What can you do to make your business more investible? There’s a lot to consider, but today’s episode might help clear some things out. Chuck Cotter once again joins Elliot Begoun for another episode of Brothers from Another Mother. The two answer questions from listeners on everything about increasing your investibility. They discuss pre-money vs. post-money cap, incentive equity, social responsibility, fundraising, and the importance of relationship-building. Plus, they get to talking about exciting and worrisome happenings in the space right now. Get valuable tips for founders by tuning in!

—

Listen to the podcast here

With Chuck Cotter “Brothers from Another Mother”

It’s our monthly installment of Brothers from Another Mother. We talked about how we can make these new and fresh every time because I know you all get tired of Chuck talking about himself. I certainly get tired of hearing Chuck talk about himself, and that has nothing to do with the show. We came up with absolutely no ideas. We will ask all of you to give us suggestions of future topics and things that you want us to cover so that we can come prepared to speak specifically to them and nothing off the table. Chuck, what’s going on?

It’s not much. I guess I’m dealing with my newfound life as a celebrity here because I have heard this show is followed by tens of people. Our whole life is going to change. I need to reassure my wife. She’s still my ride or die,

I’m getting ready for Expo West. I know neither one of us did fancy, but I heard from most people that it felt good and went pretty well. There was a pretty good crowd, but it made me very ready to get back in front of everybody and be in front of everybody. I have seen a lot of chat around that. I’m going to continue to call this out. We talked about this a lot, the Seed to Series A funding is challenging.

Support the brands that are raising on Crowdfunding now. They need it. Even if it’s a minimum investment, it’s not the dollar as it is the support and shares it. I know of three brands for sure in our community that are raising on Wefunder. That’s the Riff, Spinster Sisters and Tia Lupita. Show them some love, but all of our natural products, CPG brands. That leads us to the first question that we have. It’s around convertible notes. Angels and small funds, everybody has seen a ton of deals float, value cap and discount. Beyond lowering your value cap or increasing the discount, have you seen or thought of any out-of-the-box ideas that can make your offer more investible than somebody else’s?

How out of the box you have to purely depend on demand and how much you are struggling getting people over the finish line. Maybe give me 30 seconds to contextualize a convertible note and explain the discount evaluation cap. I want people to know what do we mean when we say in the box, outside of the box.

In the box means a discount and evaluation cap in a note where it is safe. Here’s how it works. If there’s a 20% discount, that’s pretty universal. If there’s a $5 million valuation cap, if you go raise at a $4 million valuation, the investor gets 20% off that price. If you go raise at a $100 million valuation, they are going to convert it to $5 million, whether you raise it $20 million, $50 million, $100 million or $1 billion, because that’s the maximum that they can convert at. It’s their locked-in upside. The investor gets the better off, meaning whatever gets them more stock, the discount or the cap. This is the standard way a safer note works.

As far as what’s outside of the box that we have seen people offering that can help people get over the finish line, there are lots of stuff. One thing that we see people offer sometimes is essentially incentive equity. It’s dangerous though because if you offer one investor incentive equity, and you don’t offer the other’s incentive equity, what you have essentially done is repriced the investment for the people to whom you are giving incentive equity. You are giving them 2% or 3% points in options.

Explain what options look like?

An option is the right to buy a stock in your company. In this case, the options are usually given phenomenal value, which is not the way it’s usually given. It’s usually given at fair market value. Let’s make something up. Let’s say you are raising a $5 million cap. I’m thinking of investing $500,000. This is not exact math, but that would get me maybe 10% of the company at conversion. It’s not exactly right. To get me over the finish line, you offer me another 5% in options.

What you have effectively done is reduce the cap by 1/3 because I get another 5% of the company. I will get 15%. That can make sense when it’s someone that you need to get over the finish line who’s writing the biggest check, and therefore that’s the differential, or if it’s someone who genuinely can provide value to your business outside of the investment. That’s sometimes something we have been seeing people do to get bigger checks over the finish line. Be careful with it.

