[00:00:03] Ray Latif: Hey, thanks for listening to the BevNET podcast. I'm Ray Latif, I'm here with John Craven, and we're at the offices of Circle Up in San Francisco. We're joined by Ben Lee, who's the managing director of Circle Up Funds. Ben, thanks so much for having us. Thanks for having me. Yeah, so Circle Up is an investment platform that connects entrepreneurs with investors. But there's a little more to it than that. Ben, can you elaborate?
[00:00:27] Ben Lee: That's right. So at the core, Circle Up is, as you said, an online marketplace for investing. into innovative early-stage consumer brands. And so, food and beverage happens to be a large segment of the types of companies that we work with. At its core, what we're doing is finding great early-stage consumer products companies and connecting them with a network of large institutional investors and high-net-worth individuals who are looking to make significant investments into growing stage companies. Outside of that, we do manage a couple of other vehicles that are actually investing directly into these companies. So that's some of the more of what we're doing outside of just being the marketplace itself, is that we are providing capital to the companies in the Circle Up network as well.
[00:01:12] John Craven: And that's your particular role here now, right?
[00:01:14] Ben Lee: That's kind of my focus these days is I'm spending my time helping to invest in the companies and support those entrepreneurs that we back.
[00:01:22] Ray Latif: That's a fun job.
[00:01:23] Ben Lee: It is. Yes. It's exciting to be involved with the next generation of great up and coming brands.
[00:01:28] Ray Latif: Yeah. Now, Ben, you've been to a few BevNET Live events. You've spoken at the events and Circle Up's kind of gone through a little bit of an evolution since you were on stage. Initially, it started out as sort of an equity crowdfunding platform. Why has there been an evolution? Why kind of move in the direction that you're moving into now?
[00:01:45] Ben Lee: a little bit of a response to what we've seen in the marketplace. When we launched back in 2012, I joined right after launch, it was still very new to the whole ecosystem. This idea of going out on the internet, raising money from a broad base of investors that you may not know personally, was kind of a new concept. What we saw was, the typical company that we were working with was a little bit earlier stage, maybe $2 to $3 million in revenue, raising a smaller round, maybe half a million to a million dollars. And we saw that the types of investors that were investing were typically investing smaller amounts into these businesses. As the The platform and the concept of raising capital through a marketplace like Circle Up has caught on over the years as we've seen many companies go through the process and be successful. We've been fortunate enough to have over 200 companies be funded through Circle Up, raising over a total of $300 million. We've seen more and more acceptance from more traditional investors, family offices, small private equity funds. And we've seen on the entrepreneur side, companies that are a little bit further along that are raising larger rounds of capital. And so as a result, we've seen just a shift in terms of the type of investor and entrepreneur that's really engaging with the marketplace from where we were on day one.
[00:03:00] John Craven: And I guess as you guys have evolved, it seems like the marketplace and sort of its purpose and value to circle up the company probably has changed as well now, I guess, just in the sense that it's, you know, you sort of have this public facing piece to what you guys are doing, unlike, say, a traditional investment banker, who's actively raising money, right? I mean, that still exists.
[00:03:20] Ben Lee: The marketplace is still core to everything that we do in the sense of, As you said, it kind of gives us great visibility into just what activity is going on in the market, what trends that we're seeing in terms of both what entrepreneurs are building as well as what investors are expressing interest in with their wallets. So I think it gives us a great viewpoint into the different dynamics of the early stage consumer ecosystem.
[00:03:45] Ray Latif: You know, I wanted to back up for a second and kind of talk about your background. I mean, how did you come to CircleUp? I mean, and, you know, what's your history, what's your education and, you know, how'd you get involved with this? It's still a relatively a startup, isn't it?
[00:03:56] Ben Lee: You know, it's still kind of a startup atmosphere here. It was early on compared to a lot of traditional players in the market.
[00:04:00] Ray Latif: For sure, yeah.
[00:04:01] Ben Lee: So my background has been, my career has been in the consumer investing world. So I spent several years in investment banking and at a private equity firm where I was investing into early stage consumer products businesses. Ryan Kohlbeck, our founder, was formerly at Encore Consumer Capital, right, a founding circle up. And it's seen the same exact issues that I was seeing at my old firm, where we needed to invest 15, $20 million into a company. And that typically required that a business be 10 or $20 million in revenue at the low end. and came across lots of great entrepreneurs that we didn't know how to support them or where to send them that wanted to raise smaller amounts of capital and were earlier on in their life cycle. And so seeing that gap in the marketplace I'd gone up to business school and was looking to stay involved within consumer investing, but had this itch to really solve that problem as well. And so when I came across Circle Up, it was just a perfect alignment in terms of solving a real world issue that I'd experienced myself and saw an opportunity to fill that gap with this more efficient marketplace that was really leveraging the technology that's available today.
