Own a piece of Ricks Picks
The game is changing thanks to the Jump Start our Business Startups (JOBS) Act. This change of an 80 year old law will change the way start-ups are financed lowering the barriers for investors. I believe it is a great thing for the economy and for potential investors keeping in mind that there are risks involved but there is also the upside of rewards.
I have written about Ricks Picks before. I have been an investor in Rick for more almost seven years. I know more about pickling, packaging, shelf placement, in house marketing dollars and flavors than I ever expected but that is what is wonderful about being an investor. Doesn't hurt that I get to taste the wares.
Rick is raising on Circleup, a crowd funding platform geared towards consumer products. I am a huge fan of the company as they are truly filling a void in the marketplace for companies that start with some money from friends and family but are not doing $10m in business where they can get private equity funding.
If you are an accredited investor and interested in being a part of Ricks Picks click here. I am excited about then next phase of Ricks Picks.
I’m a taste believer in the pickles for certain.Question–It is clear what it means to be an investor on Circleup but not as clear (or I can’t find it) on the requirements to raise funds as a company.Can you point me towards that?
I actually invested on CU for Rick and did not find the process that seamless. This is the link to Rick on CU. https://circleup.com/c/rick…If you go through the process of signing up I believe you eventually lead to Rick. I am going to send your comments to the team at CU. It is not that simple
Thanks Joanne. We’re very proud to have Rick’s Picks in the CircleUp community. As you know, we only accept a small percentage of companies that apply to CircleUp. However, we were excited to bring Rick’s Picks to our community for several reasons. We believe Rick has a unique product that has the potential to disrupt a very large, and stale industry.
Hi Arnold, For companies we look for consumer and retail brands, typically that already have placement on the shelf (often with >$500K in trailing revenue). Occasionally we accept Seed stage consumer/retail companies. We focus on this consumer/retail because we believe it is an under served market (20% of GDP but 5% of VC funding). If you know someone that would like to raise money on CircleUp, please send them here: https://circleup.com/join/c… Hope to see you in the CircleUp community.
Hi Ryan, I’m not seeing investor accreditation requirements / process. Do you have a link that outlines?
Thanks Ryan…Really love the idea behind CU. Like Ricks Picks as well.But your response and the form on the link seem really loose. Feels like a club with no published membership rules. I’m fine with an entrance requirement that goes from $500K trailing revenues to zero for seed, but that’s not really a criteria. And your form (just looked) speaks not at all to seed.I’m kicking on this cause I love this idea a lot and from the outside, this feels unclear from both the investor side but way moreso from the company wanting to raise funds. As an example, we have a food company considering a raise–no way I can tell whether this is a good avenue for it.The criteria should be public and open.
Not talking specifically as to whether you should do this for (I’ll let you mention it if you want) but I can tell you that the raising market is going to get very crowded. At a certain point (and I don’t know when that is) you won’t be able to stand out from the other 1000 people pitching. Right now the number is small. And of course there will be people pitching on the CU clones or competitors.So if you are going to do this I’d do it sooner rather than later to take advantage of the lack of competition.Your consumer product fits it perfectly I think. And if I understand what you are selling you actually have a barrier that the others (who simply want shelf space) could lose when other people selling (say pickles) come along and knock them out of their retail locations. Especially if those retail locations are large chains (Whole Foods, Target) as opposed to smaller venues who act independently and would be more loyal.By the way when you raise money make sure you have the money to hire some brains. I have a ton of experience in selling to small business and operating small business. The thing that kills is the fact that you spend all your time making every little small f-ing decision that you can’t even spend time on the bigger picture or the important things.
Thanks Arnold- sorry you didn’t see the criteria for seeds. If you enter <$500K it will show you the criteria. We talk very publicly about having a team of private equity professional that pick which companies go onto the site and we also talk about what we look for in consumer companies. Feel free to email us at [email protected] if you have more questions
Thanks will do.
To what extent does the pitch involved how they will use the funds?My concern when investing in a small operation is that they don’t have the human resources to pull off what they want to do. This really is the bane of small business. The guy or people at the top wear so many hats and get involved in so many small details they don’t have the time or the energy to actually do as much as they’d like to.Everything takes time. I’m reminded of when my dad (who has done sales) tells me some idea and to “just call the guy” as if you close a sale or setup a deal with a single phone call. Sometimes you get lucky but most of the time it’s a constant back and forth process. I’m sure Joanne can relate to this from some of the things she has done in the past.
this business is in the stage where the fixed costs remain the same and the business can grow three fold. might have to hire another sales person but essentially everything is in place. rp has been around for awhile. it is a mature brand in this space. people have defined roles.
