Lara Schmoisman

00:05

This is Coffee Number Five. I’m your host, Lara Schmoismann. Hello, everyone. Welcome back to coffee number five. My coffee is ready because I’m ready for an amazing talk today. And you guys know a little bit about me. And I was brought up in a family of lawyers. My mother, my father, my brother, they’re all lawyers. And I didn’t realize that living in a legal family, I absorbed so much in my life because it was inevitable that they will talk law around me. And. Or just asking about your day was talking about law. Then I realized in every little job I had in my life that I was using that legal information. And I felt like it was a little bit of an advantage than my peers because I had vocabulary that other people didn’t have.

 

Lara Schmoisman

00:57

Or even I understood some situations, or at least I understood what I can deal by myself or what I need help with. But mostly, I understood that there are so many regulations out there, and in every job that I had and in every situation, I had to look into the legal context and make sure that I was compliant. This is not to scare you, because it sounds scary every time that we’re talking about law, it’s a little scary. But as I start working as a marketer, I had to be so many things. And with these new technologies that they change all the time. You need to learn, read the fine line.

 

Lara Schmoisman

01:41

But also, as I help my clients in the CPG industries, there are so many little things out there that you need to know to protect yourself or to prepare yourself, because knowledge is power. So today, I invited Karak Posner. Welcome. She is a partner at Jieun’s. Oh, my God. I cannot pronounce that, so you’re gonna have to say it for me.

 

Kara Posner

02:11

Yes.

Lara Schmoisman

02:12

And Kara specializes in helping brands on the CPG world. But what I love about Cara is that and her firm, that they help companies that, you know, even though they are a big firm, they are not working only with big clients. You help clients throughout all the process.

Kara Posner

02:35

That’s right. That’s right. And, yeah, thank you so much for having me. Obviously, we’ve become good friends over the past few months and really interested in keeping that relationship strong and have really enjoyed getting to know you and what you do and just really happy to be here and talk about whatever you think we should talk about. My name is Kara. I am a partner at Judy’s Lewandin. We are a boutique law firm located in the meatpacking district of Manhattan. And we do one thing all day, every day. That’s work. With brands who are looking to scale, grow and eventually sell to a strategic private equity or some sort of new owner at the end of the line. I don’t think I’ve ever met a founder who said they want to pass the business onto their kids.

 

Kara Posner

03:19

So we’re working with brands who are looking to put in five to seven to nine years of really hard work and then pass that brand off to a good steward who’s going to take it to the next level. And although we are just lawyers, we like to call our practice law plus, because what we really try to do, in addition to giving good legal advice and drafting contracts, is really set our founders up with the best chance to succeed within the community of CPG. So because we only do this all day, we are living and breathing the industry. We’re meeting people like you, we’re meeting other service providers, investors, distributors, brokers, buyers, and really trying to foster those relationships so that we can either answer every question that our brand has or know exactly who they should talk to answer that question.

 

Lara Schmoisman

04:09

And it’s the same here. And that’s why law is such an important part of that, even in marketing, when I need to say that’s I have two really long lines that I don’t cross, that is legal and taxes. And I see those two things. You really need to talk to an expert.

 

Kara Posner

04:31

Yeah, that’s right. And we like to call ourselves full service lifecycle corporate counsel. So that allows us to come in with the brand at any stage. Ideally, we’re with them from formation. That’s not always happening because legal is kind of the last thing you think after you get your stuff together initially. But some brands were meeting pre idea, pre launch, pre name in some cases, and then others we’re meeting in the context of their m and a transaction where they realize, okay, the regional law firm that I’ve used, although I love them, I know they’re not the best at this, or the big law firm that somebody told me was the best, doesn’t quite do enough in this particular industry. So we’re auditioning for that deal at that stage. But along the way, we like to do three things.

 

Kara Posner

05:14

One, help brands manage all their day to day contracts. Everything internally amongst founders and employees, everything externally amongst supply chain partners, service providers, celebrities, anybody you could be negotiating something with. Two, we help them raise money. They’re doing that a lot, often multiple times. And we do probably four to 500 finances a year, all different shapes and sizes. And then third, if all goes well, we help them sell, or if something doesn’t, you know, if it doesn’t all go well, we help them get creative, perhaps find a new path, you know, merging with another brand or you know, going under the wing of a private equity company that, you know, has portfolio brands that are distressed or whatever.

