People 04 December 2017
One peek at Julia Cheek's path, and you can see she was bound for something big right from the start. But it's hard to imagine anyone could have foreseen how dramatic her rise or how vital her work would truly be. But dramatic and vital it is. Julie Cheek is the CEO and Founder of EverlyWell, “the next-generation health testing platform empowering consumers to order, self-collect, and understand lab tests."
To date, EverlyWell has raised $5 M, making it one of the fastest-growing consumer healthcare startups in recent history. With seventeen employees and thousands of customers around the country, in just one year after launching in beta, EverlyWell has reached millions in sales.
CIO Magazine named Cheek “the number one female entrepreneur to watch" for 2017. No wonder. Prior to founding EverlyWell, Cheek served as the Vice President of Corporate Development and Strategy at MoneyGram International where she the youngest VP in the company, and that's not the half of it.
Photo Courtesy of EverlyWell
Originally from Dallas, Cheek earned her degrees in Economics and Psychology at Vanderbilt University, summa cum laude, naturally. In March of 2016, she relocated to Austin to build EverlyWell, relying on her background in strategy and operations. “I ran corporate strategy for a public company; earned my MBA from Harvard Business School where I graduated as a Baker Scholar; and started my career in consulting," Cheek explains.
Having the opportunity to attend the schools she attended was an important part of her success, Cheek says. “I've been very fortunate to get access to some of the best educational institutions in the world. I was introduced to my first investor by my college roommate. And, as I mentioned earlier, my exposure to entrepreneurship and my classmates at Harvard made me realize that I wanted to start a company. Being around incredible people that were bringing their ideas to life was a big part of determining my own career and life path. You have to surround yourself with people that you can look up to and that can push you to be better."
Success is in Cheek's blood. She says she's always excelled academically and been extremely driven at whatever she set my mind to. “I'm an only child, and both my parents are lawyers. Since I was eight years old, I showed horses and was a competitive equestrian. I sort of always 'marched to the beat of my own drum,' if you will. I retired at 25 from showing horses and finished as a multiple world champion."
Julia Cheek on Shark Tank
"I always graduated at the top of my class from high school, college, and business school. It's a natural ambition that's hard to explain, and not something I always viewed positively. My parents actually discouraged me from taking so many honors classes in high school because they wanted me to have some fun. That work ethic continued into my 20s and now in my early 30s. I think to have a strong sense of self and never-give-up work ethic are two key traits to entrepreneurship." says Cheek.
Cheek's reasons for starting EverlyWell are extremely personal. “After personally having a really bad experience with very expensive lab testing that resulted in little explanation from my doctors, I knew there had to be a better way – especially since managing biomarkers is a top contributor to preventing chronic disease."
Along with a few other passionate people, Cheek launched Everlywell “to redesign lab testing to be convenient and meaningful." She was confident she could make such an endeavor work.
“In the beginning, I wasn't necessarily inclined to take the startup route, but my exposure to entrepreneurship and my classmates at Harvard Business School made me realize that it was possible. For me, I didn't realize that entrepreneurship could be a career path and that someone like me could do it. But being around incredible people that were bringing their ideas to life, made me think, 'I have to try this!'"
Cheek says witnessing the inefficiencies in the healthcare system and seeing how consumers were moving towards taking control of their personal health, as well as having faith that the market was ready, made her realize she had to take the leap. “I knew that if I didn't at least try, that I would regret that decision for the rest of my life. I was super passionate about the idea and solution, but I also looked at the market forces and believed this could actually work."
As one would likely imagine, starting EverlyWell has been equal parts rewarding and challenging. But, Cheek says, she can't imagine erasing one minute of the experience. “I think one year at a startup is equivalent to five years in the corporate world. I've had to become an expert in every function and grow the company and team at a very fast pace."
Because of the nature of what EverlyWell does, launching it did have its unique challenges, Cheek explains. “When you're a startup you want to be disruptive and transformative, but in our case, we are working with people's health and their data. So, there is a level of discipline you have to have from day one that you simply cannot compromise."
Photo Courtesy of EverlyWell
Taking on such a challenging pursuit might be an unexpected from some. Not so for Cheek. She says that she doesn't think a person who knows her was surprised. “My friends say my husband and I are the most risk-tolerant couple they know. He's also an entrepreneur. I also think very, very few people understand what it takes to build a company from scratch, even if you've watched it as an investor or early employee. You really have to be a founder to understand - something I know now.
"As for support, Cheek had that on every front. Perhaps that's what kept her from ever seriously considering giving up. “I am constantly evaluating if we have the right products, right business model, and right approach - but that means tweaking or shifting direction, not giving up. It has never crossed my mind. That being said, I work 24/7 and hope at some point I'll be able to find some balance. The response from our customers and our team keeps me going. For example, we had one customer that utilized our Vitamin D and inflammation test after experiencing inflammation and fatigue. Through this, she learned her hs-CRP was abnormal, and after visiting her physician, found out that she had Thyroid cancer, and she was then able to go into treatment and is now in remission."
