At our February PubTalk, we examined the various funding options available to entrepreneurs in the food and beverage and consumer product industries, from the perspective of local entrepreneurs making their way through the funding journey. Our panel, moderated by Allison Condra, Associate at Davis Wright Tremaine LLP, included Katie Poppe, Co-founder & CEO of Blue Star Donuts, Camden’s Catsup, Boxer Ramen & Little Big Burger, Jeff Boggess, Co-founder & CEO of Trail Butter, Lynn Le, Founder & CEO of Society Nine, and Kelly Oriard, Co-founder of Slumberkins.
Here are the top takeaways:
- Know your numbers. “Learn your profit and loss…before all the beautiful marketing,” said Lynn Le. For consumer products, funding is largely driven by inventory. Put a system in place for invoicing, calculating your cost of goods sold, and balance sheet. Then when you tell your story to an investor, you’ll show that you’ve done your homework and you truly understand your business financials. Of course, as an entrepreneur, you don’t know if the numbers will work out when you’re bootstrapping, and that can be stressful. Jim Huston of Portland Seed Fund asked Katie Poppe what advice she received when she was deciding to invest her inheritance in her business. “I had called all of the adults in my life that I respect…and every single one of them told me not to do it.” She concluded she would win the respect of her family and friends if it didn’t work out but would let herself down if she didn’t go for it. She went on, “If I didn’t do it I was always going to wonder, ‘what if?’ and that was the bigger loss for me.”
- Build relationships. Whether you’re starting your first business or your fifth, fundraising is about building relationships. Find a mentor in the community willing to provide guidance to you on your funding journey. Make a connection with your early backers—they can be a great source of feedback for product improvements and new product ideas. Kelly Oriard emphasized that you should be inspiring investors to believe in your company the way you believe in your company. “Bring friends and family into your brand to help build your vision,” she said. If you’re worried about all the documents and financials, always pull it back to your vision. Lynn agreed, suggesting that you “convince them the world sucks without your brand”. Jeff also agreed that relationship building is essential: “Securing funding came down to the relationships we built with them,” he said.
- Funding takes many forms. We heard about a variety of funding options from our panelists including crowdfunding, convertible notes, private investments, and even Shark Tank. Why choose the loan option? Jeff said, “We were conservative by nature.” He wanted to maintain ownership and was trying to stick it out as long as possible before taking a loan that would help him build inventory. The funding options you choose for your business may depend on your aversion to risk and how much ownership of your company you want to maintain.
See photos and watch the video from the evening: