SPEAKER_02 0:05

Hello and welcome to the Future Ventures podcast on Scaling with Clarity. Today I'm joined by Vincent Kuiper, a founding partner at God of Ventures, on the early stages of food tech and CPG Investment Syndicate backing the next generation of food and consumer brands across Europe and beyond. Originally from the Netherlands and now based in Madrid, Spain, Vincent focuses on what actually makes food companies work not just at the idea stage, but they scale into real economically viable businesses. Through Gotha, he's built a global network of operators, investors, and industry experts helping founders move from pilot to production in one of the most complex industries in the world. Welcome to the stage, um, Vincent.

SPEAKER_01 0:54

Hi Maxime, thank you so much for having me. Really excited for this conversation.

SPEAKER_02 0:59

Absolute pleasure. I would love if you can just kind of walk us through the origin story. Who is Vincent Kuiper? What makes you tick? How did you come to venture?

SPEAKER_01 1:11

Yeah, of course. Um, yeah, so as you know, like I am originally from the Netherlands, from Amsterdam. I have a very financial background, so I started investing at the age of 16 when my father basically gave me um a funny birthday present, which was a brokerage account with 50 euros on it, so I could buy public listed equities.

SPEAKER_03 1:34

Yeah.

SPEAKER_01 1:34

Um, and of course, it was a smart birthday present, and um, and he said, Well, let's see if you like it. And for some reason, I got hooked, and I really loved sort of the game of investing and reading about companies and understanding how they work, and it was like a whole new world opened for me. Um, so that's that was the main reason why I studied finance. So I did two master's degrees in quantitative finance and in accounting, basically with one goal, and it was to improve my investing skills. So, also during my studies, I worked as an equity analyst at a private bank in Amsterdam. And ultimately, after graduating, I saw that I wanted I wanted to work more like closely involved with the management teams of the companies that I invested in. So I started working in private equity, and uh I started working at one of the first private equity funds in the Netherlands in Amsterdam, H2 Equity Partners. So basically, what H2 does is they buy majority stakes in all kinds of SMEs in um very like niche fragmented industries. So I have seen, I would say, like 35 to 40 different niche industries in in only like a period of three years, and my my core responsibility was to do first of all a lot of like market research and deal sourcing, but also the the deal execution, so actually like like working towards the signing and closing of a deal, and then also the portfolio management. So the last year, for example, I worked full-time on uh on a buy and build program where you buy one strong platform company, how we called it, and you acquire several tiny competitors and you integrate them all. Uh, and especially that year was very yeah, let's say my it was a very steep learning curve on in many ways. But I also I also had to sit together with the management teams at their office of our portfolio companies, um, and basically I worked together with them to realize uh operational improvements or to work on new pricing strategies or other like commercial excellence programs. So I've also seen that side of the of the table. But then after after a couple of years, I I noticed that I wanted to work more international and and also with more exposure to to industries that I was like genuinely um passionate about because that that was the downside of working at a generalist private equity fund. You see a lot, which is amazing, but if you are unlucky, you can you you have to work full-time in an industry that that just yeah, you're you're just it doesn't give you so much energy. And then um, so I quit my job and I moved to Madrid to do my MBA at IE Business School, which is highly focused on entrepreneurship in general, and that basically changed a lot of things for me. So, first of all, I met my current co-founder Christina de Medieta. Christina is half Swiss, half Spanish. She worked before in Venture Capital in London at an early stage fund focused on food and health. Um, and but especially she has a background in the food industry through her family business, which is a family of an international trading company in food ingredients and finished products. So one side they supply a wide range of ingredients and raw materials like cacao, coffee, uh nuts, seeds, and other spices. And on the other side, they develop uh finished products to retailers, so they have a wide network uh in the food industry. And basically, during our MBA, we we talked a lot about our about both our backgrounds, and we decided to to bring that together and to launch an investment syndicate called Gutta Ventures. So an investment syndicate is basically a group of individual angel investors, and we bring these angel investors together, and on a deal-by-deal basis, we invest in startups in the food industry. So that's how it started.

SPEAKER_02 5:43

Amazing. Um, a couple of questions that come in out of this. How many angels are now part of God? And um I get Christina's side. Uh obviously, the food tech is uh or food is is part of the family, but kind of like what what if you're seeing 30 to 40 industries uh across like your private equity career, kind of like why do you decide to go into food tech and CPG?

