When Raising Millions Starts With A 'FirstLook'

23:38Okay. Booscoos, if I'm paying$7 for a box of couscous, I'm wondering how does price point fit into your strategy here?

23:46Brian Folmer:I would say I was a little bit more price sensitive earlier on. However, I don't know if you follow a lot of the economists and investor Wall Street types out there, but they say we're entering like a K-shaped economy. Yeah. Yeah. And so you're either getting ahead or falling behind. And so I do wonder if there is a opportunity, a window right now for brands that maybe were at a higher price point and wouldn't have worked out five or 10 years ago. Could they work out now? Because, yeah, the people who have the money, they're spending it. Yeah. And so yeah, otherwise the price point obviously is something to consider and like where you sit on the shelf and who you're targeting.

24:26Brian Folmer:But people just can't seem to stop spending. And so we'll see what happens. If this boost boost is$6 a box, does that give you pause when it came to your attention? Yeah. And if they told you this is$6 a box, would that give you any kind of pause or would you have to reconsider putting it in your box? I mean, I'll ask them, where do you, like your price point now, is that always going to be that way? As economies of scale kick in, do you wanna bring that lower? Where do you wanna sit for almost like the planogram on a retail shop? Where do you eventually wanna sit? Or who do you wanna appeal to?

24:55Brian Folmer:And so I do ask that to see where they're going with it. Just to be clear, I like what you're doing, Booscoos. I'm just picking on you because it's, I'm being the devil's advocate here. So anyway, all right, good stuff. Yeah, two for two, I think, at least in terms of conversation. SUSE, all in one recovery drink mixes, protein and hydration, 20 grams of whey protein, 1500 plus milligrams of electrolytes, 100 calories and only four grams of sugar. Do they come in stick packs? Is that what it is? Okay, so this is a bag of, looks like eight stick packs or eight packets, is that correct? Yeah, I think so.

25:32Oh, I'm sorry, six. My eyesight's completely gone. Another brand that actually is very reminiscent of that nostalgic branding, the sort of chunky lettering, chunky font that you see with a lot of emerging brands. Remember Ugly back in the day? Sure.

25:49Brian Folmer:Ugly was like an OG of that kind of branding. I love that branding. Oh my God. Yeah. Ugly Drinks, which was a runner up in one of our New Beverage Showdown competitions. You know, I see a lot of DTC potential for this. I'm trying to figure out how they, a product like this fits on retail store shelves because it's kind of big. Yeah. But for me, I'm just like, does it taste good and they have a vanilla flavor strawberry milkshake and a salted orange salted caramel is that salted caramel wow nice it really is going um uh cool brand yeah it tastes unbelievable not that i'm a huge i don't know hydration or protein drink guy but that one was it's especially if you use like a either a milk or a plant-based milk oh man you'll drink it pretty quick it's almost too sweet.

26:38Brian Folmer:I mean, they could even dial it back a little bit. It's good. Worth a shot. I'm noticing a theme here, as I'm sure our listeners are. You got protein, protein, protein. What's happening here? All right. Here's a different one that's not protein. Okay. Another big pouch that contains 10 packets. This is Awesome Everyday, the complete superfood gummy. Awesome Aminos is the name of the brand. Awesome Aminos is in a a smaller font in the upper right-hand corner, describes the products as daily nutrition perfected, all nine E-A-A-S plus 19 vitamins and minerals and 55 greens and superfoods. I mentioned Groons and the success that they had, that rocket ship.

27:21I have to think that brands are looking at that and saying, hey, I should get into that business too. And here we have Awesome Aminos, which feels kind of Groonish, but for kids. Yeah, gummies are hot right now.

27:32Brian Folmer:And it's so funny because gummy production used to be tough to pull off just, I don't know, five or 10 years ago. And I guess all the co-men out there caught up. And so now you're seeing gummies everywhere. And obviously, Grunz set the stage for that. Awesome Aminos is interesting, though, in that it's for kids and teenagers. Okay. And their argument is that if your body is short on any of the essential amino acids, it can lead to developmental issues, whether it's depression or ADD, for example. And so every day you should give your kid a packet of these. There's about six gummies in each one.

