Full Transcript

Sari
The bigger your dream, the bigger your goals, the more support you need, not less. And you need to go and seek that out. You need to get people who are experts in this industry as well as find a community. You will go so much farther, so much faster, wastes a lot less money and feel supported, like you're making the right decisions, and you are moving ahead quickly. You are making progress. We're not going to keep doing something if we're not making progress. And that's where I see the start stop start stop cycle of so many businesses that I connect with. And so I am so excited to announce that Food Business Success is open for 2023. And you can go to foodbizsuccess.com and get yourself signed up. After you register, you will be able to join us on live calls inside Fuel, the monthly membership program. And you will have full access, lifetime access, to all the programs that are currently in Food Business Success. I believe in these programs so much. It's something I have built up over the last four years to really create so much value, to over deliver to my clients. And I give you a three month program guarantee that if you don't think it is tremendous value inside Food Business Success, I will refund your program fee. And I am going to give you your first month free inside Fuel. So all you need to do is put in the code "podcast" and you will get your first month free inside Fuel and then you can come check it out for yourself. I throw an amazing party and you are invited. I would love for you to join us. Come get inside. Welcome to your Food Business Success! This podcast is for early stage entrepreneurs in the packaged food industry ready to finally turn that delicious idea into reality. I'm your host Sari Kimbell, I have guided hundreds of food brand founders to success as an industry expert and business coach, and it's gotta be fun. In this podcast, I share with you mindset tools to become a true entrepreneur and run your business like a boss, interviews with industry experts to help you understand the business you are actually in, and food founder journeys so you can learn what worked and didn't work and not feel so alone in your own journey. Now let's jump in! Hello, and welcome to the podcast. I am recording this the Saturday after wrapping up Whip Up A Business You Love Workshop. And I'm really proud of myself, I'm definitely celebrating, it was a success, no matter what the results are. Yes, I am inviting you to come join me in Food Business Success but you can still get this workshop and the links will all be in the show notes. It's an incredible workshop. I'm so proud of it and I am wiped. This weekend has been a lot of sleep and a lot of recuperating from a couple of really intense weeks. I went after it and I'm so proud of myself. But you guys know how that is when you go, when you have like a long period of time where you're just in it. It didn't go exactly perfectly but I tried to model that for you guys. Like yeah, I forgot to hit record on Tuesday's workshop. And that's how entrepreneurship is, you're never going to do it 100% perfectly. ou can try to think through every detail but you just got to get it out there. You got to do your best and learn from it. And next time, I'll have a big sticky note every time on my computer, it says record, right? And these things happen. And it's all about like getting back up, being resilient. How can you just get back up and keep going, right? And don't make it mean anything about you. It's so easy to say, oh my gosh, this is never going to work. I'm never going to be successful. I'm never gonna figure it out. Or I'm, you know, I'm a failure. I'm a loser. And believe me I had a moment but we can't make it mean anything about us personally. I'm not a bad person because I didn't hit record, right? I'm just a human who made an error. Not a problem. It doesn't mean anything about whether I'm going to be successful or not. It's like well, I guess it's just going to have to be Thursday, and it's gonna be amazing. And then we had a link issue again. And I'm like, really, because of course, I checked it like, five times. And of course, in the last time, I must have messed something up, but people still got in. And those who didn't, the replay's available. Like, it's hard, it's hard doing this stuff but this is how we, this is how we roll, right? As entrepreneurs, we keep going and keep putting yourself out there. And yeah, I had to process some emotion, and I was upset, and I was disappointed for you guys who couldn't get in. But you have the replay and I hope you took advantage of it. As we're going into February here, yes, we are in February now, I'm going to take a little step back from some of my individual podcasts. I know some of you guys are like, I love your individual podcast and then some of you get so much value out of the guests. And this month, I decided ahead of time, I want to make this all about money. We have so many money stories and so much money drama going on in our business. Well, we bring it in well before we start a business, I should say. And then business is going to bring it all up, right? So it's all of the stories that we come in with. Is the things like money is the root of all evil, and money makes you greedy and greedy is bad. And now we go into business and we're going to be asking people to part with their money, to give us their money in exchange for our product or service, right? To offer