Access to early stage funding is vital for really good brands to validate their growth hypothesis, prove product-market fit and position themselves to build a business. However, there is typically a gap between these early-stage brands and the investors who are willing to place bets on them. This funding gap is what Michael Movitz seeks to bridge with Brandjectory, a new relationship building platform optimized for brands and investors in the natural products industry. After more than 25 years of experience in the industry, Michael saw that brands and investors are essentially asking the same questions about each other and set out to build an online platform that brings them together in relative ease. Less than a hundred days since its inception, the platform is already proving itself of value to brands and investors alike. Find out how exactly they are doing it as Michael joins Elliot Begoun in this episode. Plus, don’t miss out on Michael and Elliot’s solid fundraising tips!

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Brandjectory: Bridging The Funding Gap In The Natural Products Industry With Michael Movitz

I’ve got a good friend of mine, Michael Movitz, joining us. We’re going to talk a little bit about early funding and how the funding gap has challenged many brands and a solution that Michael and a group of others have built to try to address that. We’ll spend some time talking about early-stage funding, mechanisms, the gap that exists and how Brandjectory is poised to offer a solution to the challenge and the motivation behind it. This was a group that came together with CPG experts and investors who solved a problem that they were seeing in the marketplace.

I believe in the fact that having access to early Angel money is vital. It gives good founders and good brands the opportunities to validate their growth hypothesis to prove product-market fit and to position themselves to build a business. We’ve talked a lot about the fact that you can jump on the hamster wheel and go into the venture world, but you can also build a business that is nimble, capital-efficient and resilient. That’s something that we are strong advocates of. In fact, we’ve launched our new eTardigrade hybrid learning program that works with brands to help them do that. I’m very excited about that. I’m happy to share any information on that. We are going to jump in and without further ado, I’m going to flip it over to Mr. Movitz. I will let him introduce himself and tell us a little bit about his background and a little bit about Brandjectory. Michael, thanks for being here. Share a little bit about you.

Thanks for having me on. It’s an honor and a privilege. I’ve been in the natural products industry for many years. I started back in the mid-‘80s when it was a bunch of pale thin people eating tofu, twigs, nuts and berries and the organic industry was not for the masses. Over time, I worked at a natural products retailer, a broker, a manufacturer and I was at SPINS for sixteen years in a number of senior-level positions. When I started, we had 25 people and when I left, we had almost 200. I started my advisory at The Movitz Group many years ago. We worked with early-stage brands on go-to-market strategies and helping to prepare to raise capital.

As things progressed through those conversations and I worked with founders and investors, we eventually developed and identified a solution or I should say we identified a need for efficiency and a better solution than the capital raise process for both investors and brands in the food and beverage natural product space. I got together with a couple of other industry veterans who saw similar needs in the market and we developed Brandjectory, which launched back in May of 2020, right in the smack middle of the pandemic. So far, it’s going well.

We’ve got a little over 100 users. It’s a relationship-building platform designed for specifically natural products CPG founders and investors to discover each other, connect, communicate, share information, and build a relationship and on the path to partnership and transaction. It’s all about all of the processes that are taking place before the transaction, not the actual transaction itself, which there seemed to be a lot of gaps and a lot of pain points in. Hopefully, we’re helping them solved that problem.

One reality is that you raise money from people you know and you made an important point, I think, about the fact that what the platform does, what project it is focused on is establishing and building relationships. That’s discovery and relationship-building. There’s the old adage when you’re raising capital that it’s best to go to the well before you need the water and start building those relationships and start doing that. It’s not easy to do it when it’s disaggregated and you’re trying to reach a bunch of different Angels. We’re going to talk more about that platform, but I have a question for you in terms of the why behind this. You saw this challenge and this growing funding gap. What were the signals to you that you had to do something to respond? What were you seeing in the marketplace?

Almost immediately when I started my advisory back in 2016 and I would talk to early founders and verbally, they had the exact same questions, “How do I find investors? How do I know who’s a good fit? What do I need to communicate with them and tell them? How do we keep them updated? How long is this process going to take?” Fascinatingly, I would talk to investors and they would ask the exact same questions, “How do I find the right brands that fit? How do I convince them to keep me updated on a regular basis? How do I help them understand that I’m not going to write a check on the first 1 or 2 conversations?” I would make introductions to the brands and the investors to try to help.