28:07Brian Folmer:And I give these to my son every day and he loves them. And as a parent, I feel better that, all right, we're not missing anything. And so, yeah, it was an interesting thesis that if it does come true, I think they'll do pretty well. Timing has to be right for a lot of brands. And I think the timing for this, I'm not saying this one way or the other, you know, MAGA and MAHA have definitely influenced how people are thinking about eating, drinking and supplements and whatnot. And, you know, the fact that parents could say, well, I'm giving my child this so that they don't have to take that might go a long way with folks.

28:41And the ability to talk directly to consumers via e-commerce or, you know, get their attention via social ads seems to be a superpower for a lot of brands like this.

28:53Brian Folmer:Yeah, yeah. I mean, it's a powerful moment too, especially as a parent. You always want the best for your kid and you would hate to look back on things and be like, damn, I wish I had done something different. And so, which I'm not saying that they're, you know, preying on you, don't make the mistake. But yeah, I think a lot of parents are, you know, they'll do anything for their kid. And so, and you obviously want your kids to grow up to be, you know, have everything they need. I think you just created a tagline for awesome aminos. Don't look back and wish you had done something different. Give your kid awesome aminos.

29:25Brian Folmer:Yeah, it really, I mean, the potency of the pain point that a brand solves can be pretty interesting and really can drive sales. I mean, we were just talking about, was it Primal Queen? Yep. And how they went from zero to 300 million in sales in 30 months. And branding, I don't know, not like the best branding in the world, but they're solving a very potent pain point for women. And so, yeah, if you have a strong enough pain point, that'll do a lot of heavy lifting for you. I guess the question is identifying that pain point and why it hasn't been addressed. Yeah. Which is strange to think that you could have such a big opportunity that hasn't been executed upon.

30:06Yeah, the whole VMS space is interesting.

30:09Brian Folmer:Yeah, if there's, I don't want to call them shortcuts. I'm not saying, oh, take these gummies and that's the shortcut. But if I can buy a product that solves a problem that I know needs to be solved, then yeah, I'm going to buy it. Why not? Yeah. I was going to say, what's in the box? I was going to do a little seven action here. What's in the box? but you have a bag in that bag. All right. Zoli Gummy Pops, P-O-P-Z, the Clean Teeth Pops. Should I not go to the dentist anymore? What's happening here? I mean, you probably should still stop by every once in a while. But yeah, they formulated their lollipops.

30:45Brian Folmer:They have a whole candy line where it helps cut back on the, or reduce the amount of bacteria in your mouth that contributes to cavities. And so that's how they make this tagline, candy that cleans your teeth. And they're doing great. They're actually, I believe, out of Michigan. The founder started this when she was 12 years old. And now she's, I think, 19 or 20. Wow. And she's like a sophomore at Michigan State. But great product. I mean, they just drank the partnership with Disney. So they'll be all over Disney parks. Yeah, definitely a kid's product. But as we know, kids don't buy their own products.

31:22A lot of times, it's the parents who buy them. So you got to appeal to the parents and zero grams of sugar sounds pretty good. The clean teeth pop sounds really good. I would be concerned, and I'm not sure if this is a concern that you take into account when you're evaluating these products and brands, that you might get sued. That the potential for someone to say, hey, clean teeth pops, wait, you're giving candy to kids and claiming that it'll be better for your teeth. Do you think about potential scrutiny like that or potential lawsuits when you're putting products in boxes or certainly investing in them?

31:56Brian Folmer:Yeah, I mean, that is usually if it's something that's, yeah, that sticks out. I'll ask that question during due diligence, which is interesting because, you know, what was it? Poppy or AlliePop, one of those brands, you know, they got sued because the, yeah, the claims, you know, does it have enough prebiotics in it? At times you just pay the class action and keep moving, which is not the ideal answer, but it's more so. I want to know the founders have thought about this and are preparing for it if it hasn't happened yet. But because you know how it goes, the lawyers are always going to get paid.

