[00:00:10] Ray Latif: Hey folks, thanks for tuning in to another episode of Taste Radio, the number one podcast for the food and beverage industry. I'm Ray Latif, the editor and producer of Taste Radio, and with my show co-hosts, John Craven, Jacqui Brugliera, and Mike Schneider. In this episode, we're once again joined by Maxine Kozler, the co-managing director of LA-based investment firm LDR Ventures, for the latest edition of The Maxi Minutes. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we would love it if you could review us In The Apple Podcasts app or your listening platform of choice. We are surrounded by cameras here at the studio at BevNET headquarters in Newton, Massachusetts. I count one, two, three, four, five. Is that right, John? Sure. Okay, everyone. Just I just want to make sure I can still count folks. But yeah, we're doing a whole new video set up. We're trying to get a lot more content In The YouTubes In The Instagrams In The Tick Tocks, perhaps, perhaps, can we still use Tick Tock? I thought that was banned. Is it banned now? We're gonna do it until they tell us otherwise. Not yet. No, I think I think like the White House was looking at the whole kind of thing where it's like, you know, people might be spying on us through the Tick Tocks. Ray, every time you pick up your phone, someone's spying on you.
[00:01:24] Maxine Kozler: Stop.
[00:01:24] Ray Latif: All right.
[00:01:25] Maxine Kozler: We're being spied on now.
[00:01:27] Ray Latif: Yes. Well, in any case, people watching the video might be like, Ray, is that actually you? Because I am completely dressed down differently than I normally am. I'm wearing a black hoodie and a baseball cap. It's a deep fake, Ray. It's a deep fake, Ray. Yeah, no, but I was wondering that we would feel like to dress down for one of these things I know just like the common man here like a bunch of idiots exactly John you're wearing a hoodie Yeah, you're all in uniform Yeah, mine's a very thick hoodie for these cool.
[00:01:59] Maxi Minutes: All right, I'll just I'll take off my oh for crying I feel like we should be plugging our merch store. Like we have a merch Really plush comfortable hoodie. Have we ever charged from? Why would we do that? Just by reviewing us In The Apple podcast app or your listening platform.
[00:02:20] Ray Latif: Well, bottom line here is that we may be, we may be dressed at schlubs, but Jackie, you look fantastic. You have a very nice maroon. Is that a sweater? Is that a sweater?
[00:02:28] Maxine Kozler: Yeah, it's a nice turtleneck. Which makes it fancier.
[00:02:32] Ray Latif: Okay, so fancy.
[00:02:34] Maxi Minutes: It's cold out there in San Diego. You gotta gotta stay warm.
[00:02:37] Ray Latif: I heard it's like In The 50s Yeah, well, maybe next week or the next episode I'll dress up in one of those white leather suits that Elvis wore toward the end of his career You know, I was watching the Elvis movie you guys seen that the the one with Austin Butler Can't say that. Oh my goodness. It is really good Jackie. Have you seen it?
[00:02:53] SPEAKER_??: Oh
[00:02:54] Ray Latif: No, I think you're the only Elvis fan here. Okay. No, it's not. I wasn't dating yourself. It's okay I wasn't an Elvis guy myself But Austin Butler who played Elvis won a Golden Globe for best actor for his performance and it is phenomenal Especially, you know toward the end when he was like turning into like that Sort of fading Elvis and sort of had to reinvent himself a couple times. I mean, he's just fantastic. So I Highly recommend watching the Elvis movie if you haven't already had an opportunity. I think it's on HBO Max and HBO if you're streaming and all that stuff, so. The Sailing Elvis. Captain Elvis. Commodore Elvis. Captain Elvis, yeah. Before we go any further, I just want to give a quick shout out to our sponsor for this episode, Cognizant. Cognizant is a clinically tested nootropic ingredient that delivers a patented form of citricoline to supply your brain and those of Your Number with the energy it needs to stay sharp. Learn more at cognizant.com. That's C-O-G-N-I-Z-I-N.com.
[00:03:52] Maxi Minutes: You know, Mike sure could use some Cognizant.
[00:03:55] Ray Latif: Always. Anything to make me smarter. I'm all about the Cognizant at 11am. And I can't imagine what it's like at 8am, Jackie. I always bring this up. You're always on top of your game, even early In The morning like this.
[00:04:10] Maxine Kozler: Yeah, Cognizant every morning.
[00:04:13] Ray Latif: There it is.
[00:04:14] Maxi Minutes: We have a product in front of us that has some Cognizant. Are we allowed to talk about that yet? Not yet. Not yet.
[00:04:19] Ray Latif: Okay, all right.
[00:04:19] Maxi Minutes: We'll save it for later In The show.
[00:04:21] Ray Latif: We're really on a tight track here.
[00:04:23] Maxi Minutes: We're definitely on fire here.
[00:04:24] Ray Latif: Well, I'm excited because we're going to have to get up In The morning for all the cool stuff that we're going to be doing with Naturally San Diego. We have a nice partnership going on with that organization. John Craven, you are and have been spearheading this whole partnership. Tell us all about it.
[00:04:42] Maxi Minutes: Yeah, well, we're a new member sponsor of Naturally San Diego, which I'm sure, uh, listeners out there have heard of the Naturally network, but, uh, we're joining the affiliate in San Diego where, you know, a good chunk of our team, including Jackie are based and, uh, we're doing a little kickoff party on February 20th at our office with them. So I'm going to be there. You guys are not going to be there. Well, Jackie will be there, but, uh, I'll be there.
[00:05:08] Maxine Kozler: Yeah.
[00:05:09] Maxi Minutes: You know, another meetup, just trying to engage with the community and maybe, uh, Hang out before the chaos of Expo West right exactly exactly by the way.
[00:05:17] Ray Latif: Why am I not gonna be there? I can't come why was I not In Your band? Yeah, I didn't wipe down the toilet seat the last time was there The only one I'm kidding. I don't do that kind of thing, folks. That's not me.
[00:05:35] Maxi Minutes: I had to do some minor plumbing action In The San Diego office.
[00:05:39] Ray Latif: Oh, for crying out loud. Now you're going too far, Mike. Now you're going way too far. I took care of it. I took care of it. This is a classy show.
[00:05:45] Maxi Minutes: It wasn't because of me. But anyway, one last thing In The Naturally San Diego. Jackie will probably be our local contact since, well, she's in San Diego and we're not, but We're definitely looking forward to engaging with their members there in San Diego. Lots of lots of good companies. I think they have like 500 something members.
[00:06:03] Ray Latif: So yeah, Jack, if you're the point person, what's the best way for folks to get in touch with you?
[00:06:08] Maxine Kozler: Yeah, if you want to get in touch with me, just email me at jbrugliera, B-R-U-G-L-I-A-E-R-A, at BevNET.com. And if you don't know how to spell that, just go to our about page on BevNET.
[00:06:19] Ray Latif: Just Google it. It's a tricky one. Or just go to eatwithquee, D-M-R-A at eatwithquee. Slide In Your DMs. Actually, maybe not. I remember you had an issue with that where too many people were sliding In Your DMs. So forget that. Yeah, we're going to have to cut that. I think that phrase is canceled, right? Yeah. No sliding. No sliding. You have to follow her first and she has to accept your follow. There we go. Yes.
[00:06:38] John Craven: All right. Guessing your margins? That's risky. Belay Financial gives CPG brands the clarity to scale smarter, faster, stronger. Get your free inventory ebook by texting TASTE to 55123 and start making data work for you. Vibrant Ingredients In The natural ingredient partner powering food and beverage innovation, delivering flavor, function, and protection through a science-backed portfolio. Vibrant delivers purpose-driven solutions that help brands create extraordinary experiences. Discover what's possible with Vibrant today. Visit vibrantingredients.com.
[00:07:27] Ray Latif: John, you mentioned Expo West and good Lord, we are just about a month away from the granddaddy of them all. The granddaddy of all trade shows, Expo West happening in Anaheim, California, March 7th to the 11th. Is that accurate? Good memory. Yes. There we go. We are looking for news. We want to know what you're doing, what you're exhibiting, who's going to be there, why you're there. Please send us all that news. Jackie, what are the details? How do people get in touch with us about Expo West?
[00:07:55] Maxine Kozler: head to BevNET.com slash Expo West or Nosh.com slash Expo West. That's where you can find all of our Expo West coverage. You'll also find a link there to submit your news In Your booth number. We will be compiling a list of coverage to make sure you're not missed, your booth's not missed, and we're checking out what's new. We also will be compiling a insider booth list. So if you're an insider, make sure you send over your booth number. We'll be publishing that list a week prior to Expo West. And if you're not an insider, you still have time to become an insider so you can be included In The guide.
[00:08:31] Maxi Minutes: That's one good way to stand out during the show. But you know, everybody's got something new. The strategy is, oh, we're going to launch something new at Expo West and we'll just bust right through the clutter. Maybe not going to happen for you, but if you do want to bust through the clutter, we've got some great packages. You know, you could get some mid-rolls on Taste Radio to talk about where your booth is, or we've got some other interesting packages. If you want to talk to our sales team, send us an email and we will hook you up. People do listen to a lot of Taste Radio on their way to Expo West, it seems. They do. Yeah, they oftentimes have a better... ability to recall what happens In The pointless episodes than I do so. And in a nice little 15-second mid-roll, you could tell us what your new product is and to come to your booth. I mean, that is a great way to get people interested in what you've got.
[00:09:20] Ray Latif: It really is. I mean, I In The hardest part about Expo West is navigating the show. I mean, There's no shortage of great products to try and great brands to see and cool people to meet. But trying to plan it all out and schedule your time effectively and efficiently is kind of difficult. And frankly, Mike, you're 100% right. BevNET does try to distill as much information In Your exhibitor lists, you know, into Boos to see and where to go as possible. And you can do that again by getting in touch with our teams or getting in touch with Taste Radio to amplify what you're doing at Expo West. So let us know. What's the best way if folks want to get their mid-roll, get a mid-roll at on Taste Radio?
[00:10:02] Maxi Minutes: Shoot us, shoot us an email, ask at Taste Radio.com for starters. We'll get you, we'll get you in touch with the right person from there. There you go. You're going to be standing out with the white leather suit, right?
[00:10:12] Ray Latif: I am going to be in full Elvis persona and I'm going to be watching the Elvis movie 24-7 for the week prior to Expo West. Going all in. Yeah, I'm going all In Your know what's gonna stand out at Expo West, Ray? What's that? Pancake cereal. Why don't we have pancake cereal yet? Before we get to pancake cereal. I wanna talk about pancake cereal and why those boys have not sent us the pancakes. You know, it's a big TikTok trend, but you know, just before Expo West, we're gonna be partnering up with the founder of SnackShot on a pretty cool event, right, John?
[00:10:47] Maxi Minutes: We're working on that. We're working on details coming soon. I don't know. Save the date or something like that. Yes. Tuesday, March 7th. I. I think it's six to eight p.m., and it's going to be at a location closer to Los Angeles than Anaheim, but we'll be sharing that info soon, so. Save the date, March 7th. Another nice way to connect with people before the chaos of Anaheim. Exactly. Before you fill up on pancake cereal. All right, Mike, you can talk about pancake cereal.
[00:11:20] Ray Latif: I can't stop thinking about pancake cereal. So the fine folks at Belgian Boys, Recently introduced pancake cereal. Now, this is pretty amazing stuff. Apparently it was a big TikTok trend. Does anyone know about this? People eating pancakes for cereal? People do a lot of weird things on TikTok, Ray. Okay. I didn't know too much about this.
[00:11:41] Maxi Minutes: Is it cereal sized pancakes? Or is it pancakes? pancakes in cereal form.
[00:11:46] Ray Latif: I think they're going to be soft or crunchy or... Jackie, what is this stuff? I don't know.
[00:11:51] Maxine Kozler: Yeah, I think it's just tiny pancakes. Everyone loves tiny pancakes.
[00:11:55] Maxi Minutes: What happens to numpty like me who puts milk on it? What's going to happen? You're still a numpty, Mike. It doesn't matter.
[00:12:01] Ray Latif: So apparently... Numpty at the top of the table. This In The description. Belgian Boys has taken a viral TikTok trend and brought it to Target shelves. They knew pancake cereal the limited time offering will be available at Target nationwide beginning February 1st as of a recording date That's tomorrow, and it's it's In The are beautiful pink boxes Belgian Boys is known for that What do you call that static pastel sort of aesthetic yeah pink aesthetic? It's literally In The front of the box the viral trend Brought to life, and it's got a bowl of little small pancakes and a spoon and I don't know tomorrow Do you put milk in this yes? Or you just eat the pancakes like that's where maple maple milk.
[00:12:43] Maxi Minutes: I think you can do whatever you want to investigate further ray Okay, we'll investigate further Well, you must try both options Michael blend it and try to make a latte out of it. How about that?
[00:12:54] Ray Latif: I'll do everything Yeah, I'll do that You know what they should do? They should do a partnership with Malk. Malk's been In The news lately too. M-A-L-K. Malk is a brand of organic almond and oat milks that recently launched a new commercial that asks, do ingredients really matter? And basically they're kind of calling out These larger competitors, these sort of legacy brands, I guess you can call some of these competitors legacy brands that have all kinds of ingredients beyond oats and water and sugar and flavoring In The products. I'm not going to mention the names of their competitors, but in this video, there's someone at a farmer's market booth from Malk who basically has two packages, one of Malk and one of their competitor. You don't see the brand names. You just see the ingredients on either one. And Malk's clearly In The one that's In The Malk bottle. It only has three ingredients. Whereas the competitor has like, I don't know, a lot, a lot, including things like calcium carbonate, acerbic acid, et cetera, et cetera. Some stuff that people just don't know. And so they filmed people coming up to this booth and were like, uh, what's in this? Like, why would I drink this stuff? Why would I drink that stuff? And it's just like a straightforward way of saying, look, do you know what's In Your almond milk? Do you know what's In Your oat milk? Because if you don't, why are you drinking it? So pretty effective campaign in my opinion.
