Many know Innocent, the smoothie maker. Fewer people know JamJar Investments, the investment company set up by the three founders of the smoothie company after they sold out to Coca Cola for something in the region of $250m. JamJar makes investments into early-stage ventures aimed at the consumer market.
I listened to a dinner talk by Kirsty MacDonald, one of their investment committee members. There were some interesting insights into how they judge whether a young company is worthwhile investing into.
- Back in the late 1990s, the Innocent founders were turned down by EVERY single venture capital firm they approached. There was already another famous smoothie company and no one thought they could do it. As a last and final act of desperation, they emailed all their friends saying “Do you know any rich people?”. This lead to a £250k investment, which was also the only external investment they ever needed. Never give up! As an aside, the two guys who made the £250k sold out a decade later for an eye-watering £65m, i.e. 260 times their investment.
- They are happy to look at any and all pitch decks, but don’t ever make them longer than 15 pages for the initial contact.
- What they really want to know about ahead of investing can be summed up as “Product, People, and Potential”.
- Regarding product, they love seeing repeat clients and client retention.
- Regarding people, they want to see an all-star team, not a single founder who tries to do it all alone. They want to see a team where people support each other and act as a team.
- Regarding potential, it simply has to be a big market, a big problem, and a big solution. It should also be a market that is growing.
- They love brands. Also, they are not afraid to tell companies that they need to change their name. Changing a company’s name should be seen as a potential positive step, not something to be afraid of.
- The pitch deck doesn’t need to include the proposed deal or deal structure. Fine if it does, but not required.
- If you cannot say in 2 sentences what your company does, then forget about it.
- Don’t get disheartened when people turn you down. It’s only their opinion and they can be wrong to turn you down. JamJar turned down early-stage funding for “HelloFresh!” and countless others that rose to become superb success stories.
- Your business plan should always be focussed on going deep into a market / country, before expanding into other countries. Go deep first, then go wide.
- As an entrepreneur, always take references on potential investors. You want to make sure you are not getting funding from the wrong kind of investor.
What they really want to know about ahead of investing can be summed up as “Product, People, and Potential”
This dinner was a semi-public affair and the dinner presenter did not object to me sharing notes with my readers.