Will Schmitt of Miroma Ventures.

Welcome to the Puck Venture Capital and Beyond, a show that explores the evolving landscape of the venture capital world. We'll have candid conversations with today's VCs and entrepreneurs who are shaping those changes. I'm Jim Baer, managing partner of Baer, Negron and Troff and president of CMUG Advisors. This podcast brings change makers to the table to discover the inner workings behind the decision making strategies and ultimately to how they got to where they are today. Today we're talking with Will Schmidt of Maroma Ventures, the investing arm of the Maroma Group, an international firm focused on growth stage consumer brands and media platforms.

Will and I get into the nitty gritty of marketing new businesses in today's brand disruption ecosystem, investing in top entrepreneurs challenging the norms and the opportunities ahead in the ever changing plant based protein industry. Will Schmidt, welcome to the Puck. Will is here on behalf of Mirima Ventures. Will, give us a little bit about your background before we jump in. Yeah.

Of course. First off, thanks for having me on. Really excited to be here. Yeah. I'll share a little bit on my background.

I won't bore you too much. It's a finance oriented background. Originally started in investment banking advisory work in the middle market with William Blair and Raymond James doing a buy side, sell side advisory work in the consumer space, working with, food and beverage companies on particularly m and a and as well as equity led processes. Cut my teeth there and and got a base of skills on, you know, building models and doing, you know, financial diligence and support on building the information memorandums and things of that sort. From there, I became pretty interested in in kind of the the buy side, transitioned to a lower middle market private equity firm out of San Francisco.

It's about 250,000,000 under management at the time. Looking at buyouts in the consumer space again, really with a focus, I would say, on on food and beverage and and restaurants. Really looking to identify great assets and great businesses that were well managed by management, where we had some sort of particular skill set that we could bring to the table or wait on lock more more value to the business. So had a really great experience there, and that's that's where I kinda put more of my investor hat on and really ought to be a more strategic partner beyond just being an investor and providing capital in a transaction. I quickly realized that, you know, some of the best investors in the space were really adding more operational expertise to these businesses, doing much more than just financial engineering or putting together a transaction and acquiring for a attractive multiple.

Had a really, really great experience there. Wanted to go back and get some operations experience. So spent a few years at Coffee and Tea Leaf in their finance department. Really my first taste of kind of inside a a corporate organization, corporate finance. I had a really great experience working closely with the CEO and executive management there and, ultimately ended in a successful sales at Advant International, a private equity firm that acquired the company.

Went back, got my, business school degree at at USC and became much more interested in growth stage with consumer. And so joined a family office outside of Boston called Beachwood Capital. Focused early on in consumer, I would say, seed series a stage. There, became much more interested in the the innovative emerging companies in our space. So that brings me to where I'm at today with our group.

We're a marketing media group. We have have, 10 or so marketing agencies that we've acquired over the years, and that's the way we look to add value is we're, we're a bit different, I guess, than most other traditional private equity venture capital funds that they were more of an operator. So, Will, that's exciting. And so as we're talking about Mirima Ventures and its $100,000,000 fund, the key is, if I'm understanding this, is you do a lot of marketing for the companies you invest in? Yeah.

Exactly. That's what sets us apart is the ability to to add value beyond just providing a cash investment or a check is really the, you know, long term strategic partner. We wanna be the marketing partner of choice and grow with these businesses. And so my job and part of my job is to identify, you know, the up and coming emerging brands that are positioned well to disrupt large attractive categories and find great entrepreneurs that you support. And ideally, we can add value and provide support in marketing, whether it's on social influencer strategy, digital content production creative, you you name it.

Really, we've got a full offering of marketing capabilities. And so, really, what we wanna do is tailor our offering and our package in terms of the marketing capabilities we can bring. So if you're coming into a company, I know you can do a seed round for instance with, let's say, 50 to $100. You also can put $3,000,000 into a startup. Is that like for an a round?

And in those situations, do you see yourself leading those rounds or do people come to you after they're putting a group together? Yeah. It's a great question. We can lead rounds. I think our our preference is to come in alongside a lead or invite a lead into the financing.