[00:05:09] John Craven: Well, and I guess as far as that sort of problem of traditional investors being, I don't know, looking to deploy $15 to $20 million, I mean, there's kind of another side to that, though, right? I mean, investing in the early stage is probably riskier. These companies are going to need a lot more money. How do you guys sort of approach that in terms of just, you know, these companies that you're dealing with, they probably are on less solid footing, I would assume, and so on?
[00:05:39] Ben Lee: Early stage investing is inherently very risky, much riskier than a company that has $20 million and 10 years of track record of having built that business. When you're investing in a two-year-old beverage business that has a million dollars in revenue, it's inherently just much riskier. And I think that's one of the big reasons why we as a platform are big proponents of diversification. All the financial research out there will tell you how important diversification is into any portfolio, but in particular, in early stages, you want to make sure that you've got broad exposure across a lot of opportunities so that when a couple inevitably will go to zero, that you still have an opportunity to make great returns across the asset class. The research has shown that early stage consumer investing actually has amazing returns. The Kauffman Foundation has done research that says you can return approximately three and a half times your money in four and a half years, which is very favorable when you compare it to a lot of the traditional industries that you think about, like biotech and healthcare and software and all these other categories. It's just a matter of making sure that you've got the right diversification. It's one of the reasons why When we launched, we were purely a marketplace. And as we saw the opportunity to provide easier access to diversified portfolios, is one of the reasons we launched the Marketplace Index Fund, or what we call our Mix Fund, about a year ago now. We launched that because it gave individuals an ability to write a single investment into a fund that was going to give them exposure to 30 to 40 companies, rather than having to make 30 to 40 separate investments. You said three and a half times in four and a half years. Once again, what does that specifically relate to? It's the returns in early stage consumer investing. Some research that the Kauffman Foundation had done on angel investing.
[00:07:20] Ray Latif: Versus tech or any other industry. That's right.
[00:07:23] Ben Lee: Okay, interesting.
[00:07:24] John Craven: With equivalent proper diversification, whatever that means in the given industry.
[00:07:28] Ben Lee: So that's the returns for the asset class overall, right? So that's not for a single company or two companies. So that's why when we think about the early stages, yes, any single deal is inherently very risky. But when you can build in diversification, it just tremendously increases your chances of making a return within that asset class.
[00:07:45] John Craven: And I guess just one more question on sort of the problem that you were talking about before. I mean, I assume the problem of having to make bigger investments is that you're probably missing out on good opportunities because you're simply too late or what is the actual problem with that?
[00:08:01] Ben Lee: The biggest problem is that there are great opportunities to get involved in a company early on when they may only be doing four or $5 million in revenue. And then they will eventually grow into a larger company that may not need your capital later on, or it may become much more competitive to acquire that business later on and make an investment into that business later on. And as a result, you might have to pay a higher price to get into that business. And so as you look at the level of competition at the earlier stages, there have been several investment firms that have popped up to invest in the earlier stages, but it is still just a fraction relative to middle market and larger consumer private equity, and a fraction compared to the amount of capital that's going after other industries like tech or healthcare.
[00:08:50] Ray Latif: Yeah, I just want to note that you can tell that John just had a cup of coffee because he's on the edge of his seat.
[00:08:57] John Craven: It's been a long day, man.
[00:08:58] Ray Latif: We actually got off a plane, I don't know, when was that? I don't know, Ray makes us take these crazy early flights. It's terrible. But a lot of times, or maybe it's just Ben. Ben is a great interviewer, interviewee.
[00:09:10] John Craven: I feel like the, and if I didn't feel this way, we probably wouldn't have asked you to do this, but I feel like all of this insight into the investment end is always great stuff. It's stuff that every entrepreneur needs to understand. And, you know, we're talking a lot about the perspective of the person on the investment end, which I think is something that it always strikes me that the small entrepreneurs, when they're like trying to figure this stuff out, a lot of times, like, I think don't really have a grasp of what like the investor wants. They're just thinking from their perspective, you know, they have a great idea. And, you know, it's sort of the better mousetrap that they built.