32:27Literally, what I heard from a label and regulatory attorney is that the class action attorneys get together once a month in a boardroom. They bring with them a ton of products they bought at a Target or Whole Foods or whatever. They put everything in the center of the table and say, let's look at this one. Oh, yeah, we could definitely see these guys. Look at this one. Yeah, we can. And he said, this guaranteed happens.

32:53Brian Folmer:I want to know how much lawsuits have contributed to inflation in the United States. Brands have to do so much, whether it's how they build their site, all disclaimers in the branding or the packaging, everything. There has to be a measurable amount of inflation in products because of lawsuits. Frivolous. Seemingly frivolous. Let's be clear. There are lawsuits that deserve to be filed. And then there are those which probably don't have a material impact on the end consumer. I might get in trouble for saying that, but, you know, I'm not an attorney and I'm not someone who's advocating for people to eat products that they don't believe is going to do what it says it's going to do or negatively affects them.

33:36But I've seen a lot of lawsuits in the 15 years that I've been doing this. I've seen a lot of lawsuits. So I'm like, what is going on here?

33:41Brian Folmer:I know. And it's sad because, yeah, these founders are working hard and all of a sudden they get hit with a lawsuit. and it just totally derails their day, their week, their month, and sometimes even the company overall, which is so sad. I remember way back in the day when Vitacoco was really hitting its stride and they got hit with a$10 million lawsuit claiming that, I forget exactly what the details of it were, but Mike Kerbin was up on stage at EpipNet Live and he was talking about how furious he was about it and how it was just certainly negatively impacting their growth and just a distraction.

34:13Yeah. And he did what you said they do. what some brands do, which is they paid it. Settle. Pay it. Go or settle. Let's move on. They're in a good place to do that. Some brands are just not. And you see new brands. You know what? I mean, a brand that you're invested in, I'm not going to mention the name, but I saw an Instagram ad two days ago that said, hey, have you drunk this product? Have you consumed this product? Let us know. How crazy is that?

34:38Brian Folmer:There's Instagram ads to join a lawsuit. Yeah. Oh my God. Yeah. Unbelievable. It's nuts. All right. Let's go back to that. Let's get back to the positive here. Last one. Carne Seca, dried crispy beef jerky. I'm seeing more of these brands and products come to market, but that's not the name of the brand. Again, I got that wrong. The name of the brand is Vaccaro Bandito. It's veteran owned, and it comes in this two ounce pouch made with grass fed beef. This is their original variety, 42 grams of protein per bag. No artificial ingredients, no sugar added. Again, protein, protein, protein, protein.

35:15I know, I just happened to grab a bunch of protein ones this time around, I guess, but... I think this is probably reflective of what you're getting and some of the inbound brands that are coming to you. So, yeah, people are eating beef and meat more than I thought they would at this point. I thought people would be cutting back on beef. It seems like people are doubling down on it.

35:35Brian Folmer:I think people are just waking up to the fact that our food supplier, I guess, yeah, the food industrial complex, whatever we want to call it, has just failed us. And you see it all the time where a brand gets acquired and all of a sudden the ingredients change from what they used to be. I think it happened to Siete, for example, and people flip out. And so everyone just kind of realizes, yeah, big food. They're worried about the shareholders. They're worried about that balance sheet and the bottom line. And so I think there's a pretty big shift back to like, what is just natural? Like what is not overly processed?

36:11Brian Folmer:And so, yeah, with jerky, for example, pretty straightforward. Jord, jerky, dry it, put some seasoning on it, put it in a bag. And so, yeah, I think there's just a movement back to that because people are just waking up that, yeah, big food has failed us for the most part. Yeah, definitely a shift in the market and how people perceive consumer packaged brands. There's a lot more scrutiny around ingredients, formulations, what's in there, what's not. How does that affect your perspective on funding? How do you think it affects funding in general from the CPG investment landscape? I think it fuels it.

36:45Brian Folmer:I mean, I think investors realize that this is what the consumer wants. And so if you're building a product that hits on that, that's a big positive. There's a lot of brands that are moving sort of in the same direction at the same pace and doing the things that we've been talking about. Clean your ingredients, meeting consumer needs, just understanding where the opportunity is and attacking that opportunity. what might put one of those brands in position to receive investment versus the other? We talked about X Factor. I mentioned X Factor before. How do you think about X Factor? And how do you talk to your partners about, how do you convince them as to an X Factor being the reason that you should make an investment?

