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What Matters to Investors

Beverage World:

By Bill Anderson

One of the best things about my job is that every week I get the opportunity to talk with highly intelligent, high-energy entrepreneurs about their business plans for early-stage beverages. Like any potential investor, I have a strong sense of what should be included in a good pitch to an investor.  It’s pretty simple.  For me, it’s about three critical components:  Team, Product and Investment Returns.

Team. The quality of the brand’s founders and the team that has been assembled is more critical than anything, and this has to include everything from integrity to skill sets to work ethic.  During a presentation, I’m always going to be asking myself: Are these good people with stellar reputations? Have they had the force of character and personality to be able to raise some capital from family and friends? Do they have an ingrained desire to work hard and run frugal operations?

Product.  In today’s overly crowded market, with millennial consumers in particular demanding new choices and products with rich brand stories, an entrepreneur has to be able to explain – ideally in one or two simple sentences  —  why her product is differentiated. It’s important to be specific about why consumers and distributors will see a product as truly unique.  A brand founder should be able to show momentum from key consumer trends:  keen interest from Millenials, for example, or brand marketing that will drive high social media interest.

Investment Returns.  Surprisingly, this point is often left out of many otherwise stellar presentations, and it creates a very big hole. It’s never too early in a presentation to tell an investor, in very explicit terms, how they will make a good return.  That means a founder must be ready to discuss investment time horizons, the capital required to run this brand through to an exit, and the broadest range of potential acquirers. Investment returns are what it’s all about.

Finally, what impresses me most is when a brand founder can tell me what he will do in small steps to help build the brand and not about how the brand will grow to $10 million in sales in two years. Examples of building the brand case by case, in small targeted markets to start, with realistic sales and cost projections, are much more impressive, and they exhibit greater business acumen and a deep knowledge of the value of brand-building.