[00:09:48] Ben Lee: Right. And it's so important because you've seen how much investment activity there is going on in the, especially in the beverage category and all the large players are acquiring a lot of up and coming beverage brands. You know, we've, we've seen several recently in recent months. And so it's really important just knowing how capital intensive it is to build a beverage business, to know how to approach an investor and to know kind of what they're looking for.
[00:10:09] John Craven: Yeah. I think, you know, Ray earlier in the day at another company that we won't name was asking about, there was kind of a mention of like needing to raise money. And he said, are you raising money? And the answer was like, well, every company in this space is like always in need of more money, right? To your point, I mean, it's totally true, right? Yeah. Pretty much till they're exiting almost in some cases.
[00:10:32] Ray Latif: And that kind of sort of leads to my next question, which is, Yes, everyone wants money, but how do you, and you talk about risk, you know, one way to reduce risk is through diversification. What other variables do you guys put emphasis on and think highly of, I guess, to help you reduce that?
[00:10:49] Ben Lee: So I think there are some key indicators that an investor, from a pure financial standpoint, are going to look at that help recognize when there might be something that's just unsustainable. So one of the toughest things about beverage is that it's a highly competitive category and that you're often spending a lot in doing promotions and other activity to really get the brand out there. And so you want to make sure that you've got a healthy, sustainable gross margin in the business. I've heard that before. It is essential because you need to make sure that you've got the marketing dollars below the gross margin line to make sure. Can you put that in context or numbers? It varies a little bit by segment, but traditionally within beverage, you probably want to be at least in the 30 to 40% gross margin range. There are other product categories in consumer products that are fortunate enough to have tremendously high gross margins, like personal care and beauty can often have 75, 80% gross margins, but within beverage, it is 30 to 40% is a pretty healthy margin, especially at the early stages when you might not be operating fully at scale.
[00:11:54] John Craven: And I guess for beverage, it's also probably different and acceptable since you're, I assume, expecting much higher velocity than personal care.
[00:12:02] Ben Lee: That's absolutely right. And so it's a, it's a matter of knowing that you can build amazing volume. The great thing about beverage as a category is that it's the type of product that a consumer can consume multiple times a day. Potentially. It's not like, a makeup brand that you might buy every couple months. You know, you literally can buy the same bottle of kombucha that you love two, three times a day.
[00:12:24] Ray Latif: So gross margin, velocity, anything else?
[00:12:27] Ben Lee: I mean, from a financial standpoint, those are some of the key things that you're gonna look for. I think more qualitatively, you're also going to want to understand what the market potential is for a product. Is it another me too product that is coming out? Obviously, you look at Coconut Water as a category that has enjoyed tremendous success over the last decade. And you continue to see companies coming out with new Coconut Water brands. And you have to ask yourself, what is the reason for being for that specific brand? And some come out and have a reason for being, whether it is because it is using new technology like HPP, whether it is completely organic versus others, they have different evolutions that make sense. And others are just a me too product. So that's a big thing that you have to ask yourself about the brand is why should a consumer value my product over someone else in the market.
[00:13:17] Ray Latif: Good segue because you're looking at the marketplace. You've reviewed thousands of investment opportunities. You know, in terms of to date and in 2017, what trends are really standing out and what are some of the ones that maybe passed their prime? You know? That was a big sigh.
[00:13:38] Ben Lee: It's hard to try to call the market. I guess that's the job of an investor is to try to figure out what trends are really out there. So one of the things that we're seeing is recently that there continues to be a real interest in functional beverages. And one of the areas where that's that we've seen it develop is adaptogens and other herb-based additions to beverages. I think you've seen it recently in other ingredients like turmeric and these other herbs that add functional benefits to a beverage. I think people are always gonna be looking for beverages that are better for you, that actually do something more than just hydrate you. I think that's an ongoing trend and it's just continuing to figure out what that next benefit is that we can get out of it.
[00:14:20] Ray Latif: It sounds like natural functionality.
[00:14:22] Ben Lee: Yeah.
[00:14:23] Ray Latif: that begins with unknown ingredients or sort of nascent ingredients, you predict they eventually move into the mainstream.
[00:14:30] Ben Lee: I think you put it much better than I could.
