Investors Circle NY Affiliated
Since Fall 2016, Foodshed Investors NY has been collaborating on deal diligence with Investors Circle NY, forming the new IC Food & Farm Committee. To understand the investment criteria and application process for ICNY, please visit this page: http://www.investorscircle.net/our-funding-process .
In addition, Foodshed Investors NY (and IC Food & Farm Committee) are guided by the following additional criteria when evaluating deals for promotion, review and investment:
Inspired by Slow Money Principles, Foodshed Investors NY aligns ethical values and financial considerations when investing in small food enterprises — an approach that is substantially different than other angel investors (and most other impact investors) in some very significant ways.
Please carefully review our Investment Criteria to gauge whether your business should apply to make a presentation at a monthly public meeting of Slow Money NYC — the first step towards being considered for funding by Foodshed Investors.
Key Values: Sustainable, Local and Small
(1) Sustainable – We screen enterprises based on environmental, social and economic impacts on the local food shed, relying on guidelines set out in our Entrepreneur Self-Assessment. Also, we strongly favor enterprises that complete the free B Corporation Impact Assessment and share the results with us.
(2) Local – The definition of “local” is evolving along a continuum in which the more “local” enterprises are favored for funding. Definitely Local = Grown or caught within 250 miles of NYC and marketed in NYC. Possibly Local = Made in NYC foodshed using mostly local ingredients. Arguably Local = Owner lives or operates in NYC foodshed. Mileage radius is not strictly applied, yet investors want to visit and to patronize the enterprise.
(3) Small – Small is beautiful. Like the government, our definition of “small” varies by industry but generally applies to an enterprise with the following traits: (i) revenues of less than $10 million, (ii) fewer than 100 employees, (iii) independently owned and operated and (iv) not dominant in its field.
Nurture Capital: Relationship-Driven
Investors seek close, personal connection to entrepreneurs and the food that they produce. We are eaters first, investors second. Beneficial relationships between investor and entrepreneur might include: mentor, advisor, consultant, board member, or corporate officer.
Key Financial Considerations
- Early Stage Companies, Some Revenue – Despite this strong stated preference for early stage companies, we may also review pre-revenue Start Ups and expanding Mature Companies.
- For-Profit – Enterprises must demonstrate a strong likelihood of imminent profitability.
- Form of Capital – Equity is strongly preferred — yet debt, particularly if convertible to equity, would also be considered. Non-traditional forms of capital, such Royalty Financing, may be proposed as well.
- Amount of Capital – On average, Foodshed Investors would be able to contribute roughly $50,000-1,000,000 towards each enterprise. We may participate in capital raises in excess of its own contribution when collaborating with other funders.
- Return on Investment – We seek a market rate of return (ROR) on investments. However, investors may accept less-than-market returns when anticipated social and environmental returns are robust.
- Exit Strategy – Our investors are generally not looking for a short-term exit, buy-out or corporate acquisition. As “slow money” implies, investors are willing to be more patient to await the ripening of profitability and a possible exit event alongside social and environmental returns. Investors understand that some food enterprises, such as farms, are special cases — not appropriate for an exit strategy that might be applicable to a scalable enterprises, such as consumer packaged goods. In such cases, investors would consider dividends to be a strong incentive when there is no clear prospect of an exit event.
- Needs Slow Money Investors – We aren’t greedy and we don’t need to invest in every deal. If a business does not need the special attention of investors inspired by Slow Money, then we encourage that business to seek financing from other, more traditional sources. Similarly, if the business has robust impact but little hope for profitability, then we prefer that such an enterprise apply for a grant from a charitable foundation.