SPEAKER_01 6:11

Yeah, so so to answer that uh that last question, basically, because of all the conversations that that that me and Christina had, and we we really see clear opportunities in the food industry. We believe that that the industry itself is at a turning point. Um, it was a very tough decade, I think, between 2013 and and 2022 or 2023. And um right now we believe it's at a turning point. So you see very fragile supply chains, you see that the food industry is is like massively underdigitized, and you see that there are very big shifts in uh consumption behaviors and consumer demands. And instead of seeing that only in a negative way, we believe that um it actually results in huge opportunities for investors to invest in the startups that that sort of anticipate on the on the changes that this industry is is going through. And and also like to add on to that, I think in the last decade a lot of mistakes were made. So, for example, um the general thought was that people would prefer some products only because of sustainability. That's basically the clearest example. Yeah, in the end, after 10 years, we all know that that is definitely not the biggest driver for consumers to change their consumption patterns. Um, and I think that past decade, like it resulted in a lot of more sort of rational business sense and discipline discipline within the industry, and that's very close to my background. So I've been investing for 13 years, I worked in private equity, I worked as an equity analyst of public listed companies. Like it doesn't get much more rational from a financial point of view. So I think that that my involvement in the industry is a perfect timing, I would say for both sides of the industry, but especially also for me. Um, but I also think that that all the startup founders that are creating new companies, I think they also are starting to understand this. So they are much more rational, they are uh more capital efficient, they are more focusing on unit economics than before. Um, and then the sorry, the first question, could you repeat the first question?

SPEAKER_02 8:26

I was just kind of wondering how many angels they're part of.

SPEAKER_01 8:30

Yeah, so we now have uh 56 angels from 15 different countries. Um, so the majority comes from the Netherlands and from Germany, Spain, Switzerland, but we also have investors from the US, from Mexico, from Italy, from France, from uh from Saudi, Singapore, Scotland, and and a few more.

SPEAKER_02 8:53

Um, I you know that might be uh a bit hard, but it's kind of like a dual question. What's the average check size that that you guys write as a syndicate? And then the second one is like, are you able to pick one investment that you guys have made that you are the most proud of? And and it's okay to say that you love your children equally, uh, but if you can pick one, let us know.

SPEAKER_01 9:16

Yeah, of course. So as a syndicate, as a group, we we invest between 150 and 500k per ticket. And it depends a little bit on the situation, but also on the investor appetite, of course. Um, and I think right now average tickets are more around 200k. But as we are we are basically growing every week as a syndicate, we are onboarding new investors as well. We are seeing new people and meeting new people that are interested, and we are we are open to grow as long as the investor has a good profile for us. So we try to be really selective here and and really build a high quality LP base or investor base. Um, so yeah, I would say I I think the average ticket will grow along the way towards 250, 300k probably next year.

SPEAKER_02 10:06

Okay, amazing, amazing. And do you want to pick a favorite?

SPEAKER_01 10:09

Or yeah, no, that that's very different. I I can explain briefly like um what the investments are that we made. So the first investment is in Winwin. Winwin is a UK company that um that has developed an alternative for cacao based on carob as a raw material, and um, let's say a patented complicated fermentation process. Okay, so they created a new ingredient which looks like cacao, it tastes like a cow, it melts like cacao, um, or cocoa, that's actually the better pronunciation. And um and chocolate manufacturers can use that in their production process of chocolate. And I've tasted their their products.

SPEAKER_02 10:49

Yeah, I think it's how closely does it resemble cocoa? Like, is it pretty close in terms of taste profile, or yeah, yeah, it is pretty pretty close.

SPEAKER_01 10:58

And and it's very interesting. So you have alternative cocoa and you have self-cultivated cocoa, and these are like two different fields. So on one side, we invested in win-win, and sort of the the product market fit here is more in, for example, in in um bakery products, where cocoa is a smaller part of the full of the fuller product. Um, and that the reason for it is that the the new ingredient it's not 100% cocoa, so you you will taste the difference, but it's a very small difference. Yeah, on the other side, we also invested in a company Kokomodo, and Kokomodo does sell cultivated cocoa, so it's a very different process, obviously. So they get um a DNA cell from a cocoa bean, and by using that DNA cell, they basically recreate cocoa, and the result from that is 100% cocoa. So the I would say the scalability and the manufacturing is much more complicated and it also has higher risks. But the final product, if you are able to scale this, you can literally recreate cocoa. Um, and the product market fit here is likely to be more in the in the premium segment in in chocolate bars, for example, because the taste profile is more similar. So we love the the area of cocoa.

SPEAKER_02 12:19

Got it, got it. I mean, your co-found is half Swiss, so I I I guess maybe maybe that's connection, but if even in the beginning of our interview, you talked about unit economics. Now, obviously, that um and you said that it's not enough just to create an alternative uh ingredient. Um, you you've uh developed a paper that talks about kind of what does it take to scale a food tech company, but uh what are the unit economics for both those companies? Are they closely matching the naturally produced cocoa or are we higher, lower, kind of like what and and what is potentially holding because because we we know like over the last two to three years there was a global shortage of of cocoa? So kind of like how closely are these companies positioned to be able to capitalize on this global shortage of of cocoa?

