Caroline Fabacher might’ve entered the biz world as an attorney at law. ⚖️ But, it was always her love for finances and startups that continually drew her closer to her current position: Principal at Springdale Ventures. 💸
We chat all about – – Beam, the 1st Texas-based Angel Network dedicated to women-founded companies– What makes some pitches sing 🎵 and others screech 🦉 (to a grinding halt)– How the heck does one secure funding these days, from an insider’s perspective
[0:50] Intro to Caroline Fabacher, Principal at Springdale Ventures. How UMAI & Fabacher met – at CANTEEN.
[1:40] Fabacher’s background in law school. She fell in love with finances and startups. Joined a boutique venture firm that focused on serving entrepreneurs. Early-stage capital raising.
[5:02] Were any of the companies that you worked with CPG brands?
[7:54] How did you segway from law to the CPG realm? Found the right entrepreneur – believed in their product. Quit her previous job within 18 hours of receiving a formal offer to join the CPG team. “I’m okay betting on me.”
[11:50] What’re some of the pain points that you saw after joining the CPG industry? It’s still a boys club.
[12:40] A note on Beam in Austin – new angel network focused on backing female founders. The issue with venture investments – there’s a lack of women at the table, period. Fabacher is a part of Beam’s founding committee.
[16:30] The value of a Bad Actor Investor Removal Provision. A commitment to a better investor-business ecosystem.
[20:00] What’s your day to day like at Springdale Ventures? Fundraising. Being accessible to portfolio companies.
[23:35] What does your firm look for in an investable CPG brand? Generally, 1 million in total revenue. Digitally native brand. Margins & cost of customer acquisition play a smaller role in this decision.
[25:10] How much does the founder matter? So much! A factor that sets product apart. Leadership is huge.
[26:26] So, what qualities do you look for in a founder? You know it when you see it. Experience – but this looks different depending on the team.
[28:00] What’re some ways that a company can improve their pitch to potential investors? Go through old decks from successful companies (example: Tinder & Airbnb). What’s the structure? Get to the point as quickly as possible – show them why they should care. Find a flow. Google who you’re talking to!
[30:50] How important are mission statements or hard numbers in a pitch deck? Thoughtful, cohesive branding matters. And, knowing your numbers establishes credibility.
[32:00] How accurate is Shark Tank in relation to the pitches that you see? Not fair to compare them as they’re so heavily edited. Usually, over the course of multiple calls. Post-money versus pre-money valuation.
[34:30] Best piece of advice for a CPG biz that wants to get funded? Have someone that can speak on your financials.
[35:36] Work-life balance. Hard work matters, but your job can become a black hole. You must set healthy boundaries. High-pressure situations aren’t sustainable. Escape into the outdoors.
[41:00] Closing. Show up, do your best, and be nice to each other. For women thinking about starting a business: DO IT! Representation matters.
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Alison Smith:Welcome to the UMAI Social Circle, where we talk consumer goods, marketing tips to help business owners and marketers alike grow. I’m Alison and that’s Karin. We are the co-founders of UMAI Marketing and we’re being joined here today with Caroline Fabacher, principal at Springdale Ventures, the Austin Venture Capital Firm growing CPG brands like Cece’s Veggie Noodles, Mosie Baby, and FitJoy. Welcome Caroline.
Caroline Fabacher:Thanks for having me. I’m excited to be here.
Alison Smith:Thanks. Well, we’re excited too. So just a quick recap on how we know Caroline. So we worked with Caroline at a canned vodka soda company, maybe a year or so back. And she was the co-founder there and we were the marketing team. So that’s how we met. We’ll get a little bit more into that, but first we wanted to do a deep dive into your background. So you studied law and became a lawyer out of school, right?
Caroline Fabacher:Yeah. So I did my JD/MBA, SMU and the whole time that I was doing my law school classes, I was like, oh, I really don’t want to practice law. I want to delay.
Alison Smith:Too late.
Caroline Fabacher:I know, right? I want to work with startups. And my MBA concentration was in strategy and entrepreneurship. I was taking the starting a business class and writing business plans and taking venture capital and private equity finance classes. And just, that’s where my heart was and I didn’t know how to justify like, I’m a little bit fancy, a little bit high maintenance. I got to have this certain standard of living, but also I want to work with startups, they are not paying anything. So I was like, what do I do?
