“SHOW ME THE MONEY” 🤑🤑🤑
By Eléonore Lafonta & Ivan Farneti at Five Seasons Ventures
Well today I won’t show you the money, but I will write a couple of suggestions that can help the founder of a startup to get money from investors. And since I recently joined Five Seasons Ventures, a food tech focused VC fund, I’ll address particularly food tech entrepreneurs. Like every other founder of startups, the first job of an entrepreneur is to secure the resources, more or less money in our case, to get the business going. But wether you know it or not, food tech companies have specific attributes their founders can use to seduce and ultimately put VCs in their (beds) cap tables. So, let’s get started:
1/ Find a good entry point: if you don’t want your email to get lost in the multitude of inbounds VCs receive, simply don’t send one. Instead, ask for an intro call from another entrepreneur or VC!
2/ Wet investors’ appetite 🤤: send them samples & organise tasting events! It’s also a good way to have customer feedback as, before being investors, VCs are also potential buyers.
3/ Use your story! You’re not doing some random things; you are actually building a better food product or service which is not only crucial to solve perhaps the current pandemic (or some of the effects of the issues derived from it), but also your business may play a preventive role in avoiding further environmental or health crisis. 🦸🦸🦸
4/ Focus on taste! Taste is still the most important reason for people to “go back and buy again” where the first encounter with a new food can happen because of a discount, voucher code, special offer or a friend offering you a bite.
5/ Focus on finding the right price point! I’ve been working on personalized nutrition lately and this category is still too premium for European consumers, which explains that lots of startups in this space like Hundreds had to relocate to the US. It may also be a matter of time: some innovative products, like Soylent were maybe ahead of its time 5 years ago in the US, but demand for Huel and YFood is exploding right now in Europe.
6/ Focus on availability: your product has to be where your customer is. At Five Seasons Ventures, we believe in the power of online distribution, even for product categories that are normally distributed in retail. Just Spices, one of our portfolio companies, has disrupted the spices category by building a huge online community (394k followers on Instagram) and selling directly to consumers.
7/ Focus on nutritional values. The consumer mindset has shifted, people are becoming increasingly more conscious of what they eat and the wider impact that food has on their health and wellbeing. RXBar has built its success on clean recipes and transparent packaging. Yamo delivers 100% organic fresh natural baby food with the best nutritional content.
8/ Focus on sustainability: consumers are more interested than ever in where their food comes from and how it is made, stored and transported. In that sense, genuine sustainability credentials can help food tech companies build a very strong brand. The German startup Share claims to plant a tree or send a free meal to poor children each time they sell a cereal bar and has built a strong online community upon this policy. When we invested in smart water bottle company Air-Up we were very impressed with the water and CO2 emission savings their product can drive.
9/ Then focus on everything else: recruitment, growth, margins, etc. But you already know it, don’t you? 🤓
Hope these recommendations will help you raise big money and if you believe you have ticked all of the above, you can send us something (a deck or food, or both) at eleonore@fiveseasons.vc, 93 rue de la Victoire, 75009.