them value in exchange for money. And so we have the mind stuff, the drama around that but then we also are just dealing with money, like the tactical strategy of how do I handle money and when do I invest more money, and how do I go get that money? You need capital, you need funds to grow and scale your business to make it actually work. And so I have a couple of podcasts with guests that I'm going to be sharing with you this month. And this first one, I'm so excited. I love this guy, truly. So I will be welcoming Michael Movits on to the podcast and I was able to meet him in person at Fancy Food Show and we actually have a group of us who got to meet him. And you know, he and I have been in contact, I think we talked back in 2020, like pretty early days of the pandemic I think, or even late 2019. But he was just starting Brandjectory and we got connected somehow, maybe on LinkedIn, and we had a chat and I just liked him already. But it didn't really go anywhere. We were just like, yeah, good luck. Like, here's what I'm doing, here's what he's doing. And then we reconnected when I was doing a workshop presentation in Food Bevy, with Jordan and he reached out to me and just said, I love this coaching aspect that you're bringing to it, all of the mindset staff. So he and I have been in communication a lot, he comes to all of my stuff, which is so swee because like, you know, he's working with brands that are so far beyond what, you know, where they would need Food Business Success. But he is such a great supporter of mine and I just want to recognize that. And I'm so grateful that he is in my world. And he is one of those super connectors. And so I'm so excited to introduce my folks who came with Fuel members who came with me to Fancy Food. Everybody just loved him and he was, they showered him with all of their products as gifts. And it was just a beautiful thing. The longer I've been around in the industry, I noticed that I surround myself with just amazing, really generous people who gives so much to me, and to those that they serve around us. And so I am so grateful to know Michael and be a part of his generosity and vice versa and that we are doing more in this industry to help you all create the business that you want to, which is so fun. So I'm going to give that little intro first before I give the official intro for Michael. So Michael Movitz is a 32 year Natural Product CPG industry veteran. He is the co founder a Brandjectory, and Brandjectory is so cool. I am actually a coach in there as well, which I'm loving. But it is an innovative platform dedicated to connecting early stage CPG founders with CPG investors. They're nurturing these relationships and helping founders prepare for and navigate the capital raise process. Michael is also a managing partner of the Movitz group, an advisory group of industry experts helping early stage CPG brands raise capital and build go to market strategies. Michael's tenure over the last 32 years includes 7 years as an advisor and consultant to early stage founders, 16 years with Spins, which is such a great organization, giving us so much data. And he's held various senior positions, sales for the Natural Products division of the JM Smucker Company and a Natural Products broker. He's kind of like me in that, like I've done a whole bunch of things and we haven't done the same things. But he has done a lot of things in this space, which is so cool, because he brings such a neat perspective as well as connections. And he began his career as an independent Natural Products retailer in 1990. And Michael serves as an advisor to Rule Breakers Snacks, 12 Tide Seaweed Snacks, and Just Date. I love those guys. Michael is a selection committee member of the Nutrition Capital Network, a mentor to brands in the eMERGE network, and industry thought leader and a member of Naturally Chicago among other organizations supporting the industry. So you guys are about to be really blessed with this interview, I think he shares so much and he's so generous. And we put together well, I should say he put together, I'm just, gave you the way to get it. But he put together a five page guide, How To Have A Successful Raise, like how to be ready to take on investor money and it's so important. If you want to grab that guide that he put together, go to foodbizsuccess.com/brandjectory and I will put the link in the show notes below. But that'll give you an introduction to Michael and I was thinking about it and I put those in the email that you might even be too early. You know, if you feel like I'm too early for Brandjectory like if you have not done any financials yet, you may want to consider signing up for Master Your Business first. And that can be a really nice first step to get yourself ready. And then go work with Brandjectory at that point when you're like I'm ready to go meet people. I'm ready. He is like the connector to you and those those investment, those investors and people who want to support these brands with their dollars in the CPG industry. All right. Without further ado, here is my interview with Michael. Well, welcome, everybody and welcome Michael Movitz to the podcast. I'm so excited to talk to you today. I already did your intro. So let's jump in. And let's start talking about raising capital. And actually though, I'm gonna back up, why don't you tell me a little bit more about Brandjectory in general before we jump into specifics about capital.