Caroline Fabacher:So I was tweeting about startup stuff, mostly to kiss up to a business school professor whose class I was taking on Twitter and he tweeted a lot. Tweeting about startup stuff and a startup attorney followed me. And I was like, wait, a startup attorney is a thing? What is that? And I stalked him through Twitter, found the firm and the rest is history. That’s where I ended up working. I got an offer and I spent the first four years of my law career at that Boutique Venture Firm.
Alison Smith:Wow. Yeah. Okay. So what [crosstalk 00:02:53]-
Caroline Fabacher:Boutique Venture Firm that focused on serving startups and entrepreneurs.
Alison Smith:Okay. So what things were you doing specifically?
Caroline Fabacher:Yeah. As a young attorney, so we were doing anything from your very first corporate needs. Entity formation, organizing your corporate governance documents, it was really sexy stuff. And then from there, your very earliest needs, which were usually service agreement contracts or bringing on employees and then through capital raising. So our core area of expertise was early stage capital raising, so a lot of friends and family rounds are probably where I spent most of my time and C grounds and then a couple of series A rounds.
Caroline Fabacher:The firm did some work further down the chain, but that’s really where I spent the most of my time. And just it continued to fuel that love of startups and working with them and doing anything I could to help them move the ball forward. Yeah, being an attorney is a [crosstalk 00:03:53] very sexy thing.
Alison Smith:It’s paperwork. A lot of paperwork a lot of times, right?
Caroline Fabacher:Yeah, and you can feel like that some days. Don’t get me wrong. Some days lawyering felt like a slog. But for the most part, it was the underlying purpose that got me super excited to go to work every day. That every day I’m helping an entrepreneur move the ball forward. And a lot of cases, a lot of our clients were the very earliest stages. They had just formed the business, they’ve got an idea, they haven’t refined their business model yet. They often don’t even have a product. And so if they have you on the phone or they’re sending you a quick email, they might also ask you a question that’s not legal, if it’s about their business strategy. And so to have that opportunity to also put my MBA to work was really fun and rewarding and satisfying.
Alison Smith:Yeah. Because you were with these companies since inception basically. [crosstalk 00:04:47]. You were-
Caroline Fabacher:You see some of them grow, but you see some of them die too. That happens where you’ll bring in a new client, you’re really excited about them, and then next year they don’t exist.
Alison Smith:Oh yeah. That’s tough and tough to hear as a business owner, but were some of these brands that you worked with CPG brands? Is that how you got into that field?
Caroline Fabacher:I mean, yes, because it was my client that approached me to come work with them. So yeah, some of them were CPG brands. I’m trying to think. But really they ran the gamut, anything from true small businesses that were services focused all the way to more venture investible startups. And at the time I was primarily in Dallas, but then came back to Austin. So there’s definitely a difference between the types of startups that you see between the two towns. Although CPG is really exploding in Dallas too, and they have skew up there now. So I’m curious if I was a day one attorney all over again in Dallas, what the makeup of the clients would be, because it’s changed so much. The ecosystems are evolving in Texas, which is really cool to see.
Alison Smith:And how long ago was that?
Caroline Fabacher:Let’s see. I graduated in 2016, so I guess I started with them in 2015 as a clerk and then left in 2019.
Karin Samelson:And correct me if I’m wrong, you really got started on Twitter, on social media. That’s how you got your first job, really.
Caroline Fabacher:Yeah, pretty much. I never set foot in our Career Center at SMU, which is probably like my bad and a wasted opportunity. But a lot of law school career centers and business school for instant are to a certain extent are set up to funnel you towards a particular type of job, right. A lot of business school students end up in consulting or an investment banking. There’s a couple recruiters that come to campus and they do their thing. Same thing in law school where it’s really designed to funnel you towards big law and that’s just not where my heart was.
Caroline Fabacher:I realized pretty early on through my clerkship’s that I have to be really close to my work, to be really excited about it. I have to almost hold it a little too tight to do great work. And so for me, that didn’t mean compiling thousands of pages of documents and then sending them off to a corporate client who I may never meet or see. And in the case of my clerkship was on the floor below us in the same building, and I never met anybody there. I like working with small businesses and with venture backed startups because it is so tangible, it’s surreal, it’s so personal, and everybody is so invested. There’s an intensity there that I just think it works for me and it makes me excited to do my work.
Alison Smith:I totally agree on that.
Karin Samelson:Well, so how did you segue from law into the CPG world?