[00:14:33] Ray Latif: Well, are you hiring, Ben? No, but trends-wise, I mean, health and wellness is definitely the overarching trend. It's overarching, yeah. For sure. Is there an opportunity though for some of the products that aren't necessarily naturally formulated? I mean, there are some healthy beverages or better for you beverages out there that aren't necessarily full and chock full and completely formulated with natural. I mean, is there room for other?
[00:14:57] Ben Lee: I think it depends on where you're approaching the market. Certainly, as you look at C-stores, that type of customer that you're going to market toward, they might still have some desire for functionality, but they might place less of a value on natural or organic or inherently better for you. And I think that you can carve out success. when you know who you're targeting. I think that's really important. And this speaks to my earlier point about like, why is it that the customer wants your product? You need to understand what that buying decision is, like what really resonates with the customer as to what they're getting out of your product and make sure that the key factors address those needs. And so for someone who is less inclined to worry about natural and organic, and maybe cares more about price point, It's an opportunity to create a brand that may not follow the same trends, but still follows this trend around functionality and benefits outside of just hydration.
[00:15:58] John Craven: Well, and I guess putting both of those together, the financial aspect and a trend, how do you look at a company and let's say they have both of those. I mean, I guess it's really your job to kind of have a crystal ball of like, you know, all right, good financial model, good trend, you know, is this something that really has legs to it? Right. So that being said, I guess are most of the things that you guys kind of look at more like tweaks on existing things. So they're not, you know, totally me too, but. You know, there's something new in there, but it's not like, you know, some totally bizarre herb that no one's ever heard.
[00:16:33] Ben Lee: It's always really hard to tell. And I think that's part of the riskiness at this early stage is that you inherently can't tell whether or not it's something that's going to stick around for the next 10 years or if it's going to be something that is hot for a few years. Over the last several years, you look at ingredients that have come up like chia, you see matcha, you know, getting a lot more attention. You see a lot of initial growth and then you're always kind of wondering, is this really going to break out and really sustain? And so I think you're inherently betting on what you think can happen based off of The current trends, if there's any great velocity, you have to believe that there is a reason for being, and that reason for being should continue going forward. An example of an early category that we at Circle Up have made a bet on and have worked with, and you're seeing other companies come out with similar products, is the drinkable soup category.
[00:17:26] Ray Latif: I knew you were gonna say that.
[00:17:27] Ben Lee: I mean, and Sonoma Brands came out with Zupanoma, and you're seeing a handful of other brands come out. It's still TBD whether the American consumer will ultimately want a drinkable soup. I think that it does follow some of the key trends around snacking, kind of more robust snacking rather than something very light, almost meal replacement like rather than just a beverage. But candidly, it's still TBD. And I think that those are the types of bets that you have to make in the early stages. Sure. based off the information that you have in hand.
[00:18:00] John Craven: In that case, though, at least there's a proven, you know, there are a lot of dollars being spent on soup and other things that you can steal from, right? So it's not something that's totally like this completely new taste that has to be developed or whatever. But the cold versus hot is non-trivial.
[00:18:17] Ben Lee: Oh, don't get me wrong.
[00:18:18] John Craven: I think it's, you know, it's something that, like you said, is TBD for sure.
[00:18:23] Ray Latif: There does seem to be a common thread with these early stage companies that you've worked with. You know, they include Tio Gaspacho, you know, black— Looking at the wall here. Yeah, looking at the wall. You have Black Medicine. You have Rebel. You know, you've worked with a bunch of other brands. Bhakti Chai is another brand. They all aren't those Me Too products that you were talking about. They have that differentiating factor to them. In some cases, they offer an ingredient-based advantage or manufacturing advantage. In the case of Black Medicine, where they make a product coffee, that's very different than how a lot of other brands make coffee. Are those advantages sustainable advantages? I mean, is it possible for you to really identify a sustainable advantage and why is it that they can produce their product and sell to a lot of consumers and stay on the shelf where another competitor can't just jump in and do their own product, you know, i.e. Teo Gazpacho and Zupanoma?