Other things are offering rights to invest in the next round, offering discounted right to purchase equity in the next round. You don’t want that to be too big but it’s possible. It’s basically giving people more upside. At the end of the day, if you are doing an early-stage convertible note investment, you are a binary investment. Most investors know it. They will either lose all their money or they will make some money. If you can make the ceiling higher where you are turning the hypothetical return in a home run from 10 times to 20 times, you become a much more appealing investment.

I have seen a couple of other things. I had an idea that might completely be untenable illegal. Usually, most of my ideas are. We will see what you say about that one. We have done this before, which is warrant coverage. It is similar to options but some type of warrant coverage. For example, it’s 25% warrant coverage at Series A, plus two years so that you can choose to buy at the Series A price two years post-Series A, things like that.

The one risk I see is that you get too fancy and you over-complicate it, or it gets too hard for the investor to do. The hardest money to get is that first check in a note. This is my perspective and seeing so many of these happen, for whatever reason investors don’t want to be the first in because if they are wrong, but they followed fellow investors in, they can say, “I followed this person and they are pretty savvy. I’m not a total idiot. “

If they are the first one in by themselves and it’s a failure, they have to own that failure. They are reluctant to be that first money in. Once money starts coming into a note, I usually see the note start to get fully subscribed fairly quickly. Once there’s a sizeable person in who’s done all the validation and said, “This is a good investment.” If that’s the case, maybe the way to do it is to offer an early bird on the value cap. It’s a $5 million value cap. The first $250,000 in, maybe the value cap is 3, the second $250,000 in, the value cap is 4, everybody else is 5.

I know you are old enough. The early bird discount is starting to play a large role in your life. It’s a good idea because there are people waiting to see money coalesce because FOMO drives people, and people want to see it validated by other people they think are smart. One more reason is let’s say you are telling me, and I’m an Angel investor, that you need $750,000 to get to the next milestone, I don’t want to be the first $50,000. If you can’t raise the rest, my money is wasted because it’s not going to get you anywhere.

It’s a terrible investment if you are not going to get at least another $500,000. I think of offering sweeteners, but let me tell you a practical concern I have. Anyone coming in later who is willing to write a big check is going to say, “I want the same thing you gave those people.” Unless enough time has passed that you can rationalize the difference in a deal, they are going to say, “I don’t want a worse deal than what you gave to the other $100,000 investor. I want the same thing.” That would be my bigger concern. If three months pass, you can rationalize the difference.

Instead of it being dollars, you can say, “The first 30 days of the offering, they close.” You going to have to be creative. You have to show up. I have talked to lots of investors and Angels. They see tons of opportunities. A lot of them are falling in relatively the same thing. They are going to invest eventually and do their money, but they are going to invest in the one they think has the most upside for them. Make yours more attractive. By them investing sooner or being that first one in, there’s a benefit to you. Share the benefit with them.

Here’s a specific question. By the way, please ask questions with specificity. Don’t worry about feeling like you should know these things. This is so complex. We add a bunch of terms and throw a bunch of things at you. As entrepreneurs, very few of you got into this because you deeply understood raising private capital. The more you understand how this works, the better you are at determining whether a deal is good for you or not. The question somebody asked us to give them an understanding is, “If an investor invests in my note, $200,000, that has a 20% discount and an $8.5 million value cap. If the note converts at the value cap, does that mean they own 2.35%?”

They would own about 2.3%. If I’m not accounting for all the other things that are going to be happening then, which is other people’s notes will also be converting, and you will be raising new money. If we exclude every other variable, here’s how you calculate how much someone will own. You divide what they put in. The $200,000 is up top. It’s the numerator. The other half of the fraction is the $200,000 plus the valuation, which is the pre-money.

In this case, $200,000 divided by $200,000 plus $8.5 million or $200,000 divided by $8.7 million. That will tell you how much they are going to own. One important caveat, it is becoming more and more popular for investors to put post-money caps in these things, especially in these safes. The math is different and depending on how extreme it gets, it could harm a founder.

