Investment Climate Podcast: Rob Leclerc of AgFunder – How to Get Funded in 2024 – vegconomist

In this podcast series, co-produced by vegconomist, Alex Shandrovsky interviews investors about benchmarks for funding Alt Proteins in 2024 and uncovers the investment playbooks of successful Climate Tech CEOs and Leading VCs.

Podcast Host Alex Shandrovksy is a strategic advisor to numerous global food tech accelerators and companies, including alternative proteins and cellular agriculture leaders. His focus is on investor relations and post-raise scale for agrifood tech companies.

Episode one can be found here, the second is here, and part three is here.

Episode 03: AgFunder’s Rob Leclerc

In this episode, Alex talks to Rob Leclerc, founding partner of AgFunder which has about $200 million in assets under management. Rob talks about how investors are looking into companies nowadays and their expectations. He also discussed how the market shift, sectoral challenges, and founders’ roles affect the fundraising process in this current investment climate.

Key Facts AgFunder:

• Goal: AgFunder invests in early-stage food tech and ag tech seed to series A companies.
• $200 million company assets.

Alex’s Top Findings:

1. Market Shifting. There is a saying nowadays that if you don’t have the margins of tech, you’re not tech. Tech valuations are not given anymore, not like in 2021. Record high food tech IPOs have crashed and cheap interest-free money has become very expensive.
2. Alternative Protein Situation. Early on in the alternative protein days, there was an assumption that food was going to be technology, which means it was going to have gross margins and technology-like growth rates. The input costs are generally higher and the end products tend to be premium products.
3. Cost Challenges. Cost is one of the biggest drivers, but you have taste, texture, convenience, and health. Unfortunately, no company is kind of meeting and beating on all those categories. There’s a small handful of companies that are able to compete on cost in certain categories in certain areas but there’s still probably some compromise on taste or texture.
4. Distribution Difficulties. You have tons of gatekeepers, whether it’s in food service or retail. Distribution now is extremely difficult as people are sort of not willing to try products.
5. Venture Capital Expectation. They are looking to have 10x return on their investments. It’s harder than ever to get the attention of your ideal customer investors. Getting a 10x return from a seed round is very difficult. Companies should take the money and if you cannot build a profitable company with the money that you’ve got, you are probably not going to make it. When you’ve raised 25 million, 15 million for Series A, and you need another one to two funding rounds before you even think you will get to profitability with your optimistic, distribution and sales goals.
6. Company Strategy. Great companies are drowning in the noise of AI written emails, LinkedIn automation bots, and email sequences. Typically founders have spent hours looking through LinkedIn connections or share lists of hundreds of names of their investors to ask for interest. The process is time-intensive and often really ineffective. Warm outreach allows you to easily map actual warm connections of your investors and team members by seeing beyond just the LinkedIn connection.
7. Founders/CEOs Role. A product-focused and narrative-driven CEO would attract capital. Investors want to see incredible execution. They want to see evidence that the CEO can manage every nickel in that company like it was their last, and has a plan of profitability.