Handbag Designer 101: The Stories Behind Handbag Designers, Brands, and Industry Icons

Mastering Venture Capital with Rachel Johnson 💼✨| Emily Blumenthal & Rachel Johnson

• Emily Blumenthal • Season 1

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Step behind the scenes of venture capital funding with Rachel Johnson, co-founder of J&O Law Firm and founder of Ami Health. With a decade of experience guiding high-growth companies, Rachel shares her dual insights as an attorney and founder, offering invaluable advice for entrepreneurs navigating the world of funding. 📈💡

💡 Key Takeaways:
🔹 Is Venture Funding Right for You? Not every business needs VC backing—know your path.
🔹 Go All In: Why full commitment and massive growth potential are essential for VC success.
🔹 Scaling Smart: Avoid common pitfalls like rapid, unstructured hiring post-funding.

From board dynamics to strategic growth and the realities of investor relationships, Rachel’s practical advice is a must-hear for founders at any stage of their entrepreneurial journey. Don’t miss it! 🎧

🎧 Tune in now! #HandbagDesigner101 #VentureCapital #Entrepreneurship #ScalingSmart #StartupSuccess

Our Guest: Rachel Johnson is the co-founder of J&O Law Firm and founder of Ami Health, offering a rare dual perspective as an attorney and entrepreneur to guide high-growth companies through the challenges of funding and scaling.

Host Emily Blumenthal is a handbag industry expert, author of Handbag Designer 101, and founder of The Handbag Awards. Known as the “Handbag Fairy Godmother,” Emily also teaches entrepreneurship at the Fashion Institute of Technology. She is dedicated to celebrating creativity, craftsmanship, and the art of building iconic handbag brands.

Find Handbag Designer 101 Merch, HBD101 Masterclass, one-on-one sessions, and opportunities to book Emily Blumenthal as a speaker at emilyblumenthal.com. 

Buy Emily’s Books: “Handbag Designer 101” & “Savvy Suzanna’s Amazing Adventures in Handbags”


Youtube: / Handbagdesigner101-ihda | Instagram:/ Handbagdesigner

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Speaker 1:

It's hard to not get excited. I think in our industry, when I'm talking to you or doing a potential new call, I always want to know you know what are you building, who are your customers, what are you doing? So I think, naturally to be in this space, you have to be excited about new ideas.

Speaker 2:

Hi and welcome to Handbag Designer 101, the podcast with your host, emily Blumenthal, handbag industry expert and the handbag fairy godmother. Each week, we uncover the stories behind the handbags we love, from the iconic brands and top designers to the creativity, craftsmanship and culture that define the handbag world. Whether you're a designer, collector or simply passionate about handbags, this is your front row. Seat to it all. This is your front row seat to it all.

Speaker 3:

Welcome Rachel Johnson to Handbag Designer 101, the podcast, Rachel, who is co-founder of Ami Health and the J&O Law Firm. Did I say all that correctly? Yes, Huzzah.

Speaker 1:

Yes, and co-founder and managing partner of J&O Law and then I am founder of Ami Health.

Speaker 3:

Yes, the flex is better coming from you than me. Yeah, well, I tell my students, linkedin is where the old people hang out. That's where you should show off, like I'm proud to announce. Seriously, it's out of hand, but we connected on Substack, which right now I think is probably one of the kindest platforms. Everyone seems very supportive and excited and there's not a lot of anger there yet, which is nice, and it's really great to connect with people who are like-minded, excited that we were able to go back and forth. And I know you said like well, I'm not in handbags. And I said, but you've done so much that I think people would really benefit from learning about. You know a story? That's Rachel Johnson.

Speaker 1:

Yes, and when you said you teach entrepreneurship, I knew that I could give some golden nuggets of wisdom of just what I've done over the past decade of running J&O and really working very closely with high growth companies.

Speaker 3:

So how did you end up being someone who was working with high growth companies? Because that just does not happen overnight.