Let me explain, and the numerator is the same, it’s the investment amount, but instead of the denominator being the investment amount plus the valuation, it’s just the valuation. In that case, $200,000 divided by $8.5 million because that’s a post-money cap, not a pre-money cap. That gets to be a big difference when the amount you are raising because you are doing a series of different notes or a couple of different note rounds, or safe rounds, it stacks. If all of a sudden, you raise $2.5 million divided by $2.5 million-plus $8.5 million, it’s not so terrible. If it’s $2.5 million divided by $8.5 million, that’s a much different math equation for the delusion for the founder. I know that was probably a little too fast. Let me TLDR it. The pre-money cap is better for the founder. The post-money cap is much worse for the founder.

If you are doing a post-money cap, you have to make that number larger. It can’t be same-same. Another follow-up question to that is, “Does that $3.5 million dilute as that new money, the bigger money comes at an institutional round?”

Generally speaking, yes. In a normal order of operations, let’s pretend we are doing a Series A round and I got $1 million of convertible notes outstanding. The venture fund will come in and give me a valuation. That valuation assumes that all my convertible notes have already converted at the time the new money comes in. For example, if a venture capital fund offers me a $10 million pre-money valuation, and I have $1 million notes outstanding, that’s $10 million after the notes have converted. It means an order of operations. First, the notes convert. Second, the new money comes in. Therefore, the note or the shares issued because of the notes are diluted when the founder is diluted because of the new money.

To put that in more specific or layman’s terms, the reality is the conversion happens before the new money comes in. If you are being asked this by one of your early investors, they will be diluted alongside you and everybody who’s in that qualifying round.

Merely to tie it back to what I was saying about a post-money cap and a safer note, this is the key distinction. In a pre-money safer note, when you go to a second note safe round, it has the effect of diluting the people who were in the first round. After everything converts, that’s going to be the effect. Whereas if it’s a post-money cap in the first round, when you go to the second note round, all the dilution that would occur as a result of the second note round goes against the founders, not the first note holders. That’s why it’s so much harder for founders.

I had a question from Aaron, “Does being a sustainable business like being a B corp or having a strong ECG report help get investment?

All things being equal, yes. People care about responsible investments. Investments become more attractive because of the social aspects they may provide. For a lot of people, investments can become more attractive if it’s a female founder because of the historical lack of opportunity for capital and people wanting to be a part of redressing that. It’s very rarely will any of those things be the primary motive. The primary motive is still, do they believe you are building a company that will make them money?

Any point of differentiation, that’s what it is. If the business is not a good business, if the category is not in a hot category, and there is no real opportunity for monetization that’s better than somebody else, then no. If you are neck to neck with another investment consideration that has similar upside, similar revenue, and all of that kind of stuff, then yes. It’s like two candidates interviewing for a job. One of them has a Bachelor’s and one of them has an MBA.

If one of them does a terrible job of interviewing, it does not matter. If they are both great interviews and both have great skillsets, the one with the MBA probably has a leg up. In my opinion, for what it’s worth, it is not the reason to get a B corp or do that. That should be part of the ethos of your brand or not. If you are one, you should definitely be talking about it in the investment space. Here’s another cool question. I love these kinds of questions. It shows me that we have some explaining to do, “What is an SPV? I hear a lot of people talking about that.”

SPV stands for Special Purpose Vehicle generally. It is usually a limited liability company formed solely for the purpose of making an investment into another company. Although there are other reasons, this person wants to ask more specifically. The most common reason for doing that is for a couple of investors to be pooling capital and having one investment vehicle.

We are seeing more of these done by Angel syndicates or Angel groups or folks like that. My guess is who had sent this question in has to do with what they see on equity crowdfunding. The benefit in that particular thing is that if it rolls into an SPV, it reflects on your cap table as a single entry, that limited liability company, versus all of the individuals that would show up if they were all doing it independently. Sometimes you will see SPVs and Angel syndicates too, your minimum investment amount is $100,000, and there are 4 or 5 people that want to put in that amount to aggregate to $100,000. They will do an SPV to come in that way.

When you are crowdfunding, you and I have said that people don’t want a bunch of people on their cap table. Why? When you are a corporation, stockholders have rights to certain information. You have to distribute certain information to stockholders when you are taking certain actions. To only have one person to have to deal with, that person being the SPV, instead of a thousand people is dramatically simpler for the corporation. When venture investors get in, they view that as a very important issue.

