TERRY LEE
| Company Founded: | Rosaluna Mezcal | Year Graduated: | 2009 |
| Title: | Co-Founder | Degree: | BASc, Pre-Medical |
| Location: | Residence Hall: | Keogh |
One of the biggest lessons Terry Lee learned while a student at the University of Notre Dame was to trust where life led him, especially if the path forward was not what he envisioned. In the fourteen years since graduation, Lee has launched a highly successful career in sales in the medical device industry, traded that path for a series of startups that saw him soar to the highest heights and sink to the lowest lows, and now as co-founder of a spirits beverage company.
Each step along his winding path is a long way from his original dreams of becoming a professional athlete and sports team surgeon.
He came by his choice of majors naturally. “My dad is a neurosurgeon, and I grew up around medicine. As I was considering majors, I chose Pre-Medicine because I was inspired by how much my dad loves what he does,” Lee explains.
His choice of colleges was more serendipitous. “I hadn’t heard much of Notre Dame, but I had the opportunity to play soccer there. Looking closer, I saw it was a great academic school and just the right distance from my hometown of Cleveland. My dad was able to come to all the home soccer games.”
The academic rigor combined with the demands of varsity soccer helped Lee develop a strong work ethic. During senior year, he decided not to pursue medical school and began interviewing for jobs instead. Lee landed a management leadership position with Johnson & Johnson’s Ethicon subsidiary in Cincinnati. His first assignment was a serious challenge for a new graduate: selling medical devices to clinicians.
“Having been pre-med, I had never taken a business class. Terms like finance and marketing were completely foreign to me. Working for a 120-year-old company with an intentional way of doing things was a great launchpad. My training and experience at Johnson & Johnson provided a great foundation for my career.”
A key learning was approaching his job like a well-oiled machine. “I focused on these principles: show up, bring great energy, establish rapport, build trust, listen and understand needs, and demonstrate how I and our company's products could fulfill the customer’s needs—then repeat consistently.”
By year three and the ripe age of 25, Lee was a territory leader at Ethicon, pulling down a six-figure salary. It was then that he developed the “grass is greener syndrome.”
“I had friends who’d gone into investment banking and venture capital. Learning what they were doing made be a little envious. Eventually I realized my path in sales, although incredibly formidable, was better for me. All great careers, to some degree, become sales jobs. Learning how to communicate effectively, listen intently and inspire others—these are invaluable skills.”
In 2012, the tech startup world was heating up. A close friend of Lee’s who was working at an iconic venture capital firm, General Catalyst, reached out to him while conducting due diligence on a company called CoachUp.
CoachUp’s value proposition of connecting coaches with student athletes through a digital marketplace appealed to Lee. After meeting the CEO, Lee decided to quit his job with Johnson & Johnson, move to Boston, and work as an unpaid intern with Coach Up. “My parents initially thought I was crazy for leaving Johnson & Johnson but were incredibly supportive. It was scary, but I took a bet on myself.”
For the first few months, Lee lived off his savings before being hired full time. He soon discovered that consumer marketplaces are among the most difficult companies to scale because you have to grow both sides of the marketplace simultaneously. In the case of CoachUp, the question was: what comes first, coaches or athletes and their parents? And deeper still, how do you create enough value, so both sides return to the platform after the initial connection?
Once Lee wrapped his mind around the business, it was off to the races. Soon, he was leading the company’s operations with a specific focus on helping the CEO fundraise, build the team, and lay the foundation to grow. During Lee’s tenure, CoachUp’s sales increased to a $4 million run rate, they closed a $6.7 million Series A round, the product experience for coaches and athletes was enhanced, and the team grew from seven to 24 employees.
With this experience under his belt, Lee next joined a direct-to-consumer apparel brand called MeUndies, which bills itself as having the most comfortable underwear for men and women. Starting as a consultant, he rose to the position of chief operating officer despite not having a business degree. “On paper, I wasn’t anywhere near qualified, but the leadership team believed in me,” Lee says. “It was a combination of the right timing, great people and an incredible product.”
While MeUndies didn’t seem as sexy as other consumer startups, it rose like a rocket. Over the next three years, MeUndies grew from $5 million to $50 million and was named the seventh fastest growing retail brand by Inc Magazine. During this time, Lee had the autonomy to build out the MeUndies team. “I was heavily influenced by my time playing soccer. Startups are like a sports team in that you have to build the culture and identity of a team; identify and recruit the best talent; and understand, inspire, and manage the various personalities and egos,” he explains.
In 2017, Lee left the company to launch a skincare startup called Panacea with his brother and another partner. The founders raised $750,000 in seed capital, secured notable press from top beauty and lifestyle publications, and launched in 2017. Ultimately, they decided to close Panacea in 2019 after it failed to gain traction.
Lee groans at the memory. “MeUndies achieved incredible success early on, so in hindsight it got to my head. I probably rushed into doing my own thing before I was ready. Starting a company from an idea is really hard. In ways, it’s much harder than growing a company that has achieved some level of product/market fit. Skincare is also a competitive category. Unfortunately, we didn’t have a clear unfair advantage.”
