Three episodes down, two to go.
Today's episode with Liz Myslik from Loft Growth Partners is the most important one this week for founders thinking about raising capital.
Here's why:
"Everybody's money is the same color"
Liz has been angel investing for 20+ years and now runs a growth-stage fund focused on consumer brands (food, beverage, personal care, home, pet).
She said something every founder needs to hear:
"Everybody's money is the same color. It's the ultimate commodity. What differentiates one investor from another is how they show up for their partner companies."
She calls them "partner companies," not portfolio companies. And her fund only invests in 5-8 companies at a time.
Why so few? Because with 20 or 30 companies, it's impossible to devote meaningful time to any one. Liz's philosophy: failure is not an option. Every company needs to succeed.
Ask yourself WHY you're building before you raise
This is the part you need to hear:
"Before you even think about raising capital, ask yourself why you are building your business and what you want to achieve with it."
Because taking equity investment from institutional investors leads to a very specific outcome: selling your company.
Not everyone wants that.
Some founders love making their product. They find joy in creating new flavors, being in front of consumers, working IN the business.
But once you take investor money and start scaling, you work ON your business, not IN it. What you do every day changes completely.
Liz's advice: "The best source of financing is your own business. You will have total control and optionality if you are actually profitable. And yes, it is possible to be profitable from the beginning."
The Back to the Roots story
Liz told me about a company that pivoted multiple times before finding their magic.
Started growing mushrooms in a warehouse. Added grow-at-home kits. Then cereal. Eventually landed on organic gardening products.
That's where they hit the J-curve. Now they're the leading organic gardening brand at Walmart, Target, Home Depot, and Lowe's.
The mission stayed the same: help people feel connected to food. But HOW they manifested that mission changed over time.
Liz's takeaway: "If you have something you want to give to the world, the how might change. The why doesn't have to."
Quick wins from this week so far:
Intros: 4 founders from last season are already meeting with investors! That’s the goal of this podcast. We aim to help founders reach that next level of funding.
Insight: More investors and accelerator operators are lined up to be guests on Next Round. We’ll be continuing our flow of five episodes per week.e
If you're raising in Q1-Q2 and haven't asked yourself "Why am I doing this?" and "Do I actually want to sell my company one day?", listen to today's episode.
Liz will make you think twice. In a good way.
🎙️ Chris
P.S. - If you've been enjoying Season 3, hit reply and let me know. I'm planning to keep this daily cadence going through January.