Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Dozens of people sat in the audience at the Knoxville Entrepreneur Center (KEC) as Kate Wiggeringloh and John Phillips, the Co-Founders of Primeaux, took the ‘hot seat.’ Primeaux is a custom, artisan cutlery and cookware company based in Knoxville. The company has grown substantially in the last few years, with custom orders really taking off during the pandemic.

The topic of today’s ‘In the Room’ session was to critique their start-up pitch and pose questions to stump the founders. Gera Grinberg is an executive and attorney representing both major companies and investors. He founded Grinberg Law Offices in 2007 and is using his years of expertise negotiating investments to pour into Knoxville’s entrepreneurs.

With one minute on the clock, Phillips and Wiggeringloh start their elevator pitch. The Co-Founders are seeking a $500,000 investment with the confidence that they will double those funds in six months. Right now, they say the demand is present. The only things holding Primeaux back from scaling are capital for manufacturing costs and hiring new employees.

Then came the questions. Grinberg asked about the root of the name Primeaux, the plan to scale, the stickiness of the business, the cost, the possibility of manufacturing in China, and what is the predicted return on investment.

Phillips and Wiggeringloh remained calm and collected as questions came from every corner of the room. They are no strangers to pitching. After all, Primeaux won the “Crowd Favorite” award at the 2022 “Startup Day” hosted by Innov865, and have presented their business strategy many times at local start-up events.

“We have no competitors for the type of work we are doing,” Phillips said. “There are no major manufacturers in the realm of custom knives with the materials we are using.”

Using the Primeaux Co-Founders as an example, Grinberg educated the audience about the art of the deal when being in a room with investors. He said the key is to make the investment opportunity “sexy” for investors. He encouraged entrepreneurs to focus on getting the verbal agreement for the money, then negotiating the terms of the contract. As Grinberg said in the last session, when you take money from an investor, you are getting married to them.

“There should be a mechanism where we can divorce from the marriage,” Grinberg said. “You have to make sure there are terms in the contract that doesn’t tie you together forever.”

Furthermore, he explained the risk involved with taking money from investors. If you don’t have severability in the contract, then it puts a lot of your personal assets at risk.

“If you take money from an investor for a business and don’t pay people back, then get prepared to be sued personally,” Grinberg said.

His final advice was to be intentional about developing a relationship with the investor before making the deal official. He recommended going out for dinner with the spouses in attendance. How do the four of you get along?

“You need to get along with your investor’s spouse. If you don’t think they’re pillow talking about the investment, then you’re wrong. You need to have a good working relationship, and trust with both of them,” Grinberg said.

The next session will be on February 22.

---