That's not to say that she doesn't get criticized. “I get it all the time," Cheek says, “from employees, from potential investors, from media. Most people don't compliment the boss. I've learned to take what's valuable and let go of the rest. If I worried about 99 percent of people thinking the company wouldn't work, then I wouldn't have started the company. It's a bit counter to the idea of entrepreneurship in and of itself. I can't worry about being liked. I want to be respected, valued, thoughtful, and fair."
It would be difficult to talk about challenges Cheek faced and not wonder how the Theranos debacle affected Cheek and her work. Cheek explains, that, “It's definitely a topic that came up while I was raising funds back in late 2015/early 2016. EverlyWell works with some of the most well-respected and fully-certified partner labs and has not created any new testing method. We utilize only existing, technologies, and our labs are both internally and third-party validated through regular proficiency testing."
The most recent and exciting chapter in Cheek's story is her major Shark Tank win, which is as remarkable as it is inspiring. Cheek says she is a big fan of the show and has been watching it for years. One of her investors, Halle Tecco (the founder of Rock Health) and one of her board members suggested she apply for the show, seeing her as the perfect fit – so she did.
The twenty-page application took about fifteen to twenty hours to complete, Cheek says. And, she continues, “there is an extremely low probability that you will even make it airing. But I was really committed and felt like the audience for Shark Tank is where I wanted to tell our story. We have a consumer product, and people don't even know that this option exists for lab testing. We know that our brand and consumer education is incredibly important to our growth, so it was really a once in a lifetime opportunity to get to pitch the sharks for an investment.
You get one shot to tell the story to the sharks and to America. I put a ton of pressure on myself to be sure I could tell the story of EverlyWell in the best light - and ideally get a deal from a shark." Needless to say, Cheek describes being on the show as nothing short of nerve-wracking. As for the result? Well, Cheek says, “We're extremely excited to be partnering with Lori. Her investment will help us roll out an additional twelve plus tests next year. We'll also be announcing several big partnerships, that will all make our at-home health tests even more accessible and affordable for our consumers."
Ask Cheek what she would say to others looking for investors of the grand kind she would advise anyone to choose their investors wisely. “As CEO of EverlyWell, I've been through a few funding rounds, and I've experienced firsthand how difficult the process can be. One of my top pieces of advice for raising your first round of funding is choosing the right type of investor for your business.
Pick your investors the same way you would pick your employees: look for someone who is a fit for both a skill set and cultural perspective. Know exactly why you want to work with them and why they should fund you. You need to know how it fits in with their portfolio and vision - and you want to vet them as much as they vet you. You can waste a lot of time talking to great VCs or angels who just structurally or philosophically don't fit with your company."
Cheek hopes other women will see her success as something they can have to. There's plenty of room for greatness, and here's what she hopes that every woman knows. “Being a female founder can be particularly challenging, but it can also be amazing. I would love for women to know that starting your own company can be amazing and rewarding, and it can be the best career path in the world. I really want to encourage other women to build the life and the business you want."
Cheek's Top Three Keys to Success
1. You know your business better than anyone else. Listen to feedback from advisors and investors, but ultimately remember that you know your business best, and you are the one building it with your team! If you hear a consistent theme, figure out how to address it. But if you take every piece of feedback seriously, you'll never be able to move forward. You have to have a healthy amount of confidence in your business and path forward to be able to stay focused and incorporate advice sparingly.
2. Hold your principles. “It's easier to hold your principles 100 percent of the time than it is to hold them 98 percent of the time" —Clayton Christensen, one of my professors from business school. To me, this holds true in life and in entrepreneurship. As a founder, you set the standard for the company and the team. You'll make a lot of mistakes, but doing the right thing—in any type of situation—is critical to building respect and being proud of your own actions.
3. Your business is your #1 priority. I am a pretty transparent person, so when asked how I maintain a work-life balance - the reality is that I don't -- and I do not have a goal to achieve that balance. At this stage, my business is a 24/7 job, and from every founder I've talked to, that does not get any better with time and scale - the challenges are just different!
Business entities can be defined as the corporate, tax and legal structures which an organization chooses to officially follow at the time of its official registration with the state authorities. In total, there are fifteen different types of business entities, which would be the following.
- Sole Proprietorship
- General Partnership
- Limited Partnership or LP
- Limited Liability Partnership or LLP
- Limited Liability Limited Partnership or LLLP
- Limited Liability Company or LLC
- Professional LLC
- Professional Corporation
- Nonprofit Organization
- Cooperative Organization
As estates, municipalities and nonprofits do not concern the main topic here, the following discussions will exclude the three.
Importance of the State: The Same Corporate Structure Will Vary from State to State
All organizations must register themselves as entities at the state level in United States, so the rules and regulations governing them differ quite a bit, based on the state in question.
What this means is that a Texas LLC for example will not operate under the same rules and regulations as an LLC registered in New York. Also, an LLC in Texas can have the same name as another company that is registered in a different state, but it's not advisable given how difficult it could become in the future while filing for patents.
