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Top Investors in Food and Beverage Companies Over the Last 5 Years

Fundraising, Investing /

The top investors for the last five years by number of deals puts Circle Up at the top of the list with 96 deals, followed by Accel Foods at 29, Food-X at 17, MassChallenge at 16, and 14 by Indie.Bio.  The list contains not only venture capital but funding portals, angel networks, and accelerator groups.  You can see the list here: Last Year Last 2 years Last 5 years CircleUp – 30 CircleUp – 75 CircleUp – 96 AccelFoods – 9 AccelFoods – 20 AccelFoods – 29 CAVU Ventures – 9 Food-X – 17 Food-X – 17 MassChallenge – 6 MassChallenge – 14 MassChallenge – 16 301 INC – 5 Indie.Bio – 12 Indie.Bio – 14 Food-X – 5 CAVU Ventures – 10 Khosla Ventures – 14 New Crop Capital – 5 301 INC – 7 Central Texas Angel Network – 12 S2G Ventures – 5 New Crop Capital – 7 Emil Capital Partners – 11 HSBC – 4 S2G Ventures – 7 Ben Franklin Technology Partners – 10 Indie.Bio – 4 Ben Franklin Technology Partners – 5 CAVU Ventures – 10  

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Company Spotlight: CancerGene Connect

Company Spotlight /

Richard Burghardt wasn’t walking into the unknown when he grabbed onto the opportunity to shake up the genetic counseling world with CancerGene Connect – in his younger years he’d spent long hours in the laboratory with his father, who was a reproductive cell biologist. “I was comfortable in that world, at least I knew enough to have intelligent conversations,” said Burghardt, whose previous business move was starting software company that spawned the Charade Date app that sought to apply DNA technology to the dating world. “The software company was already in place.” The new company is CancerGene Connect, which uses technology and processes created by and licensed from the University of Texas Southwestern that allows a patient to assemble their family medical history on a secure online platform. The goal of that step is to apply predictive analysis to discovering inherited diseases early, which can help overworked genetic counselors treat the most risk-prone patients early ahead of the normal one-year wait time. Burghardt said CancerGene Connect is has just over a dozen account currently active in something of a beta test phase, including two pilot programs in divisions of two of five largest hospital systems in the country. A $700,000 seed round that helped the company form in 2015 has let the Dallas-based operation get its platform operating the way that can best serve the market. A $1.5 million round that Burghardt is starting to assemble now will help the company begin a sales and marketing push into both small specialist sites and large hospital groups and not cede any ground to the three competing companies in the field. While the genetic counseling field is a small one that has let CancerGene Connect find early validation, there is large growth potential in general cancer detection and treatment, along with cardiovascular and metabolic diseases that can similarly cause chronic illness with expensive treatment costs. There is also a forecast for robust business in breast imaging and MRI centers, with client sites paying for the service that patients are then able to fill out online. The sales push will see CancerGene Connect grow to around 15 employees from its current six by the end of 2017. Burghardt said the company’s real growth opportunities will come from adding more hospital groups to its customer base and expanding from the pilot programs it is currently holding in major health care systems. “Someone like an office for a single breast surgeon we can go in there and then be live in 30 days, but that’s just one account,” he said. “Selling to hospitals has a lot more steps because there are so many things they have to be careful about with security of patient information. Early on, we’d do a (Hospital group) demo that went great and I’d expect to have the money rolling in, but now it’s a year later and we’re still getting the deal closed.” Looking longer term, Burghardt said there are business opportunities in leveraging the aggregated patient data the company will have the ability to compile, but said it will take years of business at many more sites to obtain that much useful information.

