$312 million, three seasoned professionals, and “no BS”
With the support of a “who’s who” of industry investors, three prominent figures in the consumer products sector have secured over $312 million to establish a growth equity firm.
Nick Giannuzzi, the founder and partner of the legal company Giannuzzi Lewendon, Andrew Abraham, the chief executive officer and founder of Orgain, and Peter Rahal, the co-founder of RXBAR, are in charge of Humble Growth. Nestle Health Science, Mike Repole, co-founder of BodyArmor SuperDrink, Gary Hirshberg, founder and CEO of Stonyfield Farm, Paulo Lima, co-founder of IT Cosmetics, Sean Lang, founder of Ainsworth Pet Nutrition, and Verlinvest, which has invested in Oatly, Vita Coco, and Tony’s Chocolonely, are among its limited partners.
Mr. Rahal told Food Entrepreneur, “Any problem a company has, someone has the experience, someone has been through it, and we can pull them into the situation to help.” The bench is quite lovely and has a deep design. Our group has dealt with any problem or retailer you can think of, and that experience is quite helpful.
“We want to be an institution in this space to allow and enable and help founders and management teams execute their vision faster, easier,” he stated, referring to his goal with his colleagues at Humble Growth.
There really isn’t a founders’ fund or operator-led fund that has empathy or that can hold you accountable if you’re trying to raise capital or expansion money. that has experienced it, as it can truly aid in your exploration
Many people consider Mr. Rahal to be an entrepreneurial success story because he founded the innovative “no BS” protein bar brand, which Kellogg Co. paid $600 million to purchase in just five years. He founded Litani Ventures, specializing on early-stage investments in consumer businesses, after that purchase.
“In actuality, I wanted to raise growth equity, but I didn’t while building RXBAR,” he stated. “It turns out we didn’t need it, but in the process, having some experience at the table would have been great.”
He talked about the beginnings of Humble Growth and offered guidance to businesses looking to raise money in an interview.
Food Entrepreneur: Tell us about your collaboration to start Humble Growth, three of you?
Peter Rahal: Andrew, Nick, and I have all made some little investments. It turns out that venture investing in consumer goods, food and beverage, and beauty actually doesn’t make sense since there won’t be enough billion-dollar outcomes to offset all the losses. This is why we were doing seed deals, which were less rigorous and more emotionally driven.
It became evident to me very quickly that investors simply cannot afford to make that kind of early-stage investment. However, larger growth checks are warranted when the company is one or three moves away from a truly sizable and attractive business for an acquirer and has sufficient data to demonstrate product-market fit. For consumer goods, the growth stage logically makes sense, and we united upon seeing the market’s promise.
What is your humble growth investment thesis?
We classify the products we invest in as fast-moving consumer goods, which includes anything from food and drink to vitamins and even clothing. and last, the infrastructure that supports service providers or certain components of them; a marketing or email service, a co-manufacturer, a supplier of raw materials, etc.
The most crucial requirement is that we comprehend the market and, even more crucially, be able to provide the management teams with genuine assistance in growing their businesses.
The check amount ranges from $10 million to $40 million. That determines the size, so the business must make enough money to cover that amount on the cheque. Usually, you would need to be making more than $20 million.
What distinguishes Humble Growth from other establishments?
I will be the first to advise the CEO or founder not to seek outside funding. We simply conduct ourselves with a certain level of sincerity and honesty.
Three factors are critical to the success of this business while developing a consumer goods company. The product is the first. Second, the individuals. Thirdly, distribution is the issue.
Both Andrew and I were product-focused CEOs, and given my background in product design and packaging from RXBAR, I can offer a great deal of expertise and value to help improve a company’s offering. Additionally, we are familiar with all the manufacturers that we may hire to help engineer the product and make it as fantastic as it can be.
It turns out that once your product is perfected, people and creating the best-in-class culture are the most important things. Whether you’re selling protein bars, lip gloss, eyelash extensions, or anything else, the really difficult component of the organizational puzzle is actually company creation, according to the many entrepreneurs and executives I’ve spoken with. In my experience as an advisor and investor, everyone ultimately needs assistance with that. When you work with a company long enough, the strategy part becomes clear. However, they require assistance in establishing and growing the organization, as well as in defining its culture and making sure its principles are upheld.
What qualifications and experiences do you all bring to the table?
I’ve never seen a better deal engineer than Nick. Whether it’s an M&A deal down the road, a contract with a celebrity, influencer, or contract manufacturer, he has the experience and pattern recognition to plan and arrange those deals to perfection. He’s a really valuable asset.
Andrew’s experience is very remarkable. I’m still trying to find a problem with him. He performs well in every area. Everything: people, product, pricing, distribution, everything of it. He fits the description of a “five-tool player.”
My background is mainly in the area of My greatest accomplishments at RXBAR were creating a culture and fostering teamwork. That’s probably where I excel the most. Of course, positioning, marketing strategy, and packaging design
However, the three of us are covered for everything, and even in the event that Andrew and I are redundant, we can undoubtedly work together to position a company as favorably as possible.
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What suggestions do you have for entrepreneurs looking to raise finance in the difficult climate of today?
Till your product is ready, grow slowly. The largest error is for people to try to grow and raise money before their product is ready, which is a bad use of money.
Do you think that product-market fit is more significant than profitability?
Product-market fit, in my opinion, is paramount, followed by profitability. The bottom line is profitable if there is a true product-market fit. Making money isn’t what you want if your business is growing and your product fits the market. It should be run at a net 1% rate. Once you reach scale, you may make adjustments and turn a healthy profit.