We fit in better as a strategic co investor, bringing that marketing expertise to the table. We have no problem, you know, having a lead investor. Right? You know, the majority of the round is for us to follow on. One thing we try to do and we like to do is is really reserve capital for follow on as well and make sure that, you know, as the business scales that we're adding value in different ways and, bringing more marketing capabilities and at the right time media to the table as well, whether they're exploring a TV buy or out of home or radio, etcetera.

And so that's really by design as we work with some of the very large corporate CPG clients like Amazon, Audible, and Netflix, and Disney, and Starbucks. And so work with a very large CPG and Fortune 500 companies on a more traditional marketing engagement structure. But with the venture and growth stage, really wanna identify great entrepreneurs with game changing ideas that we can, really affect real value. So let's talk timing for instance. Let's say somebody comes to you with an idea for a new food product in the fake, you know, the what do we call it?

The foam meat space. It's the next Beyond Meat. It's the next Impossible Burger. And by 2025, we're gonna have all this out there in the marketplace. They come to you with this idea, they're gonna need $20,000,000 or $30,000,000 or some amount of money to actually get a product to market.

So they're a long way from, quote, marketing. Do you get in early like that or do you get in when they're basically getting ready to do the marketing? Yeah. Yeah. No.

We have the flexibility to go very early on. We can go free market launch, free products, free revenue. Our preference and generally where we get most comfortable is right around that first institutional round of capital. So it could be a seed or a series a. Generally, there's product in market and there's business generating revenue.

Just gives us a bit more to dig into and assess from a partnership standpoint. Also allows us to do our job better in terms of digging in on the marketing strategy, figuring out where we can add the most value and what's really gonna move the needle for the business. Going too early with some of this like a scenario like you outlined, obviously, significant risk in that type of scenario. Also more difficult for us to add value that early on. Tend to stay away from those sort of opportunities, but we do see a lot of attractive dynamics that we're seeing in plant based protein and alternative protein that we like.

We think it's it's definitely here to stay. You know, the early movers, the Impossible Burger Beyond Meat, as you mentioned, really kinda proved out that there is a market, that there's a consumer base. It's not just a diet trend or vegans that are looking for this sort of product. There's really, you know, consumer base that wants to eat healthier, wants to exercise more, generally, you know, lean into health and wellness. And so that's the primary consumer base for those players.

And what we're seeing is kind of a second and third wave come to market, if you will. So that was the first those first movers in alternative protein or plant based protein. I'm gonna set the stage and got the consumer introduced that idea of eating healthier in a in a plant based format. Now we're seeing more premium options and even put more cleaned up, less synthetics and fillers in terms of the ingredient and formulation of of the products. Some really exciting things.

I think on the third wave would be more at the early stages, which I think you're alluding to, which would be cell based cultures, lab ground type meat. You're you're seeing it already come to market, really early stage businesses that haven't launched a product to market and are far away from doing it, but have some really game changing science and innovation on it. So I don't know from a percentage basis what you're investing in vis a vis plant based proteins or other consumer products or other beverages in terms of kind of new technologies. But I would think that contrary to, like, a technology company where you need a seed round to write code to get a software product going, In the plant based world, at least, I wouldn't think you'd be doing a lot of seed rounds or companies that were essentially getting ready to market because I would think there's a fair amount of r and d and money that needs to go in. So if I'm reading this right, I'm not seeing you being the initial investor so much in the plant based opportunities, although you look at them a little later.

But, so in the area of seed and or startup rounds that you're doing, what are some of the exciting opportunities you're seeing right now that maybe a little forward thinking, unusual that you could tell our audience about? Absolutely. So yeah. In the businesses that are positioned very much in the science based lab tech type categories, certainly within the protein sector. Really difficult to get comfortable that early for us.

But outside of that more broadly in plant based food and beverage, still seeing a lot of innovation and a lot of things that we like, whether it's in, you know, dairy category, for instance, whether it's oat milk, almond milk. Still seeing a lot of really exciting businesses come to market and innovate in the dairy category, whether it's, yogurt or other sub verticals. And I think that's really exciting. I mean, again, it's people wanna incorporate more vegetables and and more plants in their diet on a daily basis, and so they're looking to early stage and emerging companies to really fill that gap. And so I think those sort of businesses on a cedar series a, that's right right down the fairway for us.