 

Lara Schmoisman

05:54

Wow, that was a lot of information. So let’s break it down a little. So I. Let’s talk about young brands, either in food and beverage or beauty. I see a lot of brands that have one mindset that they want to scale fast and then they want to go and answer. So my question is, and this is where it gets a little complicated because not everyone has the funding to go and scale as fast. So how can you help a brand scale from the legal side?

 

Kara Posner

06:33

Yeah, I mean, I think the first thing that we try to do is just be a listening ear for their goals and their strategy and then giving them insight and advice based on what we’ve seen in the past, you know, helping them structure that initial financing round, making sure they don’t raise too much and get diluted too quickly, or making sure they raise more than they think they need so that they can push the valuation higher when that money runs out. And just really trying to help them strategize timing, type of equity raises or even debt raises. And helping them think about how they’re going to get to that goal is, like you said, everybody wants to scale, everybody wants to sell.

 

Kara Posner

07:09

But the path for one brand may be very different than the other because one brand may be a founder who’s quit her job and putting the 80 hours a week that’s required, and the other one might be someone who’s still at a large, strategic, and kind of doing this on the side. So really meeting each brand where they are and helping them formulate a strategy that works.

 

Lara Schmoisman

07:27

I love that we have the same scripts for our brands and our clients. And this is so important, though, because each brand, and this is another problem that I’ve been finding consistently, everyone wants to replicate what happened to their neighbor, the successful neighbor, and that’s impossible to replicate. You don’t know where they were at, you don’t know where they started, you don’t know their budget, you don’t know all the information to try to replicate. You need to understand exactly where you are and who you are and start your race there.

 

Kara Posner

08:01

Yeah, that’s right. Yeah. Every situation is different. You know, I have some brands who are self funded by high net worth individuals, some brands who had to scrape together every penny from 100 different people and have the biggest cap table you could possibly imagine. But there’s ways to manage each of those type of processes. And what we really like to provide is just that assurance that nothing you ever ask us or send us is ever going to be a case of first impression. We have seen it before. Most of the time, we’ve seen it with the same counterpart. Most of the time. We can look in our files and redline the agreement you sent us to review against six other ones that six other brands already saw.

 

Kara Posner

08:38

And there’s huge efficiencies in that, including keeping the other side honest, because once they see us on the email chain, they know they can’t say, I never give that, or I’ll, you know, only accept this if you agree to that, because we’ve already seen it. So that’s one of the more fun parts.

 

Lara Schmoisman

08:54

You know, the truth in this business and people’s, they talk law firm, and the only thing that they think is about how much it’s going to cost. How can you start the brand and keep your legal cost low, but at the same time work with a real company or a real attorney and not trying to create a template contract?

 

Kara Posner

09:17

Yeah. So what we really try to encourage all of our brands to do, regardless of the stage they’re at, it’s their choice, is to never feel shy about asking for an estimate. We are not scope of work type people, lawyers, by definition, they generally bill by the hour, usually in small increments, but we don’t have time to look at something you send us, tell you how much it’s going to cost, and then, you know, do the work. But if you ask us, you certainly can. So we tell our brands, don’t be shy, ask for an estimate. Whenever you’re on shore.

 

Kara Posner

09:45

We can usually ballpark pretty closely, and that gives them visibility and choice, you know, because a brand might send us a 30 page manufacturing agreement, and I know that’s going to take somebody 7 hours to mark up, and I know that translates to $4,000, but they don’t know that unless they ask and they may say, oh, my God, that’s too much. Can we just do a high level memo of things I can’t possibly agree to, and maybe that’s a third of the price. So encouraging estimates is how we work with tiny brands. And eventually we get a rhythm and a cadence where the request for an estimate kind of tends to fall away because they understand the time it takes.

 

Lara Schmoisman

10:19

Yeah, that’s really important. And it’s really important to tell people that they have options and that there is not a negotiation of price, but there is an option that maybe you don’t have to see the whole contract. You just have a high level notes.

 

Kara Posner

10:34

Yeah. Especially when the high level notes that we give you might actually kill the deal. There might be four things in there that you can’t live with. And the other side says, well, I have to have that. What a shame to have marked up an agreement for 7 hours that gets thrown in the trash. So we really encourage, you know, asking for those.

