Silicon Valley has acquired a taste for food. Not the kind with calories, but the business of food: making it, distributing it, serving it, and helping people discover it. Among both entrepreneurs and investors, there’s a fast-growing enthusiasm for finding both high-tech and low-tech ways to bring new shopping and eating experiences to consumers.
That was the clear takeaway from a FoodStartups gathering in San Francisco’s SoMa neighborhood on January 10. It was the fifth such meeting since late 2011, and the largest to date, with 170 people cramming into the ninth-floor SOMAcentral startup space at 153 Townsend to hear a panel of investors talk about the funding options available to new food companies.
The panelists covered all the major asset classes in the investing world, with the exception of non-profits/social enterprise and pure (non-accredited) crowdfunding. As the moderator, I asked each panelist to explain what types of companies they invest in, what advice they’d give to budding food entrepreneurs, and what signs they see that it’s a good time to be starting (and investing in) food-related enterprises.
I was too busy moderating to take notes, but in general the panelists agreed that it’s a promising time for food startups, given consumers’ rapidly changing tastes and their openness to new ways of discovering and buying foods. But getting a new food startup off the ground is probably as difficult as ever, and inevitably requires lots of bootstrapping and friends-and-family funding before it can rise to the revenue level where angel, venture, or private-equity investors might be interested.
Here’s a rundown of the panelists.
Representing venture capital: Andy Donner, partner at Physic Ventures in San Francisco. Donner’s firm has invested in food companies such as Yummly and Revolution Foods.
Representing the angel investing community: Adam Salamone, associate publisher at Harvard Common Press, a Boston-based publisher of cookbooks and parenting books.
Representing corporate venture capital: Meredith Schwarz, manager of General Mills Ventures in Minneapolis. It’s a corporate venture fund focused on investing in food technology, packaged food brands and digital media.
Representing crowdfunding: Ryan Caldbeck, CEO of CircleUp in San Francisco. As I explained in a July 2012 profile, CircleUp runs an online clearinghouse where accredited investors can vet consumer goods companies in the $1 million to $10 million revenue range.
Representing private equity: Kevin Murphy, director of Encore Consumer Capital in San Francisco. Encore invests exclusively in leading consumer products companies, including JuiceTyme, Aidell’s, Ciao Bella Gelato, California Splendor strawberries, and Zuke’s dog and cat treats.
FoodStartups is a non-profit co-founded by Matthew Wise and Andreas Sæbjørnsen, who are also the co-founders of media startup Founderly and event sharing platform Cosemble. The photos above were taken by Tony XQ Chen, a producer at Founderly, and are used by permission (thanks Tony!).
If you missed the FoodStartups event, don’t despair—Wise says the next one is coming up February 21. Meanwhile, try catching the tail end of the Fancy Food Show at San Francisco’s Moscone Center—it runs through January 22.