SPEAKER_01 13:13

Yeah, I mean I mean during during these periods of huge shortages like we have seen in the last couple of years, then they are like they're almost right now able to sell their products at uh at lower prices, and now of course the price of cocoa has already like halved and it's it's I think it it decreased by maybe 60 percent right now.

SPEAKER_00 13:35

Okay.

SPEAKER_01 13:35

So right now it's um that is a headwind for these kind of industry for these kind of companies for basically every alternative cocoa company. Um, but in in general, the I think the the idea is that they are able to sell their product at like approximately 30% lower prices than the average cocoa price in in the last couple of years. And I think the difference with the last decade, like the the difference with the last decade is that price parity here is much closer and much more feasible and viable than than with many of these kinds of projects that we have seen in the last decade. And still, like you, I also need to admit it's very high risk. Um, a lot need to happen, also like in terms of sort of technical processes to to make it work, and and we we are fully aware of that. So it's um yeah, I would say it's we we understand the risks, we also see the risk, we think the risks are very real here, but at the same time, there is a viable path towards providing a new ingredient at price parity or even lower prices.

SPEAKER_02 14:48

Can I just double-click on this? So you said that technical processes are key component or critical component. What else must go right for a company like that to succeed?

SPEAKER_01 15:01

Yeah, I mean also um consumer adoption, and that maybe that that's a little bit different, different topic, but um we still need to see whether the consumer is ready to eat self-cultivated cocoa or or alternative cocoa, and we are starting to like of and of course these companies do a lot of tests with that and panels and and all kinds of like testing events, and we're starting to see positive feedback there, and that's very promising. But I think that yeah, I I would say you can you can describe that as market risk, so you have all kinds of risks involved when these companies scale. So you have technology risk, you have scalability risk, you have a market risk. Um, and I think this in this field you you you have all of them because, like the technology, it's not that easy to to to create the technology in the beginning. You have scalability risk because with these fermentation processes, um, when you increase to commercial or industrial volumes, that also brings complexity, and you have market risk because uh we still don't know whether the cons the consumer will adopt these types of alternatives, yeah. And and maybe and the reason why I'm saying this because this this sounds not too exciting or not too attractive from an investor point of view, but the real thing is here that this is the reason why for most ingredients um alternatives don't work because it's there are too many risks involved. But cocoa is an example where we believe that the supply chain is so fragile that you will see these disruptions in the fl uh supply chain in in the next decades to come, and for coffee it's the same. So, like I believe um the expectation is that in 2050, 45% or 50% of the supply of coffee beans will be reduced. And cocoa and coffee are for me the two ingredients where where we see now a lot of innovation, and this is the real reason. Like, these are, in my opinion, maybe the only ingredients where there's a real demand for an alternative, and in the end, like it's not always visible. So, right now, when the price of cocoa has reduced by 50%, um, of course, right now there's no direct need for an alternative from the eyes of uh of chocolate manufacturers. But when in two years or three years a new disruption will come and the price quadruples again, then every chocolate manufacturer will have learned from historical disruptions, and they they they will likely have like a second supply stream, which they can use in these kinds of um times.

SPEAKER_02 17:53

So if I understand correctly, um I think Calibo is one of the largest buyers in the world of chocolate, and they're all forward contracts, other contracts like three years, five years, tenure contracts in terms of this, or kind of like um what if if you are to paint a horizon or timeline, how long do you think it's going to take for uh what it's self-based cocoa or or alternative-based cocoa to maybe not become a mainstream, but but but be a regular ingredient as part of product?

SPEAKER_01 18:23

I I think within within the next five years. And okay, um, and we are still early, and and we we know other companies in this in this field that are active, like on a global scale, but you're starting to see the results right now. So I think even yesterday, like a different self-cultivated cocoa company announced their first official cell-cultivated chocolate bar, which they can now, I think, and and I think they're already allowed to sell it, and they work together with a big chocolate manufacturer. Um, so I think it's really it's coming right now, and it will take some time before it enters like retail stores. But um, yeah, I believe it it makes sense and that also the public is open to to try it. For example, like Kokomoto, so the company that we invested in, they they showcased their products um at a huge event in San Francisco, I believe one month ago, and the feedback from from from the audience was was amazing. Like people couldn't believe that this was self-cultivated cocoa, yeah. And and I think that's that's so uh so cool to see, but it also gives a lot of hope. Um, and it's not, I don't know. I think in the field of cocoa, it's also felt very different from cell-cultivated meat, maybe. Um, but cell-cultivated cocoa, it's not that scary, or it's not that there are not that many weird steps in the process. Um, I think it's much more straightforward than you would imagine, and that the taste of the products um is great, so that might convince people to try it more.

SPEAKER_02 20:00

Yeah. So if people want to try it, how do they get their hands on on Kokomoto?

