Executive Summary

From the beginning, the two co-founders of Birdies have relentlessly focused on two goals: meeting the needs of their target customer (“Birdie”) for stylish but comfortable shoes and maintaining financial discipline. A strong partnership with Norwest has helped Birdies grow profitably, survive a COVID crisis, and complement the founders’ exceptional skill sets with functional business expertise and support.

Partnerships are essential to the success of a startup. And they take many forms: between founders, founders and early investors, the company and early customers, and the company and business partners.

Birdies exemplifies partnership success in all these areas.

The idea for Birdies came to Bianca Gates when she was hosting dinner parties. Her guests arrived wearing stylish outfits, but they had to take their shoes off when they entered her home. She had to do the same when attending friends’ parties. Frustrated by having no choice but to dress down a carefully selected ensemble either with frumpy house slippers or by going barefoot, Gates believed there had to be something better: house shoes that were stylish enough to complement dinner party attire and comfortable enough to wear for hours. Most of her guests felt the same way — including her friend Marisa Sharkey — but she couldn’t find any. Together, Gates and Sharkey set out to create the footwear no one else had.

In 2015, they each put in $50,000 of their own money and founded Birdies. Without any background in making or selling shoes, they leaned on their work ethic and propensity for asking questions to help them make a product that met their objectives: chic shoes for home entertaining that combined the support of a sneaker, the softness of a slipper, and the style of a flat. The resulting shoes delighted Gates and Sharkey as well as hundreds of other women looking for the same thing. Birdies customers liked them so much, in fact, that they did something Gates and Sharkey hadn’t expected — they wore them outside the house, opening the door to an even greater market opportunity for their shoes.

Complementary Co-Founders Find Like-Minded Investors

Early on in their Birdies venture, the co-founders discovered they were ideal business partners. “Marisa and I are the most amazing duo,” Gates says. “I am the eternal optimist, and she is the eternal realist. We had such complementary skill sets that there was no confusion or arguments over who would do what.” In addition, Sharkey notes, “we’re both willing to do whatever it takes to build a great company. We have the same vision of what we want Birdies to be.”

Early customer acceptance plus financial discipline quickly made Birdies profitable. By 2018, the company required more capital to meet the growing demand for an expanding line of products.  

Enter Priti Youssef Choksi, who recently had joined Norwest as a partner after successful tenures in partnerships and corporate development at Google and Facebook. Choksi knew of Gates from their overlapping tenures at Facebook. “I bought my first pair of Birdies when Bianca was operating out of her garage and still an employee at Facebook. They were beautiful and comfortable.”

But it wasn’t only the shoes that drew Choksi to the company. At the time, direct-to-consumer (DTC) businesses were attracting a lot of attention and investment, and Birdies had solidly established itself as a DTC brand. Even more attractive were the co-founders. “What made Birdies an easy investment decision for us was the combination of Marisa and Bianca.”

Norwest Senior Managing Partner Jeff Crowe visited Birdies’ retail store in San Francisco. The co-founders met with the firm’s investment committee around a conference table covered with shoes. The result: Norwest led a Series A funding of $8 million with a $6.5 million participation in 2018. 

Birdies ‘Punches Above Its Weight’ with Norwest

The partnership with Norwest’s partners and Portfolio Services team proved fruitful for Birdies across several dimensions.

“As first-time entrepreneurs, there are so many things you don’t know. So, the experience and guidance provided by Norwest has been so valuable,” Gates says. For example, Sharkey adds, Norwest’s Talent & People advisors “have been tremendously helpful in recruiting candidates, walking us through the process of building a team, and putting in place benefit plans and HR processes.”

Both founders cited the contributions of Principal Laura Boyd from Norwest’s M&A and Capital Markets team. “Laura is a rockstar,” Gates says. “She has relationships everywhere.” Of particular value was Boyd’s work to move Birdies from its original bank to J.P. Morgan Chase. Sharkey says this change has been highly beneficial in lowering costs and gaining access to bankers who understand the nuances of Birdies’ business, such as inventory financing.

“We’re relatively small compared to the businesses [J.P. Morgan Chase] would normally take on,” Gates notes, “but as part of the Norwest portfolio, they treat us differently. We’re punching above our weight because we have the Norwest portfolio of brands with us, not to mention Laura herself.”

A defining episode in the Birdies-Norwest partnership occurred when an investment firm submitted an unsolicited equity term sheet for $20 million. While that sum seemed attractive on the surface, the founders and their Norwest board member, Priti, considered all aspects of the proposal before deciding to reject it. 

“Our business just did not need an infusion of capital at that time, because we were close to becoming self-sufficient,” Gates recalls. “In hindsight, that was the best decision because it would have taken us down a very dangerous path, and we would not be where we are today.”

During the COVID pandemic, the company faced an existential crisis when the overseas partner that Birdies relied on for designing and manufacturing their shoes went out of business. Almost overnight, Gates and Sharkey had to rebuild virtually all their key supply chain functions and relationships. Norwest provided valuable guidance and contacts in several areas, including finance, legal affairs, and supply-chain management.

In the end, the massive reorganization proved beneficial to Birdies, which now has tighter control over a more cost-efficient supply chain. It also emerged from the pandemic in a stronger competitive position.

“Because we did not over-capitalize, we never hired too many people or took on more leases than we needed,” Gates notes. “So, when everybody else had to pull back, we were able to push forward. We’ve never had to do layoffs or default on any leases.”

Capital Efficiency Underpins Resilient, Growing Business

Effective capital management is just one of the values that Birdies and Norwest share.

“From the very beginning, we operated a very capital-efficient business,” explains Gates. “So, when we first met with Priti, Jeff, and the Norwest team, we found people who had the same values. We didn’t want to partner with investors who had a growth-at-any-price approach. We and Norwest have the same vision, and that hasn’t wavered.”

The result has been a consistently growing, profitable business. Within a few years of starting the company with a small amount of money and little knowledge of the footwear business, Birdies had sold more than a million pairs of shoes. Revenue-per-employee is well above the industry average, and product returns are significantly lower than the average.

Throughout the journey, Birdies and Norwest have maintained a strong partnership built on mutual trust and an appreciation of complementary contributions.

“After all this time, what gets me excited about Birdies is still Bianca and Marisa,” Choksi says. “They have such dedication and a tireless work ethic. I am inspired when I see how much they take on beyond their operating roles, in giving back to the community and lifting up women.”

The founders return the compliment.

“Norwest understands us and what we’re trying to do with this company and what obstacles we face along the way,” Sharkey observes. “Priti is very helpful in her ability to crystalize the issue of the moment and home in on what we need to focus on.”

“There’s a lot of noise that investors want their companies to grow at any cost. But that has never been our experience with Norwest,” Gates adds. “They really focus on building a successful business for the long term and on helping their founders achieve their vision. They provide so much more than just capital.”

Shared values and mutual trust have forged a deep partnership that has helped Birdies mature into a successful business with a unique and sustainable value proposition.