There are only many of those that you can do in a day. I knew there had to be a more efficient bigger impact solution. I started to think about what that might look like. I went through a couple of iterations in my mind. At the time I happened to be reading a blog from a family office investor in Phoenix named Tom Malengo from The Litchfield Fund. I reached out to him and we started to build some rapport and quickly discovered that we shared a lot of the exact same observations about the process. The need for trying to help both parties to get more efficient and build relationships better and find each other, earlier in the process of when brands needed it.

We started iterating as well and through the process, Jeff Grogg from JPG Resources reached out to Tom with similar thoughts on trying to help solve this issue. The three of us got together and we started working on something that eventually became a Brandjectory. We did piloting and testing back in 2018 and in 2019, we did the official building and coding. We hired some developers. We invested our money and we went into beta around January of 2020. We were planning to make an official launch in the summer of 2020, but the pandemic accelerated that need after no more trade shows, no more conferences, no more events where typically brands that investors could meet each other.

There was an accelerated need for an online platform to be able to create that connection. We launched in the middle of May and it’s quite exciting because it is helping to solve exactly those issues. We’re still very much in the early stages and building our user base, recruiting investors and brand founders. It’s a two-sided marketplace so it’s a little bit more complex. It takes a little bit more time, but the parties that are there are starting to see some value and we’re getting that flywheel moving.

First of all, I applaud you for doing it. I stood on the sideline and bitched about the funding gap. You guys took action and I think that’s fantastic. I was on in the beta stages. I’ve been extraordinarily impressed by what you’ve built. I think it’s an ecosystem that is needed. We’ve talked a lot and not only on this show but in general about early-stage funding and the importance of it. The importance of founders putting together a capital plan at least for five years. If you have revenue targets, if you have a growth hypothesis if you have all of those things in place and you recognize what you’re going to need to activate in order to drive that revenue.

You also need to start paying attention to the fuel that you’re going to need the feed that and right now it’s funding, but what you’re going to need 1 or 3 or 5 years from now. The different types of funding that exist from straight capital to vertical notes, to asset-based lending to venture debt. There’s a lot of creativity. Building early relationships is vital in this process. Let’s first talk about the platform specifically, how it fosters that, but then put your advisory hat on how do you encourage founders to work to establish those relationships? Not only with the investors they need now, but the investors and other types of funders that they’re going to need tomorrow?

I’d like to start with that last point. We get a lot of questions, “When should I start talking to investors? I’m not raising capital yet.” The answer is short and simple, now. It’s a 3 to 6 months process once you know how much you’re going to raise and have your materials together, meaning your financial model and your investor pitch and all of your ducks in a row to prepare to raise capital. We’re trying to help solve one of the things, is to help that discovery process and shorten that history and that learning process between the parties and that rapport-building relationship-building that takes place. Because typically to get funding a brand and investor are going to be interacting a couple of dozen times at least.

The way that the platform is set up is similar to a social media interface or a little bit like a dating site. The idea is that a brand would have a profile that is structured for the purpose of talking to investors, informing investors about the things that are important to them, which is very different from a social media profile that is consumer-facing or a LinkedIn profile that is professional facing. This is about what does an investor needs to hear and how do I need to communicate to them to increase their interest in my business. The profile is there for the investor to review and then the way that the brand makes themselves even that much more interesting and improves that communication process is to post updates. It’s very much similar to LinkedIn or Facebook, etc.

The brand would be posting updates about their growth story, revenue milestones, learnings from marketing events, key hires, new distribution and new product launches. The things that investors want to see and hear to understand some credibility and some traction that’s going on with the brand over time. An investor has the ability to follow a brand and keep tabs on those updates or they can reach out and connect which would allow you then to have direct communication. There is chat messaging and video conferencing on the platform. Transactions occur off the platform. It’s about the relationship-building process and all of the elements that go into that. It also includes document sharing which the founder then has the ability to decide who are they going to share the documents with.

You don’t want to put confidential things on your profile until you’re ready to share them. Once the investor has a connection that you approve, then the investor gets to look at those documents to gain a little bit more insight and continue and proceed with the process. One important thing about the several important things is that we have structured the site for security and privacy because we know that brands do not want to post and disclose things that other brands would not want to see. There is no ability for one brand to see another brand’s profile or their documents. That interaction is strictly between the brand and the investor that they choose to connect with and the posts that they choose to display.