There’s an interesting question here around going back to funding in general, and that is safes and LLCs. This person is saying that they have heard that a safe is not a good instrument if you are an LLC.

I’m going to say generally that’s the case. Why? The short answer is tax. The longer answer is I’m not the person to explain why. It’s a tax attorney or a CPA. The gist of it is someone owns a membership interest in LLC. It’s pass-through taxable income or losses. According to a lot of people I have talked to, there’s at least some meaningful ambiguity about whether safe holders should be passed through income or losses, which is inconsistent with the idea or the purpose of a safe, which is they are not equity holders until it converts. That’s why when we have LLC clients, we push them to a note.

I will tell you that still in this space, they are ubiquitous within tech. In CPG, they are still more the exception than the rule. Unless you are doing something with a safe to make it very attractive, typically, a safe does not have a term or interest. It’s less attractive to the investor in some respects than a note. You don’t want to show up with an outlier and have to explain it or walk through it and make it harder for you to raise. It’s a good question. I think we will see more of them coming because they are so popular in tech and being talked about a lot.

If someone disagrees with me, they can send me a message and maybe I can learn from it. The safe comes from Y Combinator. I think you could say as an investor or certainly at least has the perspective of an investor. The new safe that they put out a couple of years ago is a post-money safe. I would argue, as a result, it’s far more investor-favorable than the prior safe or the typical convertible note. That’s one reason I also try to steer clear of it.

The second reason is because the Y Combinator safe is on a website, what happens is if you try to use it and make some changes that are more company-favorable, they just redline it against the one that’s on the internet, which is very investor favorable. They take issue with any change. Whereas convertible notes have substantively the same points because there’s not one form that everyone uses. We tend to get more company-favorable terms. Practically, that’s why we do it.

A cool question here has taken us to a new topic. It’s a two-part question. What are you seeing right now that’s exciting to you in this space? What are you seeing that is worrisome?

Why don’t you go first?

Definitely, what worries me and it’s been top of mind a lot is this funding gap. It worries me that it’s going to limit the number of good founders and good brands that can survive. What I hope is brands begin to realize that entrepreneurs can’t fall prey to somebody else’s narrative that they got to create their own. If they know that they are going to have limited dollars, build a model and a plan to prove traction, product-market fit, and viability in a smaller experiment or a smaller way. Begin to raise capital each time they can prove something more. Do it in the tranches and not try to get sucked into, “I’m going to grow. I’m going to hit that trailing twelve months that opens the door to the biggest funds,” and so forth.

I had a call with a founder on this. Her comment was, “For two years, I was told to get your trailing 12 above $3 million, and there will be money. I got my trailing 12 up to over $3 million, and now I’m being told to get your trailing 12 up over $5 million.” That’s the challenge. That’s one worry. The other worry I have is brands and founders coming in without thinking about how they are differentiated. This business is hard enough. Being in this business as a me-too is even harder. Those are the two things.

There’s a lot that I’m excited about. A lot of them have come out of the pandemic. It’s some of these new channels like Fare, SnackMagic, GoPuff, and outlets like Foxtrot. There’s democratization that’s happening, and opportunities for brands and eTailers to do things and get to customers in ways that make sense in a more controlled and tardigrade fashion.

The other is we are seeing people responding to these funding challenges, equity crowdfunding, equity debt funding like Kickfurther for inventory, and things along those lines. The same things that are keeping me up at night or worried for our entrepreneurs are also the same things that are energizing me because their solutions are being found for them.

You nailed it. On the fear side, I don’t have data but I think you have the same feeling. There’s this widening gulf between who’s getting funded and who’s not. It’s hard to explain to people because I will have every month a fundraise where our brand has barely gotten any sales. They are nowhere near the $1 million run rate. They are given a very large valuation and a very large check because someone believes in what they are doing and wants to make a big bet early.

We have people who are very hard to differentiate, maybe even farther along or trying to scrap for $25,000 to $50,000 checks. It feels like that has become more of haves and haves not than it felt like a few years ago. Part of that feels like they are even more brands to your whole, “Don’t be a me-too.” The related issue seems to be there are a lot of people who have seen all the success of consumer brands over the last years and exits that are popular.

