We all recognize how hard it is to raise capital. It is even more so when we search for the wrong kind. Let me replace the word wrong with misaligned. Misalignment is the quiet killer of brands. When an investment structure forces the entrepreneur to travel down a path not in the best interest of the business, the effects can be devastating. Yet, we see this happen all the time. Founders must spend money, grow fast, and build towards ubiquity just to monetize the investment. The power-law venture approaches of equity, convertible notes, and SAFEs are not the only arrows in the quiver. Don’t get me wrong. It is not that the structures mentioned above are inherently flawed. It’s just that they don’t fit the majority of the businesses within CPG. There are many other ways to fuel your business, and more innovative solutions are being developed daily.
I want more alignment funding. An approach that starts with the entrepreneur and investor aligning around a shared outcome. One that allows the entrepreneur to build the type of business they want to create and provides the investor with the kind of return they expect to receive. Debt, equity, dequity, revenue-based financing, redeemable equity, CAREs, so many options exist. It is just a matter of creating awareness on both sides of the ledger. It will take time for these alternatives to take root, but take root, they will. This is an industry of innovators, and it abhors a vacuum. The way we fund emerging brands is changing.
Join me for an exploration on Wednesday, March 6th, at 1 PM PST. I will lead a conversation with four founders who are building their businesses differently and are raising the needed capital using innovative structures and terms.
Tonya Donati, Founder of Mother Kombucha, Kyle Koehler, Co-Founder of Wildway, Kelly Perkins, Founder of Spinster Sisters, and Emily Griffith, Founder of Lil Bucks, are all leading mission-driven businesses that are nimble, capital-efficient, and resilient. They have or will raise funds under structures and terms that are in alignment with their desired outcome. They are taking the path less traveled, and they recognize that it’s not easy.
We will discuss their approach to balancing profitability and growth, their chosen investment structures, and how they will find aligned capital.
