- General Mills' venture capital arm 301 Inc. recently landed startup investments like Rhythm Superfoods and Good Culture in addition to scouting new opportunities at Natural Products Expo West.
- VC firms like 301 Inc. tend to look for startups that excel in areas like proof of concept in the marketplace and category management opportunities at retail, John Haugen, founder and general manager of 301 Inc. and vice president at General Mills, told Food Business News.
- Executives for Rhythm Superfoods commend 301 Inc. for its technical expertise and assistance, including optimization of packaging materials for profitability and scale and synergetic relationships, such as introducing the startup to people along General Mills brands' supply chains.
Venture capital is one way to invest in the future of the company and the startups driving the evolution of the food industry. Plus, VC investments are easier logistically than to start a new brand from scratch.
Analyzing 301 Inc. and any other food and beverage VC firm's investments illuminates the types of characteristics that make a good startup. Each company is different, and each relationship will present opportunities for learning, but Haugen listed a few qualities that could be generalized among successful startups.
For example, with Good Culture, Haugen called cottage cheese a nascent category but one that is on-trend with clean label protein snacks. Cottage cheese can be a scalable ingredient for other types of protein-rich snacks as the brand continues to grow. Rhythm Superfoods creates plant-based nutrient-dense snacks using proprietary production techniques. Rhythm's products, production methods, and ideas are translatable to span multiple categories and segments, which means the brand can be scalable and attractive to an investor.
If startups and smaller companies are seeking capital, they should look for the unique opportunities that any business might offer them in addition to financial resources. But more important to have is a frame of mind that considers the big picture and the next steps for production scaling and profitability. Haugen said that what catapulted entrepreneurs to initial successes may not be the same keys for those entrepreneurs' success at the next level up.