FoodBytes! Webinar: Leading Investors Share Fundraising Outlook amid Covid-19 Crisis

 

We hosted our first FoodBytes! webinar this past week, featuring some of our community of investors who shared their outlook on fundraising in the midst of the Coronavirus pandemic. Investors who joined us include Tom Spier of Boulder Food Group, Amanda Donohue-Hansen of Cultivian Sandbox, Michael Lavin of Germin8, Daniella Vellinga of Rabobank F&A Innovation Fund, and Roderik Bronkhorst of Rabobank Equity Private Placement.

Watch the webinar and read on for our key takeaways from each investor. Plus, don’t miss Food Navigator’s Elaine Watson cover the webinar: Raising capital in a pandemic: ‘There is Plenty of Dry Powder Looking to Get to Work in This Market’

Brad Blomstrom, Anterra Capital:

  • This is truly unprecedented in terms of demand shock, however food is relatively insulated as an entire ecosystem – people will always need to eat
  • Founders: If you’re in the middle of a deal, get it done. Over-communicate to investors the depth of whatever pressure you’re facing right now. Get to 12 months of runway by fixing your burn rate or finding other ways to reserve cash
  • Investors don’t know what valuations should be, given market volatility, but looking at 30-40% discount range right now
  • Make sure your supply chain is prepared for a snapback 
  • If you’re dealing with VCs right now be patient, they’re putting out a lot of fires

 

Tom Spier, Boulder Food Group:

  • We’re giving guidance to our portfolio companies to cut discretionary spending where they can
  • Getting early stage deals done right now is going to be more challenging; not impossible but it will take more time
  • On the supply chain side: find redundancy where you can

 

Amanda Donohue-Hansen, Cultivian Sandbox:

  • We continue to remain bullish on the sector; investors often flock to agriculture as a stabler asset class
  • Pricing is challenging and takes longer for their team to think through scenarios. They’re applying more scrutiny to valuation
  • It will take startups longer to fundraise. If startups have less than 12 moths runway now pull all existing investment levers to ensure sustainability of business
  • Ag remains an essential activity; not so much a question on demand, as supply chains being disrupted
  • With respect to fundraising, be open to raising more capital and get creative with your investment strategy

 

Michael Lavin, Germin8 Ventures:

  • We all need to be clever and resourceful. Startups that adapt will be best positioned to come out winners
  • Show prudence. Adjust your milestones and highlight opportunities to be cash efficient. Revise your financial plan and show flexibility 
  • Consider stable financing: secure debt financing and then market equity fundraising with debt already secured
  • Keep VCs warm and don’t take a NO – circle back
  • General plans for your company’s future of work – translate culture of work into a more digital forum

 

Daniëlla Vellinga, Rabobank F&A Innovation Fund: 

  • Retaining as much liquidity as possible is of paramount importance
  • Explore government and grant funding opportunities that are popping up globally in response to the crisis
  • The sales growth of 2 -3x we’ve seen over past few years is going to significantly decrease
  • We’re likely to see an increase in data solutions and robotics innovations in the ag sector, as human labor is a key supply chain vulnerability now
  • Investor syndicates will likely gain strength during this time and startups should play a proactive role in building them
  • Startups should be less concerned with valuation right now and focused on securing capital if they need more runway

 

Roderik Bronkhorst, Rabobank Equity Private Placement: 

  • For CPG businesses that are able to nimbly pivot to focus on e-comm, that success will be a valuable metric for future investor due diligence
  • This is the first real F&A CVC stress test and the jury is still out on if they will respond similarly to the VC community or if this will alter their strategies moving forward

 

Feel free to leave a comment below, and stay tuned for the next webinar via Instagram, Twitter or LinkedIn

The views and opinions expressed during this webinar are those of the speakers and do not necessarily reflect the official policy or position of Rabobank or its affiliates. The information provided herein is for informational purposes only and is not intended to, and does not, constitute legal, tax, investment, accounting, or other professional advice. 

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