 

Lara Schmoisman

10:52

I always say something that my dad always told me is, you need to know your no areas. If you understand your no go areas, then you can. The rest is a negotiation. But if there are some areas, you cannot even start negotiating.

 

Kara Posner

11:08

Yeah, yeah. There are non starters and then there are negotiation terms. And it’s important to try to focus on the non starters first so you don’t waste time.

 

Lara Schmoisman

11:18

And also I see in companies that when you’re budgeting, you forget to put certain costs in. And normally those costs either marketing and law, I see it way too many times that they are preparing, they put all their budget in creating the product and they forget about what’s going to happen after because you’re not going to make money immediately after you launch a product.

 

Kara Posner

11:43

Right. No, it’s true. Yeah, we are. We know that we’re an often for budgeting item. We also are pretty confident we get put on 90 day terms even though the 30 days. But we wouldn’t have been able to work with so many thousands of founders over the years if we had a habit of, you know, being inflexible or chasing them. I tell every client on a prospective call, like, look, our billing practices are fairly friendly. You know, we’re kind of slow getting our bills out and then send them. And then you have 30 days and if you have a problem, you call us and work something out. Either we wait longer, put a discount or whatever.

 

Kara Posner

12:16

So thankfully we’ve been busy enough and we have enough really big clients that don’t really even look at the bill, that we’re able to be flexible with those smaller brands that need a bit more help in the beginning.

 

Lara Schmoisman

12:28

And it’s great that you guys are working with the client because you want to keep the client throughout the whole process until they’re ready to sell.

Kara Posner

12:36

Yeah, yeah. No, that’s ideal. I mean, the day they sell is always the day we get fired, but it’s also the happiest day for everybody involved.

Lara Schmoisman

12:43

Right.

 

Kara Posner

12:44

Coke doesn’t need us as a lawyer Unilever doesn’t need us as a lawyer, so, but it’s, it’s the ultimate goal for all of us. We want to work ourselves out of a job, we want to work to get fired because that means that the grind paid off and the dream came true for the founders that we worked with.

 

Lara Schmoisman

12:59

So being realistic, how long it will take to self funded company, from getting the brand out to being able to sell it or getting real profit, in your experience?

 

Kara Posner

13:19

Yeah, I mean, I think that’s a super data driven question. I think it depends on the sector we’ve seen. Our beauty and personal care clients tend to have a bit more success, self funding and getting to profitability quicker just because the margins are better. And then on the flip side, our beverage clients probably have the hardest time because it’s such an expensive business to get into. So it depends on your scrappiness as well. You know, like you said, budgeting super important, not forgetting the things that you need is there. So the answer certainly varies, but it also depends on the founders personal wealth situation, how much they’re willing to do themselves before they start leaning on third party. So I’ve seen some brands self funded all the way to exit. I’ve seen some brands have crushing dilution from their first round.

 

Kara Posner

14:06

So it really varies widely.

 

Lara Schmoisman

14:08

What are the mistakes that you see consistently that it could be avoided?

 

Kara Posner

14:15

Well, that’s the favorite thing we love to talk about because I think it’s where we add the most value and we’re always looking at it kind of.

 

Lara Schmoisman

14:21

From the end of the line.

 

Kara Posner

14:22

What messes up an acquisition, what brings down the value, what stretches out the process. And they tend to fall into four categories, usually. One, your cap table, you know, getting sloppy with your equity issuances, with your transfers, who owns what, you know, promising people things and never getting around to document it. You know, keeping your cap table and your equity issuance history very clean and very tight is probably the number one thing that can disrupt a deal if not done right. Because the buyer wants to know that you are selling 100% of what you own and that the components of that 100% are the people you say own it. We’ve had deals close and then the next day someone comes out of the book with an email that then caused a seven figure problem for the founders. So number one, cap table.

 

Kara Posner

15:11

Number two, IP owning your formulas, owning your trademarks. The latter is easy. File your trademarks sooner you get registration, you own it. The former is harder. Owning your formulas is all in the web of the contracts that you build from the day you start to the day you sell. Did every single employee say that you own the iPad? Did the founder say it? Did the manufacturer say it? Did the distributor? Everybody who’s touching it or seeing it. So, ownership of formulas is totally within the contracts. And it’s not a one stop thing. It’s a web. And then the third thing I would say that messes things up are labeling claims, especially in beauty, personal care.

