# Serena & Lily: Serena Dugan and Lily Kanter. They Built a $20M Brand—Then One Investor Almost Destroyed It

- Show: [How I Built This](https://hardwarepodcasts.com/podcast/how-i-built-this)
- Published: 2026-08-03
- Length: 1h 15m
- Page: https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo

## Summary

Lily Kanter and Serena Dugan, co-founders of Serena & Lily, explain how they scaled a luxury home goods brand from a baby boutique to a $20M enterprise, navigating a disastrous private equity deal that nearly destroyed the company. They detail the 'cash incinerator' nature of their wholesale model, the clever hack of using customer deposits to fund production, and the strategic pivot to direct-to-consumer during the 2008 financial crisis. The founders recount fighting a predatory investor who sued them, forcing a restructuring that involved buying out the hostile party with onerous terms from other investors, before ultimately selling the company to a family office that cleaned up the capitalization table.

## Chapters

- [0:00](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=0) Introduction: Serena Dugan and Lily Kanter
- [4:08](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=248) Lily Kanter's Microsoft Years and Baby Store Origins
- [9:32](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=572) Serena Dugan's Artistic Background and 9/11 Loss
- [17:37](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=1057) The Partnership: Meeting and Launching Serena & Lily
- [29:13](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=1753) The $100,000 Order and Cash-Flow Hack
- [37:23](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=2243) Packaging Failures and Selling the Baby Store
- [42:58](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=2578) The Predatory Investor and Hostile Term Sheet
- [52:59](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=3179) The Lawsuit and Capitalization Table Crisis
- [1:08:04](https://hardwarepodcasts.com/podcast/how-i-built-this/2026-08-03-serena-lily-serena-dugan-and-lily-kanter-they-built-a-20m-brand-then-one-investo#t=4084) The Acquisition and Company Restructuring

## Topics

- [Crowdfunding & preorders](https://hardwarepodcasts.com/topic/crowdfunding)
- [Fundraising & investors](https://hardwarepodcasts.com/topic/fundraising)
- [Direct-to-consumer & e-commerce](https://hardwarepodcasts.com/topic/direct-to-consumer)
- [Pricing, margins & unit economics](https://hardwarepodcasts.com/topic/pricing-and-unit-economics)
- [Growth, exits & acquisitions](https://hardwarepodcasts.com/topic/growth-exits-and-acquisitions)
- [Leadership, teams & culture](https://hardwarepodcasts.com/topic/leadership-and-culture)

## Most relevant to

early-stage companies, companies scaling up

## Mentioned

- Microsoft (company)
- Pottery Barn Kids (company)
- Bugaboo (product)
- Babies R Us (company)
- ABC Kids Expo (other)
- William Sonoma (company)
- Starbucks (company)
- Mavron (company)
- Kate Spade (other)

## Related episodes from other shows

- [#258 - How Dossier Disrupted the Fragrance Industry](https://hardwarepodcasts.com/podcast/the-startup-cpg-podcast/2026-07-21-258-how-dossier-disrupted-the-fragrance-industry) (The Startup CPG Podcast)
- [052: The business model behind custom window coverings, Alice Orozco of Pret-a-Portiere](https://hardwarepodcasts.com/podcast/product-startup/2017-05-09-052-the-business-model-behind-custom-window-coverings-alice-orozco-of-pret-a-por) (Product Startup)
- [Founder Feature: JoLynn Henke and Peter Clarkson](https://hardwarepodcasts.com/podcast/the-startup-cpg-podcast/2024-05-24-founder-feature-jolynn-henke-and-peter-clarkson) (The Startup CPG Podcast)
- [#77 Making a deal on Shark Tank with wildwonder's Rosa Li](https://hardwarepodcasts.com/podcast/the-startup-cpg-podcast/2023-01-24-77-making-a-deal-on-shark-tank-with-wildwonders-rosa-li) (The Startup CPG Podcast)
- [006: Customizable swimwear with Kelsey Duffy of Versakini](https://hardwarepodcasts.com/podcast/product-startup/2016-04-19-006-customizable-swimwear-with-kelsey-duffy-of-versakini) (Product Startup)

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