SPEAKER_01 20:07

Or yeah, that I think right now, right now that's very difficult. Um Kokomoto is is is working together with with all kinds of uh big players in the food industry to further like commercialize their products, but I think you you need to have some patience here, and um I think that it will take it will take some time, but not too much.

SPEAKER_02 20:29

Yeah, yeah. So it's it's do you see a wave coming kind of like the Dubai chocolate where it's cocomato on people go okay? I hope so.

SPEAKER_00 20:38

I hope so. That that would be amazing.

SPEAKER_02 20:41

Yeah, amazing. That that's fantastic. I mean, um from what so I kind of want to shift gears a little bit. Um obviously, taste, proximity to market, uh uh taking away some of the risk or dependency because like you can't control the the weather environment. Uh if if a if a if a founder is coming to you to pitch a product alternative ingredient, what would make for a really compelling pitch to you? What would make you look uh at this and say, yeah, okay, we're willing to risk some money?

SPEAKER_01 21:18

Yeah. Um, I think the the first thing that I look at is the value proposition, and that that's something that that's uh that I really learned during my private equity time. So, like, what is the value proposition of what you are selling? And you you would be surprised that like in so many cases the value proposition is just simply not that strong, or it's just not that clear. And I think a good value proposition is often focused on uh providing something at lower cost. Yeah, and and it has to be very clear, so it must be you you have to understand it directly. So if if someone with an alternative ingredient gives me a pitch and it says, like, I can offer this to uh um to the buyer at 30% lower cost, like then I'm uh I'm directly interested. Like how is he doing that? And that that yeah those are all like follow-up questions. But for me it starts with the value proposition. And if the if this value proposition is not good enough then I I will already have my doubts whether there's a willingness to pay and like why would someone actually buy your product and it it's very it's a it's a funny trick to just focus on that value proposition because it's so simple but it provide it's so insightful to dive deep on that um so I will start there and then we dive uh yeah in into the rest how does the market look like is it big enough can you enlarge or expand your market uh yourself is it um how scalable is it how far are you with your your RD and your development how capital intense it's definitely something that we look at we we love industries and companies with technologies that that are not too technical if you understand what I mean so I know we we sometimes yeah so and and that that's such an important topic so I love technologies that that are not too technical or too complicated but with a higher probability of success and a higher probability of of sort of of scalability of scalability success and you see that very often like I see lots of differences here so some technologies are extremely complicated and it costs a lot of money yeah it's extremely high risk and for me it's it's difficult to to invest in those kind of technologies but if it is not super complicated but still complicated enough that you are or you can patent it for example um but you but it is much more feasible to scale it for me that those are the more interesting startups to look at and then we we dive deeper into the financial plan unit economics uh how yeah got a couple of questions there one um if the technology is not too complex i mean obviously on one hand it reduces technology risk so it's it's a lot more attractive from investability perspective but um does does this then uh uh negate the the moat that the company would have you having a complex technology and and the second one is like what's your take on like you're talking you're talking to these other self-cultivated cocoa companies that come into the market so like is your viewed it like a rising tide lifts all boats and the more the merrier it it just it will help it would help accelerate adoption kind of like what what's your position yeah I I mean um regarding your last question that's that's completely right I I believe the industry is is so huge and and it's massive I believe that there will be like if self-cultivated cocoa will succeed then we will see multiple winners at the same time um and I think that every company will probably um focus on specific niche areas or specific geographies and um because of that I believe but especially because the market is simply too big that we will see multiple winners there. Yeah and on the moat side the if technology is uh is is not too complex how do you build a moat around a food tech company yeah that that of course that's a good question and in my opinion it's always a little bit like it's not black or white I think and there's also a middle part where technology is complicated and it it might give you like uh a one year or two years head start yeah but not but not ten years or not like a forever head start and I think if you if you have a technology which is very complicated but um but not too complicated so it gives you for example a head start of two years and you can patent the process yeah so it further delays competitors then I think that's that could be the sweet spot actually you don't you don't need to have a 10 year head start like if you have a two three year head start and you you act you you you really succeed in executing at a very high level then that head start should be enough makes sense makes sense um in in in one of your uh I think it was in the report I saw capital versus access uh what you said capital is not is necessary uh but it's not sufficient and so what does access really mean uh in practice yeah yeah access really means access to the big players in the food industry in my opinion and uh that that was the initial vision that we had when we started the syndicate and obviously the big access that we have is not through my side but through the the side of my co-founder Christina and her family business so they work together with with so many big uh big food companies all over the world actually with with a core focus on Europe and being able to introduce the startups that you invest in to these companies is very valuable and we see that all the time with also with the companies that we invested in that like yes you can help them with strategy and go to market and everything but very often these teams they have their own vision and I also think you should respect that in a way you shouldn't interrupt too much there. You can guide them but also have respect for their own vision and they're also experts in their field. But by being able to to introducing them to these players I think that's really really valuable. So it's access is is literally making it's not that that's complicated right it's just making warm warm introductions to to all the big food companies and also distributors and retailers and basically all the stakeholders within the ecosystem and the investors as well.

