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Articles
For Founders: Seize this Moment to Raise Capital
By Bunmi Olayanju MBA CFA
While the headlines have been awash with talk of a venture capital winter, it’s crucial to understand that it’s merely a season, not a barren period. The data shows that while the pace of fundraising might have decelerated in the past year and a half, there’s still a robust ecosystem of deals being struck across stages. For founders who can present their businesses credibly and compellingly, now could be an opportune time to secure the capital they need.
Let’s delve into why the current fundraising climate holds promise:
Abundance of Dry Powder: Latest data from Q1 2023 shows VC firms in the U.S. sitting on a staggering $303B in uninvested capital, a figure nearly double that of pre-pandemic levels. This reservoir indicates there’s ample capital seeking worthy ventures.
Momentum-driven Investments: After a period of caution, investors are eager to finish the year on a strong note or begin the new one with vigor. Given that VC earnings are closely tied to the multiples on their invested capital, there remains a consistent interest in bankrolling promising startups. Angellist’s Q3 2023 data underscores this, revealing a notable uptick in investment activity.
Favorable Valuations: Recent trends show startup valuations undergoing a correction, reaching some of the most investor-friendly levels in recent history. Lower valuations allow investors to reduce their investment costs, making their desired returns more achievable. Q3 2023 reports from AngelList and Carta suggest that median valuations remained consistent or even edged higher across venture stages compared to the preceding quarter. Furthermore, AngelList’s Q3 VC report points out that valuations, particularly in the early stages, might have hit a floor, offering a potential uptick in the near future. For investors, this presents a lucrative window to enter before valuations surge.
The Angel Impact: Angel investors, especially in the early stages, have become indispensable. Data from Carta highlights that checks amounting to less than $25,000 constituted between 31% and 59% of all pre-seed capital raised in the first half of 2023. This engagement level is poised to rise with the sizable accredited investor base in the US and the increasing adoption of angel special purpose vehicles (SPVs), which offer a simplified and efficient medium for angels to pool resources and back startups collectively.
In conclusion, while cyclical downturns in venture capital can create an atmosphere of apprehension, they often conceal underlying opportunities. The current climate, with its abundance of uninvested capital, investor eagerness to achieve momentum, attractive valuations, and the significant role of angel investors, makes a compelling case for founders to actively pursue their fundraising initiatives. Armed with the right strategy and a clear understanding of the evolving investment landscape, founders can effectively navigate this VC winter, turning prevailing challenges into unparalleled opportunities.
Bunmi Olayanju MBA CFA is a finance expert and investor. Visit here to learn more about him
Reckitt’s Mead Johnson, Abbott Cleared by US Court in Infant-formula Case: Food Safety and Health Headlines
Food Safety and Health
Reckitt’s Mead Johnson, Abbott Cleared by US Court in Infant-formula Case – Just Food
Reckitt Benckiser’s Mead Johnson unit and Abbott Laboratories have been cleared by a Missouri court relating to claims certain brands of their premature infant formula can cause a serious gut condition.
Authorities Find Source of E. coli outbreak in Iceland – Food Safety News
Health officials in Iceland have found the source of a Shiga toxin-producing E. coli (STEC) outbreak that sickened more than 20 children.
CFIA Rebukes Silk Co-manufacturer in Listeria Outbreak Inquiry – Dairy News Today
Canada’s food safety regulator, the Canadian Food Inspection Agency (CFIA), has rebuked Joriki, a co-manufacturer of plant-based milk for brands such as Danone’s Silk and Walmart’s Great Value, following an investigation into a listeria outbreak.
NGOs Charge EU to Tighten up Laws for Mercury Levels in Tuna – Just Food
Non-profits Foodwatch and Bloom Association have called on the European Commission to tighten rules on the sale and advertising of tuna products containing high levels of mercury.
Metal Pieces in Bread and Buns Prompts Recall in Canada – Food Safety News
Wonder Brands Inc. is recalling various brands of bread and buns because of pieces of metal in the products.
Lifeway Foods Rejects Danone’s $283M ‘Opportunistic’ Takeover Offer: Funding and Acquisition Headlines
Funding Acquisition and Finance News
Lifeway Foods Rejects Danone’s $283M ‘Opportunistic’ Takeover Offer – Food Dive
Lifeway Foods rejected a Sept. 23 offer by Danone to acquire the kefir maker for about $283 million, or $25 a share. Danone, a long-time shareholder in Lifeway, currently owns 23.4% of its common shares.
