Tipsy Elves

E-commerce clothing company Tipsy Elves knows a bit about the perils of financing, making the national spotlight in 2013 with founders Evan Mendelsohn and Nick Morton appearing on Shark Tank in search of funding.

Ultimately, they received $100,000 in funding from investor, Robert Herjavec, in exchange for a slice of equity after showing they had made more than $1 million in their first two years.

The company has rapidly grown since, but the pandemic posed challenges when the company experienced substantial sales declines in March.  

Tipsy Elves: Meet MultiFunding

Mendelsohn first met MultiFunding founder Ami Kassar at a pre-pandemic event where the latter was a guest speaker.

“It was unique to go to a presentation then have him meet at your home the next day,” he said.

Mendelsohn was duly impressed – even more so when Kassar met him at his home early the next morning before a flight.

Working with Kassar and Fran Miller, a senior director of business financing at MultiFunding, Tipsy Elves was able to take advantage of the federal Main Street Lending Program established to combat the financial ravages businesses suffered due to the pandemic. In fact, Tipsy Elves was the first MultiFunding client to secure a loan through the program – and one of the very first in the nation!

“Not only was the interest rate low, but the company won’t have to pay the principle for several years,” Mendelsohn said. “MultiFunding helped Tipsy Elves navigate the reams of paperwork required to receive the loan.”

“It puts our balance sheet in a very strong place,” Mendelsohn said. “It’s likely this will be the last financing we will need as a company, and having this loan secured allows us to focus on growing our brand and scaling our business.”

San Diego-based Tipsy Elves got its start in 2011 as an e-commerce clothing brand selling novelty items, such as ugly Christmas sweaters. It didn’t take long before the company caught on and began expanding to offer all sorts of holiday-themed wares.

Since then, the company, which has grown to about 25 employees, has enjoyed consistent growth and has exceeded $100MM in lifetime sales. It now offers about 20 different clothing lines, including Christmas, Halloween, Independence Day, St. Patrick’s Day, among many others.

And then the pandemic hit.

The company saw a sizeable dip in sales, especially after actor Tom Hanks announced he had COVID-19 a week before popular holiday St. Patrick’s Day.

That slowdown lasted about a month, with solid year-over-year growth returning.

“A lot of that’s fueled by people shopping online that normally wouldn’t have done so,” Mendelsohn said, noting that online shopping was already a growing trend. “The pandemic just accelerated that.”

Mendelsohn also said holidays have become even more meaningful to people during the pandemic. 

“Holidays have become a good excuse to celebrate, put on a fun outfit, and break up the monotony of pandemic living” he said.

And MultiFunding helped smooth over the rough patch.

Mendelsohn said financing can be one of the more challenging aspects of running a business.

“As our business has scaled, our financing needs have become more complex to keep up with our needs for inventory financing and growth capital. We’ve grown quickly and we buy lots of inventory, so the money is always moving.”

Evan praised MultiFunding for its responsiveness. “They connected and stayed involved in the process.”