 

Kara Posner

15:48

Saying things on your label that you are not allowed to say by law will scare a buyer away quicker than anything else, because that’s just something that’s out there in the market and it makes you a target. So what we recommend and we don’t do it. So it’s not a plug for us. To all of our new brands. Make sure you have your labels reviewed by a FDA and regulatory lawyer. Not a brand agency, not FDA consultant or somebody who thinks they know everything. A lawyer, because the law changes all the time. So that’s the third thing. And then the fourth thing I would say that messes things up is how your commercial contracts that you’ve executed over the years intersect with your acquisition.

 

Kara Posner

16:27

We’ve seen absolutely terrible situations where a brand accidentally gives their manufacturer a right to consent to a change of control of business or a sale of the company, which is usually buried back in the boilerplate. And if you’re not looking at that, if you’re not having that reviewed by a lawyer who is in this world and knows how those acquisitions play out, it’s easy to miss. And it’s very expensive, because what you do in that setting is you’re going to sell. Your manufacturer knows how big of a customer you are, how much money are you doing? And they say, yeah, I’ll give your signature if you give me $30 million. That is a true story that we have seen play out. And it was super unfortunate.

 

Kara Posner

17:05

Luckily, there was a lot more millions of dollars going around that the problem was solvable, but it was still very painful. So making sure that as you’re executing those contracts over the years, you’re doing it with a lens towards that eventual sale and that diligence process with that buyer.

 

Lara Schmoisman

17:20

Yeah. Wow. It’s scary. It’s really scary to start thinking about everything that can happen when you’re just trying to start and make your own brand happen. But you need to think about this a way to protect yourself.

 

Kara Posner

17:34

Yeah. Yeah. Always.

 

Lara Schmoisman

17:36

Because it’s not only the law, it’s not for. When you have a problem is to use it in your benefit so you can know what the problems are that could arise. So you are prepared.

 

Kara Posner

17:50

Yeah, that’s right. That’s right. Yeah. And that’s why we love getting in early, because we can prevent a lot of these mistakes, you know, as long as we’re involved or even if we’re lightly involved. We have some brands who are cost conscious and they want to use us every six months for 30 minutes phone call. And that’s a fairly inexpensive way to ask us a million questions at one time. And then, you know, maybe we don’t hear from them again for a few months.

 

Lara Schmoisman

18:15

Yeah, I was thinking about that. That’s an amazing opportunity just to get someone every few months and have questions. I always recommend to all my clients when we do labeling on, when we do their packaging, to get everything outside of the agency approved. And if you have someone in regulatory, you talk to someone. But also, there are so many laws that they’re changing all the time. In beauty, you have the mockra law that is fairly new and nobody really knows what’s going on. And there are things that I’m sure that they’re going to evolve and change. So it’s something that you really need to start to be up to date.

 

Kara Posner

18:57

Yeah, that’s right. And we’ve always felt not nervous, but we know we’re not able to keep up with that in real time, which is why we rely on some colleagues who are experts in that field to send referrals to. But, yeah, the regulatory stuff is constantly changing. And like I mentioned, it’s one of the things that can really disrupt a deal. And it’s also really inexpensive to do right at the outset. It’s just you got to be willing to spend a tiny bit of money to do it right.

 

Lara Schmoisman

19:25

And also, for example, from the marketing side, there are so many things that I’m doing every day that I think they’re important for the brand growth. Like, for example, the claiming that I need to be very careful for every content that I put out there, for any brand that I’m not doing claiming. Because that can affect the brand.

 

Kara Posner

19:45

Yeah. And then from your internal standpoint, even if you are putting claims on there, you want to shift that liability to the brand to say, hey, this is, I designed what you want me to design, but the ultimate approval of this has to be on you.

 

Lara Schmoisman

19:58

Of course, all the approvals are always in my clients, and they have the final say. I will never post anything that is not approved by my clients, but I seen horror stories lately of marketers out there just putting claims, like, dermatologically tested. Okay, what is the test? Oh, they thought it would look good. No, you cannot do that.

