Here’s David Bronner, iconic captain of Dr. Bronner’s Magic Soaps, one of the industry’s more unlikely success stories in recent years, speaking to Mother Jones: “The activism side of the company enables us to take risks that no sane company would.” Note the unholy trinity there of activism, company and sanity.
Here’s how crazy Bronner is. He caps his salary at 5X the lowest-paid worker, throws millions of dollars—50% of company profits—at cris de coeur such as GMO labeling and hemp legalization, and regularly spurns offers from buy-out firms. He’s running a family business, and he’s running it well. He’s running it so close to the vest that traditional models of growth capital just don’t make much sense.
Is he alone? Of course not. Legacy brands deep inside the natural products core—Nature’s Path comes to mind, as does Bob’s Red Mill—often step up to the most daunting challenges because they remain autonomous, family-centered, employee-owned and focused on a very long term. This is an entirely different prospect from the typical startup timeline that brings in outside owners early to help mature a business and prepare it for ultimate sale to private equity or a strategic acquirer. So let’s ask this question: If all you’re going to do is build a natural products business, does that timeline make as much sense? With decades to grow in fits and starts, are the pressures for growth and Wall Street access as applicable?
Lo and behold, at the very moment that purpose moves center stage in business school parlance, entirely new sources of capital proliferate in the market. Crowdfunding brings cold, hard cash, whether gifted outright or equity-based, to entrepreneurs in need of a boost. Kuli Kuli Bar, for example, is crowdfunding its entire $350K seed round on AgFunder to spread the moringa gospel far and wide. Smartypants, an all-in-one gummy multivitamin maker with a savvy mindset for marketing dietary supplements to younger demographics, has now raised $4.7 million on CircleUp in two hugely successful rounds.
As competition gives way to collaboration and sustainability trumps the exhaustion of churn-and-burn, should it come as any surprise that the fabled exit loses some luster in the new economic order? Should it come as any surprise that natural products entrepreneurs live on the bleeding edge of this trend toward building something that lasts? The answer to both is an obvious and resounding “no.”
For more on the intersect between natural products and the new world order in finance, check out the 2015 NEXT Forecast, now available.