Private Equity Investors in Consumer Produc
As a race, we don’t invest in CPG companies because they need more capital than Early Stage investors have to invest. Getting national grocery/retail distribution is expensive, as is the ongoing ad budget required to keep product moving off the shelf. However, given our experience in the CPG industry, we are often asked how to raise $3-10MM from Private Equity funds for consumer products.
This is a difficult question because relatively few private equity funds are focused on consumer products. Even fewer of them invest smaller amounts of capital – $2-5MM. Most of the time, PE funds look to write equity checks of at least $10MM. The old adage “it’s easier to do a big deal than a small one” turns out to be broadly true from the investors perspective.
Still, many firms will be happy to hear from you, even though you need “too little money” at the moment. Try to meet them when you’re not pressured to quickly raise more capital. Tell them straight out: you don’t need money, but you would be pleased to hear their thoughts on how you should proceed. Here are some places to start.
In addition, there are several family offices that look to invest in consumer products. These include:
Alliance Consumer Growth
New York based fund. An outgrowth from Family Office that invests in high growth consumer brands in consumer products, apparel & leisure, restaurants, specialty retail and education.
Life-sciences, nutrition and wellness focused venture capital fund with Nestle as major LP.
Simon Equity Partners
San Francisco based Family Office with diversified interests including consumer products.
Belgian family office which represents the controlling shareholders of Anheuser-Busch InBev.
Finally, we are Limited Partners in one PE fund which truly looks to place growth equity investments in Consumer businesses. 2x Consumer Products Growth Partners in Chicago, www.2xPartners.com, has invested in Beanitos (healthy snacks), Good Karma (non-diary beverages), MegaFood/INNATE Response (food supplements), The Seaweed Bath Co. (natural personal care) and Tasty Bite (Indian and pan-Asian foods).