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Food & Beverage Investments in Q4 2016

Fundraising, Investing /

The Food and Beverage Industry has seen over $2.8B in funding in nearly 270 deals in Q4 2016. The Ingredients and Flavorings industry leads the way with over $2B worth of funding in 19 deals, followed by Candy & Snack Foods at $221M in 62 deals. Meat, Fish, and Seafood follow with $185M in funding. Check out the complete list of funding and deals by industry: Industry Funding Total # of Deals Ingredients, Flavoring & Condiments $2B 19 Candy & Snack Foods $221M 62 Meat, Fish & Seafood $185M 13 Non-alcoholic Beverages $115M 51 Alcoholic Beverages $73M 69 Food Safety & Preservation $53M 12 Fresh Foods $49M 10 Canned & Frozen Foods $48M 13 Wholesale Food Distributors $46M 6 Dairy Products $36M 8 Bottling & Distribution $7M 2 Food Service $4M 4 Total: $2.85B 269

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VC Profile: GE Ventures

Investor Profile /

Headquarters: Menlo Park, California Sectors: Energy, Enterprise, Health Care, SaaS, Health Diagnostics, Information Technology, Manufacturing Description: GE Ventures combines capital, technical and commercial expertise to scale great ideas that drive growth for partners and GE. Focused on the areas of software, healthcare, advanced manufacturing and energy, GE Ventures helps entrepreneurs and startups accelerate their ideas by providing access to GE’s global network of business, customers and partners. Offering a tailored approach and unparalleled resources through its Global Research Center, GE Ventures helps reduce development cycles and accelerate time to market for entrepreneurs and companies. “We scale ideas and grow companies that advance industries and improve lives.” Recent Investments: Lora Health $75M / Series D Evidation Health $3.4M / Series B Clearpath Robotics $30M / Series B Sarcos $10.5M / Venture Website: //geventures.com Ty Findley is a Sr. Associate where he focuses on early stage and growth equity investments in advanced manufacturing technologies. Ty joined the GE Ventures team after graduating from Northwestern University’s Kellogg School of Management. Prior to joining GE Ventures, Ty was a product development engineer at Boeing working in the New Airplane Studies team and he also completed enterprise rotation assignments in the Engineering Leadership Development program.  Ty was also previously a Venture Fellow analyst at G51 Capital, an Austin – based venture capital firm. Ty received his Bachelors of Mechanical Engineering from Baylor University.

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Venture Capital Seeks Food and Beverage Investments

Fundraising, Investing /

The food and beverage space is seeing tremendous innovation.  Venture capitalists are now making investments into innovative food and beverage companies.   Target investments must bring innovation and offer a scalable business model.  Their food & beverage investments nearly all focus on replacing common food items.  Investments typically target technologies around plant-based protein.  Often, startups raising funding are developing new processes that could change what we eat.  Several trends top the list for venture capitalists.   Here are four food and beverage trends with Texas companies leading the way: Fermented flavors – fermentation brings health benefits and for soda lovers fermentation also provides a natural fizziness to the drink.  Salt and Time and Buddha’ Brew are two Texas-based companies leading the way Food safety testing—new testing tools such as in the field mass spectrometry, and food processors are gaining attention. Evaptainers uses evaporation cooling technology to provide refrigeration for foods  and Green Ocean Sciences has developed a field mass spectrometer for food testing. Next generation foods which include cold brew coffee such as High Brew Coffee and Chameleon Cold Brew.   New fruit and vegetable offerings include novel ways of packaging and distributing fruit and vegetables.  Rhthym Superfoods offers a new way of consuming Kale.   Veggie Noodles delivers vegetables in the form of pasta, and Beanitos offers beans in the form of chips. Floral flavors – adding herbal and plant flavors to foods and beverages such as Sway Water and Daily Greens. Here’s a list of the top 24 VCs in food and beverage investing: Sequoia Capital Benchmark Capital Accel Partners Greylock Partners Andreessen Horowitz Union Square Ventures First Round Capital Bessemer Venture Partners Kleiner Perkins Caufield & Byers New Enterprise Associates Founders Fund Lightspeed Venture Partners Foundry Group Index Ventures Khosla Ventures Social Capital Emergence Capital Partners True Ventures Floodgate Fund General Catalyst Partners CRV Spark Capital Battery Ventures Redpoint Ventures

