Raleigh-based Lookout Capital just bet $8 million of its investors’ money on Wright Foods and NCSU-developed technology to deliver produce that stays fresh longer. So what factors made Lookout and the fund’s backers to place the bet?
After all, the deal is the firm’s biggest to date.
In an exclusive Q&A, Lookout founder Merrette Moore offers details. he also has advice for entrepreneurs seek to raise money.
- What was the most significant reason for making such a large investment?
The most significant reason to make such a large investment has two parts:
(1) There was considerable interest among our investor base and network in this deal, and (
2) The company was willing to take that amount of investment from us. Aseptia’s technology and process are a game changer in the food processing and packaging space.
We worked hard to sell the deal to our investors and network, but the upside of this company made our job easier than it otherwise would be.
- Based on how your fund operates, I assume you approached participants in the fund who agreed that this was a good deal and wanted in. If so, what did they tell you they liked about the deal?
Given our investment model of taking every deal to every investor, we had to sell Aseptia as an individual investment. There are lots of reasons our investors liked the deal, but it all comes back to the game changing nature of what the company has. This is a company with a protected technology and process that is head and shoulders better than anything else on the market. And speaking of the market, it is huge.
- Products, customers, technology, management team, market opportunity – Please speak to each point (and others if you want to include) that led you to make the investment decision.
Products: As I mentioned earlier, the company’s core technology and process is head and shoulders better than what else is available. It allows a wide range of packaged foods– smoothies, salsa, purees, sauces, soups, etc.– to be processed while retaining nearly all of its taste and nutrients. It also enables these products to be stored at room temperature for weeks and even months.
Customers: The company already has developed a roster of blue chip customers– major players in the food industry. It continues to attract the interest of other major players as well. The fact this is being done with a limited sales force in place is pretty impressive.
Technology: The technology is truly world class. It is protected through an impressive IP portfolio of patents and trade secrets. At the end of the day, the core technology is what gives the company much of its value.
Management Team: The company has the foundation of a very good management team. While needing to be filled out, the core team is capable. Of equal importance, it is open to collaboration and input from us and others.
Market Opportunity: The overall market opportunity for the company is large– into the tens of billions. Pretty much any processed food product that has historically been on a shelf or a fridge box is fair game. If the company can sell and execute, the sky is the limit.
- What can other entrepreneurs learn from Wright Foods’ development as a company to court and land its own investors?
Some quick takeaways:
- Create, develop or build something truly special and world class. Me too ventures are nothing special and not interesting. That means you in particular, social media
- Worry about building a special company and things like valuation will take care of themselves.
- Look at investors as value add collaborators and not as necessary evils. An investor should be able to able in ways other than putting in money.
Lots of advice packed in three thoughts. Listening, entrepreneurs?