You know, we would absolutely look at a business raising anywhere from a few million up to 5 to 10,000,000. But it's demonstrated proof of concept in the market and maybe we've done really well online and and selling through Amazon or other online retailers. And maybe it's executed on a regional basis in a grocery retail strategy, but really needs capital to really build out product portfolio and, fund distribution on a on a national basis or in a more traditional grocery retail expansion strategy. So I think there's some really interesting plant based food and beverage companies in the space. Another space I would point to, this one is a is a bit of a head scratcher because if you think about it, it's alternative alcohol.

So either low alcohol or alcohol that's been cleaned up with more organic ingredients. We're seeing especially millennials and Gen z's wanting to really even when they're particular in alcoholic beverages, in a manner where maybe they they don't have a hangover. They feel better about what they're putting in their body. Right? And they can trace through, and and there's transparency on ingredients and what they're putting in on this.

And then also along those same lines, seeing some really interesting things on, nootropics, adaptogens, CBD beverages, beverages that don't have alcohol in them, but still give you some sort of social buzz or effect that people, you know, are are moving away from alcohol or trying to put less alcohol in their diets. So it's really interesting things that still have that health and wellness theme, a clean movement within food food and beverage that we really like. The other category that I would highlight just because it seems to be almost all encompassing at this point is really the more social impact and sustainability theme businesses. And I like to think about that maybe a little bit deeper of a layer, rather than just having the culture or the mission of sustainability. I'd like to see some sort of innovation in in the product, the packaging, the supply chain, something that from a, you know, investor standpoint, you can point to and say this is, you know, a competitive advantage or differentiation beyond just having, obviously, you know, the social impact being in the mission, which we we obviously all carry very much about the environment and and making the world a better place.

Let's talk about that a little in terms of your mission statement and the values and so forth. It sounds like making the world a better place with the global warming issues we've got out there and the water issues we've got out there. What about cruelty to animals, the way that we've got chickens raised and cows and everything treated in this country? I know one of the challenges is economics. I know that we can talk about, for instance, the new laws in California about pork that are coming into play.

There's a lot of things, but these are gonna have major economic impacts. Help us understand where the puck's going. We wanna make the world a better place. We wanna have values where we take care of our planet. We want to make sure we treat animals better, but the economics have to be there.

So what is your firm doing to help essentially get those values in the forefront, but from an economic perspective making it work? Yeah. Exactly. It's really important and it's a great point. You know, the economics at at some point have to work, and I think we're all headed in that direction.

Right? From, you know, the FDA to to politics in the space for that have significant impact on the large strategics and are moving them on a certain time line, some faster than others, down that path of sustainability and really doing better for the environment. But at at some point, as you highlighted, economics have to make sense. And that that can be a real concern, a challenge for early stage businesses that have a thin margin profile already because they don't have the scale and economies of scale and the margin profile when they're buying ingredients that fundamentally just cost more on a dollar per pound basis can be really, really difficult and challenging. I think what we look for is entrepreneurs that have those game changing ideas and that innovation that are with the potential to disrupt an entire category, those are the businesses and entrepreneurs we wanna we wanna support.

They're the challenger brands. They're the ones that are challenging the status quo. And at the end of the day, typically, their product is a product the consumer is willing to pay a premium for. Right? So they can garner a premium from consumers.

That's also the the products and emissions and authenticity in terms of brand that consumers wanna support. And so that's what we look for is challengers and entrepreneurs that are challenging the status quo. They're doing what's right and not doing what's right simply because, you know, it it's easy or it's it's the path of least resistance, but quite the opposite. We want those that are that are really looking to disrupt categories and that are managing more than just the bottom line that have a much larger agenda to make a better impact on the world and society that we all live in. So do you see a change in entrepreneurs today and and who's seeking funds?

For instance, in the eighties when Reagan was around from a values perspective, people wanted to make money and you've got people that wanna go to Wall Street today and they wanna make their money and they wanna be involved in a tech company that's gonna go public and make a lot of money. But we are seeing some changes out there from a perspective of this generation of entrepreneurs coming up. Are you seeing them focusing on new technologies to make the world a better place? Absolutely. And I think there is a fundamental change in mindset over the generations.