He adds, “It was the lowest point in my career because our company failure impacted my relationship with my brother. Having to close Panacea without returning money to our investors also gave me a great deal of humility. The biggest lesson learned is that you must have an unrelenting commitment to finding your unfair advantage. Since then I’ve become maniacal about identifying the unfair advantage whether it’s founding, investing or advising a company. It has to be clear or it’s not worth pursuing.”
Lee vowed to take his time before starting anything new. Ultimately, an opportunity found him: a niche cousin of tequila called mezcal. While tequila is ubiquitous to margaritas and can be found in virtually any bar or restaurant in America, mezcal is the lesser known of the agave-based spirits. Though both are made from the piñas of the agave plant, mezcal’s agave is fire roasted, which gives the beverage subtle notes of smoke and florals.
“My best friend and I discovered mezcal and loved it as it is more artisanal and simpler than tequila. Mezcal is made with agave, water and lots of love. I never had ambitions to start a spirits brand. This exploration into mezcal was an excuse to spend more time with my best friend,” Lee says.
Once appreciated almost exclusively inside of Mexico, Americans discovered mezcal in the 1990s. Its popularity was driven by the small-batch, hand-crafted nature of the beverage. However, unable to meet demand, many of Mexico’s mezcal distilleries went out of business. Like a phoenix, mezcal re-emerged 20-plus years later, and is now one of the fastest-growing categories of beverage alcohol. The global mezcal market reached $458 million in 2021, and sales are projected to exceed $1.3 billion by 2026.
In 2018, Lee co-founded Rosaluna with three partners: Freddie Martignetti, a venture capitalist who runs an early-stage tech investment firm called Nava Ventures investor; Pepe Mireles, an accomplished entrepreneur across real estate, hospitality and interior design; and Nate Brown, a creative director best known for his work with Jay-Z, Drake and Beyoncé. It was a years-long process to identify and bring the right team together.
As for the company’s unfair advantage, Lee points to the exclusive agreement his company has with it production partner, JJ Méndez León Jiménez, part of a family dynasty that has grown agave and produced mezcal for over six generations in Oaxaca, Mexico. In an era of opportunistic distilleries, the Jiménez family is a rare single estate heritage operation that grows its own agave and lovingly crafts it into a sublime mezcal with just agave and water.
Another advantage is co-founder Freddie Martignetti’s roots in the spirits industry. His family owns the sixth largest wine and spirits distributorships in the United States. The family’s experience has been invaluable for Rosaluna in connecting with industry experts, strengthening distributor partnerships, and navigating the complexities of the beverage alcohol system.
“Launching a spirits brand is capital intensive. It’s a three-tiered system where suppliers sell their product to a distributor, who then sells it to local bars and liquor stores, who then sells to end consumers. The capital-intensive nature of the industry is one of the reasons most spirits brands are owned by multinational conglomerates. They have war chests of capital to support their brands. The odds are against us, but we’re crazy enough to believe Rosaluna will win the hearts of consumers,” Lee says.
Lee and his co-founder took a patient approach and spent three years developing their brand and business. The company has completed two funding rounds in excess of $7.5 million. Rosaluna is now sold in 14 markets, including California, New York, Florida, Illinois, Texas, and Massachusetts. Adults over the age of 21 can also purchase Rosaluna on the company’s website.
Lee has also leaned on a Notre Dame friend, former soccer teammate and Drizly CEO and co-founder, Cory Rellas, as an advisor on how best to build the Rosaluna brand and drive distribution. Rellas is an expert in the space: he and his co-founders exited Drizly, an alcohol delivery platform, for $1.1 billion to Uber in 2021.
Lee says the biggest challenge to date has been mastering the complexities of the distribution system. In 2022, he learned the hard lesson of over promising and under delivering on his forecast. “I naively thought we could grow the business 3X. It’s very hard to do in the liquor because you’re not in direct control of your sales growth. Growth is largely controlled by the distributor, so learning how to manage distributors effectively and create a win-win partnership is paramount. It takes more time to get the flywheel going than in other consumer industries I’m familiar with.”
Another hiccup was not bringing on industry-proven senior leadership earlier. “A common dilemma that most startups face is when to bring on senior leadership. Our delay nearly proved catastrophic, but we now have strong leadership across important functions like sales and finance. Rosaluna grew more resilient from this challenge, and our board feels more confident in the direction of the company than ever.”
What hasn’t been a hindrance is Lee’s lack of a business degree. “Building companies is my sport. Similar to how LeBron James approaches basketball, I want to continue to improve and become great at building companies. I’m beyond lucky to have found something that provides purpose, meaning, and fulfillment in my life. I feel like the luckiest guy in the world.”
Asked what advise he would give to others who aspire to start their own company, Lee offered this: “I believe there are two major forces in life: pull and push momentum. Push momentum is striving—it relies on our own energy and effort to make things happen. Pull momentum is different in that it is our destiny bringing us into our calling and future. Push momentum is tempting because it’s fully reliant on us. Pull momentum, while it still requires tremendous commitment and work ethic, has other forces working in our favor. Discern push versus pull momentum. It’s important to dream and wish for things. If something is meant to happen, it will happen.”
He encourages people to bring great energy and a positive attitude to what they do. “You’ll be surprised by how infectious they are.”