Caroline Fabacher:Yeah. It was a pretty abrupt transition where my client at the time… Well, let me back up a little bit. When I first came to Austin, I was like, “Hey, I know one of the biggest baddest founders of a CPG company. I’m going to go chase that business.” So that’s how I reconnected with the person who ended up becoming my client. He had moved on from his last CPG venture and he came to me and he was like, “Hey, I have this idea.” I’m like, “That sounds awesome.” And I was thinking about it, I was like, that’s a really good idea. I believe in that product. I believe in that vision, and in that team. And I sat down with him and told him, “I know it when I see it. And I will follow you off the cliff and build the airplane on the way down, if there’s a place for me in this.”
Caroline Fabacher:So a couple months went by, he came to my firm as a client and we formed the entity and got it started and when a little bit of time had gone by, I hadn’t heard anything. He and his other partner invited me out to the distillery to sample products. So I just went out there thinking, I’m your attorney, I’m here to taste this and just be here. And they’re like, “Do you want to join us?” And 18 hours later, I quit my job.
Caroline Fabacher:It was a no brainer for me. I was restless. I was ready to move on. I knew this was the opportunity and I didn’t hesitate. And coincidentally, I had a trip up to Dallas to go talk to our law clerks about business development and give them a little seminar on that. So I went up there for that, gave that lecture and then walked into my partner’s office and was like, “I’m sorry, this is my notice.” It was very surreal.
Karin Samelson:18 hours later. You don’t hear stuff like that very often. Making that big of a career job.
Caroline Fabacher:And that’s one of the things that I knew, but that I also don’t think my partners knew, that law is very much an apprenticeship, right? I had mentors, I had teachers within my firm, and it’s a very specific path. And if you step off of it, I don’t get any credit for what I’ve learned or the work I’ve done away from law and away from that desk. If I left at this point and learned all this stuff, I’m still coming back to law if everything falls apart at that same spot. So it was definitely a gamble, but I’m okay betting on me and I believe in this product and the team that was being put together, it just made sense. So I didn’t hesitate.
Alison Smith:Yeah. I really like that because it’s just like, take those exciting opportunities, don’t overthink it and just jump in. And like you said, and believe in yourself, so you can do it.
Caroline Fabacher:And to be fair, I don’t have any other responsibilities. It’s me and my dog. I don’t have to feed children. I don’t have a spouse. We’re not juggling two jobs in a single household. I have every advantage and the flexibility to do that so it’s a combination of yes, being ready for it, but also a little bit of luck. Right place, right time, and having everything else in place that you can make that move.
Karin Samelson:Yeah. I love that honesty about luck because some people think it’s all hard work and it’s all what you put into it and I believe that’s so much of it, but a little bit of it is luck sometimes. And I feel the same way for our business too. So that is incredible. So what are some of the pain points that you saw now that you were part of the consumer packaged goods industry?
Caroline Fabacher:Yeah. So this is not going to be surprising or exciting, but the boys’ club phenomena is not unique to corporate culture. And it’s also not unique to tech. Now you hear about it in tech and you read stories and lawsuits by those like Emily Kramer at Carta or Françoise or I think it’s Brougher of Pinterest. This is a common theme, but it’s very much alive [inaudible 00:12:23]. We are so lucky at Springdale to see a more diverse selection of founders, women, and people of color, but we still have a long way to go. And so one of the initiatives I’ve recently gotten involved with here locally in Austin is Beam, which I don’t know if you all have heard of, but it’s a new Angel Network in Austin that focuses on backing female founders.
Caroline Fabacher:And this is so awesome because it works to solve part of the problem around female founders and them not getting funding. I think less than three percent of venture dollars go to women or teams with a female founder on them. That’s insane. To put that into perspective, I think it was around three and a half billion dollars last year went to women founded companies and $5 billion is what got sunk into WeWork. So that was one deal, and that was more by a billion and a half dollars that all the funding that female founded companies received. That’s not right. But there’s two other pieces to that equation.
Caroline Fabacher:So it’s like you have to have female founded companies that are having a hard time getting funded, but there are two other parts of this problem that need to get addressed. One are female investors, right? So female investors make up less than 15 percent of venture investments. There aren’t enough women at the table, period. And female investors make a huge difference. So VC firms that added, I think 10 percent to their partnership for females, experienced a 10 percent more profitable exits. It’s good business to have female investors. And then the third piece of that is female employee equity ownership. So women make up 35 percent of equity holders in startups, but they only hold 20 percent of the equity.