I and I think, obviously, consumer purchasing behaviors moving towards towards younger generations. Right? So I think you are seeing consumers, start to care more and more about the environment, more and more about, as you said, how this chicken was raised and can you trace the sustainability or the the ingredient through the entire supply chain? And, you know, it's happened in beauty. It's happened in food and beverage.

And people are willing to, as I said, they have premium for those products. And really beyond that, they wanna join a community and they wanna align themselves with a business that has that fundamental belief. I think there are there is an economic sense to these entrepreneurs and and from a business and investment standpoint, it makes sense. But beyond that, they they really wanna invest their dollars and and really join the communities of these businesses that are that care much more about just the products and the dollars and cents because that will be there, you know, in in scale if you have the right product, the right innovation. You develop a loyal following of consumers to support the business.

So I think that's really what we look for is products, entrepreneurs, that have that innovation and have that mindset of, you know, obviously, we're gonna we're gonna put together a strategic growth plan that makes it that's economically viable. But at the same time, we don't wanna lose sight of what makes us unique and our authenticity and why consumers have chosen us versus much larger incumbents maybe that are priced at a fraction of where we're priced on shelf. When you look at different industries and their trajectories, we've got coffee where you start out with an inexpensive consumer coffee, then you've got the Starbucks and the pizza of the world, and and there's all these high end now coffees, for instance. We got two economies in America, though. We got, you know, the top 30% that are going out and driving this that are buying Impossible Burger even if it's $5 or however much it is a pound versus Chuck at Ralph's Supermarket.

It sounds like these companies are getting started. They are focusing on the higher end market. But as someone who's in marketing and consumer brands, as the products evolve, will this trickle down to the other 70% from a health perspective, from a wellness perspective, so that it's not just the wealthy driving Tesla, so to speak, but eventually, do you see the same kind of trajectory in terms of it starts out on the high end, but help us understand as an entrepreneur, does the price point eventually come down and and benefit the entire society? That's something we spend a lot of time thinking about. We wanna have a good understanding of how does this product portfolio evolve, what does the innovation pipeline look like, What are the new product introductions?

And what's the timing of those of those products hitting the market? And at the end of the day, is it a product and a platform that's gonna appeal to just a coastal community? Right? Is it in LA or in Nassau or New York specific product as you highlighted where it's just the people that are really hardcore about their diets, health and wellness, and fitness that are gonna care about it and really enjoy this product? Or is it a product in a much larger problem for the overall country and one that that is digestible and and adaptable to Middle America?

We spend a lot of time and we look for those businesses that have a potential, not just a singular product focus within a category, but have potential to build a platform, right, that aligns itself with, you know, either health and wellness theme or sustainability themes, you know, very, very large problems and trends that are multi decade trends that are here to stay. That's what we wanna see, ultimately, a business and a product that sells well, just as well as it does in Ohio as it does in California. So, Will, let me see if I understand this as well. If you're investing in these companies and you're trying to find, obviously, where they're gonna go in terms of scalability and so forth, Are there particular communities whether or not it's Los Angeles, you know, Southern California, the Bay Area, Chicago? Are there places you want to invest and you're trying to expand your base?

And are there areas where you won't invest? Fundamentally agnostic in terms of geography. That being said, we do see most of our opportunities, two core geographies, obviously, in UK and US. But if you drill down a bit further within The US specifically, we see most of the innovation, especially food and beverage, health and wellness coming out of LA. San Francisco, I would say, and New York are close as well.

Those are really the core geographies in Chicago. We put in the mix as well. But with the pandemic, actually, that's that's changed things to a certain extent. Certain extent. We've seen a mass exodus out of some of the major cities to Miami and and Austin and some of these other more secondary markets.

A lot of really exciting innovation coming out of those cities, and so we're fairly agnostic in terms of geography. We're looking to find great partners with innovative ideas. You know, we can support them on a global basis. So let's stay with Southern California for a second. If you were looking at the kinds of creative ideas that you've seen recently, whether or not they're gluten free pastas or new tea drinks or otherwise.