Speaker 1:

Yeah, so I started in big law. I worked for one of the biggest law firms in the world. Dla Piper has thousands and thousands of attorneys. I always knew I wanted to go out on my own. I worked for lawyers with their own practices while in law school. I could see them kind of having autonomy over their own lives, coming in and out of their offices, and I've always been a hard worker but I've always wanted to do it on my terms. So I always had an inkling that once I got into law I would have my own practice. I went to big law because it, you know, to learn from the best is always great, and I had law school loans that I wanted to pay off and I just knew if I could like stick it out and go through that for a few years, I could start something on my own.

Speaker 1:

My co-founder was the same way. She was also in Big Law, and so after our early years in Big Law, we decided to go out on our own. 10 years ago we just celebrated a decade of J&O Wow and we have grown and now we work exclusively with high growth, mostly venture backed companies at all stages as their outside general counsel, and our team loves doing it. We now have a team of almost 17 that we have offices in South Florida and New York and we work very closely with high growth companies to get them on the right track and hopefully have a good ending and be with them on the journey, which is very up and down and a roller coaster, but it's exciting and I always say it's like the best if you could be a lawyer and working with founders that are building their dream companies. It is the best type of legal work. It's exciting, it's fun and we see all sides of the story from beginning to end.

Speaker 3:

Sure, you know you said something that's interesting and it's one of the things that I think a lot of people don't take into consideration. Essentially, you are an entrepreneur. You started your own company. A law firm is still a company. It still has the same issues overhead, clients, accounts payable, accounts receivable. I think it should not be dismissed, diminished the fact that you had the wherewithal to work for someone big before you went off on your own to take advantage of learning their resources, clients, how to interact, paper flow and all that. And I think so many brands, designers and so forth are so excited to jump off and do things on their own that I don't think it should be discounted how important the experience is working for someone else that wants to do that that you want to do, like the learning curve from that, you should be paid for the learning curve, not going to debt for it.

Speaker 1:

Yeah, and we, when I like mentor law students, I always say you know, some people love big law and that's a forever, but no matter what, it is an amazing place to start your career and you learn how to, you know, be at the top of client services and at the end of the day, we are a services business and we have to be responsive, we have to be efficient, we have to be on top of it, and big law really, really teaches you that.

Speaker 3:

So I want to just dive right in. You deal with brands and companies and businesses that you said are venture backed. How do you recommend now this is like a wild big question If someone felt that they were ready to be venture backed, what should they have in line? So meaning looking for outside funding? Just to be clear.

Speaker 1:

Right, yes, and I think that nowadays a lot of people think that to have a business you need outside funding and that's not the case. There are several companies that maybe they take in a little friends and family round in the beginning. Maybe they bootstrap their second time founders and they had an exit and they're using their own money to start. So you do not need to raise money and it's definitely not for every company. Every company does not need to be venture backed.

Speaker 1:

We do represent some companies that have been able to just become profitable companies and need outside general counsel and have a team, become profitable companies and need outside general counsel and have a team. So if you need capital to do the thing whether you can't bootstrap or you need a lot of inventory or you're building a lot of technology you go the venture route. And in the venture route you also have to go big, because these venture firms want big returns. So it's not for somebody that wants to start a more like smaller lifestyle business even have a couple million in revenue. You know this is going big and it is a responsibility. I think you know taking on other people's money is a very big responsibility, so you have to be ready to take that on and really committed, and it comes with things that you know go with running a venture backed company, such as having a board of directors, working with a legal team, doing things that aren't necessarily the core of the business. You're running a venture-backed company that has certain requirements.

Speaker 3:

Yeah, I think that you touched upon a lot of things that people tend to think and I think this just comes from being green and potentially lack of experience that they assume that if and when they want to start a company, that the first thing they need to do is fundraise. And there's so much that needs to be done even before you get to that point, like do you have a product that people will pay for? Is it something that will sell? Do you know your competitive analysis? Do you know who your customer is, what they eat, sleep, drink, drive, all of that, all these things need to be done. Is this part of some of the back-end work you do before you take on someone, or is someone coming to you already with the funding?