Caroline Fabacher:So Beam is just one of the ways if you’re locally I think that we’re working to address this issue. It is money that is being funneled towards female founders. Female founders are more likely to hire diverse teams and allocate that equity among women a little differently. And then separately from female founding side, you also have the female investing side. And Beam Angel Network has, not a stewardship program, but a coaching program, so if you’re a young woman that is interested in angel investing someday you can be assigned a mentor. I think they’re called guardian angels and work on becoming familiar with this space, right? Because it’s high risk, high reward. A lot of these companies do go to zero. How can you step into this space with as thoughtfully as possible and Beam is working to make that happen.
Alison Smith:Love that. So you’re saying one of the big problems is there’s not enough female investors because female investors invest in female founders?
Caroline Fabacher:Partially, yeah. The data around one, what happens to an investing team when they add a woman to the team, they are more profitable, the returns on the fund increase. That’s undeniable. And then separately, they also invest in more female led companies.
Alison Smith:So what is your role with Beam?
Caroline Fabacher:With Beam, I’m on the founding committee. So because of my legal background, I help them bring in some legal partners to support the network itself and make sure our form documents that underlie every single transaction that the network does are right and strong and within the parameters of what the organization is setting out to do and serve the investors. So helping them get that set up. One of the things that will be special about Beam’s documents that was also part of my CPG company is something I believe really strongly, and I’m excited that Beam has adopted, is a bad actor investor removal provision. You hear these horror stories about female founders who are propositioned or their checks are conditioned, I know I have an anecdote about a female founder who was sent a sexual consent form by a prospective investor. You can’t make this stuff up.
Alison Smith:A what?
Caroline Fabacher:It’s insane. And so the bad actor investor removal provision is like, “Hey, we’re demanding a higher standard of behavior from everybody, from all partners at the table. And if you can’t behave, you don’t just get to keep running around writing checks and-“
Karin Samelson:Are they blacklisted?
Caroline Fabacher:Well, so the organization will ultimately remove them. But the problem has been the companies, these startups that take a check from an investor because they need money, have had no mechanism for removing bad actor investors. What am I supposed to do? Sit there uncomfortable with this investor that has done something that has, I don’t know, come up in the news repeatedly for DUIs or spousal abuse or whatever the case may be. There isn’t a way to get rid of them. That’s changing. So that was not the case at my last startup. We had a way to remove investors with unanimous vote and proper procedure that was fair. But startups taking some of the power back. To say, we want to work with good people and we’re going to hold you to a higher standard of behavior. And-
Alison Smith:Yeah. It’s like you’re in golden handcuffs once you enter that deal, I guess.
Caroline Fabacher:Yes. Well, that’s part of Beam. They are committed to a better ecosystem and better behavior and have put that in writing and that’s pretty special. Also I will say, as an attorney, if I was investor counsel, I would review that language and be like, “Don’t agree to this if you can avoid it.” It’s just a way for you to potentially lose your interest, right. I was stunned how positive the response was from the investors that we talked to with the last brand. The response was overwhelmingly positive. People want to see this change. And the people who are excited about it are the kind of people that you want to do business with. So it has never been a problem and I don’t foresee it being one. I hope it’s something that becomes more common in the startup ecosystem.
Alison Smith:I love that they’re taking control back. It’s cool.
Karin Samelson:And if an investor is against it or is in any way opposed to signing paperwork, that’s not someone you want to work with and [crosstalk 00:19:01]. So that’s really incredible. I haven’t really heard a lot about the bad actor investors.
Caroline Fabacher:And it was drafted with the help of a bunch of attorneys here locally. I started it and then I crowdsourced it from some of the best attorneys in town who are working venture deals all the time. What would you like to see? What makes sense? What’s the balance between making sure the investor is protected? It’s not like, I don’t know, they tweet about how much they love Trump, and we’re like, “Oh, got to get rid of that.” No, that’s not designed for us to comment on your political leanings or whatever it may be and we want it to be balanced and fair. And so it has input from local, I don’t know, expertise and I’m thrilled that it was something that was crowdsourced and then put back out into the ecosystem.
Alison Smith:What an awesome thing to be a part of? Let’s talk more about your role as principal at Springdale ventures. What’s your day to day? What are you up to? Let’s here it.
Caroline Fabacher:Yeah. A little of this, little of that. Really depends on the day. I joined in July. So five months, almost six months. I feel like I’m still very much getting my feet under me. But it can be everything from sourcing deal flow, review a deal intake. So as the deals come in, figuring out which ones we want to take a closer look at, actually taking a closer look at them. We discuss anything that gets through the door and is pretty interesting to us as a team, which is always really fun because the perspectives are so varied.