[00:14:16] Maxi Minutes: Yeah. I mean, I think just focusing on like the simplicity of their product relative to others. And that certainly seems like something that's kind of stuck a little bit as people have re-evaluated things like oat milk, which also kind of has a lot of ingredients in it. So. It worked for RX bar. There you go. Yeah.
[00:14:38] Maxine Kozler: I also think it's interesting because other brands are realizing that consumers are realizing that there's these oils and gums, especially in oat milk. And I think Califia Farms three weeks ago launched a three ingredient almond and oat milk that's organic. So it's very similar to Malk. And yeah, it's just cool to see that other brands are kind of taking that challenge and also listening to consumers and creating simple ingredient versions.
[00:15:04] Maxi Minutes: Man, Ray was early on this too, In The old days. Oh, that's right. Where we were going around doing booth interviews at shows and the plant-based milk things catching on and doing an interview with a, you know, certain founder of Calafia, Greg Steltenpol, industry legend.
[00:15:24] Ray Latif: Rest in peace.
[00:15:24] Maxi Minutes: Rest in peace, sorely missed. And, you know, he was, he was a great person to have a conversation with. And, you know, Ray would just be like, yo, when are you getting rid of the carrageenan? And Greg would be like, Jesus Christ, Ray. Just give me give me a break. Like, we can't do that. You know technology has finally gotten there.
[00:15:47] Ray Latif: Yeah. No, I remember I was laughing cuz Greg was getting agitated but in like in a really funny way and He knew he knew he wanted to get rid of it, too It's just like to scale up In The way that they wanted to scale and to get more I guess better for you all the milk and oat milk into people's hands They had to go through this step of okay first We've got to get more of it out there and then we can make it better. I think is what he was trying to say but
[00:16:11] Maxi Minutes: Yes, and you know, in fairness, they were a one-up of what was out there at the time, which as it relates to Malk is kind of interesting in that like, you know, Malk was also out there as this super premium ahead of its time, I don't know, HPP, like I think those things were like almost exploding In The beginning, literally. But yeah, the industry has finally caught up. So I guess your, your questions were, uh, were accurate. Great. Did you just spot an Expo West trend? Our first trend perhaps here? Fewer ingredients in plant-based milk.
[00:16:47] Ray Latif: That's like when someone says, what's the trend this year?
[00:16:49] Maxi Minutes: It's lower sugar. It's like, yeah, every year.
[00:16:52] Ray Latif: And I will, I will give credit where credit is due. I actually asked Greg this based on a stage discussion at BevNET Live in which Duane Primozich, who's one of the co-founders and managing partners of Bigger Ventures, a venture capital firm that invests in Better For You food and beverage, had brought this up. And this was, I think, probably eight years ago. And he's like, look, There's going to be a reckoning for plant-based milks because there are all these weird ingredients In The and that consumers are going to eventually going to ask questions about those ingredients. And they're going to say, okay, well, cow's milk is one ingredient and I can drink that. I know what that is. Yeah. You're telling me that oat or almond milk is better. And that has like 12 ingredients.
[00:17:33] Maxi Minutes: I mean, we're seeing the same thing in plant-based meat right now. There's that backlash. It's like, you know, the cycle or stages of like adopting these are like, wow, it's from plants and wow, this is better for me and better for the earth. And then it's like, what the hell's in this? I mean, I think that's just something we're going to continue to deal with. And I assume these companies will get better at their, you know, what goes In The products.
[00:17:56] Maxine Kozler: Yeah, I'm curious how that's going to impact people's experiences at coffee shops. And if they're going to be asking the barista, what oat milk are you using? Can I see what ingredients are in that oat milk? Because a large quantity of plant-based milks are consumed at coffee shops. And I think there's a whole nother level of understanding what you're consuming, even in that experience when it's outside your home.
[00:18:17] Ray Latif: Yeah, I think that's a really good point, Jackie. And I think, you know, it may be time. Some coffee shops already do this where they highlight branded creamers In The shops, but those are the ones that have such high quality coffee that it makes sense to let people know that what they're adding to their coffee is just as high quality as the coffee itself. So, you know, I wouldn't be surprised if we start to see maybe Malk branded creamer at say, a Stumptown or a Pete's. I think it would be a good move for those companies.
