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Food Venture Financing News - Weekly Issue No. 41

01.19.21
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In This Issue:

Re-Opened PPP Now in Full Swing

  • The SBA reopened its portal today to all PPP lenders for "first draw" and "second draw" loans.
  • As a reminder, first draw ("new") borrowers may take out a PPP loan of 2.5x average monthly payroll, with a cap of $10 million.
  • Second draw ("repeat") borrowers may take out a PPP loan of 2.5x average monthly payroll (but NAICS code 72 businesses—in Accommodation and Food Services—may receive up to 3.5x average monthly payroll), up to a $2 million cap.
  • The SBA offers a tool to find participating lenders here.

SBA Announces High Forgiveness Rates

  • The SBA announced last week that it has forgiven 1.1 million PPP loans in an aggregate amount of $100 billion.
  • Thus far the SBA has granted forgiveness (in full or in part) on over 85% of the applications it has received.
  • Small borrowers of PPP loans under $50,000 have a forgiveness rate of 88%.

Cautionary Tale

  • The SBA has just settled its first PPP-related False Claims Act against a California business and its CEO that falsely claimed on its PPP application that the borrower had not filed for bankruptcy.
  • Despite the bankruptcy case being subsequently dismissed and the PPP loan being returned to the lender, the government sought damages and penalties under the False Claims Act of over $4 million, and ultimately settled for $100,000.
  • Unlike many PPP stories in the news recently, the PPP loan in question was only $350,000, and the borrower was not high profile. If considering applying for the reopened PPP, be sure to complete the application accurately and completely.
  • Danone recently released new plant-based cheese products that highlight the influence of plant-based proteins in the dairy sector.
  • Plant-based snack foods company Outstanding Foods recently announced the closing of its Series A round.
  • The food and beverage industry has started planning COVID-19 vaccine distribution to service providers. Dollar General has gone a step further by announcing that it will plan to pay its employees to receive the COVID-19 vaccine.
  • The COVID-19 pandemic has caused consumers to prioritize immune-boosting and functional food ingredients. Industry experts predict that this will be a long-term trend.

CPG Corporate Venture and Private Equity Funds

Our featured CPG private equity firm this week is AF Ventures. 

  • AF Ventures is a New York-based venture capital firm that invests in next-generation consumer brands driving omnichannel innovation.
  • AF Ventures' 35+ portfolio companies in food and beverage, health and wellness, personal care and pet includes:
    • Alpha Foods
    • Wandering Bear Coffee
    • Soozy's Grain-Free
    • The Toasted Oat Bakehouse
    • Nona Lim
    • Native State Foods
    • Tea Drops
    • RightRice

ARTICLES

EVENTS

Naturally Bay Area: Optimize Your Pitch in The New Normal

Thursday, January 21, 2021 - 12:00 - 12:30 pm PT

Craig Bartlett and Andy Whitman of 2x Consumer Products Growth Partners will walk us through the essential components of a compelling investment pitch. Learn the right metrics to highlight, how to adjust your message for new realities in the COVID world, and the skills that will help you stand out from the crowd and cut through the noise. Plus, Trishna Saigal from Down To Cook will join Andy & Craig to share her experiences and insights from a brand's point of view.

Register here

Mattson Webinar: The New Normal: How the COVID-Era Has Accelerated Food Trends and Behaviors Going Into 2021

Wednesday, January 27, 2021 - 10:00 am PT

Join Mattson Chairman and Chief Creative Officer Steve Gundrum as he shares trends and insights on this topic.

Register here

Naturally Bay Area's 3rd Annual Pitch Slam
Virtual Broadcast From The Bay Area, California

Thursday, February 11, 2021 - 2:00 – 4:00 pm PT

Here's your chance to show what you've got — get in front of top industry investors and your peers (virtually)! Naturally Bay Area's 3rd annual Pitch Slam competition celebrating the Bay Area's brightest brands, and giving the spotlight to a handful of local, emerging companies who will go head to head for a chance to win prizes worth thousands of dollars.

Register here

Hirshberg Entrepreneurship Institute Webinars
Yes We Can: Perspectives and Strategies for a Successful 2021

These webinars will provide practical perspectives and real world advice for navigating financing, cashflow, retail, distributor and eComm challenges in the year ahead presented by seasoned experts with opportunities for you to get your questions answered by the presenters.

January 20 – Setting 2021 Goals
Speaker: Bob Burke, Natural Products Consulting, LLC

January 27 – Be Smart with Your Cash in the Post-Covid Environment
Speakers: Elliot Begoun, Founder and Brand Champion, TIG Ashley Hartman, Senior Principal, Bluestein & Associates

February 3 – E-Comm Do’s and Don’ts
Speakers: Amy Lacey, Founder & CEO, Cali’flour Foods Patrick Coyle, Vice President for Marketing, nutpods

February 10 – UNFI 2021
Outlook John Raiche, Senior Vice President, Supplier Services, UNFI

February 17 – INFRA and NCG Outlook
Speakers: Pat Sheridan, Interim President & CEO, INFRA Ben Nauman, Sr. Director of Purchasing, National Co+Op Grocers

February 24 – Telling Your Story and Getting Trial and Discovery in the New Covid World
Speakers: Jessica Rubino, Sr. Director, Content Marketing, Informa Markets (tentative) Annalea Krebs, CEO and Founder, Social Nature

March 3 – Brands Launching in the Current Market
Speakers: Nicole Bernard Dawes, Founder & CEO, Nixie Sparkling Water Matt McLean, Co-Founder, Uncle Matt’s Organic

March 10 – The Latest Consumer and Market Trends and Insights
Speakers: Carlotta Mast, Sr. Vice President and Market Leader, New Hope Network Steve French, Sr. Vice President, National Marketing Institute

March 17 – How to Successfully Pitch for $$
Speakers: Andy Whitman, Managing Partner, 2x Consumer Growth Partners Paul Richardson, Co-Founder and Managing Partner, Renewal Funds

March 24 – Navigating Costco & Thrive
Speakers: Jeremy Smith, President and Founder, Launchpad Second speaker TBD

Register at hirshberginstitute.com

Please check out DWT's newly re-launched Startup Law Blog

At 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.

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