Caroline Fabacher:And then over to the other side which is fundraising. Entrepreneurs you hear about fundraising all the time. We don’t often think about the not so sexy slog of raising money for VC funds. And everybody who’s raised a fund for a first time will tell you that it’s probably the hardest thing they’ve ever done. So we closed fund one in mid November. We’re officially done and we’re starting to think about fund two. What does that look like? Is it bigger? It will be. And then from there, because it’s bigger, what do our new investors look like? Are they the same as the ones that were in fund one? If they’re not, who else are we talking to?
Caroline Fabacher:So working on building out that pipeline and thinking about who make the best partners, because one of the things that’s really special about Springdale is that most of our investors in the fund are entrepreneurs themselves. And so we have a really deep well of talent and resources and expertise in the CPG space that we’re then able to offer, when appropriate to our portfolio companies.
Caroline Fabacher:So fine, if we can be picky and take money from people who are the best fit, that’s awesome. But at the end of the day, all money spends the same and there will be some investors who write checks and just wait for their returns and we never hear from them and they’re just more passive investors. Both are great, but part of what makes Springdale special is that our LPs really understand CPG and the space from the brands that we’re supporting.
Alison Smith:So there’s a lot of mentorship involved?
Caroline Fabacher:Yeah. So Springdale does sit on some boards. I do not sit on any yet because I’m new to the team and a principal. But yes, there is a lot of mentorship. We are very accessible to our portfolio companies to the executive teams there. We want them to call on us when they need us. Often though, look I’d like to take credit for this, but sometimes the best source of mentorship for our portfolio companies are our other portfolio companies. So they’re able to all learn from each other and watching them connect those dots and get excited about meeting each other and learning from each other is really rewarding even though we really have nothing to do with it. It’s just exciting. You feel the energy, you see these light bulbs go off and then they’re off and running to concur their next hurdle.
Karin Samelson:That’s awesome. Yeah. We have a client now who just closed around from CPG founders that have sold and it’s just like that effect of just like, I killed it on this brand. I’m just going to keep killing it.” And it’s just like a snowball. I feel like there’s no stopping you at that point.
Caroline Fabacher:Yeah. It’s exciting to see. Right?
Karin Samelson:So what does your firm look for in an investible CPG brand?
Caroline Fabacher:Yeah. So we have a couple of key parameters that are… I guess they get gatekeepers. Right. It’s the threshold for a deal that we’ll look at. And that’s generally at least a million in revenue and not monthly recurring. I’m saying you’ve got a million of revenue excesses to us, you have customers, you have an established brand, you have a viable product. There is something there. So we invest in series C and series A deals. And you’re typically a digitally native brand, but that’s not a hard requirement because obviously we have brands like CANTEEN and Beet Box. Liquor brands aren’t digitally native. It’s not possible, kind of how it works. And a lot of our food and beverage stuff is obviously outside that digitally native CPG brand with at least a million in revenue.
Caroline Fabacher:That’s the quick and dirty summary. Beyond that, when we start to look at metrics, whether it’s your margins, your LTV, your cost of customer acquisition, all these things. I won’t say we have hard and fast rules because it just depends on what industry you’re in and then the stage of your business. The more data we have, the more demanding we can be, but a company that has eight months of, I don’t know customers doesn’t have a ton of information yet. So that’s where the revenue piece I think is really important because it ensures that we have enough history to do enough homework to make sure something’s a good investment.
Alison Smith:How much does the founder matter when you’re looking at these brands?
Caroline Fabacher:Founder’s everything. I mean, great ideas are everywhere. I don’t care how good your idea is. Can you execute? And that’s the whole thing with startups. Is like, there are lots of ideas. There are lots of people out there doing the same thing. We are looking at a deal right now that we discovered a competitor that hadn’t been mentioned in the slide. That competitor had a three-year head start on him. Well, to me a competitor is good news because it says, this is going to fill a need. Right. And the founder of the competitive company was an engineer and did not have the same executive leadership history, startup experience that we see in this new founder. So they both had the same idea and they appear to both have very comparable products. We’re just betting that this founder is the one who’s actually going to scale it and take it to a significant exit. So your founding team can make or break.
Karin Samelson:And so what are the core the top things that you look for in that founder?