Let’s go back to your advisory hat and let’s talk specifically. You get to see and you have the privilege of hearing and talking to both sides of this equation. You mentioned that in your introduction that you were noticing that both investors and founders were asking similar questions of each other. What are you seeing as best practices that early-stage founders should be doing as they engage and communicate and what they share with potential investors?

Whether you’re on Brandjectory or not, keeping an investor up-to-date on your progress is crucial. Brandjectory is designed to provide updates in real-time. An event occurs over a weekend, post something on Monday. You have a meeting with a retailer where you get a commitment, post that update, where you have the commitment. If you’re not on Brandjectory, you want to provide at least a monthly update, quarterly, at longest, because the idea is you want to keep yourself in front of the investor to keep yourself top of mind. You want to keep advising of the different elements that are occurring in your business so that the investor can gain the confidence that you’re gaining traction. That there’s more than a nice profile and that it looks interesting, but there’s a progression on the business that gives them the confidence to want to be a part of it and to partner with them.

Here’s an interesting question that came in and this fits well and I’ll editorialize on it in a second, but I’ll throw it to you first. The question is Brandjectory stops at the transaction level, but do founders share terms, for example, if they’re raising a convertible note on the platform. If so, what are you seeing post-COVID in terms of changes in terms? It’s a two-part question. First, is term something that is communicated as it relates to maybe a convertible note round on the platform and in your overall view, what have you seen if anything changed in terms?

The basic terms such as the amount of money that’s being raised and general terms of the note are the simple one-line type of checkboxes on the platform, but that’s your offer because then the negotiation starts and then you agree on what those terms are.

Do you mean they don’t naturally agree to anything you ask for?

I would start to wonder if you were not starting at the right point if they agreed to what you asked for. With regards to things that I’m seeing, it’s becoming a little bit more investor-focused, a little bit less friendly to the founder. I was working on a term sheet with a client in the last weeks where the typical 20% discount is there. The length of the note is fine, but the interest rates were a little bit higher than expected. It was at 8% and if the note didn’t convert, there was an additional 12% penalty. It was a pretty hefty penalty for not converting. The investors are trying to protect themselves in the uncertainty of the market.

I think it’s important on the latter point and what’s going on in the marketplace that you have to understand and bring empathy to bear on this that investors are in it to make money. You want your investors to make money because if your investors are making money, you’re making money. Sometimes I see founders get too caught up in Marshall’s Delusion and all of those kinds of things. One of the things that you have to do is you have to be cognizant that investors are going to invest. That’s why they’re called investors. The question is not whether they’re going to invest. The question is why should they invest in you and anything that you can do to improve that argument, to improve your position in making them choose you for that investment is key.

We talk a lot about the go-to market strategy and the unit economics and all of those things, which are key but so are the investment economics, the terms and so is a recognition that the right investors should make money from the investment they’re making in you and there should be a risk premium. There’s a lot of creativity going on in terms right now, especially in convertible notes. I would imagine that most of the activity, at least at this stage on Brandjectory is in that Angel convertible note safe realm.

There’s a lot of interesting things going on there in terms of interest rates. Over the course of two years and the difference between 6% and 8% interest converted to equities is typically in a smaller investment isn’t massive, but it could mean a lot to that investor. How you structured the valuation gap which is another form of discount and there’s a lot of creativity going on there. We’re looking at ways to rethink that to create upside warrant coverage and all of those things. As you talk to the people guiding you on this process, you talked to the attorneys codifying this and putting it together. You challenge them and yourself to build something that certainly isn’t giving away more than you need to or should, but something that recognizes that investors should make money. There should be an upside for both. There should be a shared opportunity.

As you try to differentiate on the shelf or you’ve tried to differentiate digitally, you differentiate, you stand apart from all of the other decks and term sheets and notes that Angels and early-stage investors are seeing. It’s going to improve your odds. I would encourage you to do that. Brad has a question. What are your thoughts on corporate venture? Do you open the kimono robe to your business to a potential competitor within the industry for a chance at funding or corporate venture funds looking at earlier stage investments? I need to perceive and see.

Some of them are designed to dip down into the low single-digit millions. I’m only aware of one that is willing to go below $1 million in sales. I don’t know if you have any perspective on that?

