How an Art Gallery Raised Venture Capital

Posted by: John Tozzi on October 26, 2009

Earlier this year we wrote about online art gallery 20x200 in our series profiling some of America’s Most Promising Startups. Founder Jen Bekman bootstrapped the site, which sells fine art and photography prints at affordable prices, into a profitable business with $1.2 million in revenue in 2008.

Online art retailers aren’t the kind of businesses venture capitalists typically fund. But Bekman just raised $825,000 to build out the business.

Here’s Tony Conrad, partner at True Ventures, in the NY Times:

“I love the idea of taking the friction out of the art world,” said Mr. Conrad. “A lot of people want to buy nice things, but don’t know how. Jen has built a business from that, which is growing very nicely and has a lot of repeat customers.”

“This really feels like a business that can disrupt the staid approach in the art world and make it more broadly accessible.”

Sell fine art prints over the Internet? No VC would seed this idea, most wouldn’t even take a meeting. This is one of those cases where execution made the difference. Bekman made it work from scratch. Now 20x200 has a track record and cash coming in. Now she can raise money to expand.

Cash flow positive. Growing revenue. Disruptive business model. If you’ve got those three things in place, it may not matter whether you’re the kind of business VCs typically fund.

Update, Oct. 27:

A few readers in the comments have asked for more detail about Bekman’s story, so I’m pasting our earlier piece on 20x200 below. You can also check out Tony Conrad’s post on why he invested.

Her Web site is officially called 20x200, but founder Jen Bekman calls her online mart the gateway drug to the art world. The Manhattan gallery owner launched the site in September 2007 to sell limited-edition prints and photography at prices low enough to attract first-time collectors, starting at $20 for a print from a run of 200. Bekman, 39, worked for Internet companies including Meetup before opening Jen Bekman Gallery, where prices range from $1,000 to $20,000. She bootstrapped the now-profitable Net venture for less than $1,000, with the help of contacts who donated time get the site running. She now runs it with a staff of five (plus contractors), who also operate her gallery and a third venture, photo competition Hey, Hot Shot! that leads her to many of the photographers for 20x200. She splits profits 50-50 with the artists, and her art-world cred assuages artists’ fears that their work will be commoditized. “People know that I am not just moving product,” she says. But the product moves nonetheless. The e-gallery has shipped more than 40,000 prints, with $1.2 million in revenue in 2008.

Reader Comments

GG

October 26, 2009 09:41 PM

That's the article? How about a little analysis behind it? How did she do it? How can others follow in her footsteps? Are there any caveats? I wouldn't accept this article for an undergrad paper. I'm glad I'm not paying for this.

question

October 27, 2009 01:37 PM

cash flow positive?
why are there no mentions that 20x200 hasnt paid their artists in months?

Jim Welke

October 27, 2009 04:08 PM

I wish Bekman luck and hope many artists benefit from the enterprise.

Although internet start-ups are notorious for being profligate with their seed money -- fancy office furniture, scandalous salaries, etc., the above accusation, "20x200 hasn't paid their artists in months," without evidence, seems unfair, though.

Let's hope a new wellspring of art patrons will spring to life on the news of 20x200's financing and popularity.

(http://www.grassfedart.com)

Joseph Holmes

October 27, 2009 04:10 PM

I'm one of Jen Bekman's 20x200 artists (and also represented by Jen and her gallery), and I can tell you that, while 20x200 warned me a while back that they couldn't pay pay as quickly as they wished, they kept me up to date every step of the way. And at this point I'm all paid up, 100% square.

Jen and her folks have always been completely up front. They gained my trust by being open from the start, and they've always done right by me.

There are a lot of galleries and representatives struggling through hard times, but what separates the good ones from the bad is how they handle the hard times. Jen is one of the good ones.

Jon

October 27, 2009 04:50 PM

I also would have loved to hear more about how Bekman has been so successful.

Deal-a-day Fine Art Photography
http://www.wozofoto.com

Jen Bekman

October 27, 2009 04:50 PM

I appreciate hearing all this feedback -- the kind words and the questions alike.

The art business is always slow in the summer months, and the current economy brought things to a standstill during the dog days of 2009. It put a lot of galleries out of business, and was definitely tough on our growing company.

The confidence and support of our investors offers some stability to our growth, and will make it easier to deal with the seasonality of the business.

Signing checks to artists is one of my favorite things to do. I hated it when we couldn't write them as quickly as we wanted to, and I look forward writing millions of them in the future.

Lisa Hunter

December 18, 2009 03:04 PM

How did she do it? By being very, very hooked into what was happening in contemporary art. Two artists who made their NY debuts at her gallery (and made 20x200 prints) were chosen for the upcoming Whitney Biennial. Other established artists have made editions for her, probably just because they like her. And the new artists she discovers are always interesting.

This is not something just anyone could do. As with any art gallery, the dealer's "eye" is what makes it work.

Robert Cameron

February 18, 2010 11:15 AM

Hat's off to turning an idea into a viable business model.

AmericanPhotoCards.com
http://www.AmericanPhotoCards.com

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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