Caroline Fabacher:Oh, this is so hard because again, it’s one of those things where you know it when you see it, but it’s really hard to put your finger on. A lot of the times part of it is experience, right? Having experience at a previous venture backed startup, I mean, were you a coder for them or were you chief of staff. Your position relative to that says a lot. Also how long were you there? Were you there through the C round for the B round because you watched your company scale from probably double digit employees to triple digit employees and experienced some real challenges as a company, that scales and grows and what was your role in all that? Right. So experience matters.
Caroline Fabacher:And part of that also is industry experience, right? Is what you’re doing now, where you came from and where you might have deep relationships or deep specific and institutional knowledge, it’s key to your success. But that’s not always necessary. Right? We got venture investment, I had no experience in the alcohol business. I knew a lot about startups, but as long as you have a team that fills in each other’s weaknesses and you have your own core competencies, that matters. So really I’m going to say, we look for experience, but that experience can either be, educational, it can be industry experience, it can be domain expertise. It looks different with different teams.
Karin Samelson:Awesome. So what are some ways that a company can just instantly improve their pitch to potential investors?
Caroline Fabacher:Your homework. Which sounds like not that big of a deal, but you can find a ton of old pitch decks online, right? The old Airbnb and Tinder ones are hilarious to see in their first versions.
Alison Smith:I think I read the Airbnb one.
Caroline Fabacher:Yeah, and so you can learn a lot by going through lots of reps of the decks of decks, just look at them. And what you really should be looking at is structure. They pretty much always follow the same structure. And while you might think that’s boring, it allows VCs or institutional investors, or even just investors in general, who see tons of decks to get to the point as quickly as possible, right? You don’t want to make it hard for somebody you’re trying to get money from to figure out what you do and why they should care. And sticking to that relatively standard flow that you expect with pitch decks is really helpful for whoever’s looking at your deck.
Caroline Fabacher:The other thing, and the only reason I say do your homework is because I recently was able to talk to another vodka soda company and they were lovely to talk to, but it was very clear that they put mild company in their deck as a competitor. And they were talking to me and they had no idea or who I was or what I’d done before. And they were also unable to tell me how their business was positioned to win among the competition. So had they done a quick Google of one, our portfolio companies and two, who they were talking to on the call, they would have been a little bit more prepared. Now I happily took the call because one, I wanted to know what they were up to and see if they were potentially different, but then also to say, “One, you guys should do your homework a little bit more and also it’s important that you do your homework.” Because if they had considered who was in our portfolio, they would know that we were precluded from investing in them.
Caroline Fabacher:So I took the call because I wanted to know, are they doing something different? Well, it turns out they were, we can’t invest in a directly competitive business. So it was a waste of time for both of us. [crosstalk 00:30:21] They would have done their homework, they would have known that was in our portfolio and known that it was a waste of time. However, I do think that phone call wasn’t a waste of anybody’s time because I was entertained. And I want to believe I left them with some good advice moving forward, and sent them off with some new doors to go knock on. So God’s speed guys.
Karin Samelson:[inaudible 00:30:45].
Alison Smith:Got to practice on you, yeah. So how important in that pitch deck are things like mission statements and things like that? Do you really look at that or is it more about hard numbers?
Caroline Fabacher:It’s both. Mission statement is not a particular thing, but we care about brand. Right. And your mission statement is part of that. So the extent that you have a thoughtful, cohesive, appealing brand that makes sense with what you’re doing. We care about your mission statement that much, right? To the extent it’s part of your brand. But financials and the metrics matter. I don’t know if you guys watch Shark Tank, you see it on Shark Tank all the time. For the love of God, know your business, know your numbers, know your margins, know your channels. You almost immediately lose your credibility by not being able to speak to those things quickly and concisely, so that, yeah, that’s another one. The financials matter, the metrics matter. And you being able to talk about them, matters. If you can’t and you’re the CEO, that’s okay. But your CFO or whoever, or your accountant, or whoever is your partner in this that knows the answers should be with you on that call.
Alison Smith:That’s great.
Karin Samelson:You brought up Shark Tank and I watch it religiously. So how accurate is that to a reality of a pitch that you see?
Caroline Fabacher:I don’t know that it’s totally fair to compare them just because those are so highly edited and everything I’ve read about them suggest that they go on for hours. Our pitches, first pitch will be about 30 minutes, generally. Well, I would say it’s more like 20, so there’s room for questions. And then there’s usually a follow-up call where we will lean in on you and push on you about some of your metrics, right? We might challenge the way you’ve calculated LTV, we might have some questions about your margin and ways you plan to improve it. So, yeah, it just depends.