Speaker 1:

So it depends. We take companies at all stages. So some founders come to us and they just want to form their entity and they're going to raise funding In the next few months. Most people that come to us have a pipeline or they come to us and they're like listen, I've been working on this for a while. I took some early friends and family money, but I'm ready to take more institutional investors on.

Speaker 1:

Do you think do VCs and so forth want or expect founders to put in their own money to some capacity? If they think that's the case and it's understood that not a lot of people are going to have the funds but I think it comes from sweat equity and working for the company and taking a salary that you normally wouldn't. A lot of our founders, even second, third founders, are making salaries that are very small because they don't want to take away a lot of the company's funds and they want to be nimble. So it's a lot of time that's put into it and what's really important for investors is that it is your full-time role that you aren't, you know, have a full-time job and also working on the side on this thing, because they need to see you're committed and unless you're ready to go all in, investors are not going to want to put their money in. Necessarily and that's something that's really important Like you have to be willing to take a risk on yourself and go for it before other people will do it.

Speaker 3:

So when do you go to the meetings, when they meet with VCs, ie venture capitalists, or is this something you are not part of?

Speaker 1:

Yeah, no, we do not go to the meetings. Normally it's founders meeting with the VCs. We'll help document the investment and we will, of course, from like a legal lens, give advice on what the terms should be and help negotiate. We are always company counsel, but we do not attend the meetings. We try and work with our founders to make sure that they understand how these investments work. It is a lot of legalese and sometimes you are just given paper and not really understanding.

Speaker 1:

You know how much equity are you giving away? What is this? You know 500,000 investment really going to take from the company and what are the expectations? Are you know? Is this000 investment really going to take from the company and what are the expectations? Are you know? Is this VC getting a board seat? Are they expecting to get updates? What really is the expectation that comes along with the investment? And I think that's really important, especially if you're a first-time founder and you've never done this before. Just you know getting in the money is the first step. Right, it's. You know there's so much that goes along with it as well.

Speaker 3:

What kind of red flags would you say if someone was potentially getting VC money, that you as a lawyer would say I don't think this investment is going to be good for you because the expectation of the VC potentially might be too much or not realistic. Is that possible?

Speaker 1:

Yes, I think what all founders do that I've you know, I think this is kind of norm in the industry now is that most founders talk to each other and get a sense of you know they'll talk to other companies that the VC invested in and see what the temperature of the investor is. How in the weeds are they? How much control do they actually want? And some people want their investors to be really involved and it's, you know, a strategic choice to have them involved and they want them to have connections and introduce them to people, and so it really depends on what you're looking for. And some people just want the money right and don't want to have the requirements and having somebody like, really in the day to day of everything.

Speaker 4:

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Speaker 4:

For the past 20 years, I've been teaching at the top fashion universities in New York City, wrote the Handbag Designer Bible, founded the Handbag Awards and created the only Handbag Designer podcast. I'm going to show you like I have countless brands to create in this in-depth course, from sketch to sample to sale. Whether you're just starting out and don't even know where to start or begin, or if you've had a brand and need some strategic direction, the Handbag Designer 101 Masterclass is just for you. So let's get started and you'll be the creator of the next it bag. Join me, emily Blumenthal, in the Handbag Designer 101 Masterclass. So be sure to sign up at emilyblumenthalcom slash masterclass and type in the code PINECAST to get 10% off your masterclass today.

Speaker 3:

How does that work then? If you're to get, let's just say, one VC, and then you wanted to get another VC, and you're getting multiple people involved and giving away percentage on percentage, on percentage, how does that work? The dance between multiple people giving you money in terms of the expectation of you trying to keep everybody happy as per what contractually you've signed?