UpSnack Brands Acquires Pipcorn and Spudsy – FoodBev Media
UpSnack Brands has acquired the assets of Pipcorn Heirloom Snacks, a better-for-you salty snack brand known for its use of heirloom corn, and Spudsy, a company specializing in upcycled sweet potato snacks.
BRF to Acquire 26% Stake in Addoha Poultry – Just Food
Brazil-headquartered meat major BRF has signed a binding agreement to acquire a 26% stake in Saudi Arabia-based Addoha Poultry Co.
Lactalis USA to Increase Feta Production With $55M Investment – FoodBev Media
Lactalis USA has announced plans to invest $55 million to increase the volume of Président feta cheese produced in the US.
Celsius Holdings Boosts Innovation, Production Capacity With $75M Co-packer Purchase – Food Dive
Celsius Holdings spent $75 million to acquire Big Beverages Contract Manufacturing, a long-time co-packing partner.
Big Idea Ventures Announces Six New Investments – FoodBev Media
Big Idea Ventures has announced six new company investments through the Global Food Innovation Fund II (GFIF II).
1440 Foods Acquires Protein Bar Brand Fitcrunch – Just Food
1440 Foods, a company holding a collection of sports and active nutrition brands, has acquired the protein bar brand Fitcrunch for an undisclosed sum.
Kellanova Sales Rise as Shareholders Approve Mars Merger – Food Dive
Kellanova signaled a strong outlook for 2025 after seeing higher demand for its snack products in its most recent quarter. The Pringles maker, which agreed to be acquired by Mars for $36 billion in August, saw a 6% increase in organic sales year-over-year and a 16.1% increase in profits.
Kilcoy Global Foods Buys Australia Burger Factory From Tyson Foods – Just Food
Private-equity-owned Kilcoy Global Foods (KGF) has acquired a burger factory in Australia from Tyson Foods.
Revo Foods and Paleo Announce Partnership to Level up Salmon Alternatives: Food Tech and Innovation Headlines
Food Tech and Innovation News
Revo Foods and Paleo Announce Partnership to Level up Salmon Alternatives – FoodBev Media
European food-tech start-ups Revo Foods and Paleo have announced a new partnership, backed by €2.2m in EU funding, to develop plant-based salmon alternatives containing precision-fermented myoglobin.
Ohly Unveils Yeast-Based Bionutrients to Boost Fermentation in Alternative Proteins – Vegconomist
Ohly has introduced a new range of yeast-based bio-nutrients for fermentation processes used in cultivated meat, protein, cheese, and dairy alternatives.
PoLoPo, CSM Ingredients Partner on Egg-free Egg Protein – Snack Food & Wholesale Bakery
PoLoPo, a molecular farming outfit, has signed a Memorandum of Understanding with CSM Ingredients. The companies will work together to bring PoLoPo’s egg-free egg protein grown in potatoes to the commercial baking market.
Japanese Scientists Develop Low-Cost Medium to Grow Muscle Cells Without Animal Serum – Vegconomist
Japanese scientists have developed a new co-culturing system using rat cells and cyanobacteria to create a low-cost alternative to animal serum for cell growth.
Naplasol Debuts Enhanced Mycoprotein Range Following Mycorena Acquisition – Vegconomist
Naplasol, a Belgian-based protein manufacturer under the VEOS group, is launching its newly acquired Promyc mycoprotein line at the Food Ingredients Europe (FIE) event in Frankfurt next month.
SweetLeaf’s Parent Company Acquires Canada’s Drizzle Honey – Just Food
Wisdom Natural Brands, the US-based owner of the SweetLeaf sugar substitute brand, has acquired Canada-based Drizzle Honey for an undisclosed sum.
AQUA Cultured Foods Debuts its Unique, Raw ‘Tuna’ at Chicago Michelin Restaurant – Vegconomist
After achieving GRAS status earlier this year, AQUA Cultured Foods‘ long-awaited, fermentation-derived alternatives to raw seafood have finally launched into food service.
Nordic Upcycled Mycelium Startup Enters Japan’s Increasingly Attractive Alternative Protein Market – Green Queen
Oslo startup Norwegian Mycelium has set up a subsidiary in Japan and launched an upcycling service to turn food industry sidestreams into sustainable proteins.