Michael
Sure, well, and thank you for having me, it's really an honor to be with you today. Brandjectory was really, the intention behind Brandjectory is to help solve a problem for early stage CPG founders to get access to capital and capital raise resources. It we focus on connections to investors, and also the preparation and navigation process through the capital raise. It's a lot easier in tech to get access to early stage investors and resources about investing and raising capital. That just wasn't the case in CPG. So that's why my partners and I felt like we needed to do this in order to help solve that problem.

Sari
Yeah, it's such a cool organization and I've really enjoyed getting to work with you and your partner's, just did a presentation recently and going to be a mentor as well, which is exciting. Yeah, and I love some of those brands on your website that you've worked with. I'm like, oh, I love them. I love it. I love those guys. So you're working with a lot of really cool brands, how many brands have gone through the process or working with you?

Michael
Yeah, as of today, it's a 150.

Sari
Amazing. Yeah. And when did you guys start Brandjectory? How old is it?

Michael
Well, officially 14 months ago, so that was what September of 2021. But we launched in a beta in the midst of the pandemic in March of 2020. I'm sorry, May of 2020.

Sari
Oh, wow. Okay, I think I know we connected sometime in 2020 at one point. So it's fun to circle back around. And this is such a useful experience and useful. The whole Brandjectory concept, it's really needed, like you said, tech is easier to raise funds and then with food, it can be really challenging. So let's talk about when should a brand consider raising capital? What are some of the considerations that they need to think about before jumping into this, the big step?

Michael
You know, I would divide the readiness into both a personal and a business. So if we think about on the personal side, you really have to think about from, you know, the fact that somebody has started a business and is starting to get a feel for what it's like to be an entrepreneur, or perhaps they're at the concept stage, and they're thinking about, you know, what the possibilities are. When it comes to raising capital, it's a very complex, sophisticated process. It is not easy, it is not quick. It is something that you have to commit yourself to but it's also something that can be, you know, very natural part of the business process, you know, depending on what your orientation is to finance and in numbers and things like that. If you're not good at those things then this will be a treasury. And maybe it might be helpful to partner with somebody that can complement your skills when it comes to the things that you need to know and learn and commit or to conduct within your business. So that, you know, you can be successful in all elements. That's so from a personal standpoint, you know, a lot of people when they start their business are typically self funding it, whether it's from savings, or existing assets, or whatever it might be, maybe sometimes people use credit cards or have lines of credit. But then once you get from out of the personal side, and you start to think about a capital strategy overall then there are many other considerations, including who do you want to be involved with you? And I wouldn't even say married to in the process because taking money from somebody is, you know, there's obligations, there's responsibilities, there's accountability. And so I think, again, from a personal standpoint, a person needs to think about how they feel about that action and that responsibility.

Sari
I'm just making this out. Maybe this isn't the same but till exit do us part.

Michael
Yeah, that's actually quite good. I think we need a bumper sticker for the finance industry.

Sari
So trademark that. Yeah, it is like a marriage, you are committing to a relationship.

Michael
Correct, and, you know, actually, we may talk about this later. But it's it's a two way relationship. A lot of people I think, think about, you know, when they're the ones asking for the money, that they're in the vulnerable position, and they have to accept whatever the person who's lending or providing the money is offering. And that's just not the case. I mean, it's just, again, it goes back to, it's has to be a good fit, as any relationship is. And so, you know, you don't feel good about the person that you're talking to who could be a potential funding source, then it probably won't be a good situation once you're tied together, you know, through that funding. So definitely keep in mind that when an investor or a bank is doing diligence on you as a business, you also owe it to yourself to do that diligence on them.

Sari
Yeah, it is. You're interviewing them as much as they're interviewing you. And that's why it's so great that Brandjectory offers, you know, a platform for for you to meet a lot of different types of people. That's not always going to be the right fit for your personality or your brand. Okay, so what's next?

Michael
Well, I was going to refer to the business considerations about raising capital. And I think that's where I'd like to refer back to a term that I just used called capital strategy. When you have a capital strategy that's very thoughtful, it might include and should include funding from a variety of different sources. Investors are not always the best or first option that should be considered. First of all, you're giving up ownership in your company when you have an investor, which means you are accountable and responsible to their oversight and to their, you know, perhaps requirements of how the business is run depending on how much implements they have, and how much ownership they have. So there are other ways to think about funding the business. And of course, that includes traditional banks, commercial lending. But a lot of times, there's, you know, it's very hard to get loans when you're just starting out, you don't have the revenue in place. And so, there are SBA backed loans where the federal government will take on, I think it's 40% of the risk involved in the loan. And then there's other options too, there's friends and family are usually the first place that people start when they have the privilege of having friends and family in their network that can contribute for loan money to a startup, you know, in the family, but I'll make a quick side comment that you need to think about what that means when you're sitting around Thanksgiving table, the Thanksgiving table, and, you know, Uncle John is saying, so how's it going with my loan, how's it going with my money, you know, that it could be okay, it could cause a lot of tension. So, while friends and family is usually the first step or second step after self funding, if someone has that option, it also can create some dynamics, you know, within the family that you need to be thoughtful. Another source is alternative sources. So that could mean micro lenders like Kiva and Accion USA, where they provide loans and micro grants in particular, for social programs that are supporting the community or that are doing something for the environment, etc. Those tend to be small, those are in the low 1000s of dollars. But nonetheless, they can, you know, if you have a bookcase, you can use those to get started in some way. And then there's also other types of what are called asset based lending where if you have receivables, or other assets that you can get some credit against, like for example, for some reason you are actually producing the product and you have machinery, then you know, you've got something that you can get a loan against. So there's other options that, you know, don't necessarily require taking on an investor. And from my perspective, you know, they all have pros and cons, but from my perspective, the longer you can defer bringing somebody else into the company as an investor and giving up ownership, the better. I will say that the exception to that is when you have what we call smart money, and you have the option or you find an investor who can add a lot of value to your business opportunity, to your proposition, has the network, has the expertise, has skills that complement yours, or that you know, fill a need for the company. These are all things that have much more than a monetary value and can be an incredible resource and value to the investors involvement in the company.

