hit and Michele was left selling one of the “world’s most unnecessary luxury products,” she wrote, crediting that failure point for teaching her an important lesson — “the world really owes you nothing.”
After having a few more failed attempts at starting a business during a recession, Michele opted to take a corporate job at Sears to catch her breath before getting back into the entrepreneurial game. By 2010, she had launched Buytopia out of her Toronto apartment, where she worked with retailers to offer customers gift cards at a discounted price.
With no money for marketing, Michele had to think outside the box to reach new customers.
“Our first attempt at attracting customers involved buying a box of sidewalk chalk and writing our ‘deal of the day’ and our website address outside every single major building in Toronto,” Michele writes. “We got so many calls from people being like, ‘Please stop defacing the sidewalk outside our building.’”
Michele expanded the Buytopia model to create SnapSaves in 2012 — an app that digitized coupons for grocery stores. It got a lot of traction early on and within two years was acquired by Groupon. She joined the team as the head of marketing.
It was this move that got the attention of CBC’s Dragons’ Den. She joined the hit TV show in 2015, becoming the youngest judge in the show’s history. Michele was getting to meet and hear from hundreds of founders, all of them, she writes, opting to hand over expensive capital in the hopes of getting funding to put towards ads — something with a fixed return — to acquire more customers.
Over time, this funding model seemed more and more unfair and unnecessary to Michele who had been in that position herself.
“One day,” she writes, “I decided to throw out a different type of deal. I said, ‘Why don’t I give you the $100,000 you’re looking for, and instead of taking 10 per cent of your business that I will own forever, I just want 10 per cent of your revenue until you pay me back my capital, plus six per cent interest?’”
That ended up being the first Clearco deal.
Building a Founder-Focused Investment Firm
Michele co-founded Clearco in 2016 as an investment firm offering capital to e-commerce start-ups with the goal of democratizing access to capital. Clearco’s funding model is based entirely on AI — founders share all of their business-related numbers and an algorithm determines almost instantly if their business is profitable.
As a result, Clearco has invested in more women- and BIPOC-led companies than ever before. She writes:
There are so many people with great business ideas who don’t get the capital they need because that money is reserved for the “right people.” (If you’re a man and go to Harvard or Stanford University, you’ll have no problem fundraising.) Even if you have a great business idea with great unit economics, which helps determine the profitability of a business, it is extremely difficult to raise money. This is why we see incredibly skewed stats on race and gender with women- and BIPOC-led businesses being less likely to secure funding than ones led by men.
To date, Clearco has funded more than 6,000 different founders, and invested more than $2.5 billion in businesses. They are the largest e-commerce investor and have raised US $100 million at nearly a US $2 billion valuation, bringing Clearco up to Unicorn status.
Michele’s Advice to Aspiring Entrepreneurs
It takes a lot of hard work and perseverance to be an entrepreneur. Michele credits her Saskatchewan-based childhood for instilling an incredible work ethic in her. “A lot of people are farmers,” she writes, “and I was exposed to the mindset that if you don’t get up every morning at 6 a.m. and go to work, the animals are going to die. I’d like to think that my Saskatchewan roots never left me, because I still work my ass off.”
This mindset helped Michele fight back against the many no’s that she received at the beginning of her career. “You have to have the capacity to endure an enormous amount of failure,” she writes.
The flipside is that being an entrepreneur is the most rewarding career imaginable, she writes. Entrepreneurs can have a real impact on the world and create change.
“I truly believe that Clearco has an enormous opportunity, not only to be a unicorn, but to become a defining company that changes the way founders are funded.”
As a keynote speaker, Michele Romanow recounts her journey from a Queen’s University undergrad to becoming ranked in WXN’s “100 Most Powerful in Canada”. She shares lessons learned as one of Canada’s most successful entrepreneurs, including the necessity of embracing change, encouraging disruption, and incentivizing innovation at every stage of the game.
Interested in learning more about Michele and what she can bring to your next event? Email us at [email protected].