In this new podcast series, co-produced by vegconomist, Alex Shandrovksy interviews investors about benchmarks for funding alt proteins in 2024 and uncovers the investment playbooks of successful Climate Tech CEOs and Leading VCs.
Podcast Host Alex Shandrovksy is a strategic advisor to numerous global food tech accelerators and companies, including leaders in alternative protein and cellular agriculture. His focus is on investor relations and post-raise scale for agrifood tech companies. Episode one from last month can be found here and the second is here.
Episode 03: Bluu Seafood’s Fabien Friede
In this episode, Alex talks to Fabian, co-CEO of Bluu Seafood who joined the startup industry in 2010 and worked with investors on a lot of different digital businesses around the globe. He talks about the expectations in raising a fund both in the investors and companies aspect and how the importance of the two-step closing has played in their recent fundraising.
Key Facts Blue Seafood
- Goal: Bluu Seafood is a cultivated seafood company, and the goal is to provide people with healthy seafood products without destroying our planet.
- Raised 20+ Million
- Investors include Meta Ray Ventures, Leather VC, and Sparkfood.
Alex’s Top Findings:
- Challenges: alternative protein as an industry is suffering from investor fatigue due to several different topics; overall slower progress than maybe promised or at least anticipated, high CapEx needs, and poor performance of public markets.
- Length of Fundraise: Bluu Seafood’s recent round took about nine months, significantly longer than anticipated, highlighting the increased difficulty in securing funds and actually had to split it into two closings that are five months apart. Two-step closings become more common now.
- Two-step closings: when you have your investment agreement, create already shares that you can then give out to new investors that come on board on the second closing. If you give out a thousand new shares, you might create a capital reserve for another thousand. So you can actually collect the same sum again in the second closing, which is then done to the same condition, same valuation. So basically, you’re closing the round to get capital in the bank, but allow for more time to get more investors on board. If the investor doesn’t have any bandwidth to deal with you at the moment and you don’t want to lose them, you might leave that door open via a second closing.
- Perspective on Lead Investors: Lead investors play an important role by committing the most capital, conducting due diligence, and giving confidence in smaller investors to join the round. It can definitely streamline the process and attract additional investors. The due diligence is mainly done by the lead investor. So once the lead investor commits so much capital, it is a vote of confidence.
- Effective Introductions: During the outreach, founders should give a list of potential co-investors and pre-written introduction emails for current investors to facilitate easier warm intros.
- Interpreting “Too Early” Feedback: When investors say that it is “too early,” it may be a polite way of declining without burning bridges. Founders should seek genuine feedback for improvement.
- Cell-Based Space: Elements concerning cell-based space include high CapEx and low-margin products. As an investor, I need to evaluate what is the opportunity and what is the track. Scaling for example, you need to bring down the production cost, experience for the product, and how it differs from the traditional product.
This podcast is sponsored by SWARM- The Swarm gives companies and investors the keys to their networks and the business relationship data they need to grow.
Use theswarm.com/alex for a 25% discount.
