Jaime Schmidt and Chris Cantino turned their personal care brand Schmidt’s Naturals from a product sold at farmers markets into a global business that Unilever acquired for a nine-figure sum. Now the couple are backing early-stage business owners in the consumer space through their investment fund Color – making them ideally placed to offer their wisdom and perspective to those looking to grow their businesses.
Areas that are ripe for investment
‘We focus on all things consumer, which is a pretty broad scope these days. Our investments span consumer-packaged goods [CPG], marketplaces, media companies, e-commerce and the creator economy. We’re also particularly interested in the infrastructure that supports the way people shop: that’s everything from payments to fulfillment, commerce platforms and beyond.’
The value of product-market fit
‘We’re adamant about the demonstration of product-market fit before investing, meaning that the value proposition is clearly resounding with customers and we’re not going in blind. Typically, we invest only after a company has some revenue traction, proving there is room for it to grow and take a significant bite of market share from its category – particularly if it’s a crowded industry. One of our portfolio companies that comes to mind is Haus, a low-alcohol aperitif that’s an alternative to higher-sugar, higher-ABV drinks. It’s a great example of a company that’s bringing new customers into a category with a unique value proposition. We’ve also invested pre-revenue in companies that are doing something particularly novel, like A Kids Book About. The important thing is to show that your product has a real shot at expanding the overall category it’s taking on.’
‘If a founder can compel you to see the world in a new way, that’s a powerful thing – it usually means they’ll be able to do the same thing for customers.’
Founders with potential
‘It’s always great when you see eye to eye with a founder, because there’s synergy there and real potential to collaborate. But then there are those who you don’t quite understand at first, who are speaking an almost incomprehensible language. These are the ones you really want to dig into problems with, because they have infinite potential to educate and engage you about their areas of expertise. If a founder can compel you to see the world in a new way, that’s a powerful thing – it usually means they’ll be able to do the same thing for customers.’
The role of external funding
‘Honestly, we’re known as the investors who actually talk people out of seeking funding. The truth is that, despite its glamorisation, less than 0.1% of businesses actually raise venture capital. That means we advise a lot of founders on how to do more with what they’ve got, create effective partnerships and build communities organically. But for companies that are tackling massive problems, or might gain a competitive edge by moving at the speed venture capital can afford you, we’re happy to plug in with venture dollars.’
What makes a brand successful
‘We’ve been behind closed doors at big CPG companies, and we know what it takes to scale a modern consumer brand to acquisition. There are so many dynamics that go into making a brand successful across channels, price points, product development, regionality and socially – and they all have to go right at the same time. We’ve been fortunate enough to experience them all and share our learnings with the companies that we work with.’
This article was first published in Courier issue 41, June/July 2021. To purchase the issue or become a subscriber, head to our webshop.