Curious if that is the case why they can’t use debt to finance as opposed to giving up equity. Sounds more like a cash flow issue.Obviously I’m not seeing the exact details of how much they want to raise or what they are giving up.
LE- in consumer debt tends to be a very poor solution until the company gets to be $10M in revenue or so. Before then companies are usually investing their cash into growth, as opposed to paying down debt.
Rick should sell his picks on http://www.localsandvoyeurs.com! We’ve got a couple delicious small foodie businesses already signed up, but no pickles yet!
He will be reading the comments
love the corn relish!
Me too but okra is my fave
Seen this in the Chi. Haven’t bought any yet, since we make a lot of our own.
One thing I would caution with regards to putting a company on circleup (to be weighed against the benefits that is) is that you are exposing things about your company to a group of people that you really can’t control. As such it would be fairly easy for competitors to gain access to info that you wouldn’t want them to have. I’m sure the people who were just on Shark Tank with a pickle idea would love to get Rick’s data.The other things is the publicity will drive more people to compete with you. It’s like “oh I never thought of that hmm”.As someone who has started a business from scratch before at least two times w/o any info at all something like this would have been a great shortcut to the process that I had to go through to figure out certain things.Old school: The way I decided to open one business (was a retail location) was that I simply sat outside a similar place located a few blocks away. I just observed the traffic (it catered to both business customers and consumers). That was it. And I talked to some customers as they exited. And I went in and pumped the people who worked there for info. Even the owner. He had no clue what was going on. It turned out to be a good location (despite an experienced person in the business saying it wasn’t). I would have loved to be able to get actual financials and other business information.
LE- thanks for the feedback. One of the reasons we focus on consumer/retail is because the the most important assets a consumer/retail company has tends to be the brand and execution. Candidly, the idea of a new snack bar, or baby food, isn’t novel. What’s unique, and proprietary, is the brand (which is trademarked) and the execution. Most that have worked in the industry can guess within 5% what the revenue and gross margins. Contrast that with a tech company where there is typically much more proprietary IP in the idea alone. Its why you cant find a “stealth” consumer company. While copying ideas might work for 1 location, it tends to not work that well when trying to build a massive business – think starting a copycat of Starbucks. You can copy the exact format, and probably even produce better coffee, but the brand has massive power.
What’s unique, and proprietary, is the brand (which is trademarked) and the execution The brand is of course important. But having an actual product that is good you obviously won’t disagree is quite important. In addition to the back story that makes the brand of interest to consumers and most importantly to the press. A good example might be willa.com or rickspicks.com where there is an interesting twist. With Rick it’s “a yale graduate is doing pickling” with Willa it’s the mother daughter connection. With lulitonix.com it’s “Lianna (luli) Sugarman Chief blending officer/Kale Addict”. That’s the “angle”. My point is that the branding angle and hook to me is much easier to come up with than the actual great product. I know someone who was on Shark Tank twice. The angle was “young attractive blond girl has three kids and does this from home”. Didn’t mention her husbands involvement at all. Ruins the story. Most that have worked in the industry can guess within 5% what the revenue and gross margins.Anyway my point actually relates to the above statement. Your statement assumes that these things are started by people that have worked in the industry.(Strictly) My observation is that is not the case. Most things like this are started by people with really nominal industry experience. They get an idea one day and run with it. If they see a story that someone with no experience was able to pickles they think “hmm I can do that also then”. Or bake cupcakes. And the reason for my original point. That is the competition. Not an established player who someone who knows the business. (In fact those people are less likely to leave corporate america to do a startup.)That said the angle that you have taken consumer/retail is 100% correct. Because consumers can relate to it it’s like stock investors who buy what they know.
Hi Joanne, I thought about you yesterday (Thursday), I was driving to work …. Flipping b/t WFan & WCBS…..and Joe Connelly ….CBS/WSJ business reporter….. He was talking about the new crowd funding rules….and he mentioned Ricks Picks. It caught my attention as I recall you have written several times about them.Apparently there was a sign on the door at their store inviting people to invest
the cat is out of the bag
I can’t recall whether you ever mentioned what it was that caused you to invest in Rick’s Picks. Seems like that corner of the market is super saturated an yet it’s been a success. To that point, do you think there’s one thing that’s contributed most to the co’s success?
it wasn’t saturated when I invested. I invested seven years ago.