SPEAKER_02 28:03

Makes sense um it I mean in in many ways like when when founders that that they're in high demand or their companies are very desirable often they make the decision based on kind of like what access can the company provide or what kind of additional intangible things can it provide beyond the cash um so that that makes perfect sense.

SPEAKER_01 28:24

Now you you talked about the food industry being fairly um uh fairly traditional maybe not as advanced in with in terms of technology what's their predisposition to looking at uh uh alternative ingredients or alternative products like like are these companies like what is like food distributors or group buys kind of like like are they open when you're introducing them to like let's say alternative or cell based uh cacao kind of like what's their what's their perception what's their take are they open i i i think they're open but only if the if the proposition makes sense so also like if it is too difficult if it is too expensive is it if it is if you cannot implement them directly in a manufacturing system it's all too complicated and I think that's very different from from other industries um and that's the whole reason why so many products and ingredients sort of failed in the in the past decade so like margins are generally thin in the food industry so if you come with first of all an expensive product it it simply doesn't make sense but second also if a food manufacturer for example needs to pay a high amount upfront like for example huge capex investment it all it but very often it also doesn't work because of these like low margins so I think success here comes if you if you can have a combination of both where you can deliver something which is close to price parity and second if these manufacturers or distributors or how you will call them if they can implement it in existing systems and that's very important and that I think nowadays I I see more and more startups that are focusing on this so they literally mention this like in their decks like you can use our ingredient directly in existing manufacturing lines but it's super important and that's also with with winwin for example the alternative cocoa company like their new ingredient which which takes a lot of steps to to develop it but the final ingredient can be used directly in the in the 12 step process from a chocolate manufacturer yeah that's super important so for the for the manufacturer they make it almost seamless to switch between cocoa or alternative cocoa yeah I mean anything that reduces friction is likely exactly what option so that's perfect yeah so you talked about cocoa you talked about coffee um I know that we haven't yet touched upon uh the CPG side of of of God but kind of like where do you see the next set of opportunities coming from yeah yeah I mean so so initially we focused indeed a lot on on food ingredients and and ingredient innovation but we always said that we also see um that the consumer is changing and that's not only Gen Z but you see it basically also in in other generations just like consumer habits and and patterns are really changing compared to the the past few years or or past decade you you see it now with the protein boom and this year with the the fiber maxing and and all these kind of trends but also with GOP1 which is uh which has serious effects on the food industry so we believe that we are starting to see all these kind of dynamics that will really change um yeah the demand regarding CPG brands or or consumer products and still if you look into if you walk into the supermarket like 80% of the products is let's say classified as unhealthy or at least it's full of artificial ingredients and additives um many products that don't really have a nutritional value and we believe that that there will be a lot of innovation there and we are seeing all these startups popping up so yeah we are we are actively investing in that field we for example invested in agua de madre agua de madre is a UK functional beverage brand focused on gut health okay and so you see that right now as well that gut health is is very um I would say popular but from yeah but yeah exact yeah but but in a way also for good reasons like there is there is research behind it um and I think it's still an emerging uh emerging field we are also investing in um I think we we haven't closed yet but I can describe the company like it's it's a frozen food company focused on like clean label products higher in protein and fiber and lower in saturated fat salt and and sugar so just a cleaner alternative to what you see in frozen food right now and with like a new branding and I think that's also an example so I personally like I do a lot of research um to successful CPG stories. So on my Substack since January 1 like I write every week um a case study so I really dive deep into a successful CPG brand that uh realize an exit or for example one billion valuation in the last two years. And it's very insightful if you dive deep into these companies like you're starting to see patterns between the success cases. And I think we can learn a lot from that and by taking this with us when we are evaluating startups. So for example like one one pattern that I saw is um there are many sort of boring product categories so for example let's say soups or salad dressings like the or pasta salsa like these three three different product categories but all three haven't seen a lot of innovation in the past 10 15 20 years and if you now look at at most of the products like for example here in Madrid when I look at at pasta salsa or salad dressings there's literally not one healthy option that I can find so and so I will always like make it myself because I prefer to to eat healthy. And of course not everyone thinks like this but there's so much innovation room like room for innovation here. And these are these boring industries that haven't seen innovation and I think new brands new marketing new logos new colors um can really disrupt these kind of industries yeah interesting and so but I mean if you're doing one case study a week um that that's a lot of research kind of like what what what have what has emerged as the common denominators to what makes a company succeed versus a company that doesn't like what what what are your observations yeah um I think almost every company that I that I covered started D2C and focused obsessively with building a strong brand okay um and it's not not always about the ingredients but it's very often more focused on the problem that they solve so I think most really successful companies they solved a problem and of course you can debate whether what are real problems but for example um chumps chumps is a US company that