Sari
Yeah, thanks for breaking that up like that. I think that was really helpful. And I think it can be easy for brands to be like, I'm just gonna go get investors that seems fun and sexy and like, ooh, I have investors but it's a big commitment and like I said, it's not fast money and there are a lot of other ways. We were talking about Justin Gold before we started recording and, you know, yes, he had a very large exit $286 million, I think, but you know, he will say that he gave away a lot of his company along the way. And so it's not like he got all of that money, a lot of other that was split among a lot of other investors and so you have to be really strategic and I agree as long as you can sell fun, or take on some some early money. I love SBA loans or that friends and family. What's the difference? Let's say that some clients come to me with this, or they're like, I have a friend who has lots of money, and they want to invest, right? They want to be an investor. And I always try to get clarification of like, are they just loaning you the money? Are they gifting you the money? Or are they actually wanting to have some equity? But is that like, are there any legal considerations? I know, when you're working with investors, you need accredited investors and you need certain legal pieces. But could I just do that? Could I just be like, my friend wants to have 10% equity and give me all this money, any thoughts on that?

Michael
Anytime you're selling shares in a company, they're SEC regulations that require fees to be less than nice to be dotted, have to be to make sure that you're in compliance with the laws. So it is a, it is actual equity, there are absolutely procedures and regulations that have to be followed in legal agreements. If it's a loan, I would not take money from anybody without an agreement in place. And that agreement is not just, you know, a paragraph saying, you know, you're loaning me this and I'll pay you this interest and repay him and in, you know, three years or something. Money can do very odd things to people in friendships and relationships. And at the end of the day, you have to have to have to protect yourself. And that doesn't mean that you're taking advantage of somebody. I'm saying that you just have to have the right agreements in place and attorneys involved to make sure that you're protected. And, you know, there's certainly there's some templates online and do it yourself types of things. And, and I suppose those might be tempting. But again, if you're talking about taking money from anybody, whether it's a friend or an acquaintance or somebody that was just introduced to you, you've got to hit the right legal agreements in place.

Sari
Yeah. Invest in that it'll make I mean, there's so many sad stories of people taking money and then create like, it's like divorces and you know, fighting and arguments, and just gets really painful. So do the work ahead of time. Yeah. So I love that you're saying like, as I but I do like the SMART Capital, the smart investment because there are I know, companies that bring on maybe like a VP of sales or somebody like that. And there may be even some investment of time in exchange for equity or something like that. So you're bringing on strategic partnerships and potentially strategic investors. And I think that is really smart. But it comes with the legal pieces. And knowing that you are giving up some of your ability to make independent decisions, right? You now have to run your decisions by somebody.

Michael
I guess that's true, I guess. So it depends on their ownership, if you still have if you're still the majority owner, you know, you technically have the final say, but it also depends on what the terms are in the agreement with that investor. There's all kinds of rights and blocks that they can put in which, in the early days, those agreements don't, or those terms don't really come into play because you're probably raising on what's called a safe note, or a convertible note, which are basically loans until they can burn into an actual equity position in the company, when the company gets to the point where they raise a series A and what's called a price run, and there's actually a real valuation tied to it. And, you know, at that point, it's ownership. But in the beginning, you know, when it's loans, it's much less complicated intentionally, but you still have to protect yourself.

Sari
Yes, absolutely. So how do I figure out when I'm ready? Well, I always describe it like a stair step, right? Like you're going along, you put in that self funded money and you're like, okay, I got the product, you know, the MVP, I started selling, maybe it's at farmer's markets, or it's online or I got a few small accounts. And then you're gonna hit a block where you're like, I need to, you know, get real packaging or uplevel my brand or now I want to get into distribution and we're going to a co packer. So then we kind of hit another, you know, like that staircase, right? And we got to like, go get the funding. Again, maybe that's now friends and family. And then we were gonna go along for a little bit, what do you see is like the main block or challenge obstacle that comes up for people when it's like, now it's time to raise money, now it's time to get investors involved?