And you were also saying where you saw where people are focused on b to b or their enterprise software, whatever it is, animal protein stuff. If you're an entrepreneur that's just gotten your MBA and you wanna go out there and raise $5,000,000 and jump into the consumer product space just because you love it, are there certain areas or ideas that you feel comfortable sharing that might inspire some listeners? Yeah. Looking at doing your research and Hallmark on the trends that are driving beauty, personal care, fitness tech, those are really exciting categories where you're seeing a lot of innovation come to market, whether it's technology driven or driven by access to higher quality ingredients, more sustainable ingredients, or innovation in in terms of formulation. I think those are some really exciting categories that you could spend a fair amount of time in and think about where are the subverticals, where is the growth coming from, and really go to market and put together a go to market strategy that's really well positioned for a launch to market.

I think also you have the benefit now in today's market where it's never been more cost effective to launch a business. It's also never been more difficult to build a brand. But in terms of barriers to entry, they've never been lowered. Be able to put up a Shopify site, start selling direct your product, formulate your product as many do in food and beverage and beauty in in your own home or in your garage, and really, you know, try and figure out what's working well, what isn't, get real time feedback from your consumers, real time reviews, and do it in a cost effective manner. Right?

And so I think those testing grounds and and those battle grounds in the early days are very, very important to be able to gauge feedback, adjust what is working well, what isn't, really fine tune your strategy and and positioning, and then really more formally launch to market and raise a a seed or a pre seed or friends and family type round. That makes sense. I had an interesting opportunity recently in this scenario where I don't know a lot, but there's an excellent, what I would call, intuitive chef in the Southern California area that was taking vegetarian high protein sausages and making bolognese with tomatoes and other things. Basically, I was like, wow, where can I buy this? Now, I know, for instance, Impossible Burger or Beyond Meat could come up with a product like that, but is anybody getting the fact that the Italian food market is huge and whether or not it's a meatless lasagna or this bolognese?

I would think somebody could start a company taking tomato sauce and making a bolognese, for instance, and going to market with something like that. Are you seeing those kind of creative things being done? Yeah. Absolutely. And then that's one of the the things that gets me most excited is thinking about these very large sleepy categories that are dominated maybe by just a few players in the space, where really there's been a lack of innovation or a lack of anything really new or exciting coming to market.

Those are the areas I would, as an entrepreneur, look to attack. You know, these very, very large categories that are dominated by just a few players that have really failed to innovate other than just on flavor profile or maybe some extent line extensions. And so, yeah, fundamentally rethinking a product and reformulating it, but still delivering and not sacrificing on pace. I think that's really, really important. Right now, beauty personal care on efficacy of the product, it still has to perform, it has to deliver on pace.

But if you can do that and meet them at least on taste and have a healthier product formulation, then that's, I think, really where you see some of the winning and game changing ideas. Those businesses scale very quickly. When somebody is trying to bundle something, and let's stay with the Bolognese example where you've got a tomato sauce being combined with a meatless sausage, for instance, would you encourage entrepreneurs in that situation to joint venture with the Beyond Meats of the world? Or are they gonna take the idea and do it themselves? Do you need your own plant protein to do something like that?

In terms of where the puck is going, there are these protein based plant products that are out there that are really you see them on the news all the time. The sleepy entrepreneur coming along with this new bologna sauce is gonna get lost and the Beyond Meats of the world are gonna have much greater opportunity to go out and do that themselves. But these bigger companies, do they want a joint venture or partner? I mean, how would you approach it as an entrepreneur? I think a lot of the emerging brands and entrepreneurs that are coming to market are approached by very large strategics or other brands that have had success in the category that have reached some level of scale.

I would say, you know, considering brand partnerships or ways to collaborate is fine and that would encourage that. Would also encourage the the early movers and the the emerging companies coming to market to consider influencer strategy and working with celebrities as long as they're well aligned on the brand and really, you know, incentivized to really believe in in the mission and the product. Right? And it's not just a pure economic arrangement. Those are really impact can be really impactful and and important partnerships and can really help scale a business and generate tremendous excitement and a buzz for a business in terms of scale could still be, you know, sub 10,000,000, net sales.

And so we'd absolutely say you should explore those sort of arrangements in terms of, like, a pure economic or licensing. I would say I would be very, very hesitant to explore that. I think what the large strategics are looking for is really these up and coming brands and businesses, and they're watching very closely their category, protecting the category. And so I would be hesitant to partner with a with a large strategic early on unless there's some fundamentally some sort of value add beyond just, you know, an investment or some sort of a licensing arrangement type of deal. That's very helpful.