is famous for its meat sticks so they they they grew from zero to 900 million dollars in revenue in in 12 years and it it's a fascinating story and basically their story was okay meat sticks um have been in the US for for decades but if you look at the two in incumbents it it's it's full of artificial ingredients it's very fatty it's in terms of ingredients it's uh it's not something that you want to eat every day so why don't we recreate a sort of a healthy meat stick so with much clean label higher quality beef and actually we create a product that women can also eat and in the beginning like women were were not targeted at all in the field of meat sticks it was purely focused on men and they sort of found a simple way to to just recreate it make it a little bit healthier and and also target women and that was very successful and I think that's uh that's just a simple example of you you don't want to change sort of con consumer behavior too much. Yeah so I think also in most success cases not every success case but most success cases like you you find a product and you change a few things that make it really better and then that that's the easiest way to convince um to convince consumers to to change to your product but if you really if you if you try to change their behavior that's very difficult so that's one of the factors of my failure cases so I try to when I dive deep into a successful case study I also try to look at who tried to do the same but who failed and that's that's one thing that that I consistently see that if you try to change that consumer behavior then if you if you if you talk about friction what you what you just said like this is basically friction and friction is so important so you need to try try not to change their consumer behavior have a simple product very clear proposition uh know who you target in the beginning as well um and if you do all these steps like these are some i'm i'm going a bit from from from left to right right but um if you combine all these things that those are some of the patterns that I see between these success cases got it so um focus on community focus on building a relationship with a consumer reduce friction focus on ingredients uh package it differently um now if we're talking about chomps obviously if they make a healthier product does this mean that the shelf life is shorter you specifically talked about being able to bring product on stream or uh utilize the existing supply chains or just require um like ideally not require changes on the the manufacturer side kind of like what has been the impact from that perspective in terms of bringing a product that's different or maybe healthier does mean that the short the shorter life um the the the shorter shelf life kind of like what are some of the uh unavoidable implications that come from this yeah no I I think that's a great point so by creating products that are healthier like it brings other issues and complexities so so one issue or one topic that we always talk about with with the companies is uh is shelf life for example but there there are sort of innovative tricks how you can improve shelf life so for example if you if you balance the the pH levels between the ingredients that has a positive effect on shelf life so even if you create natural ingredients if you balance that it at least it's it's something that that a founder uh once told me those are sort of simple tricks how you can increase shelf life with with natural ingredients um but also for example we we looked into a very extremely clean label high protein protein bar manufacturer um with I think shelf life of of six to twelve months and he basically told us that I simply only use ingredients which have a long shelf life so he said that yeah and and so if you think about that you can also focus on ingredients that have a long shelf life from itself and try to pick the healthiest ones that together also have a great taste um that can definitely work and I think um yeah apart from that uh taste is extremely important as well and that that's that's maybe yeah rule number one in the food industry in general but also if you look at these success stories that taste is maybe maybe literally the most important factor yeah and it only makes sense I mean it like everything if everything is equal like the the the taste has to be there and then obviously in order to overcome the the the status quo the the resistance to change you have to have a product that offers other benefits whether it's a lower price or a higher quality or whatever whatever else it might be. Vincent are you observing any kind of differences from a geography to geography kind of like what may be popular in Western Europe versus like North America or or somewhere else kind of like uh anything that's emerging and beyond kind of like the the the cultural differences in terms of like wow we have different cuisines yeah I mean us is is by far the the leader in this field I I was in I was in New York one month ago and it was so fascinating for me to see all these emerging brands and and of course you you for like you have the event expo west I was unfortunately not there but still in New York you have all these kind of small convenience stores where you can buy like cool modern emerging brands so you have like Public Grocer the Shelf um Meadow Lane and of course I I went to all of them just to see what's there and amazing to see and in my opinion it's it's 10 times more active dynamic innovative than what you see in Europe and I think this the I think in general like the success cases will come in one or two or three years to Europe. So it's very worth it to look at the US market and see what the trends are there. And I think if you do that in a in a strong way and and that's not only the food industry right I think it's it's yeah in in so many industries um but your European market is in some ways different for example regulation wise so Europe is much more regulated which is sometimes very annoying but on the other side um it also makes sense and it also increases like the quality of the food for example that that you you see in Europe um but maybe to give an example here so we also invested in in farmless so farmless is a Dutch startup that creates um alternative proteins based on natural fermentation okay so in their process they basically use renewable energy and and carbon dioxide um as the drivers for this fermentation process and so they don't use any farmable land to create proteins and it it's a fascinating company with a with an amazing founder and amazing team but their ingredient falls under the novel food regulation in Europe which is a very long process before you are able to sell your products in Europe and in the US