Michael
Well, typically the triggering of is getting, having a promising conversation with a retailer where, or a distributor, or another business partner where there's an opportunity to sell a large quantity that you perhaps have not made before. And the only way to pay your ingredient suppliers and your manufacturing partner is to have to get that money from somewhere because you don't have the cash flow to support it. That's probably about 90% of the time of when people realize, okay, it's, I can't finance this growth on my own or through my own sales. So I gotta bring in some outside capital.

Sari
Yeah, that makes sense. So it's like, again, these things take a lot of time, I think that there's a myth that like, all sudden, I'm gonna be on Costco shelves, or just immediately like, these conversations take a long time with retailers, you know, you might be in conversation with Target for months. And so it's a little bit of the chicken or the egg, like, you got to kind of start thinking like, how am I going to finance this if I'm in, you know, a large region of a Target, or Costco, or Whole Foods or anything like that? And then you have to start those conversations. And it's a lot, it's a lot to start piling on the business.

Michael
Yeah, you're absolutely right. Actually, you hit on something about timelines with retailers that I want to address. And there's also another point that I'd like to circle back and make. Wwhen it comes, with regards to the timelines, you know, there's a whole buying cycle and presentation and waiting and follow up cycle. And then you have to wait for the retailer's reset schedule, etc, you know, before you finally get the order, the PO. When it comes to raising money, it's not, you don't get a check from the first person or the first conversation that you have, you don't get a check after the third conversation. There's plenty of studies that show that it typically takes about 25 touchpoints between an investor and a founder before a check is written. And so that's why it's so important to start talking to investors today before you know that you need the money. Because building that relationship and becoming comfortable with each other, and having that investor, building confidence, or that investor gaining the confidence in you and your business prospects, it takes time, because there's, you know, multiple conversations to have that layer and build on themselves. That eventually, you know, tip the scale for the investor. So that's one part. So typically does take three to six months raise to raise money. And that's once you start the process of saying, okay, I have all my materials together now, and I'm going to officially raise my money, and you can expect it to be three to six months. And in today's environment, where investors are a little bit more or quite a bit more cautious. It could be nine months, can be a year. That's not unusual. And there's a whole bunch of strategies around that maybe we'll get into that. The second thing that I wanted to circle back on is with regards to how do you know when you're ready, and I said that, well, 90% of the time, it's because there's a triggering event of a big order. What really should be happening is ideally, you would have what we call a pro forma, which is essentially your profit and loss statement, your income statement, your cash flow statement, and your balance sheet for projected out for at least the next three years. The next 12 months should be monthly. And the next two years after that, you know, are okay to be annualy. But the reason why it's so important and the reason why I bring it up is as it relates to figuring out when you're ready is that if you have a plan in place of how you're going to grow, and the expenses and resources that you're going to need to support that growth, you will see in black and white on a piece of paper. In order for me to get to x level threshold of revenue, or to pay for the resources that I need to get there. I know that I'm going to need money at this point in time. And that's really ideally what should be happening is that before you even start down that road of, you know, just taking any order you can get and you know thinking about the business that you know might be in front of you. You got to put some thought into it and and be grounded and practical about it too.

Sari
Yeah, I love that. I mean it's, you know, a lot of people come with the drama like in their their thinking so far down the road usually it's like but when I get this big, I'm gonna need this much money. And it's like, let's put it on paper. And I do that with one on one clients, I have a simplified pro forma. So at least we're doing the forecasting and then we start playing with the numbers. And it's like, okay, what if you do get a big account here? And then you can see, like how much money do I actually need at that time? But looking at it in black and white and taking out the drama, it's just math. And we're forecasting so we're playing around, these are guesses. But it's so good because this money, like you said, I mean, you know, you can sell fund from your savings or credit cards, or 401k, or something like that really quickly, friends and family might take a little bit longer. But the more money you need, the further out you have to plan. And you're going to need some of these key pieces. So what, you said 3-9, even maybe a year to find investors in this current environment, what are the things that you need to have in place before you even think about raising money?

