Vanessa and I met in 2007, not long after I had moved from Chicago to New York. I had left the Midwest to fulfill a lifelong dream of trying my hand in the Big Apple, where I had recently landed a job at a large national women’s organization. However, my career in social justice- and arts-oriented nonprofits, plus graduate school debt, had left me dead broke, so when it came to housing, I needed something cheap. My requirements were simple: functioning shower, private bedroom with a real door (not one of those accordion vinyl deals), and no vermin—but I couldn’t find jack shit within my budget that wasn’t a slum. Months passed, and as my welcome on friends’ couches wore out, I got desperate. So desperate that I clicked on a Craigslist ad titled, “$1! Free rent for 20-something female.”
Usually, a post like that begins with something creepy like, “I’m just a normal seventy-year-old guy with an extra bedroom willing to give a nice lady free rent if she’s willing to walk around in lingerie…” But this one was hilariously written by someone who claimed she was a twenty-two-year-old professional poker player looking for someone to manage her apartment. We sent each other links to our MySpace profiles and met up a few days later. (To be extra safe, in case this “woman” should turn out to be that old guy, I brought a friend with me.)
As luck would have it, the stranger behind the ad was Vanessa Selbst, and Vanessa Selbst turned out to be not only normal, but awesome. We hit it off, and I moved in. My roommate duties weren’t really deserving of living gratis: I moved her car on alternate-side-parking days, collected rent from our other roommate, set up our utilities on auto-pay, and didn’t let the apartment turn into a pigsty. When she wasn’t traveling to tournaments, Vanessa and I ended up spending a lot of our free time together; she enjoyed bourbon and house parties and practical jokes, and she was sharp as a tack. She was my type of friend. After a year of living together, Vanessa went on to Yale Law School, and while she was there became the most successful female poker player in history.
Fast-forward three years. I was still at that women’s organization. I had taken the job as a way to get to New York, but I never considered it as a long-term gig. The minute I stepped my foot into Brooklyn in 2007, the energy of the local food businesses—that guy who left law school to smoke meat, the artist who took a risk on a creative pie business, the architect creating ice cream sandwiches—inspired me to seriously consider a career in the field. These people became my heroes. I wanted to emulate them.
I had always loved cooking and baking—and while working my nine-to-five, I started digging deeper. I found a gig writing restaurant reviews for a West Village newspaper. A family in Brooklyn Heights hired me to be their personal chef. I started a cooking blog. I baked pies for Will Forte. A friend and I hosted a private dinner series. I joined a food-focused book club. I was throwing pasta at the wall, trying to find my place in the industry.
Despite my efforts, I couldn’t find anything that paid. I felt trapped; in three and a half years, I applied to sixty-five other positions, in a range of fields. Things got existential—and bleak. I didn’t hide my emotions at work. I’d be combative with my colleagues. I’d skip out on meetings with important board members. I was an extremely unhappy asshole.
In late April 2009, Agatha Kulaga, then a director of a psychiatry research clinic at the NYU School of Medicine, showed up at a meeting of that food-focused book club. We immediately bonded over our love of Eastern European desserts—and our shared ambitions. A week later we sat down to discuss a partnership, and tinkered in the kitchen, trying to figure out exactly what kind of company we wanted.
Agatha’s dream was to open a bakery. I wanted to build a company with a shelf-stable product that we could ultimately sell for mad profits. After brainstorming sessions in our neighborhood bars, we settled on a business: packaged gourmet bar snacks. We started developing recipes like spicy bacon caramel corn and bacon fat-roasted Old Bay peanuts. Our business would be called Ovenly.
A little more than a year later, we officially launched our company and landed our first client: the now-defunct café and bar Veronica People’s Club. One of the owners, Heather, was excited about our product, but she also needed pastries for her morning coffee program. Since she couldn’t find anything she liked, she asked us if we’d consider baking her breakfast treats. With nothing much else on our plates, we shrugged and said yes. Instantaneously, Ovenly became a bakery. By September, we were making daily deliveries throughout Brooklyn and Manhattan, and catering birthdays, corporate parties, and baby showers. I loved it.
We started waking up at three a.m. to bake and deliver salted chocolate-chip cookies and basil-feta-scallion muffins before heading to our day jobs—and when we returned home, we baked more. After half a year, it was clear one of us had to focus on baking full-time to keep up with demand. Since I was the one who hated her job, I unsurprisingly volunteered to resign first. I cashed out my 403(b) for spending money and got to work.
And soon enough our cash was almost gone. We had spent our savings on setup and assets—on legal fees to establish our LLC and to file for our first trademarks, on supplies like sheet pans and scoops, and on a crappy 1997 Ford Explorer we used for deliveries. Customers didn’t pay their invoices quickly enough, so we began relying on Agatha’s biweekly paycheck to buy essentials like butter and flour. To stay afloat, we were going to have to find an investment or loan—not just for our accounts payable and to maintain our inventory, but also to grow. We needed to hire staff, rent a full-time kitchen, purchase comprehensive business insurance, and buy equipment like an industrial-sized mixer and a double-stack convection oven.