They want to be consumer products entrepreneurs. It’s not always for the right reasons and not always with a realistic point of view on how much work and how long that’s going to take. That sounds very paternalistic. I don’t mean that they are not willing to work hard. I just mean that being an entrepreneur can sometimes be beating your head against a wall over and over until finally, that wall breaks. As far as an opportunity, I do see an opportunity from the funding gap, which are a whole tardigrade analogy and that program fits into.

It’s poison from my perspective of our space. It has been because money was so easy, people got on this hamster wheel of their business was only sustainable if they went and got another fundraising, and then they went and got another fundraising, and then they exited. These were otherwise totally unsustainable businesses because they did not make money. They had no path to making money and they would spend all over the place. I see that changing. That’s a good thing because we will have a lot of much healthier and more sustainable businesses.

That’s the most important message. The best way to get investment, build to an exit, and all those kinds of things is to build a good business with good unit economics and contribution margin. Too many brands fail not because of their product being shitty or the founder being lazy or dumb. It’s because foundationally and economically, they get out over their skis, lean into that next raise, and it’s not there at the exact moment they need it. We see that time and time again. Funds are fickle. You could be the darling and you can get a lot of money surprisingly early when it seems strange.

You believe that getting the next round of money is going to be the same. You operate like that and the next money is not there, and then what? Here’s the question that I want to talk about. What are you seeing in founders’ behaviors that if you had that opportunity to sit in front of them, you would love to say, “There are some things that you need to work on and focus on to be a better founder.” I don’t mean this to be critical to founders or that the founders are not doing their job. It’s just that we see so many things. Does anything come to mind?

It’s so hard because there are so many founders and they are so different. The issues that I see are not issues all of our entrepreneurs have. I have some soft things that come to mind. On the hard things, one complaint I hear from Angels frequently is, “I have founders who are starting companies who want to do a seed round with me. They want to pay themselves $200,000 a year when they are only making $300,000 to $400,000 a year in sales.” That’s not scrappy enough.

I know all the shit in the word afford because it goes into who has been lucky enough to be able to afford it, but if you can’t afford or be willing to invest in not taking a whole lot of money out of the company because you are putting most of it into growing, that’s good learning. I have heard it from a lot of Angels. They are like, “What do you mean you are paying yourself $200,000 a year? You are not even going to hit $1 million in sales until next year.”

I feel like we have got good entrepreneurs in our space in this respect, but it remains something people could learn, which is to have a strong point of view. It’s your company and your product but listen and learn. That should be your journey every day because this is not a new industry. There are people who are going to revolutionize it and make it different always. There are people who have been in it and pattern recognition for what will help you and what will hurt you. You should listen to that in informing any of your own opinions. A lot of entrepreneurs do a great job there but the ones who don’t could be a real problem.

It’s a balance between being malleable and fortitude. There’s a nugget of wisdom in everybody’s feedback. You take the wisdom and discount the rest. You don’t give up your gut but you challenge your gut. To your earlier point, where this all starts is you got to be willing to ask questions. That’s the first thing. You can’t just sit there and hope advice comes to you. It’s great but ask questions. I see a lot of people who don’t understand aspects or don’t understand things walk away from asking the question because they don’t want to be uncomfortable in asking them.

I don’t want to pretend like everyone should be learning every day. I don’t want to pretend like we are perfect in that either. I had one of my entrepreneurs give me some feedback at one point and I was defensive and not listening. I had to call her back two days later and be like, “You were right and I was not listening.” We all do that. That is a key to a lot of entrepreneurs I have seen that are successful.

I love being a lifelong learner. A lot of what I share is not my thinking. It’s cross-pollination. It’s what I have learned, seen and heard from others. It’s R&D, Rip Off and Duplicate whatever is needed. Paying yourself a wage, I will share my philosophy on that. If you can afford not to take a wage, fine. If you are going to pay yourself a salary, it should never be in the early stages. It should not be a market salary. You need to be investing in this business too and have all the potential upside in the business. Building yourself in a living wage and defending that to an investor by saying, “This is my mortgage payment. This is what it takes to buy groceries for myself and my family.”