Michael
Excellent question. And so what I would say is that it's really about having a business foundation, understanding what the investor expectations are going to be. And then thinking about, you know, how to navigate that relationship building process. And so ideally, the way that you would want to think about this is how do I build an investable business, investable CPG business, and there's about 10 things that I think would set that foundation in place. So the things that are crucial at this stage of CPG business, that mean the most to an investor, or is first and foremost, the team and the founder because the investor is betting on the founder because there's not enough traction and history in the marketplace, you know, to go on. So that's the first thing is to be able to demonstrate your capabilities and how you're going to win, why me, why now, why this product, why this proposition. You need a business plan, you need to have your operations solidified. If you're doing something that requires regulatory compliance, you need to make sure that you're in compliance. Have you defined a market need? I can't stress enough that it's, you have to solve a problem that is needed in the market. Making another flavor version of something else that's out there is nice. And it might be you know, a nice, you know, little business for a little while. But you know, in order to break through, you've got to solve a real problem that is differentiated and distinct in the market that consumers will gravitate towards because it's solving something for them that is not being solved by somebody else, or in some other way. Of course, if we're talking about a food and beverage product, it has to taste good. I know, but you know, it's it, I guess it could be tempting, excuse me, when we are in an echo chamber, you know, sampling our product with our friends and family, they're probably going to tell us that they love it. And, you know, it's probably better to try to find some constructive criticism so that you can just for, you know, the mainstream palate or, you know, for somebody who doesn't love you kind of a thing. And having a brand or what I would call a consumer value proposition is essential. Does your idea for your product, what you're solving, the problem that you're attempting to solve, does that align with your product formulation, your packaging, your messaging? Is it something that a consumer feels is consistent and, you know, just flows is the imagery in your marketing, and your logo and your design and everything else appealing and aligned to that brand proposition and brand promise? Hopefully, if the next thing is what I would call velocity or revenue benchmarks, you know, few, essentially early market validation. So that could be farmers markets, it could be sales at a couple of local stores, but something that says that, you know, anybody can buy a product once, it will the repeat purchase. And that's crucial. Because by the way, again, if you go back to tastes, somebody could say, oh, this looks good, tastes horrible, I'm never buying it again. And by the way, I'm going to tell my friends don't bother buying it. So having that having that repeat persons and what we would call velocity, which is the rate of sales, meaning that how many units are you selling per SKU per store, per week? Knowing that number, and you get that number from, well, if you're in a farmers market, you know, that number. If you are in a retail store, you can talk to the buyer, talk to the manager, talk to your distributor. Or if you're self delivering, you see it yourself. Those are the types of validations that you need. Lastly, just a couple other things being GAAP compliant, that's GAAP compliant. In your bookkeeping, and having a budget, I think is really not I think, I know it is a signal that means that you're ready because any investor that or, you know, again, traditional lending source that wants to consider you for an investment or a loan is going to want to look at your numbers. And it's they've got to be correct. And so having a strong accountant to work with, want to make sure that it is structured properly including specifically for the CPG industry, as in where his trade Spenco, where to deductions go, where does sales commissions go? Those are things that, you know, there's accounting standards, where those need to be for investors or lenders to get, have the confidence in knowing that you're ready to take on their money. And then lastly, we talked about having a pro forma repeat forecast in place, and you've got some assumptions that are realistic. And that, you know, we're going to do $20,000 this year and $4 million next year. You know, those, those are what the finance industry affectionately termed hockey stick growth.

Sari
And everybody wants it, that it's like a unicorn.

Michael
Exactly.

Sari
That's really helpful. I'd love to put together a PDF and put a link in the show notes so people can get that, that'd be really helpful. I think no matter, you know, whether you're going after, you know, series a big money, or you're just going to even a friend that's going to loan you money or a bank, you're going to need some versions of those things. They may not be as elevated or is like really, you know, really as official, but you know, those that's a great list no matter where you're at, in your fundraising. Yeah. In some form. The question I think that comes up for me is, you know, and we were talking about raising money and kind of going to that next level of your business but I don't think that this is for everybody. And that's okay, I want people listening to not be like, oh, I need to be doing this, this is absolutely where every business needs to be. I think you can create a lifestyle business that, you know, creates an income for you and your family. It does well. And, like, I guess maybe help us understand the distinctions of like, and who's what kind of entrepreneurs or want to do this kind of next level, because it's intense. I mean, you're a real business, you have a, you have a CEO and you need finance, you need sales people, like you have a team. It's a whole different elephant than like a lifestyle business, you know, locally or even regionally.

