Food Venture Financing News - Weekly Issue No. 19
In This Issue:
- PPP Forgiveness Plan to Launch August 10
- Tax Consequences of PPP Loan Forgiveness
- Food Venture Financing Trends
- CPG Corporate Venture Funds
- Links to Relevant Content and Events
PPP Forgiveness Plan to Launch August 10
- The SBA expects to launch its portal on August 10 through which lenders can seek approval of PPP loan forgiveness decision.
- The SBA plans to email instructions for using the portal to lenders before the launch.
- Borrowers will be responsible for calculating how much of a loan can be forgiven, with lenders expected to perform a "good faith" review.
- If a lender denies a borrower's forgiveness application, the borrower has 30 days to appeal.
Tax Consequences of PPP Loan Forgiveness
- According to the IRS, a borrower will not be taxed when a PPP loan is forgiven.
- However, expenses used in the forgiveness calculation—including payroll, health insurance, retirement contributions, rent, utilities and mortgage interests—will not be deductible.
- The non-deductibility of all PPP expenses could create an unexpected tax liability for PPP borrowers in the 2020 tax year.
Food Venture Financing Trends
- Kraft Heinz and Danone's venture funds recently led venture rounds for companies in the food tech sector.
- A recent report by IRI and New York University's Stern Center for Sustainable Business highlighted that sales of sustainability-marketed products continued to increase during the pandemic.
- Industry experts expect venture investments and M&A activity to increase later this year in sectors including online grocery, plant-based foods, novel ingredients, agriculture technology, and immunity supplements.
- Investor diligence will primarily focus on supply chain issues, direct-to-consumer strategies, profitability, and sell-through data during the pandemic.
- Strategic buyers will likely place higher M&A valuations and focus more on private label, center store staples, immunity supplements, and plant-based products in the new business environment.
CPG Corporate Venture Funds
Our featured CPG corporate venture investment fund this week is Tyson Ventures.
- Tyson Ventures was established in 2016.
- Key investments include:
- Beyond Meat, an alternative protein company (2016 and again in 2017)
- Memphis Meats, a US producer of 'lab-grown' meat (2018)
- Tovala, a US steam oven and ready-to-cook meals start-up (2018)
- FoodLogiQ, a US food-tech business (2018)
- Future Meat Technologies, an Israel-based lab-produced meat firm (2018)
- MycoTechnology, a U.S. mushrooms ingredients company (2019 and 2020)
Links to Relevant Content and Events
- Immunity-Boosting Company Vive Organic Raises $13 Million Series B Funding To Expand Wellness Shot Business
- Sweet! Joywell Foods Raises $6.9M to Develop Plant-Based Protein That Can Replace Sugar
- Higher Steaks Creates World’s First Lab-Grown Bacon and Pork Belly
- Noops Closes $2M Pre-Seed Round, Launches Oatmilk Pudding in U.S.
- Afresh Adds $12M in Funding for its AI Approach to Fresh Food Stocking at Grocery
- Sustainably-Marketed Products Drove More Than Half of All Growth Across CPGS in Past Five Years
- Kraft Heinz-Backed Venture Fund Leads Joywell Foods' $6.9m Funding Round
- Ready, Set, Food Gets $3M in Funding Led by Danone's VC Unit
- Latest Research From NYU Stern Center for Sustainable Business and IRI Shows That Sustainability Is Surviving COVID-19
- Key Upcoming Financial Trends in M&A
- Misfits Market Raises $85 Million Series B Funding To Deliver ‘Ugly’ Produce To More States
Naturally Bay Area QUICK BITES Wednesday Lunchtime Series
Mission Driven Entrepreneurship
- Jenn Kao: Principal, White Road Investments
- Mike Dovbish: Host, Naturally Bay Area & Executive Director, Nutrition Capital Network
Wednesday, July 29, 2020 - 12:00 - 12:30 p.m. PT
- TIG Talks is the podcast taped in front of a live virtual audience. Elliot Begoun of TIG will be joined by Greg Hobby and Brandon Casteel of SPINS to discuss these issues: What role does data play in your plans post COVID? How can you leverage the information? What programs will be available for early-stage brands?
Friday, July 31, 2020, 10:00 a.m. PT
All Checks on Deck for Racial Equity: Funding Food for Justice Equity Diversity Inclusion.
August 6th, 2020, 11:30 a.m.-1:30 p.m. PT
Speakers and presenters (more to be announced):
- Rodney Foxworth (Common Future)
- Kai Norte (Kubé)
- Tanya Holland (Brown Sugar Kitchen)
- Ibraheem Basir (A Dozen Cousins)
- GW Chew (Something Better Foods)
- Aner Ben-Ami (Candide Group)
- Alicia Kidd (The Wine Noire)
Please check out DWT's newly re-launched Startup Law Blog
At Davis Wright Tremaine LLP (DWT), we are proud to have one of the largest Food & Beverage legal practices in the country, with over 40 attorneys representing food innovators, entrepreneurs, and investors at every level of the food chain, from Farm to Label.
Please contact our Food and Beverage team if we can assist you in any way in these unprecedented times.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.