it's much easier to to go to market. So a lot of these companies they um when they are ready to sell their products for ingredients in smaller batches they first go to the US because they're not yet allowed to sell in Europe and then when they are finally like through this whole regulatory pathway then um or trajectory then then they will sell in Europe. Got it um and so for for founders like that what's uh what's their typical vision are they like looking to be bought out by big cpg brands do they have the the ambitions no no no I want to build a billion dollar brand kind of like what's what defines them yeah it it's from the success stories or from like the the founders that I see yeah from the founders that you see yeah yeah very very different like uh some founders they they show me pitch decks saying that they want to grow to 20 million in revenues and then exit and some say some say we want to build a 1 billion brand and uh and we want to go big and we we only stop if we have like conquered the entire world so I I see all kinds of different levels of ambition um which is which is actually very insightful because like I we speak to hundreds of founders and hundreds of CPG brands and it's really interesting to see the difference in in ambition and sort of obsession with becoming successful um but yeah I think so yeah it's very different. So I mean you you you talked about like your investment picking criteria so looking obviously on the on the business and economics like the like does does the business have the possibility of making money but how do you pick founders like what do you look for in a founder yeah that's a great question and honestly like when you invest like this early stage so for example we sometimes look at pre seed CPG brands so these are brands that that were launched five months ago it's very early like they don't even have a lot of data that they can show so you're basically investing in that founder. Yeah um I think first thing that I personally look at is something which I call fire in the eyes like in that it's like a Dutch translation that when I talk to to founders I love it when they can sort of show their obsession with becoming successful and their drive and the grid and and sort of the resilience and everything and and that gives me a lot of comfort when and very often that is tied to a something that happened in their lives so um for example like I I I talked to founders that that had a disease they tried to cure it they couldn't be cured and that's why they dived into eating healthier foods and now they created the product that they would have loved when they were ill like these kind of stories and then then like really having that that grid of becoming successful. So I think that's number one number two is also I would say like in terms of communication so I love it when when when a founder can communicate their plans and their company and their vision very clearly I think that's something which which we don't talk about that often but founders that can communicate clearly like what is their value proposition simple pitch text like not too long not too many words very great storytelling in general and storylines that that is what I love because it to me it proves that you have clear thinking and sort of high level intelligent thinking and that you can see the bigger picture um and third um if I if if I would like if I have to mention three things um I mean also their their background is important as well um if they have relevant background like it's not a not a requirement but if they are uh serial founders or if they if they worked in the same industry and they really understand the pain points in the industry from historical experience that really works um and that's for example in in the frozen food company that we are investing in like the the team there they have like 10 or 12 years experience with founding um their own brands in a different field of the of the food industry but if you have these kind of of people like they have so much experience to really understand how the industry works how supply chain works how manufacturing works how retailers work of course that that makes it a bit easier of course so if I can repeat so firing the eyes or high agency grid to storytelling and three it's kind of like do you have the job do you have the background experience that's required to succeed um exactly no if we pivot a little bit um want you to tell me a little bit about uh a little bit more about the the syndicate what do you love about it what do you hate about it um why not a why not a proper fund um currently obviously you intentionally made a decision to stand up an angel syndicate so um tell me more what's the good bad thing or yeah I mean and let's start with the positive things yeah um so the good things are that um look the the syndicate model is of course is much more accessible and flexible so it's more accessible because investors can join starting from 5,000 euros per deal in our syndicate which means that you get the chance to invest in in high promising startups in the food industry from from 5k per deal that's much more accessible than the typical VC fund which starts at uh an LP commitment of 100k or 250k and in general how do you get in how do you know them how do you know that they are fundraising that's very difficult for the for the typical person so in our syndicate we have a lot of people that uh work in the food industry or have an experience in the food industry for example they worked for 12 years at Cargill or 10 years at uh companies like Unilever or Nestlé like these kind of profiles and many of these um many of these people like they they want to be engaged and they want to be part of the syndicate and they want to invest together in these startups and potentially support during due diligence and that's the great thing about the syndicate which I also truly enjoy it's a very engaging way to bring a lot of bright minds together from all over the world and together you invest in the startup and it it literally feels sometimes like I have a team with 55 people around me and I can call ever anyone from the team who has the right expertise um that can help me. So for example like we are we're now looking at an opportunity in the which is more actually in the agriculture in in around biochar yeah and um and we have one investor who has a lot of experience here with financing these kind of projects through the the the bank that he works so that I am able to call him and that he is like literally like he literally enjoys that he can support us like that's amazing and I think that's so powerful if you think about it that that's not normal that you can call all these experts like norm normally you have to pay for all these expert calls like we have we have a a free expert database yeah so that that's what I really like well beyond the expertise you also get the access because those these people come from the industry so they can open doors for you so it kind of goes back to your hypothesis that it's not it's not just about capital it's about access. 