Caroline Fabacher:But as far as Shark Tank goes, the one thing about Shark Tank that is so confusing, there’s this particular nuance to venture thing. This is really dorky. When they’re like I’m seeking $100,000 for 10 percent of my business. They’re talking in post-money terms and nobody in venture does that. They all talk in pre-money terms. So that’s the only thing from the show where I understand why they do it because it makes the math nice and tidy and clean, and the viewer can understand exactly what the founder’s giving up, but capital raising outside of Shark Tank in the venture world doesn’t function like that. We talk about pre-money evaluation.
Alison Smith:Can you explain that for everyone? Pre money evaluation?
Caroline Fabacher:Yeah. So let’s see, I’m not good on the fly math, so hypothetically I’m trying to raise a million dollars at a $5 million valuation. That’s a $5 million pre-money valuation. So I’m not actually selling a 20 percent of my business, it’s $1 million out of $6 million. Because the post money valuation, my valuation is $5 million today, my post valuation will be $6 million. So the investors bought $1 million of a $6 million valuation, so it’s less than 20 percent. I don’t know if that math is eight, 17 percent, 16 percent from there. I don’t know. Less than 20 percent.
Alison Smith:Yeah. I don’t know either.
Caroline Fabacher:Calculated in spreadsheets. Don’t ask me to [inaudible 00:34:19].
Alison Smith:Yeah. Thank you for that. So we’ve gone through this, but what is your number one best piece of advice for a small CBG business owner that wants to get funded?
Caroline Fabacher:Yeah. I would go back to the point I just made, know your business, know its forwards and backwards. And if you don’t have all the answers, that’s okay. But have somebody with you who at least can speak to the financials, if that’s not your core competency. That’s okay. You immediately undermine your credibility when you start fumbling around with some of your basics, like margins and your channels. And I’m not saying you’re dead in the water, but it’s really hard to come back from that. Right. And as early stage startup entrepreneurs, you shall be eat, sleep, breathing your business, it’s a little worrisome if you don’t know it. You don’t have to know everything about your business, but your team should.
Alison Smith:Yeah. And that brings us to something that I wanted to ask you, because when you are in the startup or entrepreneurial stage, you’re working nonstop. And I know that you’re a hustler as well, but I feel like you have a really nice grasp on work-life balance. So just give a little mentorship. How important do you think is work-life balance for anyone?
Caroline Fabacher:I mean, I’m a big believer in hard work. I think that that’s what separates good from great, right. Is like who’s willing to study a little longer, push a little harder, network a little bit more effectively, hard work matters. But I felt this way about law, where you have billable hours and quotas, I felt this way in a startup, and I feel this way about my career in general. It is a black hole and it will take as much as you give it and still need more. So it is up to you to draw the boundaries and the lines and find that balance. It’s really easy, especially early in our careers to be the first one and last one out. Work really hard. Especially, I feel like for people around my age where we graduated in the middle of financial crisis, we know what it means to put our heads down and work, but your phone culture, your HR department is not going to set those boundaries for you. And it’s a monster, you can feed it and feed it and feed it and it will never be full.
Caroline Fabacher:So I’m a big believer in healthy boundaries. I am an early to bed, early to rise person. I pretty much will not look at my phone after 9:00 PM. Now if there’s a Slack that comes through and it’s truly an emergency, of course I will get on something. But I am very lucky and in the world I live in, is not life and death. Right. Nothing is going to die and isn’t going to fall apart, nothing is the end of the world. And that was something I wish I had applied more when I was doing the startup life, because after a certain amount of pressure, it’s just not sustainable. Right. I wish I’d come to that realization a little bit sooner over there because yeah, it’s business, right? These are business problems. They all have a solution. Everything is solvable.
Alison Smith:And like you said, it’s not life or death. And just some background there, so Caroline climbs a mountain every other weeks. That’s what I’m talking about.
Karin Samelson:She’s going fishing every day.
Alison Smith:No, unlike Instagram versus reality is very real. There are days when I’m crying in my closet and those are not on Instagram, but, yeah. The outdoors is a really big part of me staying sane. It’s why I’ve spent time away from Austin this year just so I have more outdoor access, because by showing up for myself outside and making this time, I am able to better and more fully show up for my team members and for our portfolio companies, and for my family and for the people who have to live with me and be around me. It’s everybody wins if you make a little space for yourself.
Karin Samelson:Well, that is some good advice for absolutely everyone.
Alison Smith:Right. And I love set boundaries early. And do you let your team know these are my boundaries or does it just come up when you cross that bridge?