Corporate funds or venture arms say they want to get in earlier and start courting and talking to people, but I haven’t seen a lot of those deals consummate yet. I see a lot of dancing around each other. It’ll happen because if corporate strategics event and corporate venture arms look to buy earlier, they’re buying that innovation for less than what they have been buying it for, which I think is appealing. I want to hear your take on the other half of the question, which is how full monty do you go on this and what do you hold back?

Any time you’re talking to an investor before you have an NDA, you need to limit what you’re going to disclose. You need to find that balance between what’s the right amount to show them that you’ve got a strong business proposition and a strong plan without telling them everything, no matter whether it’s a corporate venture arm or any other investor or any other person for that matter. There are things that I think that you could talk about your business, where you don’t have to give away the farm, but if you’re going to get into the negotiation with them, there’s got to be goodwill and reasonable intent on behalf of the parties that they’re going to enter into an NDA to have the conversation. You can’t have somebody make a good decision if you’re going to be holding back or being dishonest with somebody because whether you try to protect the information upfront or down the road, it’s going to come up at some point. There can be problems if something unfortunate is discovered after the deal is done or very close to the deal being done, it could change the direction very quickly.

I’ll add to that and then say, first of all, what I’m seeing and what I’m finding is fewer investors are willing to sign NDAs because there’s a lot of similarities and challenges. It does come down to a degree of trust. The way I would recommend it is going back to Michael’s earlier analogy of dating. The way you would date somebody. First of all, you want to learn the most about that. You spend a lot of time trying to understand that. You should spend the time and do the due diligence on potential investors as they will on you. You can talk to other members of their portfolio and see what the relationship is like. You can ask them questions about their philosophies and how they interact with their founders, learn and be interested in them.

Secondly, you start by telling them about the good traits you have and the good things. Over time, as you begin to assess, you begin to share more. There’s nothing wrong with saying to somebody, “Before I share this information, before we go any further before I frankly increased my level of vulnerability, I need to ask an honest question. Is there a real interest here? Is this something that you are giving real consideration to or is this something that you’re intrigued with an investigating? You’ll be surprised when you ask that question. First of all, it’s usually viewed favorably by investors. You also get a signal before you waste too much time whether this is going through the motions or whether this is real.

It also has to do with who you’re dealing with within investor. Especially, if it’s a corporate venture arm. If you’re dealing with the gatekeeper, that’s still too early to share a lot. If you’re dealing with a decision-maker, that’s different. One of the things about the venture arms of large companies is there are huge benefits to it. They can bring a lot of resources to bear. They have a lot of access. Some hold themselves separate from the company, others are ingrained with the company, but if you begin to enter in with a trusting relationship, it should be a trusting relationship. The other thing to keep in mind is unintended consequences. If you have a larger investment from a strategic or from a venture arm of a strategic and down the road, they choose not to buy you, does that send a signal to the market?

You think about the unintended consequences, but I would say to answer the question specifically in my take is that this goes for all investors is you start out smartly and prudently. As you build the relationship and as you see an opportunity, you keep sharing more and you call out when you’re passing certain thresholds of comfort or vulnerability, and have that conversation as a stage-gate as to whether there is a real reason to keep moving forward. Hopefully, that helped. We got Tom asking a question. It seems like Brandjectory would be a great place for early-stage brands to cultivate the next level of investor.

It would be. It’s an excellent place to do that. That’s what one of our driving purposes. The idea that building relationships are key to getting things done in any part of business whether it’s asking for referrals for service providers. Whether it’s for looking for recruiting for positions or looking for an advisor and helping to solve some smaller, big problems. Having those relationships, building your network is key. It’s the exact same thing when it comes to your capital strategy is being able to develop those relationships and make yourself known to investors that are the right fit, but as many of them as possible. Each investor has a different approach, a different lens, a different strategy, a different perspective and it’s not a one-way conversation. It is a two-way conversation.

Elliot was alluding to it with when you’re involved in that process, you’re asking questions of the investor as well and you want to get to know them. You want to be able to develop that relationship and have the trust in them as much as they have the confidence in you. The idea behind Brandjectory is that brands have the ability to signal to investors. If they’re on the platform, investors can do searches to find brands that meet certain criteria and you want to get the dialogue going, make the connections, share the information that is as desired and needed, and help your process on the way to solving, getting the solution that you need in a partner that is going to make sense.

