The GrowthWays Interview

 “Tell us what your challenges are. We don’t expect everything to be rosy”

Brian Loeb, early stage food-tech and ag-tech investor with Continental Grain Co., who also helps manage the firm’s Boulder Food Group partnership on branded innovation.

The NYC investor’s surprising approach makes investing seem more like building a healthy relationship where the good, the disappointing and the mistakes are always on the table. Here, he takes a few minutes to talk about what makes a company investment worthy, how to pitch, and why he’s a pescatarian. 

Growthways: What makes a company investable?

Brian Loeb: A common theme behind all of CGC investments is good management. Even if we’re talking to a small team with maybe two co-founders, our excitement about a business is almost always going to stem from good management. It’s obviously not the full equation -- you need to be excited about that market, the plans, especially for the next 18 to 24 months.

Also, nothing ever has to be a finished product. Especially in the investor business, we’ll look for good management first and foremost, but then we’ll want to help build around that. For example, a lot of our companies are transitioning from R&D, so they might not have that much expertise on commercializing a product. This is an area where we look to get active and help bring more perspective and experience to the table. This is broadly applicable, whether it’s food-tech venture, brand venture or more mature middle-market opportunities.

GW: When should a company consider seeking funding from a private equity firm?  

BL: There is no one answer for when is a good time for a company to start taking private equity money -- private equity in this case being anything from venture to true buyout private equity. It’s really contingent upon what your company needs. You might see three co-founders and they’ll take money from day one from seed or angel investors because they have a vision for what they want to do and they’re able to convince investors of this.

In a company’s early stages things are always more fluid, so you never want to partner with a true buyout private equity firm then, nor would you be able to. That might be ideal when you have a mature and professional management team, when there are a lot of knowns, and perhaps you still need help with acquisitions, international growth and so on. In the early stages, there are so many unknowns that you really need partners who are going to roll up their sleeves and who, through their own experiences and networks, will work with you and guide you.

GW: How was your Expo West this year?

BL: Expo West is a really energizing event for me. I’m lucky that my job isn’t to pick any one brand that is going to succeed. It’s always interesting just to see how many shots are happening to try and capture that innovative goal. We’ve found that when you are seeing that many efforts simultaneously, things can resonate really powerfully, really quickly. For example, Boulder Food Group invested in Caulipower when it was only 4-months old. Now it’s about 2-years old and it’s just fascinating how quickly that company has grown and how many consumers it’s made happy.

GW: What do you have your eyes on these days?

BL: The plant-based protein and alt-dairy spaces continue to gain momentum. It’s still pretty early in terms of what ingredients people are using and what categories are leading that growth outside of plant-based milk. So, we’re really excited to see how within, and outside, our portfolio and outside of it how innovation keeps growing.

I’ve seen a lot of interesting innovations in prebiotics, which I think will offer consumers even better access to gut health and the plethora of microbiome benefits that we are only just starting to understand. So, I’m really excited to see how innovation will play out there as well.

I was initially skeptical of CBD but in the past few months, learning about it from industry professionals and consumers and seeing a ton of innovation at Expo West, I am interested to see where CBD and the broader cannabinoid market goes over the next 12 months. I do think it’s a really novel addition to the food-and-beverage toolkit — it’s a really experiential ingredient. You only see so many ingredients out there that people can take as a routine or a one-off basis and expect to see some sort of impact that very same day. It will be very interesting to see how brands innovate there.

GW: Any tips for companies when they talk to investors?

BL: Try and put yourself in the shoes of an investor. We all see a ton of opportunities and it’s incrementally easier to get excited if the company is enthusiastic, has good data, can tell us what the market looks like, what the opportunities are, and why they are different. Also, tell us what your challenges are. We don’t expect everything to be rosy. Establish regular communication with the investor to give overviews and again, not everything has to be this rosy set of facts.

Don’t be shy about trying to get investors’ attention, but also realize that a meaningful investment from someone means that you will become long-term partners -- don’t expect a quick process.   

GW: How is the healthy industry you work in playing out in your life?

BL: My diet continues to evolve as a New Yorker with a busy job. I have been pescatarian for two or three years for environmental reasons. I try and pay attention to who’s making my food. I’m trying to become more of a supplement consumer. I don’t have a routine nailed down at this point, but I’m excited to see more accessibility to personalized information around supplements and how they are affecting me, like what Tespo is doing.