Michael
You know, the way I would describe my observations is twofold. One is that how you described the distinction between, you know, lifestyle business and, you know, more intense business that requires a lot of other gears turning and obligations. I think that's a matter of introspection. And, you know, what a person wants for themselves, for their families, you know, today, tomorrow in the future. And so I think that that's a little bit more of a a personal question, but where I really seem to what I tend to see is people who have ideas for a business, and it could come from, I was making something in my kitchen and everybody said, oh, this is delicious, you should turn this into a business. And 9 times out of 10, 8 times out of 10, you know, the person says, I wasn't really thinking about, you know, ever doing this, but here I am. And they know, granted, most entrepreneurs are first time founders. And they've never gone through this, and we just learn as we go. And that's totally okay. But I think the difference is, if you know that your strengths and skills are in product, or operations, or selling or marketing, and they're not necessarily on the business strategy front, or on finance, or whatever it might be, then you need to really think about bringing in a partner, a co founder, who can complement your skills. And, and even if we think that we are all that in a, you know, cup of coffee, having a business partner, it can be so helpful to get another perspective to bounce ideas off of, and to make sure that what we're thinking is not, you know, is fully baked. And so there, there are plenty of companies that start with a single founder, and they surround themselves with people who are experienced functional experts in different areas across the business. And those are, those configurations are incredibly valuable because they help to fill in the gaps to create a comprehensive team. And you when you're going through any all of the ups and downs of running a business, or raising money, having those folks by your side to rely on two per shoulder for an ear to bend. That's, that's gold.

Sari
It's so true. And I love that you said that because maybe, yeah, on your own, because I think a lot of people come in, and they're just really passionate about the product and making the product and maybe a little bit about marketing, or maybe a little bit about sales. But but this requires, you know, real accounting, and understanding your business and looking ahead and understanding the industry. And so I do think if, you know, I would recommend people listening, if you are more like I love the production and the marketing and the sales, but the financials and the forecasting, and some of the industry pieces aren't necessarily where you are strong at, like, I agree finding a partner. Or at the very least, like having a coach, right? Or having a program like having that you're not just in a silo, you're not in a vacuum trying to make all these decisions, because it's a lot for one person to do. Now, there are some downs, you know, there's always cons of like having a partner, you have to run those decisions, you know, things can sometimes go a little bit slower, and you might have back and forth on things. But I think there's a lot of benefits to it as well.

Michael
Yeah. And, you know, one other scenario that just occurred to me is that a lot of a lot of businesses started because a parent or a person needed to solve a situation for their child or for themselves. And, you know, like, why isn't anybody doing this? And, you know, at that point, you're off and running, right? You're determined to go out and change the world. And that's, that tenacity is going to get you much further than, you know, just thinking, well, you know, let me give this a shot.

Sari
Yeah, having a strong y is very important in any entrepreneurial endeavor. And you're right, I mean, most of the people I work with are first time entrepreneurs. And you know, you and I talk a lot about managing your mind and being able you know, that mindset piece is so important when you're a first time entrepreneur. I mean, anytime you're an entrepreneur, but you build the skill along the way for sure. And so yeah, just having support in those areas because yeah, growing your business by yourself like you can't I don't think you could do your this on your own. I can't imagine you have like, founders coming to you that are literally just wearing all the hats. But maybe you do!

Michael
It's far and few between. Yeah, exactly. If they're if they're if it's just them, it's a, you know, very, very early stage. But once they start to, you know, have some real, a lot of stuff going on, then they got to bring their people in.

Sari
Yeah, yeah, yeah, absolutely do. So, very quickly, what does a good investor engagement look like when you start? And I know and you could talk about how Brandjectory helps in that process? So how do you help people navigate? Okay, I'm ready. I have all the things ready to go, and then what?

Michael
Well, let me let me just quickly answer your first question, which is what is a successful investor engagement look like? It means that there's open communication and forthright truthfulness because you cannot hide anything from an investor. They are providing you with cash, they're looking at your business, they're diving in, hopefully, they're diving in and trying to help you solve problems and optimize your opportunity, take advantage of your opportunity. And the best thing that you could do is to keep that investor, your investors and even your prospective investors, informed on your progress. What's working, what's not working. And by the way, ask for what you think you need. Have regular conversations, regular meetings to make sure that everybody's on the same page that everybody understands what the, what just happened, why did it happen? Do we need to adjust anything? Okay, now, let's plan for the next period, whether it's month or three months, or whatever a year, and keep doing your check ins. The best thing that you could do is to plan and keep tabs and iterate and adjust. And, you know, ask questions. That's, that's absolutely critical.

Sari
That communication is everything. Being proactive for sure.

Michael
Yes. And lastly, just to close the loop on this, you know, do what you say and say what to do. You know.

Sari
And if you can't meet, you know, if you can't fulfill that, then get in front of it and explain why and when it's gonna happen and what you're doing about it. Yeah.

