By Jenny Splitter
The search for startup funding is about more than money. While the influx of cash is critical, of course, a good investor brings more to the deal than just financial investment. “What I was looking for was mentorship,” says Eric Graves, CEO at Actionable Quality Assurance, and one of the panelists for the FIRST session, “Your New Food Venture Needs $$—What Now?” What new and inexperienced entrepreneurs may need even more than money is guidance and expertise.
Many entrepreneurs first look to their friends and family members for funding but there are plenty of other options, says Stephanie Rich, head of platform at Bread and Butter Ventures. Rich recommends social impact accelerators like ImpactSKU Minnesota, crowdfunding, and grants.
Another option is the angel investor—individuals who aren’t funding your company because they like you or are related to you, but because they really believe your idea is worthy of investment. Here too, it’s the relationship that matters most. Ideally, the investor brings the kind of expertise that the company needs, whether it’s past experience in the market or something like legal expertise, but there has to be personal chemistry too, says Graves. It’s a good idea to look for investors who have funded similar companies in the past, he explains.
One way to expand the focus beyond dollar amounts is to tie the investment to company milestones rather than just revenue goals, suggests Aaron Gailmor, founder of Brass Roots. Gailmor had a milestone of succeeding in the 400 new retailers that carried the company’s product, for example. “The definition of success was a certain sales velocity,” he says. “Because if we established that sales growth, then we know we're increasing our customer base within that region and demonstrating viability of the product.”
To meet potential investors, Richard Riccardi, an investor and mentor with Riccardi Ventures, recommends that entrepreneurs seek out as many networking opportunities as possible. Subscribe to industry newsletters, for example, because many of these include listings for groups that entrepreneurs can join. Often these groups are small enough that it’s easy to meet your fellow members, Riccardi said. “It might be 25 people in a room.”
If you do connect with a potential investor, be sure to answer their emails, urge both Riccardi and Smith. Both panelists were, in fact, ghosted by entrepreneurs whom they were initially excited to work with, and that turned out to be a dealbreaker. “Remember that every kind of communication is a test or can turn into a test,” says Riccardi.
Jenny Splitter is a freelance science journalist based in Washington, DC.
The editors at Food Technology magazine, published by the Institute of Food Technologists (IFT), have announced their predictions for the hottest food trends for 2022.
While canning is commonplace today, for that generation of food technologists it was a paradigmatic example of the power of science to change food for the better.
In October 2021, the FDA released new voluntary guidance on sodium reduction with the overarching goal of reducing consumption by 12% over the next two-and-a-half years.
What changes have occurred in the way Canadians perceive cannabis since it was legalized there in 2018? How do Canadian and U.S. consumers of cannabis and edibles compare?
A roundup of food industry supplier news
Long a man on a mission, Arlin Wasserman works to help food companies make good business decisions that are also good for people and planet.
This column offers information about the nutritional and environmental benefits of edible insects as a protein source, along with safety and legal considerations.
In an effort to provide the science of food community with actionable information that can be used in their own DEI efforts, IFT shares a case study of its recent effort to increase accessibility and inclusivity in its scholarship program.
What's on the horizon for the global food system in 2022? IFT’s Science and Policy Initiatives team gives their predictions on five trends that are expected to take shape in the new year.
The foundation's scholarship program invests in the future of food science.
New Journal of Food Science article identifies opportunities to help consumers follow the Dietary Guidelines for Americans