If that’s $50,000 or $100,000 a year, whatever that number is, with a realistic ability to defend it, that’s one thing. When you say, “This is what I was making before or this is 80% of what I was making before, I’m going to continue to pay myself.” That’s not enough of a commitment. It’s definitely going to be looked upon as such by an investor. The thing that I would encourage people to do is you have to be more persistent. Not that entrepreneurs are not trying and willing to work, but we talk ourselves out of being persistent sometimes because we think we are going to be annoying or too pushy.

There’s a way to be persistent without being pushy. We are all buried and bombarded. Think about the number of emails, texts and things that come across your desk every day. If I get an email that’s 4 or 5 paragraphs long, I’m going to say out into my mind, “I will come back to it,” which I rarely ever do because I get swept away. If that person who sends it does not send me another one for a week or ten days or more because they don’t want to seem pushy, then send me another long email that’s like the first one that I don’t have much recollection of because I blew it off, I’ll do the same thing. If you write short frequent emails, 50 to 150 words, pick up the phone and use it to stay top of mind like, “I know you are crazy busy. I love to hear from you. Putting this back in your inbox,” those type of things, show that persistence and tenacity, you will move things forward a little bit faster.

I will give you an example. There’s a brand I like that I may invest in. It’s not a client, but I get buried in email. You and I have tons of shit to do. A lot of people have tons of shit to do. That entrepreneur sent me an email that was like, “I don’t mean to bug you if you are not interested. If you are, I’m going to follow up on the last email I sent that you did not respond to. Do you want to talk?” I’m like, “I am interested. I was just buried so thanks for the email.”

Fernando has a question for you, Chuck, “Any pointers if you are in that first scenario you mentioned where you have little to no revenue but a ton of potential upside?”

That’s hard, 9 out of 10 or maybe 99 times out of 100, you are going to need to scrap and get small checks when you can. There are outliers that get a fund that likes to take a big position and make a big commitment who will write $2 million to $3 million. These companies maybe have very little revenue. First of all, have you been talking to those funds? Have you been showing them your company? Have you been telling them why it’s different? You may believe there are lots of upsides, and there may be lots of upsides, but they have to believe there are lots of upsides in order to make a big swing like that early.

Unfortunately, there is no magic answer except to find all these funds, try to get them to talk to you, be polite and respectful of their time, and see where it can go from there. Your lots of upside needs to be rationally expressed to them. If you are showing them a model with lots of upsides, it better has assumptions that are achievable and not pie in the sky and lose credibility immediately.

Sometimes it takes serendipity, but you have to create your own serendipity. That’s the other point that I will make. You want to reach out when you are raising money. Whether it’s your first money or a bridge round or A round, you should be simultaneously raising this round and the next round. Investors invest in the businesses and entrepreneurs they know and have relationships with. It’s rare if ever that an investor invests in a brand or a product right off the street after 1 or 2 meetings. It takes time to cultivate a relationship.

Start cultivating those relationships. Sometimes they will manifest sooner than you anticipate they will. Sometimes they won’t, but every time you have a conversation with an investor, especially those that say, “You are a little too early, not yet, show me some traction,” and so forth, too many of you don’t follow up with regularity and don’t start nurturing that relationship.

Do that, then when the time comes that you are maybe within their thesis or guardrails of investment, they have a relationship with you already. They know you and are watching you. They are far more likely to be willing to invest than if you were contacting them for the first time, or maybe you contacted them three years before and had never talked to them again. The thing to do is start building relationships all the way up to the arc of your funding needs now. Maybe that will create some serendipity where somebody sees the opportunity and wants to come in early. If nothing else, that clock starts ticking off the relationship for that future round.

With Expo West coming up, I certainly know not everyone can afford a booth when you are at an early stage. It may not even make sense even if you can. I also understand that getting a hotel, flight or whatever is real money. Going, walking the floor, and then going to some of the events, and trying to meet people without sledgehammering them over the head about how amazing you are and they should write you a check, but just building these relationships softly will go a long way over time.