Caroline Fabacher:I mean, I feel like I’m very, very lucky to have a team that gets it, right. And also I am the least busy of my team members, both my partners, Dan has three daughters, Jen has a son, COVID has completely changed the game for work from home parents. I’m like single moms are the superheroes of COVID. I don’t know how they haven’t lost their minds yet. I’m sure that many of them have, but I have me and my dog, right. It’s easier for me to be flexible and I’m happy to do that, but they have families that they love and they have really interesting hobbies. I mean, Jen camps and is way more hardcore than I am. They all have interesting, rich, round full lives. And that makes us all willing to pitch in when somebody is trying to go on vacation or with everybody’s a little bit more understanding. I don’t know.
Caroline Fabacher:I don’t feel like I’ve had to need to set boundaries here in the way that I look back and think about some of my time in a law firm or when I was doing startup life. They were just different and I was a young attorney, I didn’t really consider it. Running a startup, I didn’t think I needed. I had a thought it would pass. And now I work with a group where it’s just part of our culture. So, I have a friend who recently made the transition to a private law firm and she was asking for advice and I was like, “Draw the boundaries now, because if you become the person that is the go-to for everything last minute, 11:00 PM, we got to get it done by tomorrow morning. You will become that person.”
Alison Smith:And, and that’s maybe another part of the problem is I don’t know if it’s a female problem or whoever problem, but saying no to… You’re maybe new to a company, you want to say yes, yes, yes. And then you get stuck in those yeses. So saying no to things and holding your ground and I think that’s more and more part of the conversation and maybe people look more and respect that you’re saying no, but.
Karin Samelson:All right. Is there anything, any other nuggets of wisdom you want to leave us with, Kelly?
Caroline Fabacher:I don’t think so. I’m like, come back to me in a couple of years and maybe I’ll have some wisdom to share, but I feel like I’m just figuring out alongside everybody else. Right? Show up, do your best, be nice to each other and learn a lot, and that’s take it and move into the next one. I’m like, I might have a nugget next year, but.
Karin Samelson:We’ll get back to you next year. Yeah, but you have-
Alison Smith:We’ll do a follow up.
Karin Samelson:You’ve given us so many good pieces of advice for CPG and those that are even dreaming about investments. A lot of people that are going to be listening are people that have nowhere near a billion in revenue right now. So I think that this is a good inspirational step that they can really aspire to. So is there anything you’d like to leave the audience with, whether it’s a call to action, a final statement, or anything like that?
Caroline Fabacher:Well, I guess for the women who are thinking about starting a business, or who are thinking about jumping into a startup, do it. Your presence lets other women know that it’s possible and representation matters, right? The more diverse the startup community becomes, the more diverse talent it will attract. And that’s a win for businesses, it’s a win for individuals, it’s meaningful, I feel like it’s harder for women to take that step sometimes because they have families depending on them or children, or they have a spouse who’s the primary breadwinner, or maybe they’re the primary breadwinner and they can’t give up that salary, but just you trying or making that leap is really meaningful stuff and paves the way for other women to follow.
Karin Samelson:Love it.
Alison Smith:Love that. Yeah.
Karin Samelson:Love a female founder always.
Alison Smith:And if anyone wants to check out Springdale Ventures is there a website that they can go to?
Caroline Fabacher:Yeah. So our website is springdaleventures.com. We are on Instagram at, I believe at Springdale underscore V where you can keep up with our portfolio companies. Well, I’m double checking right now. Oh wait, we changed it to Springdale Ventures. That’s way better. Where you can keep up with our portfolio companies and see some of their new releases or if the’re coupon codes, especially just like Christmas comes up. So yeah, we’re on Instagram, we’re on Twitter and our website is springdaleventures.com. You’ll be able to check our portfolio companies, our team, and see, what we’re up to and what we’re about.
Alison Smith:Awesome. Well, Caroline, thank you so much. This is such a great talk. Thanks for joining us today.
Caroline Fabacher:Of course. Happy to join you all and also just nice to see you again.
Narrator:UMAI Social Circle is a CPG agency driven podcast based out of Austin, Texas. We’re excited to share more behind the scene insights, chats with industry leaders or whatever else we learn along the way. Follow us on Instagram at UMAI Marketing or check out our website UMAImarketing.com. Catch you back here soon.
[…] #10: Uplifting Female Founders, Pitch Deck Pitfalls, and Getting Funded With Springdale Ventures Pri… […]
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