[00:18:44] Maxi Minutes: Easy way to justify that $7 latte.
[00:18:47] Ray Latif: Exactly. For sure. We've been complaining about ingredients so much, but we can't complain about ingredients in this snack that I'm holding in my hand here. which has sugar, enriched wheat flour, and as we go down the line, palm oil, palm oil, and there's multiple palm oils. It's like palm oil is like three times on this thing. Anyway, you know, it's probably not that great for you, but I'm talking about Reese's new dipped animal crackers.
[00:19:12] Maxi Minutes: Get in my belly.
[00:19:13] Ray Latif: Yeah. These are bite-sized animal crackers covered in peanut butter, candy, and dipped in milk chocolate. My goodness. Note the calories there. In The front, In The front, the call out.
[00:19:22] Maxi Minutes: 150 for four pieces, oh no. I like the fine print is four pieces, not the bag.
[00:19:28] Ray Latif: There's about four servings per container, which means there's about 16 cookies in here.
[00:19:32] Maxi Minutes: So you kind of messed up all the products I brought here. I was going to have like the mass produced minute here of... Oh, right, yeah. I got my Reese's crackers, this new Dr. Pepper strawberries and cream zero sugar. What else do I have in here? This In The Gatorade fast twitch, which is you know? Caffeinated sports drink and then this which like everyone In The office Which is Waiting for that right it Baja blast hot sauce, and it's nice. I don't know I guess this is kind of Would you call this like a almost algae blue green with some?
[00:20:15] Ray Latif: Chunks floating in it no that actually looks like vomit And I'm not even a color of vomit after like a heavy night of drinking for some which I've seen I've seen that sort of neon green when you've had too many like Midori sours right yeah, not me But you know I think back In The day John said it It's the consistency of duck sauce and I agree, but it's like if someone poured antifreeze into duck sauce
[00:20:35] Maxi Minutes: Was gonna bring a little cup or something, but I really wanted you to try this like while we're recording just for the reaction Did not send wings with the wing sauce just Weird yeah, although I have wings In The freezer down here.
[00:20:59] Ray Latif: What are you doing Mike I? I got pretty terrible frankly the Talking about are not typically the ones we talked about on Taste Radio or any vertical that that operates that being said I am interested in trying these tipped animal crackers and as to the dr. Pepper zero sugar with strawberries and cream I think this actually sounds pretty good, but I
[00:21:28] Maxi Minutes: I mean, it's just such an odd derivative of like a core product. That's all. But I In The strawberries and cream fake flavoring go with Dr. Pepper.
[00:21:38] Ray Latif: Yeah, but I think there are a lot of consumers who love classic cola flavors, but just want a little extra, you know, oomph to them, if that makes any sense. Not really. Okay, fine.
[00:21:53] Maxi Minutes: Moving right along. Who drew the graphics on this Baja Blast? blue Fresno pepper parachuting into like this just mess of a there's a shark with a swimming mask on and a Submarine that's being attacked by an octopus and some guy in an old-school What the heck is this thing in an old-school like almost space suit kind of wetsuit? What's going on here? Mike has literally more thought than anyone I know ever will and I feel bad for the tomatillos in a strange turn of events sugar is not the first ingredient it is tomatillos
[00:22:28] Ray Latif: People who just tuned In The podcast might be thinking we just got back from NACs or something like that. Let's get this back back on track. Back to Expo West, perhaps. You know, you're going to sample these. I'm going to. While I do this, Jackie, you have some cool things in front of you.
[00:22:42] Maxine Kozler: I do. I have a beverage called Immoral. It's a line of sparkling mushroom based teas. I'm always finding the mushroom products. This one is Reishi mango and chamomile, and it's crafted in Brooklyn. It's pretty good. It's like a healthy soda. It's a little bit sweet from the mango juice. I like the play In The word moral In The name, because people know morals are associated with mushrooms.
[00:23:09] Maxi Minutes: I thought it made you question your life choices after you drink it. No, those are pretty tasty, but they do not have a morel mushroom. skew like yeah that's the only I mean I was like wow this is gonna be some fancy stuff hence the M yeah immoral yeah but yeah that stuff's cool I like it immoral
[00:23:27] Maxine Kozler: I have a product that has cognizant in it. It's called Wingman Smart energy. I In The reason I picked it up because I've never seen it before, but it had a big call out of nitric oxide booster, which I've never really seen a call out, but I had to Google it and it's usually used in pre workouts to boost your blood flow and help with the pump. So yeah. It gets full. So yeah, this is a performance beverage that's new In The market. It has some amino acids, immune support, it's kind of doing everything, which is a little confusing, but something interesting. And I also have Moments, which was a New Beverage Showdown winner. And they have new packaging, as well as a Lemon Lemon Glow Together SKU.