[00:19:17] Ben Lee: I mean, it's a great question. And I think it is a reality for, candidly, most consumer products categories. Someone like a Black Medicine is fortunate in that there is some technology behind the pressure brewing that they do for their coffee. So it isn't just as easy as flipping a switch and getting a Me Too product out the door. But there are, within consumer products in general, there is a lot less kind of IP than there is in a technology business. And I think that that's where the power of brand really comes in. That's what makes consumer businesses so unique, is that you have to be able to have a product that's unique, that differentiates itself, so that it then is able to build that connection with consumers. And then they, even when that next Me Too product comes out, they've connected with you as a brand, they've taken you in as part of their life. That's a trend that you see across consumer products in general. The current consumer is much more about products that resonate with them and their lifestyle and their beliefs, rather than just about How much is it? What does it taste like? And what are the functional benefits of it? They care about all those things, but they also really care about it being a brand that resonates with them at a brand level. And I think that's what any consumer entrepreneur has the ability to do is to be out the gates and to have a great product that in and of itself is unique, but at the same time, to build that relationship with the consumer so that when those other competitors inevitably come out, you're able to still maintain that relationship and be that brand of choice for them.
[00:20:58] John Craven: So when you're evaluating a company, where does evaluating the brand fit both in terms of its priority and importance as well as its difficulty to evaluate?
[00:21:11] Ben Lee: or in the evaluation that is. It's on par with a lot of the financial metrics that you look at because that's how the consumer is buying. The consumers at the end of the day are the ones that are going to drive the financials for the business. It is by definition qualitative and it's hard. We're fortunate that that we've seen, as Ray said, thousands and thousands of companies over the four years that we've been running Circle Up. And I think you start to see different things that resonate, brands that really are clear about what their value prop is, clear about what they stand for, and other brands that are kind of just a little bit jumbled. And there's a little bit of that pattern recognition that gets built in to what we're doing in terms of being able to understand the quality of a brand and what we think should resonate with consumers. There's a lot of quantitative ways that you can go out and do that as well in terms of surveys and a lot of reviews, other ways that you can try to quantify what that brand really stands for. But like you said, it is inherently difficult, and that's one of the challenges at the early stages.
[00:22:18] John Craven: Do you guys do quantitative analysis on that end, or are you just saying that someone could do that if they wanted to?
[00:22:25] Ben Lee: We do a little bit of it. There's a little bit of secret sauce for us. But we certainly know, and in my prior days in a private equity firm, you're certainly spending a lot of time trying to quantify as much as possible.
[00:22:37] John Craven: Yeah, my sort of where I was leading with that question, it seems like from talking to investment folks, trying to evaluate something like that, that has a kind of gut feel to it, no matter what you do, is almost like annoying to them. Unlike reviewing financial models that, even though they obviously have some, you know, crystal ball aspect to them, are, you know, numbers in a spreadsheet that tie out, right? And the brand is always the hard part to figure out, I think, so.
[00:23:06] Ray Latif: Well, I mean, Ben, as you mentioned, you know, you like brands that become part of a consumer's life. How do brands become part of your life? How do brands become part of CircleUp's life? What do they need to bring to the table when they are ready to invest and ready to look for?
[00:23:23] Ben Lee: So we kind of take the lens in terms of the marketplace side of things. We take the lens of Putting ourselves in the shoes of the investors who are on the other side of the marketplace, trying to say, what are they looking for? One of the benefits is that we have close relationships with a lot of the investment community on our platform. And as a result, we have some good sense of the types of characteristics that they'll look for in businesses. But more broadly, we put ourselves in the shoes of any consumer investor. financials matter. If a business has just launched and has $10,000 in revenue, sure, it might be a great brand and there is a potential that it could be a fit for CircleUp, but it is likely going to be just harder to tell because it's so early on that there's a little bit less data to work off of and a little bit less traction to really know whether or not it's something that will ultimately be a fit for our investor base. So I think you mentioned this earlier, but what is the threshold for revenue? So there's no hard line in terms of the size companies that we've worked with. We've worked with pre-revenue businesses all the way up to companies that are doing $10, $15 million in revenue. I would say our typical company probably has between $1 to $7 million in revenue. So it's really in that middle range. And they're typically raising anywhere from half a million to $5 million. So, companies who are raising a little bit less than that are less typical for us, and companies who are raising $10, $15 million are less typical because they're typically going after more traditional private equity investors.
[00:24:53] John Craven: And I guess for our listeners who aren't totally familiar with how this works, can you talk about just the process of how this works? Because I guess right now there's two scenarios. the circle up fund that might put in some capital. And then there's kind of the other part where you're helping them connect with investors.