One of the many blessings of being in this business is that the investors in this space, almost to a person that I can think of are incredibly giving. They’re incredibly willing to take time, offer advice and listen. There’s a lot of benefit from having conversations and building relationships with investors that go far beyond potential raising capital from them. The vast majority of investors you’ll talk to won’t invest in you. That’s the reality of the numbers. It’s not a reflection on their confidence in you or their belief in you. It could be that they have something else in their portfolio that competes. It could be that the timing is not right. It could be that it’s not the investment for them, but building a relationship with investors who are typically well-connected and well-meaning, who see things broadly and can bring to bear the lesson learned from lots of other portfolio companies. There’s a lot of things that can be done by investors who you build a good relationship with and will never invest in you.

That could be connections. It could be advice. It could be an open door and all kinds of different things. The other thing that I would say to me has been a missed opportunity by many founders is that when an investor chooses not to invest, end the relationship or move on and you take that as that’s the extent of a relationship. It isn’t. I would encourage you to first build a relationship with investors and build a relationship that, also, by the way, is reciprocal. Make sure you ask what you can do for them and they may be interested in learning more about a category or wanting a connection or if you have a great resource that’s helping you do something, that resource they may want to bring to other non-competing brands.

Make it a real relationship. Build it and cultivate it over time. I promise you that it will pay itself back. I call it karmic boomerangs. If you continue to give out there, you’re going to be the beneficiary of that giving if you do so without expecting reciprocity. I apologize for being a bit preachy here but I feel like it’s a missed opportunity by many who are only interested in that relationship in their minds. I don’t think in their hearts, but in their minds with the investor for the capital. It’s a great opportunity if you see it is something beyond that as a long-term relationship. If you’re on Brandjectory as a brand, how do investors find you?

There are two ways. The investors can do a search themselves and set up different criteria. If you fit their criteria, then you’ll pop up in a search result. They can click into your profile, they can read about you and go from there. The other way is sending a signal. Brands have the ability, once their profile is set up to send a signal to investors that also fit a brand’s criteria in the sense of a revenue range, amount of money or checks that they write and other criteria. If somebody is only looking for an investor in a specific location, they want to regional something like that and a couple of other pieces of criteria so then the brand can then send a signal to the investors that meet that criteria. The investor gets a notification that “Brand A has signaled you. Go check them out,” and they can then click into your profile and learn about you that way.

Brad has another question, “Michael, would you be willing to provide a preview for future features that you would like to build into Brandjectory over time to enhance the platform? By the way, we have direct experience with Brandjectory as an emerging brand and have found it to be a valuable platform and much-needed service in the industry.”

Future developments are going to be based on user needs and demand. We spent years building functionality into the system that is based on three industry veteran experiences that conversations with many brands and investors. While this is not an MVP product, we tried to make this as robust as possible right out of the gate. With that said, we know it is not complete or there’s always going to be needs and desires for additional functionality. There’s a host of things that we have in the background, but we want to let the users tell us what’s the most important.

Here’s another question, “We were hesitant to set up on the platform due to the fact that somebody could potentially knock-off our product, replicate it in some form or duplicate it. What would you recommend to protect ourselves or set up on Brandjectory out the possibility of these challenges?” I’ll broaden it and say, you did a little bit in terms of how the information flows and the security, but maybe speak to that concern. It goes back to that sense of being vulnerable.

A couple of things about the platform and then I’ll talk more broadly in general. First of all, brands cannot see other brand profiles. Secondly, in terms of investors, they are self-accredited. We are not betting the investors, they are completing a self-accreditation form that is an industry-standard. Thirdly, you do not need to share anything with anybody that you don’t feel you are comfortable sharing. If you want to limit your public profile of called public meaning that visible to investors and reserve more specific privileged information for documents that you share once you’re connected that’s okay, but it does, potentially limit the potential pool of interested investors, because they will only know so much about you from a limited profile.

The connection process with an investor is the investor sends a request to connect with you. You get to view their full profile. If there’s something you don’t like or something doesn’t smell right or you go out and you check either their website or look on LinkedIn or whatever you want to do to do a little bit more due diligence on them before you accept the connection, that’s your privilege, that’s your prerogative. We gave you the ability to review who they are in full before you make that decision. Now, having said all of that, your brand is out in the marketplace. In retail, it’s online and somebody who’s going to be able to understand your product positioning and how you’re coming to market from your social media posts, from your representation at retail and then also at trade shows and other people in the industry.