To know more about such quirks and step-by-step instructions on how to start an LLC in Texas, visit howtostartanllc.com, and you could get started with the online process immediately. The information and services on the website are not just limited to Texas LLC organizations either, but they have a dedicated page for guiding fresh entrepreneurs through the corporate tax structures in every state.
Sole Proprietorship: Default for Freelancers and Consultants
There is only one owner or head in a sole proprietorship, and that's what makes it ideal for one-man businesses that deal with freelance work and consulting services. Single man sole proprietorships are automatic in nature, therefore, registration with the state is unnecessary.
Sole proprietorships are also suited to a degree for singular teams such as a small construction crew, a group of handymen, or even miniature establishments in retail. Also, this puts the owner's personal financial status at jeopardy.
Due to the fact that a sole proprietorship entity puts all responsibilities for paying taxes and returning loans, it directly jeopardizes the sole proprietor's personal belongings in case of a lawsuit, or even after a failed loan repayment.
This is the main reason why even the most miniature establishments find LLCs to be a better option, but this is not the only reason either. Sole proprietors also find it hard to start their business credit or even get significant business loans.
General Partnership: Equal Responsibilities
The only significant difference between a General Partnership and a Sole Proprietorship is the fact that two or more owners share responsibilities and liabilities equally in a General Partnership, as opposed to there being only one responsible and liable party in the latter. Other than that, they more or less share the same pros and cons.
Registration with the state is not necessary in most cases, and although it still puts the finances of the business owners at risk here, the partnership divides the liability, making it a slightly better option than sole proprietorship for small teams of skilled workers or even small restaurants and such.
Limited Partnership: Active and Investing Partners
A Limited Partnership (LP) has to be registered with a state and whether it has just two or more partners, there are two different types of partners in all LP establishments.
The active partner or the general partner is the one who is responsible and liable for operating the business in its entirety. The silent or investing partner, on the other hand, is the one who invests funds or other resources into the organization. The latter has very limited liability or control over the company's operations.
It's a perfect way for investors to put their money into a sector that they are personally not experienced with, but have access to people who do. From the perspective of the general partners, they have similar responsibilities and liabilities to those in a general partnership.
It's the default strategy for startups to find funding and as long as the idea is sound, it has made way for multiple successful entrepreneurial ventures in the recent past. However, personal liability still looms as a dangerous prospect for the active partners to consider.
Limited Liability Company and Professional LLC
Small businesses have no better entity structure to follow than the LLC, given that it takes multiple good ideas from various corporate structures, virtually eliminating most cons that are inherent to them. Any and all small businesses that are in a position to or are in requirement of signing up with their respective state, usually choose an LLC entity because of the following reasons:
- It removes the dangerous aspect of personal liability if the business falls in debt or is sued for reparations
- The state offers the choice of choosing between corporation and partnership tax slabs
- The limited legalities and paperwork make it suited for small businesses
While more expensive than a general partnership or a sole proprietorship, a professional LLC is going to be a much safer choice for freelancers and consultants, especially if it involves risk of any kind. This makes it ideal for even single man businesses such a physician's practice or the consultancy services of an accountant.
B, C and S-Corporation
By definition, all corporation entities share most of the same attributes and as the term suggests, they're more suited for larger or at least medium sized businesses in any sector. The differences between the three are vast once you delve into the tax structures which govern each entity.
However, the basic differences can be observed by simply taking a look at each of their definitive descriptions, as stated below.
C-Corporation – This is the default corporate entity for large or medium-large businesses, complete with a board of directors, a CEO/CEOs, other executive officers and shareholders.
The shareholders or owners are not liable for debts or legal dispute settlements in a C-Corporation, and they may qualify for lower tax slabs than is possible in any other corporate structure. On becoming big enough, they also have the option to become a publicly traded company, which is ideal for generating growth investments.
B- Corporation – the same rules apply as a C-Corporation, but due to their registered and certified commitment to social and environmental standards maintenance, B-Corporations will have a more lenient tax structure to deal with.
S-Corporation – Almost identical to a C-Corporation, the difference is in scale, as S-Corporations are only meant for small businesses, general partnerships and even sole proprietors. The main difference here is that due to the creation of a pass-through entity, aka a S-Corporation, the owner/owners do not have liability for business debt and legal disputes. They also are not taxed on the corporate slab.
Cooperative: Limited Application
A cooperation structure in most cases is a voluntary partnership of limited responsibilities that binds people in mutual interest - it is an inefficient structure due to the voluntary nature of its legal bindings, which often makes it unsuitable for traditional business operations. Nevertheless, the limited liability clause exempts all members of a cooperative from having personal liability for paying debts and settling claims.
This should clear up most of the confusion surrounding the core concepts and their suitability. In case you are wondering why the Professional Corporation structure wasn't mentioned, then that's because it has very limited applications. Meant for self-employed, skilled professionals or small organizations founded by them, they have less appeal now in comparison to an LLC or an S-Corporation.