[00:24:18] Maxi Minutes: That Lemon Lemon SKU, Jackie? It's pretty funny because they also have Tulsi Lemon, so they call that one Lemon Lemon.
[00:24:27] Maxine Kozler: Nice. Yeah, it's pretty good. I like it. And it's low sugars, low calorie, sparkling, and no caffeine. So it's a nice, better for you beverage.
[00:24:38] Ray Latif: Yeah, I just like that we've mentioned two former or two past New Beverage Showdown winners In The show already. Malk. Malk and Moment. Yeah.
[00:24:46] Maxi Minutes: Well, speaking of lemon, I have a new product here from the good people at Blake's Orchard. It's called Sorta Pop, and it's a better for you soda, as you would think. It's got six grams of sugar. This one's 25 calories. This In The lemon lime. And I also have the tangerine in front of me here. Also 25 calories, four grams sugar. Got a little juice. I'm going to go for it.
[00:25:11] Ray Latif: Okay. John, I'm surprised you didn't bring out Snoop's new canned coffee, Indo.
[00:25:17] Maxi Minutes: Indo, I know. I should have brought that. I haven't tried it yet. We just got it yesterday. The can looks pretty cool.
[00:25:21] Ray Latif: Tastes like coffee.
[00:25:22] Maxi Minutes: It does look cool.
[00:25:23] Ray Latif: Yeah. But it's kind of a strange name for a coffee that doesn't have any- For cannabis-free products? Yeah. Yeah.
[00:25:30] Maxi Minutes: Sort of tastes tasty. Well, we'll sample it next time.
[00:25:33] Ray Latif: Okay, fair enough. Yes. We'll be back sampling the endo snoops endo That is snoops coffee endo just to be very clear. We're not gonna be this isn't the Joe Rogan experience folks Okay, this is Taste Radio All right, all right
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[00:26:38] Ray Latif: It's time to get to The Maxi Minutes with investor Maxine Kozler. As I mentioned at the top of the episode, Maxi In The co-managing director of Los Angeles-based investment firm LDR Ventures, and the following conversation marks the first edition of the series in 2023. As in previous editions, Maxi shares on-the-ground insights about how angel and seed investors evaluate emerging brands and how entrepreneurs can best position themselves for funding success. The following discussion focuses on how founders should navigate an increasingly tighter market for private capital and the trend of angel investors passing on subsequent funding rounds. Hey folks, it's Ray with Taste Radio right now. I'm very excited to be sitting down with Maxine Kozler, the managing director of LDR Ventures. Maxine, so great to see you.
[00:27:35] Mike Schneider: Great to see you too, excited to be here.
[00:27:37] Ray Latif: Definitely. This In The first edition of The Maxi Minutes in 2023. It's been Maxi Minutes since we last chatted. I think it's been a few weeks and I know our audience is thirsty for all the insights and knowledge that you'll be sharing with us today. There's a lot of concern is probably the best way I can describe how people are feeling about investments in private capital in 2023. And I'm excited to chat with you about that.
[00:28:05] Mike Schneider: I am as well. The climate has definitely changed In The last six to nine months. And but I've got I've got some really positive outlooks on what founders can do about it.
[00:28:14] Ray Latif: Good. Good. Well how's the first month of the year going for you. I know it's a brand new year. So typically people have a lot of goals and plans for the year. Are you In Your way.
[00:28:24] Mike Schneider: Absolutely. We kind of hit the ground running, a lot of events and conferences and even a lot of new structures that founders are using to raise money and getting those angel investors still involved to really help them with their raises through some unique propositions.
[00:28:41] Ray Latif: outstanding well let's talk about a few of those but before we get into that again you know i've been speaking with a bunch of early stage founders and you know investment is always top of mind funding is always top of the list in terms of things that they need help with and it seems like and you can verify this but it seems like angel and seed investors are being a lot more cautious with their money and a lot more cautious with where they're choosing to invest their money than they had been even last year, even a few months prior. Is that accurate?