What Brandjectory is doing is helping to improve the process of that investor communication and relationship-building while taking into account as many precautions as we can to help both investor and brand through the process to feel comfortable about the process. There’s a lot of things about a company’s business that are already out in the public domain that is not proprietary or something that Brandjectory can control. We try to give you the option to limit certain information on the platform until you’re sure and know who you’re sharing it with.

I’m going to take this one for a second and say that this is a concern I hear frequently and it’s justifiable. As a founder, you’ve poured your heart and soul into building something and you don’t want to see it get taken and copied. There are a couple of things to that with rare exceptions, especially in the natural products industry, unless you have game-changing IP or technology behind it. Mostly, the differentiation of product to product is how you put everything together from the ingredients, through the packaging, through the brand, to the relationship we built with the consumer. From an ingredient standpoint, from a reverse engineering part potential, it’s very difficult not to have that risk be in existence for any product.

As a founder, your job is to make the ingredients of your product or the product itself just one element of the brand that you’re building. The best defense is to build a real relationship with your consumers, to build a brand that consumers are passionate about, relate to, and want. If you can do that, then if somebody else comes down the road with a product that is similar, but without those elements, without that relationship, without that packaging, without that passion that the consumer feels for, then you’re at very low risk and it is human nature. It’s the way things work. Plus, I always say to people, think about how freaking hard it was to get your product commercialized and out there. Take some sense that that’s a moat as well. We have two questions here from Joanna. One, is there a fee associated with creating a profile on your platform and two, are investors listed on your site, your entire investor list, and if not, how many early-stage investors do you have on the platform?

With regard to the fee question, it’s free to register and build your profile. To subscribe and be live on the platform so that investors can find you, per brand, it’s $39 a month or $349 year. There are no transaction fees, no commissions, nothing like that. It’s a simple subscription model in which we tried to lower the barriers as much as possible. With regards to the user base, we have about 105 users on the platform. It’s about an 80/20 split. Eighty percent brands and about 20% of those are investors. I think you might be referring to the logos that are on our front page. Those are a couple of our data partners, but we have about eighteen investors, I believe.

I want to say too, that this is only the beginning. One of the things that we recognized from the beginning is that typically, at trade shows and conferences, a lot of brands can meet investors that will attend those, but a lot of those investors will tend to be later stage investors of later-stage investments. For brands that are under $1 million in revenue, there’s a more elusive pool of investors that are out there. One of our objectives is to try to bring that pool of investors into the ecosystem.

There’s a lot of food and beverage investors out there and on the Angel and seed-stage side, those are the most critical for that stage of the company. They also can be the hardest to find. We want to try to bring those investors to become more visible and accessible. We’re only at the starting line. There’s a lot of investors that we’ve been talking to that span the range from Angel to later stage. The later stage investors are also interested in Brandjectory because it gives them an opportunity to meet earlier stage brands and develop that relationship. To watch the brand’s growth so that when the brand reaches the threshold of their investment criteria, or something happens beforehand that sparks their interest, they can jump in because they’ve got that relationship built. In terms of helping to solve the need for raising capital on a short-term basis, we’re working hard to build that Angel and seed investor group.

To call out to any of the investors reading this or to any of you founders, sharing this information, letting people know that this platform exists as a gathering point as a place to exchange information, only helps be the entire ecosystem. That’s one of the things that I want to do and try to do is bring tools and things to the surface that can help make some of what is so challenging in this industry a little less so. That’s a thing that Brandjectory does. It doesn’t guarantee you an investment. It doesn’t do anything other than making that outreach, update and relationship building more centralized and less dis-aggregated. The more vibrant the ecosystem can be built on the platform, the more value that it’s going to have for you and the more value it’s going to have for the investors on it.

One other thing that occurred to me with regards to the subscription price, we are happy to provide a promotion code to your readers to get 60 days free.

Another question in regards to the actual communication between founder and investor and this one was sent to you by email and that is, “What tips or suggestions do you have that founders should be doing to talk about what their plans are and how they’re reacting to the uncertainty in the market?”