When you look at what your firm does and you look at your way of differentiating because you have this expertise, do you see that as a trend? Because there is a lot of money out there, and I always argue, you know, potentially, at least in this market, there's too much money chasing too few deals, and I think differentiating yourself is important. Do you see that happening more in terms of a trend right now? Is it in consumer and so forth? Or do you also see it, for instance, going into the technology space?

Yeah. It's absolutely a trend, and I I think it's here to stay. And I think the reason you're seeing it more and more often is is what you highlighted in terms of there's so much capital on the sidelines. There's so many funds. You know, it seems like every other day, there's another fund that pops up in terms of venture capital private equity funds.

And so setting yourself apart is paramount. Bringing more to the table for entrepreneurs at the end of the day is is what it should be about because it's fine to write a check and, you know, can provide access to your network. But beyond that, I think they need support, whether it's on marketing, whether it's on supply chain, whether it's on basics of finance and accounting. These are very lean teams and organizations, and they're stretched very thin. So it's nice to be able to bring something to the table that's gonna move the needle even more than a cash investment.

To be able to have the the resources and expertise, insights, and improvement playbook. We've been here before. We build brands that are here to stay across generations. I think that's the way we look to partner, and I I think that's what we offer that sets us apart versus other investors is really that fundamental partnership mentality thinking strategically on how can we grow the business, what's gonna be best for the business, and help get them to the next stage of growth, putting together a strategic playbook, and then bringing the right partners and the right assets to the table to help support the business. One of the things that I'm wondering is you see incubators and you see accelerators and you see a lot of these communities forming all over the country, the Techstars, the other ones, and they don't have your unique ability with these marketing assets.

Do you partner with those types of firms? Because it seems to me there'd be a lot of synergy for you. No. Absolutely. I mean, I think that's fundamentally another unique part about our business model is that we're coming in as a strategic co investor.

We enjoy collaborating. We play really well with others. And so quite honestly, we're trying to put together the dream team for the entrepreneur. And on a daily basis, making introductions or suggestions to entrepreneurs depending on where they're positioned in the category and the stage of investment on lead investors that they may wanna consider or talk to. And so I think that's really important is is having the entrepreneur put together the best possible team from an investment advisory perspective for the stage that they're currently at.

Obviously, they grow across stages and most of the funds don't invest across stages, although that's changing as well with more funds allocating more resources to follow on capital and and looking to do more co investments outside of their standard fund investment stage. But, yeah, that that's really important. I think a fundamentally different model for us is really playing well with others, inviting others into the financing that are gonna be strategic and helpful in different ways, really putting together the best group, the most diverse group of investors possible. It's interesting because some of you know each other, some of you don't. But one of the things about this more competitive landscape is is there a community?

We have LinkedIn, we have Facebook, and others. But is there a community for technologists and investors and strategic investors and these incubators and otherwise to come together sometimes to get to know each other better, to have breakout sessions or otherwise in a virtual environment? Yeah. I think the more we can bring investors and entrepreneurs and advisors together and really foster that sense of community, the better. Really, as you said, it's a sharing of ideas.

It's just sharing of knowledge and background and skill sets and and really thinking creatively on where it may be the game changing ideas and where's the path headed next in terms of the innovation within specific categories. And so I think having that openness and ability to share knowledge and share experiences is really impactful. In the corporate world, for instance, there's the business round table, and they're coming up with new pronouncements. Well, in the technology space, with the movement going forward in this issue of social responsibility and also bringing more people into the community because we know who dominates the VC world. And there is a desire to change it, but there also has to be the execution of that.

Are there things that you practically are doing to actually promote that? Yeah. I I think it starts with, as you said, the execution. Right? And if you look at track record, teams, and how they go about and execute a business and and sectors that they care about, I think that's probably one of the best ways to do it is just to go out and prove it with your actions.

