A Food Entrepreneurs Story
So the story goes like this… Deborah is a promising food entrepreneur and comes up with a great idea for a really unique frozen dessert… organic, gluten free, cool flavors and really yummy. She thinks it creates a whole new market. Excited, Deborah jumps into the kitchen and works feverishly to create a line of products. She samples her friends and family… they love it.
OK so now what? Well she invests her savings into buying things, like packaging, production equipment, a freezer, an office… he list goes on and on.
After spending a great deal of personal capital, she has a line of specialty frozen desserts and now spends more money on trade shows like theFancy Food Show and Natural Products Expo to generate awareness and hopefully meet some retail grocery buyers who want to give her shelf space.
OK the show was great and now Deborah hits the road with knowledge she learned in creating a successful food sales pitch (from me of courseJ). She gets some distribution, specialty stores and the home run… Whole Foods! Things go really well and then it hits her… "I need more capital to grow". Deborah does a road show pitching investors for capital but keeps hitting brick walls with traditional channels of funding. There is no money! So this is where Crowdfunding comes in to accelerate early stage food businesses.
CircleUp is a crowdfunding platform with a twist… they are equity-based crowdfunding vs. others like KickStarter that are donation based and SoMoLend , cloud based platform that matches lenders and borrowers to promising startups. CircleUp is the only platform that allows investors to make direct investments in private companies.
So Why Crowdfunding For Food Entrepreneurs ? When I first interview Ryan Caldbeck, founder of CircleUp he pointed to 3 reasons that I, as a food entrepreneur consultant and coach see:
Insufficient investor interest in sub-$10 million consumer products businesses.
The "crowd" are the customers and consumer know consumer products best… because we shop!
Consumer based products companies hit cash flow faster than most other businesses.
Crowdfunding Platform Helps Companies Raise Nearly $5 Million
So CircleUp announced five food-related businesses that secured fundraising. In aggregate, the companies raised nearly $5.5 Million in their fundraising rounds. So here are the winners.
Little Duck Organics
Think about your all-time great dads-your Tom Bakers, your Bryan Mills', your Clark Griswolds. Those dudes were awesome. Really Awesome. Back in 2009, with two new baby girls, Zak Normandin was working on being that kind of dad when he noticed that most of the baby snacks on the shelves at his local bodega were full of junk fillers and extra sugar. Not cool. So he asked himself that age-old question every man aspiring to supreme dadness asks himself: "What would Ray Kinsella do?" The answer? Easy: make no-sugar-added snacks using the most nutritious natural ingredients out there -- No biggie. So he did. The result, Tiny Fruits, is a super-tasty kids snack made with 100% fruit and none of the nasty zombies that they put in other stuff. {Queue applause} Now, only a couple years later, Little Duck Organics has grown into the coolest kids food company around -- serving the four-feet-and-under crowd from the coolest borough of New York City. (Not official, but we dont know of any other Brooklyn start-up teams that toddlers mob like rock stars. Just saying.) Our super-delicious products are available in over 4,000 stores nationwide & we're quickly gaining respect as the kids snack of choice in playgrounds & mom-group circles alike. Littleduck Organics web site and the Little Duck Organics Case Study
18 Rabbits
18 Rabbits ("18R"), launched in 2008, brings food back to its roots by creating delicious granola and granola bars using clean, premium ingredients. 18R currently markets three granolas, four granola bars and four junior granola bars ("Bunny Bar") - all certified organic and kosher. Our bars are the bridge between health and a treat. Alison, our founder, develops all the recipes in her kitchen with easy-to-understand ingredients, combining our granola, made with whole grains, nuts, seeds and fruit to create our unique granola bar flavor combinations. None of the 18R products contain wheat, corn, added soy or refined sugars, and our delicate and crispy granolas have the lowest sugar content of any known granola on the market. Our award-winning brand design employs bold, enticing colors and clean lines that stand out on the shelf. 18Rabbits web site and the 18 Rabbits Case Study