Everybody knows that there’s uncertainty there. There’s a couple of key things to communicate. One is you’re managing your costs, and you’re looking at your cashflow on a very regular frequent basis, weekly, maybe even daily. You have reevaluated your expenses as far as what’s going to drive the most revenue and what’s going to be the most productive and get you the biggest ROI. If you need to look at your portfolio of products and make some decisions about what products you need to focus on and which ones you need to let go, then you’re demonstrating to the investor that you’re paying attention to the operational pieces of the business to help preserve and conserve cash.

The bigger question is how do you get through the current period and that could be a range of possibilities. It could be looking at new channels, certainly eCommerce, if it’s not already something that the brand is focused on. It’s crucial right now. It could be looking at alternative channels or options, whether it’s snack boxes or other venues that people are now frequenting. I think getting involved in a consumer promotion type of services like Social Nature or Sampler or Promomash. To help either from developing the influencer side of the business where you are going to have that more authentic connection to consumers or replacing the retail demos that were taking place as a way to develop and generate that awareness.

Investing in social media is important, but there may be a need to consider how do you pivot. How do you either think about reimagining the business from the original plan that you had set out to A) a different type of product or positioning and B) restructuring the package so that the price point is more attainable to a different demographic or more easily accessible online? I know of one company that packet their online orders. The only product that you could get into the brand if you were not familiar with them, the first spend would have to be $45 for a multi-pack and that’s too high for a lot of people to experiment with and to try. Being able to reevaluate what those entry points look like is important.

I’m going to take it up a level and say, the first thing that you don’t want to ever do is become a victim. That’s not what entrepreneurship is about. The proverbial shit is the thing. Let’s be realistic about that. Those founders that are still flatfooted and are still sitting there ruining the day that they didn’t get on the shelves they were expecting. They didn’t get the new distribution they have hoped and all of those kinds of things are going to be the founders left behind. I’m sorry, it’s a bit of tough love, but it’s true. Most of you reading fall into this category I believe, who have seen the opportunity amidst the chaos. We have looked at this and challenged their businesses themselves to rethink, to look for both micro and macro trends that have emerged from this and have taken action are positioning themselves well.

It’s specific to the question that was asked around, “How do you confront or how do you have this conversation with investors?” Don’t bullshit. Be honest with the things that have hit you hard this year and these things that you’ve taken by this. Many of you have different ways. Some of you have had massive upticks in volume, but it’s crippled you in cashflow and it has been difficult. You’ve had to make difficult decisions about production realms and saying no to customers. Others have been left behind in terms of new distribution or those types of things and/or funding, let that be known. To deny the fact that you haven’t been hit with some challenges is to miss an opportunity to also communicate how you responded to them.

In general, when you meet with investors and talk to investors or give your pitch, the normal mindset is to talk about all the good things. That’s what everybody does. I know a ton of investors. I’m an Angel investor and the reality is we all know that you’re not perfect and that no brand, no founder is perfect. What I and most investors want to understand is when things aren’t perfect. When you make a mistake, when the market conspires against you, when the winds swing, change and start blowing out of another direction, that you’re nimble enough, capable enough, willing enough to adjust and change and work. Talking about a struggle and how you react to that struggle sometimes can be more powerful and constructive in an investor conversation than just the bubbly, happy horseshit that usually gets shared.

I’ll take that another step. The same holds true with consumers. I’ve seen this time and time again. How many of you placed an order online and waited days only to find out that the shipping’s delayed and so forth? Sometimes that is beyond any control of the brand itself, but failure is one of the best opportunities to build a real relationship with the consumer. Because when everything goes as expected, it doesn’t give you a chance to show a consumer what the brand is made of and how much that consumer means to you. When you have a failure, when you have a stumble when you underperformed, the way you react to that underperformance, the way you recognize that is critical.

I’ll pull one that comes top of mind. Many of you probably experienced it. Zoom went down and we’ve all become incredibly reliant upon Zoom. I thought it was impactful that in my email was an email from Zoom’s chief software engineer saying, “I take direct ownership of this. You guys rely upon it. It is something that I’m going to work personally to make sure.” I don’t remember the actual terminology of it, but the concept was that they weren’t taking it lightly, that they understood with empathy the impact that it had and they were doing something. It quite frankly increased my perception of Zoom similarly to how they reacted to the security issue. These are opportunities and options for you all when you’re talking with investors to showcase you and your team and how you’re able to react to uncertainties and changes and all of those things.

