Oktopulli

Founded in 2021, Oktopulli is a German start-up creating sustainable kids' sweaters from fabric remnants and surplus goods. When Oktopulli needed to raise €250,000 for their growing business, they aimed to do so without issuing equity or taking on additional personal loans, given their existing KfW start-up loan. In light of a potential future transition to the potential new legal form for steward-ownership, they wanted a financing solution that aligned with their business – something debt-based rather than pure equity, while avoiding  over-indebtedness and thereby potentially blocking potential future funding opportunities.

To manage the fundraising, they split the financing into two phases. In the first phase, they aimed to raise between €120k and €140k to cover initial investments and planned to reassess the full €269k goal later.  A medium-sized investment company expressed interest in participating in the second round of financing but was hesitant to invest immediately due to Oktopulli’s profitability still being a year away. Based on this future commitment, Oktopulli needed a financing instrument in the first round that would not disrupt their future financing options. Silent partnerships, offered by the respective investment company as equity-strengthening investments, became the solution not only for Oktopulli's planned second round but also for their first round. As part of the agreement with the Berlin state-backed investment company, personal liability remained a requirement. Nancy Frehse – co-founder and current sole managing director of Oktopulli – therefore assumed personal responsibility for the full amount.

Throughout the process, transparency was critical to Oktopulli. From the outset, they made it clear that their terms required non-voting, capped return investments. Leveraging their strong community, they promoted the fundraising campaign through open and honest communication on platforms like Instagram and LinkedIn, taking a rather unconventional approach to fundraising.  By the end of 2023, Oktopulli had attracted interest from a mix of individual investors and VC funds aligned with their values and with steward-ownership. The funding campaign, split into €25k tickets, successfully raised the necessary funds within 3-4 months by March 2024. The final investor mix included two funds and several individuals, with 45% of investors being female.

Looking back, Oktopulli would say that clarity and confidence were probably the key to their success. They maintained control over the narrative by offering a well-structured investment opportunity and stayed firm on their red lines – non-voting, capped return investments that aligned with steward-ownership principles. This allowed them to approach investors from a position of strength, framing the investment opportunity as "Here’s a great opportunity – take it or leave it," rather than negotiating from a place of need.