Athleisure Beauty Brand Sweat Cosmetics Raises Nearly $260K In Equity Crowdfunding Campaign

When venture capitalists and angel investors gave Sweat Cosmetics the cold shoulder, the beauty brand opted for the equity crowdfunding route – and that decision has paid off. It’s secured nearly $260,000 from a campaign through First Democracy VC, a partnership between MicroVentures and Indiegogo.

“The feedback we were getting was, ‘We love what you are doing, connect with us next year, and maybe we can talk then.’ I think we’re just a little bit too young for them. They might want to see us at year five or seven,” says Courtney Louks, CEO of three-year-old Sweat Cosmetics, recounting discussions the brand has had with potential investors. “A lot of them are writing pretty large checks, and we weren’t asking for too much. We wanted a bridge round.”

Turning to the equity crowdfunding campaign, Louks, a one-time member of the soccer teams Boston Breakers and Kansas City Blues who manages Sweat Cosmetics with four fellow former soccer players, adds, “We thought, ‘We are professional athletes. We have connections. We can do this ourselves.’ There are so many women appreciating what we do. We are treating this as a way to involve more people and build awareness. It’s not like someone can say I own a part of Bobbi Brown, but they can be a part of Sweat.”

Almost 500 people backed the brand’s equity crowdfunding effort, and the money they put into it will be dedicated to a product launch, digital marketing and direct-to-consumer initiatives, particularly subscription and customization programs. Currently, Sweat Cosmetics’s assortment consists of six items: the bestselling Mineral Foundation SPF 30 Twist-Brush, Mineral Foundation SPF 30 Powder Jar, Gleam On Illuminator SPF 25, Glow Hard Mineral Bronzer SPF 25 Twist-Brush, Broad Spectrum SPF 30 Translucent Mineral Powder Twist-Brush and Skin-Balancing Cleansing Towelettes.

“There are so many women appreciating what we do. We are treating this as a way to involve more people and build awareness. It’s not like someone can say I own a part of Bobbi Brown, but they can be a part of Sweat.”

Louks reveals that Sweat Cosmetics will offer foundation shade extensions and could expand upon its towelettes concept. “Our main focus is always going to be active, on-the-go products, but we aren’t afraid to go into skincare,” she says. “We’re looking at possibly coming out with skincare meant for recovery from workouts.” Since its inception, Sweat Cosmetics has hit roughly $1 million in sales, and consumers have purchased more than 25,000 Twist-Brushes and 10,000 product refills from the brand.

The equity crowfunding campaign wasn’t Sweat Cosmetics’s first fundraising endeavor. Prior to it, the brand had nabbed over $900,000 from friends and family, and an earlier Indiegogo campaign that fell short of the brand’s $30,000 goal by $12,770. Learning from its previous Indiegogo experience, Sweat Cosmetics hired crowdfunding marketing specialist Agency 2.0 to spread the word about its latest campaign.

Asked about challenges beauty brands face on crowdfunding platforms, Louks says, “It is difficult to explain why we need money and what the money is for, and that comes with any consumer good. A lot of men are the ones investing, so we have to work extra hard to explain to them what we are doing and selling.”

“It is difficult to explain why we need money and what the money is for, and that comes with any consumer good. A lot of men are the ones investing, so we have to work extra hard to explain to them what we are doing and selling.”

The good news for Sweat Cosmetics is that retailers don’t require as much explanation. The brand broke into Sephora’s online business out of the gate, but it’s since departed Sephora while building its retail presence at Anthropologie, Revolve and Soft Surroundings. The brand is in about 70 Soft Surroundings stores and currently rolling out to 13 Anthropologie locations.

In January of this year, Louks says Sweat Cosmetics mutually agreed with Sephora that its relationship with the retailer should end. “My number-one thing with Sephora is do not enter a contract with them without knowing that it is up to you to market yourself. Do not rely on them to market you,” she elaborates. “They have a lot of other brands to promote. It was a lot of time and money spent in getting them the product, and no one knew about us, but it was a great opportunity, and there are great people there.”

Going forward with distribution, Louks views the fitness channel as a possible growth driver for Sweat Cosmetics. “That’s an opportunity that not a lot of other brands have, and it puts us right in front of our target market,” she says. “We have been a little bit stuck for the last couple of months due to capital and inventory [constraints], but this [equity crowdfunding] will give us an opportunity to replenish and go into different areas of retail. Our next goal is to go into more active retailers rather than beauty.”

Although Sweat Cosmetics’ equity crowdfunding campaign is over, fundraising isn’t behind it. Louks shares the brand is likely to fundraise again in the near future and, hopefully, it will be better received by traditional investors. “This campaign has brought some attention from venture capitalists and angels,” she says. “It proved we have something good going.”