Pitching to investors can be a nerve-wracking experience for an entrepreneur. But the good news for plant-based startups is that an increasing number of investors are looking to back sustainable initiatives. The Good Food Institute’s study indicates a spike in climate-friendly investments. The data revealed that investments in plant-based food companies tripled in 2020, rising to USD $2.1 billion in investments in 2020. Based on abillion’s data, it is also clear that global consumers are looking for plant-based options to suit a flexitarian lifestyle.
Are you a new plant-based entrepreneur? We spoke to the founders of TiNDLE, Next Level Burger, THIS, abillion and Blue Horizon Ventures to help you pitch your business better.
1. Pitch your business, not your product.
Investors are looking for businesses that can yield significant returns on their capital. Andre Menezes, co-founder and COO of TiNDLE suggests focusing more on the business aspect than the technology. “Many founders and start-ups are fixated about their product or technology but forget that a good product is only one component of a successful business. Make sure to address the business in its totality, including the team, their backgrounds, the supply chain, the product, the brand, the go-to-market strategy, the financials, the funding etc. Make sure you are confident that you and your company are worth the investment.”
He further adds, “As an entrepreneur, you must make sure you have a clear view and that you communicate very well on how great your idea is, how you address a consumer need, and how it can scale up and drive profit.”
Setting a global record for the largest seed financing to date within the plant-based startup industry, TiNDLE has raised USD 10 million. This funding was led by Singapore sovereign fund Temasek, K3 Ventures, Singapore Economic Development Board (EDB), FEBE Ventures and more.
2. Be honest and authentic.
Entrepreneurs swear by honesty when it comes to pitching their business.
At Next Level Burger’s first location in Bend, Oregon, customers lined up to try dishes like the Next Level Dog and the Mexicali burger. One of these customers was Alex Payne, co-founder of Twitter, who loved the originality of the restaurant so much that he became an investor. Matt De Gruyter, the CEO & Founder of Next Level Burger, believes in honesty and authenticity as the best policy for success.
“Know, in your bones, why you are doing what you're doing and be prepared to display an intimate knowledge of your business and craft. Don't just say what you think that the investor wants to hear, be intelligent, but be authentic,” says Matt De Gruyter, CEO and Founder of Next Level Burger.
Next Level Burger is America’s first 100% plant-based burger joint. It opened in Oregon in 2014—years before Beyond Meat and Impossible Foods made vegan burgers. Next Level Burger boasts an impressive repertoire of investment firms from the Plant-Based Food Association (PBFA).
3. Don’t get too emotional.
As an entrepreneur, you put yourself and your business out there to be scrutinized from every angle and appraised for monetary value. It’s only fair that investors play devil’s advocate.
Andy Shovel, the co-founder of THIS, suggests entrepreneurs should take negative feedback on the chin and move on. “Don’t get too emotional or defensive when investors shred your business. Instead, methodically work through their challenges dispassionately. You will hamper your persuasiveness if you take their criticisms personally.”
In August 2020, THIS, a plant-based company in the UK, raised £4 million on Seedrs in just 24 hours, becoming the fastest campaign to ever raise more than £1.5 million on the crowdfunding platform and it also became the fastest FMCG business to reach its target of £2 million.
4. Validate your assertions.
Investors are looking for entrepreneurs who can validate their claims and not make generic statements. “Entrepreneurs should make sure to validate all of their assertions. If you, as an entrepreneur, want to proclaim the cost at scale will be £1/unit - you should explain why. It's absolutely crucial that you share proof points to accompany each claim you want to make,” adds THIS co-founder Andy Shovel.
5. Talk about your team.
Investors invest in people first and ideas second. Andre Menezes places huge importance on a strong team. “Talk about your team and why they are unique and the right people to lead the company.”
6. Find the right investor.
Finding the right investor requires hard work and patience. “It’s really easy to waste time, schedule lots of meetings with folks that are investors but often not the right investor for your business or the stage where you’re at. It’s tempting to speak with everyone, but your time is super valuable as a founder and it pays to do your homework and focus on having quality meetings, getting feedback from qualified and experienced investors, and bringing the right partners on board. It’s so easy to start talking and ramble on endlessly. Be clear and concise in your responses and allow time for the other side to process them,” suggests Vikas Garg, founder and CEO of abillion.
7. What investors really want?
Roger Lienhard, founder & Chairman of Blue Horizon Ventures, is an active investor in plant-based and sustainable businesses through his food tech-focused venture capital fund.
Roger Leinhard asks three main questions to all entrepreneurs who pitch to him:
A) Explain to me how you can go global with this.
B) Explain to me how you will bring the price point down.
C) Convince me that you are the right team to do this.
Roger also cites some common mistakes entrepreneurs make during the pitch meetings:
A) Spending too much time on the problem description.
B) Lack of understanding of the investment firm’s scope and areas of expertise.
C) Not having a clear rationale for your company’s valuation.