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NDAs, Not on the First Conversation

Investing, Other /

Everyone once in awhile I’ll come across an entrepreneur who wants to tell me about his deal but before giving me any details wants me to sign an NDA which is a Non-Disclosure Agreement that requires the signer not divulge the details of the subject matter to anyone for a certain period of time (usually 2 to 5 years). To an angel investor this is a red flag. When an entrepreneur won’t even show me his one-pager without my first signing his Non-Disclosure Agreement that tells me his deal is not protected and most likely is not protectable. I advise entrepreneurs to have a one-pager ready to share with investors who show interest after a brief discussion. The one-pager should state what the business does but doesn’t necessarily go into details about how the IP actually works. If the discussion goes far enough that it enters the due diligence phase and the investor wants to see the “secret sauce” then it’s reasonable for the entrepreneur to ask the investor to sign an NDA, but not at the beginning of the first conversation. While I understand the entrepreneur’s concern about protecting his idea and subsequently his business, it’s difficult to generate interest among the investors when you can’t even tell them the basic concept. The entrepreneur should be able to inform the investor about what the product or service does at a high level and what performance advantages it has over other methods. My rule for signing NDAs is that I should know exactly what is being protected – the technology, the business model, the concept, etc. Signing an NDA without knowing this could mean the investor is signing away his ability to invest in any deal that is related to the entrepreneur’s target market or application. To carry out the conversation, I invite the entrepreneur to tell me about the non-confidential matters. “Just tell me what you can without an NDA.” This potentially keeps the conversation going. Of course, the first subject to discuss after receiving the one-pager is how can one protect the idea – patents, copyrights, trademarks, trade secrets, etc. Best regards, Hall T.

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Top 20 Investors in Drones

Investing /

Drones continue to attract investor interest from venture capital, corporate VCs, and other funding sources.   Here’s the list of the top drone investors by number of investments.  While VCs dominate the investing category by dollars, angels, and accelerators account for a large number of funded deals. Investor Name Investor Type Number of Investments Sequoia Capital Venture Capital 1,303 500 Startups Accelerator 1,279 Y Combinator Accelerator 1,197 New Enterprise Associates Venture Capital 1,187 Accel Partners Venture Capital 991 Techstars Accelerator 652 Lightspeed Venture Partners Venture Capital 516 Battery Ventures Venture Capital 503 Andreessen Horowitz Venture Capital 493 General Catalyst Partners Venture Capital 465 Startupbootcamp Accelerator 370 Union Square Ventures Venture Capital 217 Social Capital Venture Capital 190 Sherpa Capital Venture Capital 115 GE Ventures Venture Capital 112 Peter Thiel Angel 92 Xiaomi Venture Capital 18 Daimler Corporate Venture Capital 16 Cognizant Technology Solutions Venture Capital 3 DJI Venture Capital 2