Make sure you are willing to reciprocate. Is there a way you can help them and so forth? Expo is a big investment, booth or no booth. The way Chuck rolls, it is a big investment because he’s pretty boujee about his hotel choices. If you work it and use it for what it can be, which is this incredible point of aggregation where you can start a lot of relationships that you can then nurture, it can be a productive time. What are you looking forward to about the Expo, speaking of that, other than seeing me?

The answer is seeing a lot of people I like and care about that I have not seen for years in this space, seeing people that I have never met in person before that we have been communicating in the last years, and meeting new people in our space that I have not met yet. That’s the kind of energy and fun I’m looking forward to.

It’s the energy and the reminder. It’s easy over the last years to get caught in that Groundhog Day feel. Every day you wake up, you plant yourself in front of Zoom and you go. I miss the ability to be around other creative people with energy, excitement, and that reminder of what a cool industry this is and what’s going on in the industry. I’m an introvert. Typically, I hate big crowds, idle chit chat and so forth. There’s something about that Expo like a festival, coming together with my peeps. We are hanging out and celebrating what we do. It helps remind me how lucky I am to do what I do.

We all can forget that because we all could get caught up in the day-to-day grind and the finalities of what happened, but we are all pretty lucky to be doing what we are doing. It’s a pretty cool space to be in. It’s a lot of cool people. I would not want to do anything else. These kinds of events are good reminders. I went to East. It was the first time I had been back in that setting. It was small but I had not been around more than ten people at any one time in years. Suddenly you are with 20,000 or 15,000 people. You had not exercised that social muscle and so forth.

It was weird. Give yourself a little bit of time, you will show up, and you might feel a little out of it because you have not done that stuff in a while. It’s very cool. I went to NOSH and BevNET. I’m ready. It sounds like maybe we will have a little less of a COVID in-your-face situation there as things are slightly slowing and mass mandates are being lifted, so I’m excited.

The good news is being socially weird is totally on-brand for you. People probably did not notice that.

It’s big and being socially awkward again. No problem.

People forget how personal business is. I know it’s personal to you. It’s personal to me, and not being around each other can depersonalize business so much. That’s important to me and a lot of others. Expo West is re-personalizing business. I would rather do business with people I like. I care about the results for the people I do business with. I know they feel the same about me, and that matters.

When you’re saying that, my mind went to when you and I had a business meeting at SoulCycle in Manhattan. We met the person we were meeting with at SoulCycle. We each got on a bike on either side of her. That’s what we did. We had an out-of-body near-death experience in SoulCycle realizing how old I was because the music was too loud.

I don’t know how awesome it was for us because we were two human sprinklers. I don’t know what that person was looking for in a business meeting.

It was the first time I ever packed a portable defibrillator in my backpack for a business meeting. Any parting words of wisdom for those who are reading?

I would love to see everyone at Expo, meet new people, and I’m looking forward to seeing you. How about you? You got some parting wisdom.

It does come with age. I am going down to Phoenix to be with my grandkids. I get to enjoy the benefits of that age. It’s great that we are going to all be together soon enough. This conversation was important. The thing that I’m trying to get out there is to be innovative in every aspect of your business including how you are fundraising, following up, communicating, and all of those kinds of things. Bring that same level of creative energy and innovation to every aspect of what you do, and you probably will find yourself moving forward faster than those who don’t. Everyone, thanks for joining. See you next time.

Important Links

• Chuck Cotter

• Wefunder

• Riff

• Spinster Sisters

• Tia Lupita

• SnackMagic

• GoPuff

• Foxtrot

• Kickfurther

• NOSH

• BevNET

• SoulCycle

About Chuck Cotter

I advise consumer products brands and investment funds in capital raising, exit, and acquisition transactions. I’ve served as a mentor or judge in dozens of consumer-focused incubators and pitch competitions, including FoodBytes! by Rabobank, ExpoEast, and Naturally Boulder.

Our consumer team closed over sixty financing and M&A transactions in the consumer space in the prior year and represents over 100 brands and top-tier funds, where we also serve as outside general counsel. The absolute core of my, and my group’s, philosophy to the practice of law is that clients are not transactions, and we are not merely service providers. We specialize in the consumer space so that we can be more.

Love the show? Subscribe, rate, review, and share! tigbrands.com/tig-talks/