[00:29:15] Mike Schneider: Absolutely. I think we all see the writing In The wall. I don't think it's a guess or just one person's opinion. In The last six to nine months, especially, you know, that seed stage investment money has just really dried up. It has slowed down tremendously from where it was at, which was at a height. So the positive great news is this is just a cycle. This is a cycle like every other cycle in investing and finance. So we hit, I mean, a huge swell of money going into seed stage consumer products, especially food and beverage. And then we just sort of hit that point where the market was so saturated and everyone had placed their bets and then In The stock market and other things, you know, it really has slowed down. It's nobody's imagination. It absolutely has. And that kind of related, you know, the stock market does scare specifically seed stage investors. You know, if we've got angel investors involved, people who either don't normally do this, this is just a side thing that they're passionate about or just another asset class for them. The stock market is going to really affect those kind of investors. You know, these are not big funds. You know, even the smaller funds, their LPs get a little nervous, you know, when the stock market and other things are going on In The economy, you know, wars throughout the world and things of that nature. That's going to affect a seed stage investor way more than, you know, the really later stage big funds.
[00:30:52] Ray Latif: So a couple of follow-up questions from there. You called this, you know, a cycle. How long can we expect this cycle to last? I'm hoping it's only a couple of weeks, right? No.
[00:31:01] Mike Schneider: I was going to say, everyone take a deep breath, let it out. I mean, I think it's going to be 18 to 24 months. And, you know, the people I'm talking to, whether it's people at funds or the lawyers cutting the deals, they're kind of telling their clients from what I'm hearing, you know, you better hunker down and have about 18 to 24 months of capital or, you know, really change your spending to make what you do have last. I think marketing budgets are going to have to completely change, slowing distribution maybe a little bit. There's a lot of positive things you can do, but I think preserving cash right now for a founder In The number one. I wouldn't worry about growth. I would worry about preserving your cash and just, you know, really dialing in on how do I have a well run business that's not bleeding a ton of money every month.
[00:31:56] Ray Latif: Well, what specific aspects or areas of marketing do you think entrepreneurs should focus on, given what you just said?
[00:32:05] Mike Schneider: Well, a lot of money has been spent In The last couple of years on digital marketing, social media marketing, influencer marketing, in sort of like a testing. There was so much money being invested that the founders had that bandwidth to test a lot around digital marketing. And now that money is just not available In Your budget anymore. You need to preserve that for inventory In Your distribution and things like that. So founders have to just really roll up their sleeves, sampling street teams, like literally the founders getting to every event they could possibly go to and just sampling out their product, getting that first try, and then getting that sell through In The shelf. a lot of in-person stuff and founders teaming up. You know, the founders can save a lot of money if they're teaming up with other founders and they're doing events together and they're sharing resources around marketing and PR and, you know, being in an article together, sharing, you know, when a reporter calls you, you know, who else In Your community can you hand it off to. And there's a lot of founders doing a great job about this. But it's got to be a lot of roll up your sleeves, street marketing by the actual teams themselves, throwing money at a digital agency to see what's going to work. There's just not enough capital around to do that.
[00:33:30] Ray Latif: So not all the money has dried up. I think there are still angel and seed investors who are placing bets, so to speak, on early stage brands. Why? Why would you be motivated In The economy, the sort of financial environment that we're in right now, what would really move the needle for you to get involved with an emerging brand?
[00:33:52] Mike Schneider: You know, it's really funny. I had this conversation last night with my husband, Drew Coven, who's my co-managing director and a long time entrepreneur and intrapreneur. And, you know, in some ways that angel investors at this point, it really comes from the heart of just products they love and they want to see out there In The market. You know, if they're going to put some money into stuff, it's not that they were so looking at the numbers before it was, you know, taking a chance on someone. But when we talk about it at the end of the day, if we are going to write a check, it's really going to be a love that we use day in a it's the stuff that's jus day, we have it In Your ho we recommend it to people There's a lot of products around women's health that there's a ton of women and angel investors still just getting In The game. A lot of new women are writing checks around products around women's health. You know, that could be a supplement or a functional food or a functional beverage. But yeah, the angel investors who are putting money In The're not so much looking at the numbers. They're looking at this is a good product that the world should have.
[00:35:14] Ray Latif: And is it you that's reaching out to the founders after having tried the product or In The product? Or do they notice that, okay, you put this on social media or they notice you're, you know, a frequent buyer of the product and they're like, oh, you know, did a little bit of research on you, saw that you're an investor and then reached out that way. I guess, how does that relationship start?