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Company Spotlight: Bractlet

Company Spotlight /

What is the problem you are solving? Commercial buildings account for approximately 20% of US energy consumption, equating to an energy spend of $150 billion annually. According to research conducted by McKinsey, commercial buildings could save 30%, roughly $45 billion, of their annual energy consumption by implementing NPV-positive energy efficiency measures. Becoming more energy efficient is extremely valuable to commercial buildings. Not only does it reduce operating expenses and increase net operating income, but it also makes the building more attractive and comfortable to occupants, and increases the property value. Morgan Stanley estimates that the achievable 30% reduction in energy cost for commercial buildings creates $12 billion in asset value in the Top 10 US office real estate markets alone. As a result, there has been increased need for asset managers to optimize their buildings in the most cost effective and data-driven way possible. What need does it fulfill? Research conducted by Deutche Bank estimates that there is approximately $72 billion of efficiency investment opportunity in the US commercial building market available. Why have relatively few building owners opted to take the steps to achieve such savings? The reasons are simple. There is low confidence in the predicted energy savings and the savings measures identified are unable to move the needle far enough. The current building energy analysis methods can be broken down into two types. The first is the traditional engineering analysis, which requires an engineer to conduct a time-intensive building audit and the outcome relies heavily on the individual’s expertise and experience. In light of the increasing system complexity in modern buildings and the sheer volume of data available, this method is arguably limited in the number of savings measures that can be found, and the ability to accurately forecast the savings. The second type of building energy analysis involve mining lots of historical data from a Building Management System (BMS) or sub-meters and employing statistical techniques to provide insight into how the building is operating. Not only do you still need an expert in energy analytics to interpret the data, but you getting good insight from building analytics requires data from each season (an entire year). Statistical methods also struggle to understand how different building systems interact as a whole.   Neither one of these approaches deliver attractive and predictable ROIs for building owners. Not surprisingly, this has resulted in a lack of investment confidence. In contract, Bractlet’s approach to energy efficiency is unique in that it comprehensively examines the interactive effects of building occupants, building systems, and the environment to create physics-based energy simulation models that are 98% accurate in forecasting energy consumption. The simulation model is calibrated to that level of accuracy with machine learning algorithms analyzing millions of data points coming from Bractlet’s own proprietary Internet of Things (IoT) submeters and data coming from a Building Automation System (BAS). Instead of just aggregating and displaying data, the Bractlet platform actually finds energy savings measures for a building and is able to calculate the specific ROI of individual measures and curated groupings of measures. The Bractlet platform enables building owners and asset managers to invest confidently in their buildings and across a portfolio of buildings.   Who are the key leaders? The energy analytics and efficiency industry is highly fragmented, with all companies conducting their analysis in the two different ways mentioned previously. Bractlet is unique in that we create energy simulation models: data-rich, virtual testbeds to guide optimization efforts and illustrate how the implementation of various savings measures will affect building performance. Our proprietary techniques and unparalleled accuracy make us stand out from both engineering and data analytics solution-oriented companies in order to provide a comprehensive solution that maximizes savings. What is the primary benefit of your solution? More than just an energy dashboard, the Bractlet platform transforms any building into an intelligent, energy-efficient one. Bractlet’s cloud-based software provides continuous energy data analysis and saving opportunity identification with detailed forecasts of energy consumption. Using this information, customers can evaluate energy efficient investment decisions and prioritize allocation of capital across their portfolio of buildings with an accurate understanding of ROI. What is the next step for you and your business? Bractlet is currently developing partnerships and engaging with end users in our target markets, including Commercial Real Estate, Healthcare, Corporate Real Estate, and Universities in order to provide true building intelligence.

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Non-Starters in Angel Investing

Investing /

When the Conversation is Over Before it Begins I have an espresso each morning at the Trianon coffee shop in Westlake. It’s part of my daily routine. I often meet entrepreneurs and angels during that time to hear their story. In this blog you read about the up and coming companies and the story behind the people making it happen. What you don’t hear about are the non-starter discussions or as I call them, the conversation was over before it began. Here are some examples: “We’re raising money to build a software system to . . . “ Angels look for the entrepreneur to spend their own money to get the initial software up and running. It’s okay to raise money to develop it further but angels aren’t going to invest money to build the software in the first place. “We only need $8M to . . . “ The raise limit for the angel group is $2M. If it’s close to that then it’s a possibility but beyond $3M too far beyond that and it goes out of range. “Our premoney valuation of $20M is justified by . . . “ There’s almost no investment return in deals that start with a $20M valuation. I won’t say those deals will never get funded but it’s not far from there. “The market is $10B and we only need to get 3% of it to . . . “ Revenue projections based on achieving market share have little connection to reality. A bottom-up list of accounts in the sales pipeline is much more convincing. “We just hired our 14th employee and hope to complete our first customer sale later this . . . “ Startups with large headcounts bring the business plan into question. And finally, the ultimate conversation stopper: “We just ran out of money and . . . “ If you didn’t manage the last round of funding, what does that say about the next round? Best regards, Hall T.

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