Nathan Beckord
Just because CPG is a tough space to raise money in doesn’t mean you have to take every check. … [+]
Some may say there's no room for macaroni and cheese on the market anymore, but that didn't matter to serial entrepreneur Jen Zedzutto. In November 2021, Jen and her co-founders made a spectacular entrance into the consumer packaged goods (CPG) industry, shaking up the macaroni and cheese duopoly with their new noodle option, Goodells. Because, despite macaroni and cheese being loved by kids and adults alike, there were only two big players in the market at the time.
Goodells is truly a disruptive innovation. With a “secretly healthy” ethos, Goodells packs 15 grams of protein and fiber into every cup of mac and cheese. Its unique flavor variety has made it a favorite among kids, athletes, health-conscious celebrities, and the general public.
Though Goodles has been a huge success in the CPG industry, Jen didn't get started lightly. “It's not something you do on a whim,” she explains. “You have to make sure all the ingredients are in place, so everything has to line up for it to be really hugely successful.”
In this article, Jen shares how to enter an inherently risky space, how to find the right partnerships, and how to bring big-name investors and influencers onto your cap table for the ultimate win-win situation.
De-risking your CPG investments
To ensure the business wasn't a flash in the pan, Jen knew Goodells needed a sizable seed round of investment. and To create a strong product, Jenn had thousands of consumers across the U.S. test it. That meant thousands of pounds of pasta was produced and often wasted because it didn't meet her strict quality and taste standards. So Jenn did what many entrepreneurs do: she emptied her 401(k) and put all her energy into testing Goodles.
And her 401(k) wasn't wasted: Among 3,000 tasters nationwide, Goodell's had a 92% switching rate from the two most popular macaroni-and-cheese makers.
This incredible success story helped Jen raise a whopping $27 million in a seed round for Goodells, which Jen calls “risk aversion.” They had gained traction with a very solid product, which allowed them to make a compelling case to investors.
When funding CPGs, choose your partners carefully
Just because CPG is a tough field to raise money in doesn't mean you have to take every check you can get, and Jen has found value in knowing when to let go of the wrong kind of money.
“You think it's about securing money,” she says, “it's not. Money is one thing you need to be successful, but it's not everything. You're looking for a partner who is most likely to be successful. Money is usually the easiest thing to come by. You're looking for a partner.”
So she took advantage of low-risk investment opportunities and asked people for introductions to CPG investors. Like most startups, Goodells received a ton of rejections, some of which didn't pan out. On the day one investor was due to send funds, things quickly became fishy. Emails were being bounced back to internal contacts, and phone conversations indicated the money may not have been earned legitimately.
Jen's advice? “If something strange happens, run in the opposite direction.”
Jen and her team took the lead on Goodells' Series A. Venture capitalists visited Goodells' headquarters and met with all divisions of the company to discuss the direction of the company. Jen's team then assessed the fit of each potential investor based on the questions they asked and their knowledge of the field.
The lesson from this? Even if multiple investors don't come to court, youIt's wise to consider any check offered to you in terms of whether the investor will be a partner or just go along for the ride.
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Play the fame game
Once Goodells hit store shelves at national chains like Target and Whole Foods, word spread quickly: athletes, celebrities, and influencers began approaching Jen for investment opportunities.
These investors are some of Goodles' greatest assets. Because they believe in and use the product, they're happy to talk about it organically to their large followings: serving Goodles at baby showers, sharing photos of their pantries stocked with Goodles, and promoting the brand in their daily content.
Goodells has embraced celebrities and influential investors, bringing in celebrities such as Gal Gadot and Klay Thompson, as well as numerous athletes including NFL players, World Cup soccer players, and MLB players, who also promote Goodells' interests.
Turning investors into partners
Jen warns founders not to get too greedy and own too much stock. Invested in, And she calls valuations and preferential rights “misleading,” arguing that they distract founders from what's really important: building partnerships where everyone wins something.
Investors need enough ownership to be truly interested, which benefits everyone involved, including the less well-known investors.
This article is based on interviews with Nathan Beckord and Jen Zedzutto. In an episode of Foundersuite How to raise Podcasts.
About the Author
Nathan Beckord said: Founder Suitedevelops software for startups that are raising funding. Nathan Funding Stackis a new platform for venture capitalists and investment banks to raise capital and support their clients and portfolio companies. Users of these platforms have raised over $9.7 billion since 2016.
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