Michael
A hundred percent. Well, with regards to Brandjectory. So, as I said at the beginning, our focus is on helping founders prepare for the process, and then connecting them to best fit investors. We focused on seats, Series A, so generally brands that are under 10 million in revenue. And there's both an online component and an offline facilitated meetings. So we help brands to prepare through a very extensive and comprehensive knowledge base about building a business and navigating the capital raise process. We've written over 200 articles and address 65 topics, our profile structure has a lot of tips and help points to help explain what's being asked. Why an investor is interested in examples of good answers. And then we do a review of profiles to make sure that people are putting their best foot forward. And we provide that feedback, we meet with the founder, and we give our observations and recommendations. So that's just the beginning of, you know, the support. Then once somebody is on the platform, we actually customize the dating sites, so they are matched with and presented with investors that are best fit based on profile alignments, you know, the founders can reach out and message them. And that's, that's the some of the system itself. Then offline, we facilitate virtual meetings regularly. We have meetups with small group breakout rooms, where it's an investor hosting room, and just a couple of founders for networking. We have a mentoring and coaching sessions between investors and founders, one on one. And also industry experts, one on one with founders. So we know that, you know, getting capital is just part of the equation and there's this whole ecosystem of support that a brand requires to succeed. And so we want to try to bring all of those resources to bear. And I have to say that it is remarkable how generous investors and these industry experts are with their time, with their advice and their convictions and referrals. They want these founders to succeed. And it really is it's just heartwarming and so gratifying and fulfilling to see how many productive conversation are taking place that change businesses. It's just, it's so cool. And then the last actually, the last thing that we do on a founder basis is that we actually have a founder, the founder community where, you know, founders feel like they're alone and they want to hear from other founders, how are you doing this? Who do you know, there, and, you know, we just open up a Zoom room once a month. And again, the camaraderie that develops because of the ideas that are being shared, it's just so cool.

Sari
I love that, it's so important that you are surrounding yourself with people around the same stage. You know, that's what we do in food, business success, we're early stage and getting going. But then having, you know, there are different groups like Brandjectory and others that are creating that community. And I noticed in my business, when I started joining community like that, it really grew because I was getting connected with people, I was feeling more engaged, I was feeling, you know, not as alone and solitary, and it gives you more energy. And you, you know, connection is really what we're all about as humans. So, to me, it's mind boggling when people are like, no, I don't I don't have time for that. I'm like, this is one of the most important things I think you can do. This is following that who not how strategy, and that I see most entrepreneurs running around trying to do, how do I do this? How do I do this? How do I do this? Instead of saying, who do I know who could help me? Who has done this before? Who might know other people who could help me, right? It's about tightening your connections to others and really opening, it just will open up so much more opportunity so much faster. And I know you Michael are a super connector, and so am I. And when you can find super connectors that are on your side, it just like your whole business will explode in the best way possible. And that's why I call my membership Fuel. And I love yours called Brandjectory. So cool. This conversation has been so amazing, as we wrap up, I would love for you to share a couple of the big mistakes that you see founders make and how they can avoid them.

Michael
Over estimating they're a ability to accurately forecast assuming that, you know, retailers or distributors are going to be placing an order before, you know, they actually realistically will or that they're going to be selling more than than they can or that they actually will. Thinking that, you know, talking to an investor will lead to a transaction or to a check very quickly. Having unrealistic expectations of that process. And not being prepared, thinking that, you know, well, I've got my business plan, or I've, you know, got a few slides together. And, you know, I can do this. And, and really it's about not knowing what you don't know. And that's where I think having some resources to help provide some frameworks and set expectations can can be so powerful.

Saari
Yeah. And you and your co founders just bring so much industry expertise and support. It's so key. I love that you guys created that. And I remember talking to you a long time ago when it was still just an idea and working on it. And I just would imagine that investors that you're making their lives so much easier. And I do think you know, there are a lot of investors in this space just because it's a feel good space, but they also need to feel confident like they're not just oh, it tastes great. But like let me give you some money. It's not how it works, right? You still have to follow the process. Yeah, it is a feel good industry to invest in. And I'm sure a lot of people want to want to help in that space. But you guys are providing that platform to really get entrepreneurs ready for that. So it can be a better process for everybody. It's like you guys are like the bumble bringing everybody together but with help, like you help people with their profiles.

Sari
No fish photos. All right, Michael, this was so fun. I really appreciate your time today and sharing all of your knowledge. We'll put together a nice PDF here with those that list of 10 things which will be great. Anything any last words you want to leave us with before we sign off?

Michael
You know, I think I would say leverage your network and accept or consider advice which means basically allow yourself to be coachable, be adaptable, be resilient, and ask lots of questions. And at the end of the day, build a business that solves a problem for lots of consumers.