That's what we love to do. Of course, we'd like to surround ourselves with a diverse group of other investors and operating advisers, and I think we've we've done a a good job and are really fortunate to have really deep bench of some amazing people and industry veterans in their space that have achieved so much. And and really, it's it's an amazing resource to be able to bring those people to the table that really help early stage entrepreneurs that have been in their shoes before that know what really moves the needle and where to adjust strategy. I would say, yeah, just starting with being fundamentally aware that there is a bias and that statistically, it's underrepresented. There's not enough capital devoted to these businesses and entrepreneurs and then to really going out and with your actions kinda proving and and doing your best and doing your part to change that is probably the most important thing.

So in the plant based protein space, I recently heard that one of the things that they've done to, for instance, make it taste more like meat actually has to do with inserting the actual enzymes that they've isolated from meat, and that they then take those enzymes and insert it into the plant based material. You were talking about, I believe, the genetically engineered meat where it actually grows and is meat. For somebody that's a novice like me that is trying to understand where the puck is going and the genetically engineered meat versus this generation, and if you can paint a picture how this works together in the same way you had hybrids and then full electric, Is the plant based protein the first generation, and is it gonna be supplanted by this genetically engineered because it's gonna just be better in all respects? Do you have any insights in terms of where the technology is going? I wish I had a a crystal ball.

It certainly seems like it's headed to that direction. The whole mentality of first wave, first mover, second wave, third wave, it certainly feels like, you know, you have the conventional meat and traditional meat products. Now you've got plant based protein. Now you've got cell based or culture protein type products coming to market. So it seems like it's headed that way.

I would say we're still in the early innings that if you look at the overall alternative protein and plant based protein, alternative proteins with overall market, which is a huge, huge number of 150,000,000,000 or so. But, yeah, it seems like the natural evolution is the first half plant based just in terms of ingredient formulations. But thinking through that even further and taking it a step further is if you could genetically engineer that in a lab, fundamentally take the, you know, even the plant based products and ingredients out of the equation in terms of sourcing those and growing those. That seems to be the the cleanest form. I'm not sure from a practical execution standpoint, how long it's gonna take us to get there, but I think it seems like we're headed in that direction.

I know about Beyond Meat and Impossible Burger, for instance, and there's other people that have had their alternative burgers for years and years. In terms of the genetically engineered that's grown in the lab, are there any in the market right now? Or if not, how close are we to seeing those in the market? There are quite a few in the market in terms of, you know, the cell based and science, you know, food tech, if you will, type businesses. Many of them are at the very early stage of raising capital to continue r and d and continue to diligence the science and and really make sure that that they can execute this.

But there's some really innovative ideas and really some innovative tact within those spaces, even more broadly than just beef and chicken going into seafood. And do we know if we're a year away, two years away? And I'm not gonna hold you this as a profit, but any guesstimate in terms of when we might start seeing these products? I would expect to see it happen over the next five years or so. Again, that's pulling a number out of a hat.

But just looking at how quickly Impossible Burger and Beyond Meat came to market with that, which at the time, Impossible launched, as you said, you know, putting something that, in the product that bleeds like blood and tastes like blood and even has a sizzle of blood. They said it wasn't possible. Right? But seeing that was just a few years ago when they came to market. And so seeing how quickly that's evolved and even expansion beyond grocery retail and the food service on the restaurant chains, how quickly they pick that up, it's really a testament to the consumer demand for those plant based products.

And I think you'll see that happen too on the science. I think it's gonna take a bit longer for the r and d and tech to have an economically viable product to be able to bring it to market, but certainly headed in that direction. And it's really exciting to see the innovation in the tech. Exciting to see those businesses out looking to bring more partners that could be helpful in different ways as well. You mentioned CBD.

Any thought about getting into THC products at all? Yeah. We've been spending some time in in that space because we're seeing a lot of CBD products come to market, particularly within food and beverage and beauty personal care. We think it's really interesting. I think at the outset, you know, had concerns over the regulation where that falls out.

But at this point, we're seeing too much demand from consumers for the product. And so I think the regulation is is headed in that way that it's gonna make it viable for a lot of these products to come to market in a much much bigger way. I think it's really interesting. I would give caution to some of the entrepreneurs and businesses if you're looking to launch an entire business built around CBD because at the end of the day, at least for me as an investor and consumer, it's it's really an ingredient, right, that we're using. So have a business that's well positioned in terms of the product and the category and build a platform and have CBD being a part of it or maybe even a hero ingredient you're highlighting, but really build a business.