37:27Brian Folmer:I don't know when this episode airs, but right now we're in the middle of making an investment in a brand called Magna. Magna. Magna. Yeah. In the hydration space and the founder, Michael Praisman, what an absolute delight to work with him and diligence and see what he's building. So he used to be the founder of Everlane. Yeah. I sat down with Michael for a conversation. It was two years ago when he launched that brand, I think, right? Oh, nice. Okay. Yeah. Yeah. They're doing great. Yeah. Magnesium powders. They're magnesium powder sticks. Yeah. Yeah. Well, yeah, he just has such a professional demeanor.

38:01Brian Folmer:I'm actually going to kind of think about writing a newsletter on this where like, it's like the difference between soldiers and mercenaries where like, they're all going to battle, but soldiers, you know, it's something they're doing at that time in their life. And it's not like a career mercenaries on the other hand. I mean, they're, they're hired to be soldiers all the time. And so you could just tell it with some founders, like they are on a mission and they are running a tight ship. And so, yeah, with founders, as far as like what the X factor is, you just feel like some founders are like, oh, wow, you're going on a journey.

38:33Brian Folmer:There's no question about that. And then with Michael, for example, this guy's on a mission and he will do anything to succeed. And he is relentless in his pursuit. And so you can feel it with how they talk about their numbers, how everything's buttoned up, how they think about the future. And they'll tell you like, here's where we're not sure what the answer is. And here's the two lines of thought that we have. And we'll see what comes to fruition when we cross that bridge. And so, yeah, they're just very professional in how they go about pitching their company pitching the vision and getting ultimately you know investors excited to build did he pitch his team as well i mean we do he had a strong team behind him he's actually using a lot of ai as well which is oh interesting yeah wow okay i know is that attractive yeah yeah it is because you're saving money or just being more efficient again you know you're you're mercenary versus soldier like they're just very efficient with what they do.

39:26Brian Folmer:And now obviously he's gone through, he's gone from zero to 10. And so he has all those skills or has gone through that process before. And yeah, building, I think, an efficient company is super important because you don't want to make those costly mistakes and you want to be on top of everything, which I think Chad from Grounds did an awesome job at that is just being very efficient with his time and his money. I can't tell you how many entrepreneurs I've spoken with who've said the team, the team, the team, the team is the most important thing. The team is what got us here, talking about successful entrepreneurs.

39:56And, you know, early on, you may not have much of a team, but maybe there's one hire that will give you confidence that this brand can execute the way they need to. Is that part of the diligence as well? Do investors typically look at the team as much as they do the founder and the brand itself? I don't dive a ton into the team.

40:17Brian Folmer:My job, I think, is more of just filtering out what are the top six of that hundred brands that diligence that given month. Some investors do dive into that. I think some of them realize that some team members can come and go and what stays there is the founder and they need to grade that above everything else. And so having a great team obviously is super important and being a multi-time founder, you've built them. It's like the famous quote where the best way to learn to be a CEO is to already be a CEO. But yeah, team can make a huge difference. From your perspective and from the partners you work with and just, I guess, in general, how much does category matter?

40:55We've seen a lot of products where you brought up a bunch of products. We have essentially hydration sticks. We have lollipops. We have protein shakes. We got couscous. We got gummies. Maybe protein shakes is the most traditional categories amongst these brands. Angel investors typically say, look, we're looking for the big, big outcome. Usually the big, big outcome happens in a traditional food or beverage category or supplement category how much does it matter to you it matters a lot for us obviously we all want the huge outcome sometimes though there's instances where if you get in at a low enough price point

41:28Brian Folmer:like valuation and you know the outcome like you can kind of guess the ceiling over where this might end up you still get a great multiple on your investment but obviously yeah the bigger the outcome the more excited you get but that also means maybe it takes more capital maybe you you get diluted more down the line. And so you kind of have to factor all those things in. But otherwise, the worst thing you can have is a high valuation and a small market because then it's like, what are we doing here? The math's not mathing. Yeah. I'm sure there are folks listening right now who might want to join your investor group.