As novice businesswomen, we barely understood what a balance sheet was—and with our twenty-hours-a-day work schedules, our priorities were baking, maintaining clients, and distribution. Figuring out the fiscal minutiae of the business was on our back burner. We also, still, had no real business model—we had gone into Ovenly doing something very different from where we ended up. With very little factual information and a vague long-term vision, we knew finding a loan from an accredited institution within a reasonable timeframe would be impossible. We needed an angel—someone who understood our determination intimately, who saw that our nominal success had growth potential, and who would be willing to take a chance on us personally.
The first person we approached was a client and a friend, and she graciously offered to lend us $10,000. It wasn’t nearly what we needed, but we were psyched. It was a start! But when I told my former roommate Vanessa the news, she responded, “What are you doing not asking me? I’ve told you many times I want to invest in you. Let me make that bet.”
If you’re a fellow entrepreneur, you’re thinking, You motherfucker, you had it so easy. But Vanessa’s offer tore me up. Until that point, I had been comfortable with the risks I had taken personally: quitting my job, killing one career to start a new one, de-prioritizing relationships to work 100–120 hours per week, forgoing physical fitness and sleep, giving up my social life. Those were my sacrifices. With the business side of Ovenly a mess—our books weren’t current, our financial projections were a joke, and our products weren’t accurately costed—was this a smart wager for anyone else? And was I willing to bet my friend’s money on it?
The decision was wrought, but Agatha and I decided to take Vanessa’s buy-in. The offer would provide us with enough money to get a permanent space, hire a few employees, and buy the machinery we needed. With no other options, we accepted.
But when it came time to write an operating agreement, we didn’t know where to begin. Vanessa turned to her young VC acquaintances for advice. On their recommendation, we agreed to a profit-sharing model that meant Agatha and I could not take a salary; we’d only take a small percentage of our revenues, minus our cost of goods sold. Since our three-year financial projections showed hockey-stick growth within mere months, we all figured Agatha and I would only have to be poor for a little while until our distributions started rolling in.
Both our forecast and confidence turned out to be dead wrong. Nine months passed, and though revenues grew like crazy, we weren’t hitting our aggressive projections. On top of that, every dollar we made went back into the business—there were barely any profits to share.
At this point, Agatha and I had a full-time kitchen in Red Hook and had spent some of our investment as planned—we hired four bakers, two prep people, a dishwasher, and a delivery driver, and purchased equipment. Our production grew so quickly, however, that we were still spending most days baking; we didn’t have the time to focus on sales or develop a multi-year plan for the company.
I borrowed money from my brother to cover rent, and with no time to take on a second job, I turned to selling my personal belongings. One of those was a beloved antique library chair I’d purchased with my first New York paycheck. It was heavy and beautiful and smelled of old books. The chair went to my friend Sue, who I’d known since college and who had recently purchased a condo. I pulled up to her new-construction building in my rusted-out 1997 SUV and rolled the chair past the twenty-four-hour security guard, beyond the lap pool, and into the stainless-steel elevator. I sat in my car afterward and cried.
I couldn’t share any of this with Vanessa. When she asked why we weren’t hitting our projected targets, why we spent so little time doing actual business development, and what exactly we had done with her money, I avoided her or gave vague answers: that the money was going to inventory and staff, that it was foolish to think we’d be profitable in the first year. After various non-answers, she told me she distrusted our decision-making processes and worried that her investment wasn’t safe.
Her questions felt like an attack on my abilities. I became defensive. I started to resent our agreement on a gross-profit split, and felt it kept Agatha and me in poverty. I went back to being an unhappy asshole, and then I felt worse.
Finally, I turned to Agatha and a business advisor for advice, and they both had the same response: we needed to separate our feelings from our operations. Even despite our communication issues, Vanessa was not the right partner; as brand new entrepreneurs, Agatha and I needed mentors, people who could help us develop into sophisticated business owners. If we were going to start truly thinking and acting like real businesspeople, we had to make professional decisions geared toward growth—starting with finding smart money.
Agatha and I sat down with Vanessa a few weeks later. I admitted to her that I was selling clothes and furniture for grocery money, that Agatha and I were struggling to pay rent, that none of the three of us knew how hard it would be to start a business, that I had reacted defensively to her questions because of our personal relationship, that there was no way Ovenly would be profitable anytime in the near future, that a stable company would take years to build, that she was the wrong investor for us, that we were the wrong investment for her, that it would be better for all of us if we found a way for Vanessa to be bought out, and that I was scared of losing her as a friend.
Vanessa did me the third huge favor of our friendship, and agreed to let us seek a new investment arrangement. Today we’re still friends, and Ovenly is finally on its feet—but I had no idea how much it would cost to get there.