Too many businesses are being built in that CBD and hemp and THC category where it's really just based on the CBD and THC and hemp and not not on product or the innovation. With the federal regulations out there still being against THC, not CBD, if an entrepreneur came to you in California and said we wanna do a THC consumer product, is that something you would stay away from at this point? I think certainly over the regulation, we like to see businesses that can scale that don't have barriers in terms of regulation risk and or legal risk on the litigation. And so that's certainly a big concern for us. We wanna see businesses that we can grow with them.

You know, that may add too much risk to the equation. That being said, on the supply side, there are certain businesses or ancillary businesses that are supporting those sectors that aren't regulated that could be interesting for investment. You know, you know the markets and this is your expertise, but we've seen a lot of people from a legal perspective and also in the restructuring perspective because there's been no barriers to entry, so there's people going up and then they come down. It's an area talked about a lot, but when you look at where California goes, the rest of the country goes, I would think if you could build a brand in California, for instance, and then with the idea of when the federal regulations open up a little, you could scale it. There could be some opportunity for some entrepreneurs to experiment and build a mark if they had the right marketing partner.

Right? They would do a California only strategy with the ability to roll it out. And see, that's where I think from where the puck is going, you are really doing some really innovative things where you could really be part of that expansion. No. Absolutely.

I mean, high risk, high reward, the earlier you go and if you're on the forefront of regulation or innovation and can really demonstrate proof of concept even if on a regional basis or on a certain state, it could be really, really exciting, really interesting. So we're certainly looking for those entrepreneurs that are looking to challenge the status quo and and really are far ahead of the overall industry in terms of their innovation or moving to where the puck is headed as you said. And then with CBD or any of these other consumer products, would you get involved, for instance, with hardware companies that were partnering or that were being used? Like, so for instance, there's a CBD product that is vaped or a CBD product that is carried around in some kind of dispenser or something. Would you back those kind of product companies?

You know, for us as a marketing partner, we off, you know, have to be thinking about how can we provide support and how can we market the product. Even at that, in certain verticals, they, you know, you can get into situations where it's there's only certain ways you can market the product or market to to a certain consumer base. So I have to be very careful and cognizant about that. But yeah. Absolutely.

I mean, in terms of, you know, our verticals of focus within consumer and media platforms, we will look and we have flexibility looking across verticals. For us, beyond just how they're positioned in terms of the industry vertical, what's even, in some cases, more important is partnership mentality. How can we partner and where can we provide support that's really gonna drive the business forward and propel them to the next stage of growth. So that's what we look for. We obviously wanna invest in businesses that are well positioned in categories that we believe in that are high growth categories.

But beyond that, we wanna find, you know, fundamentally, we wanna look for the intangibles in in terms of, you know, the entrepreneur, the product, the economics of the business in terms of the unit economics, and to make sure that they have that loyal consumer base demonstrated even just on a regional basis. So we've also heard in the consumer product space that, for instance, women play a unique role in how certain types of products get marketed historically and otherwise. Any thoughts there, changes, or things you're doing? Yeah. It can't be underestimated.

It's hugely significant and dramatic, the purchasing power that women have in in categories. Many times, from a marketing standpoint, that's who we should be marketing to in food and beverage and and beauty. Even we're seeing more and more businesses within, baby and toddler. That's actually one of the areas of really, really interesting innovation. We're seeing, companies come to market putting our better quality refrigerated or HPP, type products that, really offer the best nutrition for for your baby and for your kids.

And so that's one of the areas, obviously, that the families aren't gonna sacrifice on and they're gonna pay a little bit more on a on a premium, but you want the best possible thing for your family. And so I think it's it's really interesting seeing that fundamental shift in terms of businesses that are coming to market that are marketing towards families or marketing towards moms and really, you know, offering a a compelling solution for families and for females in the market. It's also really exciting to see more and more female founders from the market with really incredible ideas and, really have tremendous success. Well, listen. Thank you very, very much.

I really, really enjoyed this, and we look forward to getting to know you and your firm better. And we just love the thoughts and, ideas you shared with us today. So thank you so, so much. Absolutely. Yeah.

Thank you so much. It's been a really amazing conversation.