 

Kara Posner

20:21

No, no. We see that enough. And honestly, I tell all of our brands, there are lawyers, and no disrespect to these lawyers, but it’s not the career I would choose. But they literally wake up every day. They go to Whole Foods, they go to Sephora, they go to Ulta, they take pictures of all the new brands on the shelf, they find these errors, and then they send out letters, rapid fire with chat, GPT, doing most of the writing and asking for $80,000 a pop to correct the harm that their plaintiff has suffered based on this labeling claim. And then they send the letters to us. The client does. Oh, my God.

 

Kara Posner

20:55

What I have to do is we have to pay them something because your label is wrong, and then we have to send them to a litigator and it’s just a big mess. Whereas if you just have them approved before you put it on the shelf, make sure everything that you’re saying you can say, you don’t have to deal with that headache.

 

Lara Schmoisman

21:09

Yeah. Or the truth is that many times less is more in the packaging. I believe that. Just put the right information. Don’t try to market your packaging so much because things can change all the time.

 

Kara Posner

21:25

Yeah, that’s right.

 

Lara Schmoisman

21:26

And also if you use, for example, customer reviews, you’re not putting claims, you’re putting what people say or think.

 

Kara Posner

21:34

Yep.

 

Lara Schmoisman

21:35

And that doesn’t affect you. So there are a lot of ways, but you need to understand what you’re doing and what your limitation is. Yeah, let’s talk about funding, because there is ways and ways to get funding and to raise money, but you need to make sure that you are set up correctly. I know that there is a whole tax problem that you need to be set up as a certain kind of corporation, but there’s anything that you need to be prepared from the legal side to make sure that you are set to receive funding.

 

Kara Posner

22:07

Yes, I think the one general rule I would say is, please, if you’re listening to this, do not ever start a brand and become an S corp. S corps are entities that are not meant to raise preferred money. There’s a rule you can’t sell different classes of stock and they can’t have non human shareholders. And virtually every brand we’ve ever helped raise money eventually has at least one non human, a private equity fund, an entity, because someone doesn’t want to invest individually. So an S corp is a non starter in our world, then you have the choice between an LLC and a C Corp. And there are good reasons to be one or the other. There is a common misconception that investors only want to invest in C Corp, so therefore, you should form as that.

 

Kara Posner

22:50

Or if you’re an LLC, you should convert that. That is sometimes true, but it’s not always true. And it kind of depends on the path you see for your business, type of business, and a couple of other factors. For example, if you’re an LLC and you’re losing money the first two or three years, as it’s very common beverage, especially beverage, you can take those losses personally and offset other gains. That’s. That’s super helpful. You know, spouses income.

 

Lara Schmoisman

23:15

Then as you make money, you can convert your LLC and be. I’m not sure. Don’t take me for granted. I will need maybe an accountant to talk about this. But you can be an LLC. But be. Be an s corp or threat?

 

Kara Posner

23:31

Well, yeah, I mean, so you can either be an LLC or a C Corp. So an LLC, you can stay. We’ve sold many llcs that stayed that way, all the way to exit body armor, as an example. We sold them for $8 billion. They were an LLC. Coke doesn’t care. Tons of other companies. But if you want to be a C Corp, there’s, and this is probably a much longer discussion. There’s a very attractive tax benefit in doing that, but you lose the ability to take the losses in the early years if your business is losing money. So it’s a long way of saying you should really consider it at the outset. There is no right answer between the two. Like, just, you know, a general rule, it depends on the specific circumstances.

 

Kara Posner

24:10

And, you know, that’s something that we talk through with founders pretty much.

 

Lara Schmoisman

24:15

And that’s also when we will say, maybe we should bring your accountant into the conversation or you need to. Accountant?

 

Kara Posner

24:23

Yeah, the accountant is helpful. Although from a legal standpoint, we are very familiar with what you probably should or shouldn’t be. And sometimes, if you’re dealing with an accountant that’s not as sophisticated, perhaps an accountant does a lot of restaurants or things that don’t necessarily trade and sell. They might give you that escort recommendation, and that can be catastrophic later on for reasons that are much more nerdy than I think we want to go into.

 

Lara Schmoisman

24:47

Perfect. That’s really good information. And what Isha said, which is great, again, is that you need to make sure that your accountant is, and everyone in your team is familiar with the space that you’re working in. That’s something that I always. I tell this to my clients in many regards. In Spanish, we have a saying that. It says, tell me who you hung out with, and I tell you who you are. And that goes in all spaces. I refer to this like, if you have the new product and you see it first in a place that is not what you wanted, you accept that deal because you are eager to close the deal, but it’s not where you want to be seen first, is how you’re going to be attached to at the first step.