Speaker 1:

Yeah, I mean I think that's like the whole dance of founders, why everybody says it is such a grind. You know you have a board which is kind of the center of the company and has the control. So typically every major investor will want a seat on the board and the board all other investors are really trusting to make the right decisions for the company. So, as a founder, really important is who is on your board and keeping at least a pulse on that and making sure that you feel really strongly about your board. How many people should be on a board? When you start it's normally just you know the founder, two founders, and then with each round of funding you know normally with your Series A, there will be another board member. Round of funding, you know normally with your Series A, there will be another board member. So it depends. You know there can be boards of one or there can be boards of five and we've seen them all you know work in different ways and be successful. It really depends who's on them rather than the number. What do?

Speaker 3:

you think some of the pitfalls are of founders, once they've received money, that you as legal counsel are kind of like screaming on the inside like what are you doing? Don't do that. Oh my God, this is going to blow up in your face. I think that would be really helpful.

Speaker 1:

Yeah, I think it's really exciting when you get funding to hire, because a lot of times you know you've been doing this yourself or really with a really small team and people get really eager to send out you know 10, 20 offer letters and let's get all these people on. And you have to be really intentional. You know your team is everything once you start scaling and you need a lot of people work with. You know a strategic. We have a director of people that works with our clients to really focus on.

Speaker 1:

You know who do you actually need right now and what is the like management of the company going to be once you start adding all these people Because the founder can't manage everybody. Right, you start adding all these people because the founder can't manage everybody. So you need to have strategy in place. Even if you have five people, you need to work with somebody If you don't have that person already on your founding team or your team to say, okay, we have this money in the bank, but let's hire really intentionally and make sure that there are managers for people that we are bringing on and teams, because very quickly you can get to a team of even 30 which say isn't so big, but is there performance management in place? Are people doing check-ins? Are there the things in place that can really make a successful team?

Speaker 3:

that's so much to take into consideration. Have you worked with people who are designers per se and do you, if it's something like that, do you, as legal counsel, ever review what they've created for you to put in your personal opinion if you think it's sellable? Or do you keep your mouth shut? Because I know that in dealing with factors, we had Christina Amelios on from Hilden and, as someone who is a factor, they absolutely review your assortment, they look at your product, they look at your P&L and all of that, but they also look at the product to see and check all the incoming invoices and all of that. Do you have anything to do with that? Or it's like hey, if it sells, it works.

Speaker 1:

We don't care. Yeah, it's hard to not get excited. I think in our industry, when I'm talking to you or doing a potential new call, I always want to know you know, what are you building, who are your customers, what are you doing? So I think, naturally, to be in this space, you have to be excited about new ideas and it is a lot of companies we represent our technology companies and SaaS companies and they really evolve after they get out there. You know they're developing software and it's hard to know what will stick because they do pivot so much as they build their product. But yes, like I, you know we're never giving product design and that feedback advice unless we are specifically asked. But naturally, our team is always excited to represent really cool companies that are doing awesome things and, you know, making a difference. I think it is hard to not look at the product and say, you know, is this something that's going to be successful? And, of course, we want every one of our clients to be successful.

Speaker 3:

Are you involved with what's going on tariff wise and saying maybe you should start thinking about manufacturing someplace else? Do you ever have a say or think about any of those things for your clients?

Speaker 1:

Our clients are very involved with their manufacturers, mostly on like a business sense. Most of them are very strong relationships that they've had for years and years and years. So it's, you know, touchy to get in there with legal, unless it's about the contract, and we will always get in there and look at the contract and make sure it's in the best interest of the company. But, as you know, for manufacturers it's very relationship heavy and it does mean a lot reputation-wise of who your manufacturer is and who you're working with.

Speaker 3:

Yeah, this is all so exciting, I think. And then, if you could share, if someone was about to start shopping around for VC money, what should they have in place for presenting?