100% 100% and and to give you an example there so for for one of our startups um who was not allowed to sell in the Netherlands their new innovative ingredient um we had one investor who's from Mexico and who has someone in his network who is one of the biggest buyers of whey protein and because of the huge uh price increases in whey protein this company is looking to to to find alternatives yeah and because of our Mexican investors saw that we invested in in this company um he said maybe that could be interesting for this huge buyer in in Mexico who has like yeah who is who has a very big position there. So that's some some of these sort of funny coincidences how a Mexican investor can add a lot of value to a startup investment that we have yeah we didn't know that in the beginning but it's just coincidence by having this international group of people who know a lot of people in the in the food industry. And from a from a fund structure perspective is it like same kind of like you two and 20 like how how do you make money off it yeah no of course good question maybe before we dive into that I wanted to give one other example so uh we we not only have individual angel investors on board but also family offices and family businesses and right now we also have um like a family on board who is from one of the bigger supermarket chains in Spain for example so imagine that the the access to retail yeah you have it directly within your group yeah um but also we are we are currently in talks with with a distributor who has um who has been active in the Netherlands and in germany for the last 40 years so we're trying to get all these people also on board as investors and I think that is real access that you can give um to answer your other question so like fee structures so we we follow the let's say the market standard for syndicates and there's a lot of data about that so we work with external sp platforms these at v SPV platforms they they support uh thousands of syndicates and because of that there's a lot of data available like what do these syndicates charge yeah so for syndicates it's very common in terms of carried interest you charge the same 20% but then on a deal-by-deal basis and instead of an annual management fee you charge a closing fee okay so the closing fee is uh five percent for the syndicate leads and around let's say between two and five percent for the the SPV provider who takes care of the whole management and administration and KYC side yeah and if you compare that towards a um annual management fee then the fees are lower in the end and of course they are all up front but you don't have annual management fees so in a way it's you you could argue that it is lower cost than than a fund um high return for investors because they pay less in okay got it yeah yeah so more more more money from their investment goes to the goes to the startup um yeah so that that's how we work so with a closing fee and and carried interest interesting and and because you guys invest in I'm assuming it you invested the pre-seat and see like what's kind of the average lifespan of an investment you're projecting is it like three five seven years kind of how long do you think and and obviously this is company specific but kind of like what's your hypothesis yeah of course I um I mean it's a very relevant question and it's also one of the reasons why we really believe in investing in both food tech ingredient innovation companies and also in CPG brands because um if you invest in both you have a you have a pretty good balance if you talk about exit horizons and and everything so in these more ingredient innovation plays we talk about 10 12 years to an exit you you should yeah you should be able to to to be okay with that um and and I think that that's also a good thing about syndicates like we in a way we are sort of patient capital because we don't have these fund cycles yeah um and I mean especially in that field that makes sense as CPG brands it's very different. I think exit horizons are much shorter uh the companies that we invested in that yeah they could see an exit within five years. But I mean I and I and I also think that if if you look at all these success stories even for CPG brands like until they reach their their big exit it might take seven to ten years as well but often we we step in in year two or three um so I think five to seven years for the CPG brands that we invest in is is reasonable. Okay and then and of course you have outliers here so I think you have you seen the news of Unilever buying Grunts no I didn't know it it's the most fascinating case I've ever seen so I I wrote about it actually this morning in my sort of weekly weekly sub stack that there's this company um Gruons in the US and they created functional supplements in the format of gummy beers yeah so in so they basically try to bring AG1 yeah yeah to gummy beers so instead of green powders and you have to mix it they put it in gummy beers with an actual like good taste that's very convenient. So you they had small packages larger you could put it in your in your pocket um and you eat a few of these gummy beers and you have the same effect of the AG1 shake and this company grew to a 1.2 billion US dollar exit in 32 months so this and I love this story because it's it shows that there are like huge returns possible with CPG brands as long as you follow the right playbook and of course you have a little bit of luck um but it's a great story that's amazing I know Vincent we're at time but this has been a fascinating conversation I would love to bring you back on I'm thinking of like putting together a panel of like people like yourself that invest in food tech and CPG and maybe have a little bit of a fun live competition get five or ten companies come and pitch and we we pick um a winner that but that's a yeah no really cool thank you so much for for having me and uh and I love that idea as well and also to bring these people together like I I still learn a lot from other people in the industry and I I really try to to have respect for people that have much more experience in the food industry than I have. So I think that's a great idea.

SPEAKER_02 58:57

Absolutely and in the show notes uh Vincent will we'll drop a a link to God of Ventures to LinkedIn profile to your SAP stack so people can follow your work amazing thank you thank you so much