 

Lara Schmoisman

25:34

The same happened with your lawyer, with your accountant, even to with your marketer. You want to work with someone that you feel like can help you in that space.

 

Kara Posner

25:42

Yeah, no, we think that’s super important, and we’re honest about that with our own capabilities. And we’ve taken plenty of intake calls with, you know, tech companies that want to work with us, and we tell them, we will be a good lawyer. We won’t miss, we won’t mess up the legal work, but we will miss the strategy, and we’ll probably give you no real network because we don’t know your world. So you’re welcome to engage with us and we’ll do a good job, but we’re probably not the best. There’s probably a version of us in Silicon Valley that is just infinitely better. So, yeah, so we like to be honest about that.

 

Kara Posner

26:16

And like you said, it’s just good to work with people in the industry because you know that they’re living and breathing the thing that you’re trying to do, and they can give you the most help with your goals in mind.

 

Lara Schmoisman

26:26

But also, it’s about to have that network that you know, that you go to Cara, and Cara knows me, but knows the right tax person, probably. We know a lot of people in the industry that can help you when you contract one person that you feel comfortable with that is in the industry tapping their network, because also, you know that they’re going to be familiar and comfortable working together.

 

Kara Posner

26:52

Yeah, no, that’s right. And we’ve inherited a lot of brands who had totally competent legal counsel, and we look at the documents, great job. But one of the first things they say when they on board with us is, oh, my God, you guys know everybody. And, you know, when you throw these events, I met this person and that, and now I have an intro call with this investor. So we really try to create that community to give our clients just a little bit of a leg up because we’ve just seen it so many times. And we just, by definition, know everybody over the years.

 

Lara Schmoisman

27:22

Yeah. And you want to work with people that you know that they have good experience and they have that reputation. Like, I feel a lot more comfortable working with someone I know that generates success to my clients and also that I had a positive experience that I know that is responsive. Nobody wants to work with the team. I hate when people tell me, oh, my lawyer didn’t respond. How come your lawyer didn’t respond? So that’s not okay. Or even your marketing didn’t respond. If they are your team, they should be there for you. And there is some. I know we’re all busy, and mostly when you get into litigation, I know how busy the world of a lawyer is. But also you have a team to respond.

 

Kara Posner

28:09

Yeah, no, it’s unacceptable not to have good response. It’s one of the things we drill into our young lawyers heads. The first week they’re with us because for every client that we have to make them feel like they’re the only one. We’re interfacing with 200 to 250 grants a day. But we can’t let them feel that way. You know, there’s no excuse. You have to stay responsive, because every little thing that’s coming to us, it’s the most important thing to that founder in the world at that moment. And usually they’re sending it to us like three days later than they should have. So they’ve imposed a deadline. That is even crazier because, you know, the legal does, it does fall off, and we can’t be offended by it. We just gotta react and give them the quick service they deserve.

 

Lara Schmoisman

28:52

So tell me, a day in a law firm, how does it work? Because you are a partner and what are the levels of lawyers, and what do you expect when you work with a firm like yours?

 

Kara Posner

29:06

Yeah. So we have associates who can be anywhere from a first year lawyer to a 9th year lawyer, and then we have our partners who are 910, 1520 years. And the typical day is totally unpredictable. We do have two morning meetings a week where we kind of go over our list just to make sure nothing is falling off. But the typical structure is that we’re handling a lot of contracts and we’re handling a lot of negotiations for those contracts. And junior lawyers are ideally doing most of the drafting work. And the work takes a lot of time because they bill at a lower rate. And then someone like me is reviewing their work, making sure it looks good, you know, correcting a couple things, and then they send it out.

 

Kara Posner

29:47

We have phone calls with clients or emails, but really, it’s just keeping all of the contracts moving, all the deals moving, and, yeah, trying to. Trying to keep everybody happy. There’s no two days that are exactly the same. And, like today, I’m working on two m and a deals, but I’m also working on two tiny distribution agreements and one employee offer letter and two celebrity deals. So every day looks a bit different.