I want to give Michael an opportunity to sum up Brandjectory and let everybody know how they can learn more, reach out, set up their profiles. I also want to share with you that our next two shows are going to be slightly different. I wanted to bring a more holistic approach to how we’re working with founders and supporting all of you in the market. Two areas that I feel like are under-investigated or not discussed enough is the entrepreneurial mindset. The importance of your mindset as you persevere through this uncertainty and the traits and mindset characteristics that you could learn to improve or increase that is going to better empower you to leapfrog the competition.

I’ve invited Dr. Ryan Gottfredson. He’s written a book called Success Mindset. He has a mindset assessment that he does. He’s a professor and he teaches a lot and studies a lot about what are the characteristics of the most successful entrepreneurs, leaders and teams in terms of mindset. he’s going to join and talk with me a bit about that and take your questions about how we can start thinking about, “How do I better empower myself? How do I become a better entrepreneur, a better leader and how do I get my teams also similarly aligned?” I think that’s important.

The other shows the week after is going to feature a guy named Jono Bacon. He has written two books on the power of community, a brand community, and how brands can build powerful communities and how those communities can make an economic difference in a brand’s trajectory. Jono has worked with Google and he built a community around XPRIZE and all of these other kinds of things. He’s a fascinating guy. You can find a lot of his videos on YouTube, but I felt like those two conversations around the importance of mindset and the importance of community were two things to bring to further the conversation beyond what we typically do in our industry speak. Michael, bring us home. Tell everybody how they can learn more about Brandjectory. How they can reach out to you if they want to engage in the platform and then we’ll go from there.

The website is Brandjectory.com. You can reach out to me at Michael@MovitzGroup.com or to Elliot for that promotion code. I’m on LinkedIn. The advisory for our group is MovitzGroup.com. We’re trying to help solve the pain of inefficient and difficult challenges when it comes to discovery and building awareness and that relationship and information sharing. If you have any feedback, recommendations, requests or suggestions, we would love to hear it because we simply want to help solve the issue and serve the industry.

I’ll use a word that comes from both Michael and my heritage. My Michael is a match. He is motivated to serve. It’s not easy to birth an online platform and I know that the team that’s been working behind the scenes on this is doing it for the right reasons. I’ll thank you for all of us who are trying to help early-stage entrepreneurs have a path forward and succeed in this business.

Thank you. Right back at you, Elliot. You’re the best.

Thanks so much for reading this episode. I look forward to seeing you next episode when we have Ryan on and we’re talking about mindsets. I will learn that I’m certifiably nuts, but people know that already. I’m looking forward to that. Michael, thanks so much for joining.

Important Links

• Brandjectory 

• eTardigrade

• The Litchfield Fund

• JPG Resources

• Success Mindset

• Jono Bacon

• Brandjectory.com

• Michael@MovitzGroup.com

• LinkedIn – Michael Movitz

• MovitzGroup.com

About Michael Movitz

I formed The Movitz Group in January 2016 as a natural evolution of my 25 years in the premium & natural products industry converging with profound changes occurring with consumer goods dynamics & culture in America.

Shifts in CPG product portfolios, retail strategies, consumer demands, and technology are converging to create a fundamental transformation of how food is grown, raised and processed; how brands go to market, compete and simplify their ingredient profiles; how supply chains navigate being more transparent; how retailers and restaurants capture their customer’s attention, loyalty, and basket; how on line and mobile shopping is changing consumer expectations; and more.

The traditional food system in America is adapting the principles, values and mission of the natural products industry at an accelerating pace like never before, and there’s no turning back. The influence the natural products industry sought to exert for decades is in fact coming to fruition in a most remarkable way, and conventional companies and businesses are scrambling to stay relevant.

The Movitz Group was formed to be a strategic advocate – an authentic voice for the relationship between enterprise and humanity, helping to drive progress of both, as compliments to each other. We are objective but not indifferent. Business can do better. People can do better. We can do better, together.

The Movitz Group offers professional strategic guidance to CPG, traditional retail, and capital markets through the lens and framework of the natural products industry; situation analyses and data analytics encompassing the full spectrum of defining the what, why, so what and now what; development of go-to-market strategies for emerging innovative brands; due diligence to capital markets and CPG considering investments or acquisitions; industry-insider expertise to institutional investors; thought leadership and bold recommendations with conviction, inspiration and a touch of heart & soul. 

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