Speaker 1:

Last year we interviewed some of New York's top VCs. I'll send you the link. We did VC conversations in our office and we asked them specifically this we had, you know, interviews everybody at J&O, some of our partners did these interviews. You know what do you look for in these first meetings and how does somebody get in touch with you. It was very, very interesting.

Speaker 1:

You know some people were like did you pick up some new things? Yeah, I mean, it's just this day and age people are like I respond to Twitter DMs from founders. You know it doesn't like, yes, a personal connection helps, but I think these days people are very open to you know, just connecting directly to founders. So I think that's very interesting. I think always, like you hear about pitch decks and putting together your first deck, and we get into what's really important in that pitch deck and what's really important in that first meeting, to make sure that you are especially if you're meeting with VCs you have a you know VCs, you have a you know VC-backed type of deal. You're thinking big because that's what the VCs want. So I think, really really researching what VC you are talking to and especially the actual person you're talking to, and trying to find podcasts or interviews where they are really questioned on what they look for, because you know a lot of people are looking for different things. A lot of people have different values.

Speaker 3:

That's so interesting, and do you have those interviews available for people to listen to?

Speaker 1:

Yeah, yep, they're on JOLawco. You can listen to VC conversations. They're, you know, 15 to 20 minutes and they really really give good information tailored to that specific investor.

Speaker 3:

How much, in your opinion, if someone was looking for a VC, a venture capitalist type money, can you speak to theoretically what the difference is of saying I'm looking for 200,000? That probably wouldn't be a VC. That might be an angel investor. That might be friends and family. Can you just do a quick you know, one-on-one on what each one is?

Speaker 1:

Yeah, Typically friends and family. You're raising a couple hundred thousand dollars, sometimes even a million or two million, and VCs you are more in the millions range. Some VCs are very early stage VCs, so they will write larger checks in their early rounds because they want to get in early, right, that's when the price is a really great value. The company's worth nothing. So you know, a lot of VCs do want to get in in these early rounds but there has to be some type of valuation that makes it worth it. It can't be a company that's, you know, worth $500,000. You have to somehow say, you know, have justification that your company is worth $20, $30, $40 million, right.

Speaker 3:

Wow, I just Rachel. This has been so enlightening. I think we may need to have you back on for a part two, just a day in the life, of what it takes to lock in a VC. I know our listeners are absolutely going to really go crazy over this, because this is a lot of questions that we get. I have this brand, now what it's making money. Now what I want to scale. Now what? What am I doing right? What am I doing wrong?

Speaker 3:

I think ironically, since people have been remote for so long that I think the desire to have overhead and have a pretty office and have all these wonderful things is making a comeback for founders who want to prove that they have something to show. And maybe it's not worth having overhead. Maybe people should stay remote until they shouldn show. And maybe it's not worth having overhead. Maybe people should stay remote until they shouldn't. And where should you be spending expenses and where should you? I think there's a lot of things that people need to take into consideration before they start looking for money to make sure they're packaged with a bow. To start asking people, wouldn't you?

Speaker 1:

agree, yes, and I think it all comes down to like the team as well. You need to hire a lot of people to make this work and knowing that to do that it's turning the company into something that's different, and also of the line that not every company needs to be a venture backed company, and there's, you know, a probably the majority of companies don't need to be and they can turn a profit and become an amazing company and get acquired and they haven't raised venture money.

Speaker 3:

Right, wow, rachel Johnson, it has been an absolute delight. Thank you for taking your time. How can we find you, follow you and learn more about all the amazing things you do?

Speaker 1:

Yes, you can find me on LinkedIn, Rachel Johnson. We, J&O, also have a LinkedIn page and our website wwwjoballco, and then I also write a Substack newsletter called Ami Health.

Speaker 3:

Perfect, thank you. And how do you spell Ami Health A-H-M-I? Okay, wonderful, thank you so much for joining us.

Speaker 2:

Thanks for listening. Don't forget to rate and review, and follow us on every single platform at Handbag Designer. Thanks so much. See you next time.

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Emily Blumenthal

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