[00:25:12] Ben Lee: Right. And the way we think about the fund is also that the core really is a marketplace because the fund is just a participant in the marketplace. So you're never like solely funding. That's right. Okay. So the steps of the process are really submitting some basic financial information and some information on the company. And it goes through a screening process that we have here internally. And then there is a deeper vetting and deeper profile creation process where you're providing a lot of the same materials that an investor is going to ask for. Investor presentation, historical financial projected financials, cap table, and any kind of deal terms. It is fairly lightweight, but going through just a lot of the checks to make sure that we've vetted the company to a point where we feel like this is an interesting investment opportunity that our investors would want to engage with.
[00:26:03] Ray Latif: So do you help them create that polished presentation, or do they need to come in with something that looks good from the get-go?
[00:26:10] Ben Lee: They're typically coming in with it, partly because they obviously know how to best tell their story. We're able to provide feedback in terms of, A, if there's any inconsistencies, but B, if there are places that they could improve the presentation, we'll certainly provide that feedback to them to put them in a position to present well to the investors.
[00:26:28] John Craven: And I guess for the screening process, can you give us any sort of just sense of how many companies enter the screening process, make it through, I'm assuming the ones that are kind of making it through are the ones that might eventually end up on your desk. Just again, for the context for the listener.
[00:26:46] Ben Lee: So high level, we accept about 5% of the companies that we talk with and apply to list on the platform. So it's a pretty heavy screening process. We're launching typically anywhere from 20 to 40 fundraisers in a month. And so it's a good amount of flow, but there is that heavy vetting where it is a low percentage of companies that ultimately make it all the way through the process.
[00:27:08] John Craven: So that's like, I guess, well, certainly over a hundred a month just on your numbers of people that are applying.
[00:27:14] Ben Lee: Yep. It's well over a hundred a month that are applying. And what we're seeing is that the typical qualities of these businesses that are making it through are that, you know, they have some meaningful level of revenues that shows that there's a real consumer demand for what they're building. And that some of the qualitative stuff that you're looking at is the quality of the team, you know, trying to understand what their background is, how much experience they might have in the space, but also just how well do they know their business? You have some entrepreneurs who don't necessarily have an idea for where they want to take their business, that they, Candidly, may not even know how much of their product they sold in the past year. And those are signs that they haven't fully thought through what their brand should stand for, what they think it can become, and have that vision for what they want to build. Because ultimately, at this early stage, all the financials, all the brand, all the data that you can gather matters. But it also really matters who you're investing behind. That's one of the reasons why our platform facilitates a lot of dialogue between the investors and entrepreneurs and allows them to connect because even though they may not be connecting face-to-face, there's still communication that needs to go on because you're putting a significant amount of capital behind the individual to go out and run this business to make it a success.
[00:28:31] Ray Latif: Yeah, we have a couple of minutes left, but I wanted to ask you about some of the companies that you work with, you see a lot of the same kind of products coming out there. From the entrepreneur's side, I feel like we've heard that they see a lot of the same investors kind of putting their own self out there or their own kind of presentation out there. And a lot of it becomes kind of repetitive. You know, what's the market like for investment? And what's the competition like? And how are you really differentiating yourself from other investment banks and other investment vehicles?
[00:29:04] Ben Lee: So I think that there's been a large growth in interest in early-stage consumer in general. You've seen several funds pop up over the last few years. And that could be funds. It could be family offices. It could just be high net worth individuals who are becoming more active in terms of how involved they are on the investing side. I think that the challenge for investors is that with more capital comes a need to really differentiate yourself to your point. A lot of investors are kind of just bring capital to the table. And I think to the benefit of entrepreneurs, it gives them an opportunity to really push for those investors to make sure that they're trying to bring value add rather than just bring capital.
[00:29:46] Ray Latif: Value add as in operators who are former operators in the beverage industry?
