Investment in vegan businesses is accelerating. Here are the areas it’s growing in and how businesses can find investors.
As a vegan founder myself, I understand the struggles it takes to get my business up and running. I can’t count the number of times I wanted to expand my product line, advertise my products on vegan media platforms, only to find myself not having enough funding to allow this to happen.
The traditional method many business owners follow is what’s referred to as bootstrapping. This is the process of building your business from your savings. When you make sales, that money comes in, you recycle it back into your business, and the company slowly grows from there. When you see companies such as Beyond Meat and Oatly use investment money to scale their business globally and be valued in the billions; perhaps the option for other vegan businesses to follow in their footsteps comes from raising capital.
Vegan angel investors and syndicates
Angel investors are high net-worth individuals who invest in early-stage businesses. They can include doctors, lawyers, as well as experienced business owners who want to use their hard-earned income to make another company grow. In exchange, they traditionally get an equity percentage in a business.
In order for an angel to legally invest in a business, they must meet certain financial requirements that allow them to make riskier investments. In the UK/EU, these are called experienced investors, and in the US, they are referred to as accredited investors.
While the laws have many components to them, the general rule is that the individual must have a net worth in excess of €1,000,000, excluding their primary residence, or meet other income requirements, such as an income of more than $200,000 per year in the US. Before seeking investment, please familiarise yourself with the current laws to make sure you’re not making any securities violations.
You can find angel investors by asking around in your local community, networking on LinkedIn, and browsing through syndicates on AngelList. A syndicate is a group of angel investors who come together to invest in a common project or fund, and many cities have them already.
A traditional approach includes founders validating their business with their own money, as well as money from family and friends. Once they show that their vegan product is accepted in the marketplace, angel investors come in and help jumpstart the next stage of their business before approaching venture capital funds down the road.