42:03What makes a good investor?

42:05Brian Folmer:I mean, the through line for everyone in the group is they're excited to invest in consumer brands. I would say many of them work in the industry one way or another, but we also have people that are, you know, in the real estate world, in the tech world, construction, you name it. But they all have a passion for investing in consumer brands. And so that's the biggest thing for us is, yeah, they invest in the space and they just want to be a part of the group. I think with any community, you have to have the right vibes. And if someone's not excited to be there and meet other people, probably not going to be a good fit.

42:39How much money do you typically need to become an investor at this level?

42:43Brian Folmer:per the SEC, you have to be an accredited investor. And so you have to hit those metrics. Otherwise, yeah, if you hit those metrics, I always recommend anyone that's just getting started to first take it slow. These founders are good at singing their song and they will convince you this is going to work. And so you really have to build that muscle of understanding what a good deck looks like, what a good business plan looks like, having your own opinions of what the future might look like. And then also working or asking questions to other investors in the space. Cause we're all, we all see different things.

43:19Brian Folmer:We also see a lot, you know, things together. And like, we have a group chat that everybody's in and people ask like, well, what's everyone's thoughts on, you know, this brand or this product or this category. And you get a lot of interesting takes. And I learned a lot from those conversations. And so, yeah, if you're going to get into angel investing, start slow, work with others. And also, especially if you invest early stage, don't go too concentrated, spread your capital around. Because it really is tough to find or pick who's going to be the ultimate winner at the early stage. And the data shows if like Cardi I think came out with some report where it was like indexing is the best strategy.

44:01Brian Folmer:And then when the winners from your portfolio start to emerge, put more into them to maintain your ownership and ride that off into the sunset. And I'm always kind of surprised when you meet investors who are highly concentrated, early stage, that's a risky game to play. Yeah. On the brand side, on the founder's side, when someone wants to talk to you, what's the best way to start a conversation? Shoot me an email, apply on our website, sign my dms do you respond to everything try to yeah yeah pretty good i mean i've been falling behind lately with our uh our newborn but i try to stay on top of it what's one way that always gets your attention keep the email short and sweet yeah i see these founders they i mean they'll write you an email that rivals the old testament it's like it's like what are we doing like i like yeah and that's the other thing too speaking of just more i guess another tip for founders I always think about is I'll see pitch decks.

44:59Brian Folmer:I look at a lot of pitch decks on my phone. And if the font on those decks is too small, like, oh, I'm just not gonna read this or I'm not gonna dive in that the way you want me to. And same with email. If this is a super, I mean, yeah, not trying to read this, not trying to read all that. Just keep the email short and sweet. Make sure your decks are mobile friendly. Cause yeah, I think a lot of other investors of that same way. They're on the move. They have kids, they have life, and they're not always in front of their laptops. Yeah. Brian, this has been fantastic. I feel like I could speak to you all day, but I know you're a busy man.

45:35You got things to do. Thank you so much for taking the time. I really appreciate it. Thanks for coming all the way to Boston. Congrats on everything you've built to this point

45:42Brian Folmer:and definitely want to stay in touch. Yeah, absolutely. I appreciate having me on. This is great. And yeah, love the office. You guys have something special here. Appreciate you saying that. Thank you. That brings us to the end of this episode of Taste Radio. Thank you so much for listening. Taste Radio is a production of BevNet.com Incorporated. Our audio engineer for Taste Radio is Joe Cratchy. Our technical director is Joshua Pratt. And our video editor is Ryan Galang. Our social marketing manager is Amanda Smirlinski. And our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues.

46:20and of course we would love it if you could review us on the apple podcast app or your listening platform of choice check us out on instagram our handle is bevnet taste radio as always for questions comments ideas for future podcasts please send us an email to ask at taste radio.com on behalf of the entire taste radio team thank you for listening and we'll talk to you next time

46:50Thank you.