 

Lara Schmoisman

30:13

How did the contracts change? And from the legal standpoint, when we started with having so many influencers and celebrity deals involved, yeah, I mean, that is evolving.

 

Kara Posner

30:27

We probably do, I don’t know, 100 to 200 celebrity deals a year. And back in the day, that would usually be like your typical a list celebrity that gets a ton of cash, that has a schedule of exactly how many tweets and exactly how many Instagram posts and all that. The model is changing a little bit. We’re seeing a lot more sort of founder celebrity deals, where the fat. Where the celebrities coming in, calling themselves a founder, getting equity, no cash. We’re seeing deals that are just straight up influencer, where we engage influencer platform, and there’s a service agreement for that. So the way that brands are marketing with celebrities is constantly evolving, constantly changing.

 

Kara Posner

31:06

I will say the one trend we see is just moving away from that anchor, a list that costs so much money and doesn’t necessarily do much, and a shift towards a group of influencers, TikTok, Instagram, that can really move the needle from marketing standpoint pretty powerfully, as opposed to analyst who may or may not tweet like you want to.

 

Lara Schmoisman

31:29

And do you see a success rate? And I know that it’s evolving and it’s changing all the time. So our measurements change all the time. But do you see those companies that they sign influencers deals, that they have more opportunities or growth or to be bought out?

 

Kara Posner

31:53

Yeah, I mean, it depends on the brand, and it also depends on the commitment of the celebrity and kind of their overall strategy. You know, Mike Rapoli was the founder of fighting Water and then eventually started body armor. Both of his ventures, which eventually went to code for many billions of dollars, he did a ton of celebrities and a ton of athletes. That was just his model. And it worked. It was very expensive.

 

Lara Schmoisman

32:15

Yeah, it is very expensive.

 

Kara Posner

32:18

Yeah. So, and that. And that worked great. And then, you know, we work with other brands that are true celebrity founded, like stripes, know we want, or, you know, some of these other, you know, kind of day one founder celebrities who are very involved, very passionate, despite having very busy lives in other industries. So it just, it all depends. It really depends on the love, that involvement and dedication. If you’re dealing with a celebrity who’s signing up every influencer deal they can get, chances are you’re probably not going to get a lot out of them. But, yeah, it all depends.

 

Lara Schmoisman

32:51

Right. Great. This is great information. And it helps because a lot of people are saying that influencers are going down. What’s your take? What do you see in this space?

 

Kara Posner

33:02

Yeah, I mean, it’s still a model that people are using. I think a lot of it will hinge on what happens TikTok, because that seems to be the biggest mover. And if that goes away in the US, who knows?

 

Lara Schmoisman

33:13

Yeah, who knows?

 

Kara Posner

33:14

Yeah. So, yeah, again, I think it all goes back to the type of partner you’re onboarding and whether they’re truly a true believer in the brand or they’re just looking for, you know, yet another thing to put in, you know, in the resume and have income or whatever.

 

Lara Schmoisman

33:31

So before we finish and we go, I have one more question. What are the things that you never should ask a lawyer?

 

Kara Posner

33:40

Never should ask? That’s an interesting question. I don’t think anything’s really off limits, especially when you’re dealing, when you’re working with a firm like ours who tries to be that one stop shop. So I.

 

Lara Schmoisman

33:54

What are the things that you never should ask from a lawyer or expect?

 

Kara Posner

33:59

Oh, expect from, yeah. I mean, there again, I feel like we’re the ultimate service provider. I, before going to law school, I worked in a yacht club as a server. And there are so many parallels that I still feel in that job, you know, waiting on people, making sure they’re happy, dealing with them when they scream and not screaming back, like, we are really service providers through and through. So I don’t think there’s anything you can’t ask, can’t do. We certainly have no problem firing a client that gets inappropriate, but there’s no real limits. And as long as, you know, maintain a respectful relationship, we can make it work.

 

Lara Schmoisman

34:38

Well, thank you for being here and having coffee with me, Kara. This was lovely.

 

Kara Posner

34:43

Yeah, definitely. Thank you so much for having me.

 

Lara Schmoisman

34:46

And to you guys, we will see you next week with more Coffee Number Five. Find everything you need at laraschmoisman.com. Or in the episode notes right below. Don’t forget to subscribe. Was so good to have you here today. See you next time. Catch you on the flip side. Ciao. Ciao.