[00:29:49] Ben Lee: Exactly, so it could be a former operator who is coming along and has been through the trenches before of building a brand, understands who some of the partners that you need to go to to work with are, has the right connections at the retailers to help get distribution. That's absolutely a way that you can think about that value add. One of the things that we at Circle Up have really focused on is outside of capital. We're very focused on building out our roster of partners that we have that support companies in key ways. So when we think about early stage companies, distribution is essential because you're typically still very early on in terms of how many doors you're in, and so wanting to make sure that you continue to build distribution. The team that you have, a lot of early stage companies are understaffed. May want to go out and find that next great VP of sales to drive that brand that next level You know the production and cogs and then on the branding and marketing side and those are areas where we've focused on You know, for example, we have a partnership with Amazon where because of the large number of companies that we've worked with, they were focusing on highlighting early stage, young, innovative brands through a program that they have called Launchpad. And they came to us to try to source great young consumer products that they could highlight in this Launchpad program. And it's been an amazing success over the last year and we're continuing to expand that partnership. And for us, as Circle Up companies, they get immediate access to that program. And whether that is through the Circle Up Marketplace or through the Circle Up Fund, those types of relationships of trying to make sure that you're providing value to the entrepreneur outside of just the capital that you bring, I think is really going to become more and more important. given how much interest there's been over the last few years in this investing space.
[00:31:41] Ray Latif: For sure, for sure. We're out of time, but this is a common thing that we do at the end of our podcast, which is to put you on the spot and ask you, what do you think of the Trump presidency? No, I'm not going to do that. Although, actually, that is a good question, and I'll give you 30 seconds to answer it. In this sort of uncertain political climate that we're in, how are investors thinking about the future, at least for the next four years?
[00:32:07] Ben Lee: I mean, it's been really interesting to see how the public markets have responded pretty positively to the Trump presidency. But at the same time, there's more than anything, there's uncertainty. I think that's a challenge for any investor when there's uncertainty in the markets. I think the beauty of the early stage consumer ecosystem is that, A, data has shown that consumables in general are more resilient to up and down times within the U.S. economy because of the pure fact that people continue to eat and drink every day no matter what. You might shift a little bit in terms of buying premium products over kind of more standard products, but the concept remains true that you're always gonna be eating and drinking as one of the top priorities.
[00:32:54] John Craven: You might think a little less about adaptogens, perhaps.
[00:32:56] Ben Lee: You might think a little less about adaptogens, and so maybe price point changes a little bit. But the other beauty is that at the early stages, you're so under penetrated that- Right, you can only grow, right? Even if there's a small hiccup in one area, there's still so much opportunity to grow. And so I think as you look at early stage brands, It is still a great time to invest, just given the amount of innovation there is out there, given the appetite there is at both the larger private equity and strategic levels to acquire innovative brands. I think that there is still, even within this uncertain environment, a lot of opportunity to build some amazing brands right now.
[00:33:36] Ray Latif: So my original question was gonna be about... I was gonna say, don't forget your original question. My original question is, what are some of your favorite packaged beverages that you're drinking these days? I guess, what's in your refrigerator, Ben?
[00:33:47] Ben Lee: So, and these are not Circle of Brands. I'm sorry, it doesn't necessarily need to be in your refrigerator. It could be in your pantry. These are not Circle of Brands, but... So my wife is actually of all coconut water. She loves Invo coconut water. And I have to say that I am a relative new kombucha drinker. It's probably been in the last six to 12 months that I've really picked up drinking kombucha and I'm loving house kombucha here in the Bay Area.
[00:34:14] John Craven: House kombucha, good stuff, yeah.
[00:34:16] Ben Lee: I'm not familiar with house kombucha, but I'll have to pick some up when I'm here. They're based here in San Leandro, California. It's a great local kombucha brand.
[00:34:24] Ray Latif: Outstanding. You see, we've got two brand new brands that we've never had on the podcast.
[00:34:28] John Craven: I've had it. You don't look at my Instagram?
[00:34:30] Ray Latif: Never mentioned on the podcast before. Oh, all right. So, Invo and House, congratulations. Ben Lee made you famous. All right. This has been great, Ben. Thanks so much for having us here in your office. And we're going to steal some ideas. for things that are in your office.
[00:34:44] John Craven: I have very nice wood paneling in here. I don't think that's confidential info or anything.
[00:34:48] Ray Latif: No, we have wood paneling in the office, but it's different.
[00:34:50] John Craven: We don't have... Yeah, you know. Yeah, and some of the... They have great video conferencing technology in here, too. Yes, it's pretty tremendous. Can't really describe it on a podcast, but...
[00:35:00] Ray Latif: Okay. We'll end there. Yes, indeed. Ben, thanks so much again, and thanks for everyone who's listening. If you have any ideas, questions, comments about the podcast, please email us at podcast at BevNET.com. See you next time.
[00:35:13] John Craven: Thanks.