[00:35:34] Mike Schneider: I mean, it's definitely a combination. I'm still getting an enormous amount of people just reaching out. But yeah, if we like a product, we'll just tag it, you know, in a social post. Sometimes we've actually reached out to the founder and just saying, hey, we love your product. And one or two we've discovered through, you know, being sent samples and trying it out. So it's a combination. But I would say if anyone, whether they're an investor or just a prominent person, even if they just have a large social following, if they tag you, you know, reach out to them right away. Because I have things I'll tag because I'm such a huge fan and they'll like the posts, but they won't reach out to me. And I'm like, you know, that's a little bit of a shame because I could do a lot more for you. But, you know, I'm like, OK, that's that's cool. And I'll keep In Your product because I love it. But, you know, those that really follow up and say, you know, hey, can we start a relationship? I'm more than happy to help in a lot of ways.
[00:36:33] Ray Latif: That's such great advice, Maxi. Thank you for sharing that. One more quick question. Are the checks that you are writing or considering writing smaller than they were last year or the year prior?
[00:36:44] Mike Schneider: So what I'm seeing more In The angel investors going In The know that those little checks, they don't really pack the punch that the founders need. And what I am seeing is a big kick for the SPVs. And whether it's AngelList or Carta or now Sidecar, They're just making it easier and easier to create an SPV. And that way, the angel investors can be much more comfortable putting in much smaller amounts. But as a group, they can go in for a couple hundred thousand dollars. And what's more important than this In The marketing thing. Again, each and every one of those angel investors is worth exponentially more with the contacts they have. You know, the marketing power you'll get from most of your angel investors is way more than that smaller check that they're going to write.
[00:37:39] Ray Latif: SPV stands for special purpose vehicle. Could you explain what that is In The context of investment as it relates to consumer products?
[00:37:47] Mike Schneider: Absolutely. So it's a special purpose vehicle, meaning a specific company is created in LLC for one particular investment. So that way, if someone wants to come in for $10,000 or $20,000 or $25,000, but they have an excited group of people that they want to bring in who are going to write $10,000 and $25,000 checks, they can create this limited company for the sole purpose of just investing In Your brand. And then all of a sudden they group together and they have a $250,000 investment for you, which, you know, just puts them in a bigger, more advantageous place In Your cap table. so it's better for them and then it's better for you because you actually have more investors and investors who liked your product enough that they just wanted to get In The deal and so they probably have a lot more to contribute than just even their money.
[00:38:45] Ray Latif: Now, we were chatting about some of the topics we were going to cover in this interview, Maxine. One of the things that you brought up was that this sort of trend that you're seeing of angel investors not following up on subsequent rounds or not investing in subsequent rounds. Why is that? And I guess how do entrepreneurs and founders think about motivating those angel investors, particularly if they become close with them or they feel like they have a good relationship with those investors? What can they do to get them involved In The subsequent rounds?
[00:39:16] Mike Schneider: That's a tough one in terms of, you know, really changing someone's criteria for investing. You know, it's double-sided. We had all this fresh new money come into seed stage investment, which was great because so many founders got funding that may not have previously. But angel investing, you know, really became a popular thing and something everyone wanted to try. But if someone's trying it out, they write one or two checks, they want to see how it goes. So they need a couple of years to see how these first couple investments play out before they put more money into it. It's going to be hard to convince them unless they had some crazy early exit where they made a lot of money, where they're like, oh, wait Maxi Minutes, this is a really great thing. They need time. They need time to like see how the game works and see how their deals play out. So I think if you have an angel investor who says, no, no, no, one round was enough for me. You know, I wanted to try it out. I want to see how you do. I don't know that you're going to get any more funding from them, but they're invested In Your company. Your success, you know, means something for them personally. So I would lean In The more of helping you get to either other new angel investors or to bigger funds who can come into later rounds. But if they're not professional investors where they're going to lose the money if they don't invest it, it's hard to get them into subsequent rounds. They're trying it out. I mean, they really are. So, yeah, it's just utilizing those early investors. And the conversation is not awkward because it used to be In Your original investors don't reinvest, it was a really bad sign. I don't think so anymore. You'll just say, hey, I had great people who got me started just like friends and family. Nobody expects people from your friends and family around to come into subsequent rounds. And it's kind of the same thing with like these really early angel investors. They just don't come into subsequent rounds. And the later stage that doesn't make them nervous. They got you started. They got you there. They got you In The game. And that's wonderful. But now you're looking at a different group.
[00:41:31] Ray Latif: As always, such valuable advice and insights. Maxie, thank you so much for taking the time to chat this morning and we'll see you next month.
[00:41:38] Mike Schneider: Absolutely. Can't wait.
[00:41:42] Ray Latif: That brings us to the end of this episode of Taste Radio. Thank you so much for listening, and thanks to our guest, Maxine Kozler. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at Taste Radio.com. Our audio engineer for Taste Radio is Joe Cracci. Our technical director is Joshua Pratt, and our video editor is Ryan Galang. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time.
