We recently had the opportunity to host a panel at ExpoWest to speak directly to entrepreneurs, company owners and exhibitors in the food, beverage and consumer goods industry. These video clips below are a sampling of our involvement at the show:
Startups in the food, beverage and consumer goods industry face a host of unique challenges, including legal risks and compliance issues.
1. Know Your Brand is Your Value
If you’re just getting started, make sure your company name is unique – meaning both protectable and enforceable. When you’re ready to start designing and printing packaging, for the love of Odin’s beard, do a trademark search before you begin. File your marks after they’ve been finalized and work with someone who knows how to maximize the value.
2. Avoid Friends and Family Rounds
Do NOT do it. Unless they are accredited investors or your last name is Musk.
3. Don’t be afraid to say “No.”
If you’ve got a great idea, a lot of people are going to want a piece of it. For a piece of your company, your cousin the Sanskrit professor thinks she can manage your production runs. Your uncle, the bank teller, thinks he can find you investors if you just cut him an ownership stake. Just say no.
4. Don’t Be Afraid to Say “Yes.”
This is a supportive community filled with lots of folks who will be willing to help you. Just make sure they know what they’re doing first.
5. Don’t Pay a “Finder” to Help You Raise Money
Just don’t – it’s stupid. When you’re big enough to get a legitimate investment bank to help you, then you can consider it.
6. Ask for references
Vet the people you’re going to work with, whether it’s your business partner, investor, co-packer, broker, consultant or anyone else involved. Do your due diligence!
7. Keep Things Secret (But Don’t Make it Weird)
You’ve got a great idea, probably the best ever in the history of the universe. I totally get it. Make sure you are protected by a non-disclosure agreement where and when it makes sense. Make sure your agreements with food scientists grant the resulting recipes to you. Make sure your co-packing agreement protects your recipes and formulations. But don’t be the nut job asking for an NDA at the bar at every startup competition.
8. Be Kind and Decent, Always
No matter where you are in the growth cycle, be kind and decent to everyone. First, it’s the right thing to do. It’s a collaborative industry and that makes it fun. Second, appearances can be deceiving. The person you’re blowing off now may be the serial entrepreneur who nixes an investment in your company a year from now.
9. Don’t Sell Equity Early
That is, unless you have no other option or unless the valuation is great. Or, you know, they swear they love you for your mind. Convertible notes and other debt options can be a founder’s friend.