In the last 6 months, I have been part of FoodBytes, a competition hosted by Rabobank, that brings the best and the brightest ideas in food+tech, ag+tech to the stage. In these competitions, the entrepreneurs not only pitch their business ideas, but they also are judged by a panel of judges and coached by a team of mentors. It’s an inspiring program that tackles some of the food system’s biggest issues.
One of the mentors, Chuck Cotter, an attorney with Holland and Hart, posted some great information for startups in the food and agriculture sectors. It’s valuable information for anyone starting out in this sector, and we hope you will both read and share it.
Startups in the food & ag industry face a host of unique challenges, including legal risks and compliance issues. We’re thrilled to have the legal experts at Holland & Hart on board as Official Sponsors of FoodBytes! Boulder, bringing years of experience in dealing with these kinds of challenges.
During FoodBytes! Boulder, our 20 pitch companies will meet with Chuck Cotter, Partner at Holland & Hart and head of the firm’s Food & Beverage practice, along with experts in the branding and finance sectors for a mentor session. Chuck will talk through potential legal issues the companies may face at some stage of their startup journey and give them recommendations on how to best handle them.
Holland & Hart will give the three winners of FoodBytes! Boulder a legal consultation to address the specific issues the startups are facing and give them guidance on how to navigate.
To give us a teaser of his wisdom (and sense of humor), we asked Chuck to share his top 9 tips for food & ag startups. Check them out below!
To meet Chuck and the rest of the Holland & Hart and FoodBytes! crew, join us in Boulder on Wednesday, October 26! Grab your ticket today.
1. Know Your Brand is Your Value
If you’re just getting started, make sure your company name is unique – meaning both protectable and enforceable. When you’re ready to start designing and printing packaging, for the love of Odin’s beard, do a trademark search before you begin. File your marks after they’ve been finalized and work with someone who knows how to maximize the value.
2. Avoid Friends and Family Rounds
Do NOT do it. Unless they are accredited investors or your last name is Musk.
3. Don’t be afraid to say “No.”
If you’ve got a great idea, a lot of people are going to want a piece of it. For a piece of your company, your cousin the Sanskrit professor thinks she can manage your production runs. Your uncle, the bank teller, thinks he can find you investors if you just cut him an ownership stake. Just say no.
4. Don’t Be Afraid to Say “Yes.”
This is a supportive community filled with lots of folks who will be willing to help you. Just make sure they know what they’re doing first.
5. Don’t Pay a “Finder” to Help You Raise Money
Just don’t – it’s stupid. When you’re big enough to get a legitimate investment bank to help you, then you can consider it.
6. Ask for references
Vet the people you’re going to work with, whether it’s your business partner, investor, co-packer, broker, consultant or anyone else involved. Do your due diligence!
7. Keep Things Secret (But Don’t Make it Weird)
You’ve got a great idea, probably the best ever in the history of the universe. I totally get it. Make sure you are protected by a non-disclosure agreement where and when it makes sense. Make sure your agreements with food scientists grant the resulting recipes to you. Make sure your co-packing agreement protects your recipes and formulations. But don’t be the nut job asking for an NDA at the bar at every startup competition.
8. Be Kind and Decent, Always
No matter where you are in the growth cycle, be kind and decent to everyone. First, it’s the right thing to do. It’s a collaborative industry and that makes it fun. Second, appearances can be deceiving. The person you’re blowing off now may be the serial entrepreneur who nixes an investment in your company a year from now.
9. Don’t Sell Equity Early
That is, unless you have no other option or unless the valuation is great. Or, you know, they swear they love you for your mind. Convertible notes and other debt options can be a founder’s friend.
Want more tips? Join Chuck, Holland & Hart and the rest of the FoodBytes! team in Boulder! Tickets are moving fast, so snag yours today!