Food Venture Financing News - Weekly Issue No. 48

In This Issue:

• SBA Adopts Critical Change to Paycheck Protection Program to Aid Self-Employed Workers
• Food Venture Financing Trends
• CPG Corporate Venture and Private Equity Funds
• Links to Relevant Content and Events

SBA Adopts Critical Change to Paycheck Protection Program to Aid Self-Employed Workers

• PPP loans are generally sized at 2.5 times payroll costs. However, for single-person companies that don't have payroll, the PPP loan is calculated using the net profit number from IRS 1040 Schedule C.
• As a result, many small businesses have not taken advantage of the PPP as loan amounts were quite low.
• The SBA adopted an interim rule last week to calculate loan amounts from gross income instead of net profit.
• Note that (despite criticism) this is apparently not a retroactive decision, and will only affect applications made after March 3.

Food Venture Financing Trends

• Recent reports indicate that investment, M&A, and SPAC deals have accelerated significantly since summer 2020, including an increase in the overall value of deals as the number of buyers in the food and beverage space proliferates.
• The New York Times reports that the strengthening of the job market in February was driven by increased employment in the food and drink sector as restaurants and food establishments reopen and recover economically.
• Ecommerce sales continue to accelerate as Kroger reports that delivery sales through its digital business grew 118% in the fourth quarter of 2020.
• A new study by International Food Information Council reported that parents have focused more on their children's nutrition and health during the pandemic as parents are more able to prepare meals at home and monitor food habits.

CPG Corporate Venture and Private Equity Funds

Our featured CPG private equity firm this week is VMG Partners.

• Private equity firm VMG Partners announced the close of an $850 million fund, VMG Growth Fund V. The San Francisco-based firm's total assets under management are now roughly $2.6 billion.
• VMG will continue to provide early-stage funding, as well as startup support to portfolio companies with guidance ranging from scaling brand awareness to optimizing manufacturing and supply chain operations.
• In addition, VMG reports it has substantially exited all of the portfolio companies in its VMG Partners I and VMG Partners II funds. It also announced the third exit from its VMG Partners III fund.

Links to Relevant Content and Events

ARTICLES

• Blackbird Foods Bags US$1.5 Million to Expand Motorino Pizzeria-Approved Plant-Based Seitan Range
• Ardent Mills to Acquire Chickpea Producer Hinrichs Trading Company
• Why Beyond Meat Looks a Lot More Like GameStop Than Tesla
• Three Startups Setting Out to Transform the Food System
• What the SPAC?! A Brief Explainer on the Next Exit Tool for Agrifoodtech Investors
• Instacart Doubles Valuation With $265 Million Funding Round
• Demetria Raises $3 Million to Automate Coffee Bean Analysis
• Deal-Making Rebounds and Increase in Exits Frees Funds for More Early Stage Investments
• Job Market Picks Up Strength, Led by Food and Drink
• Kroger Q4 2020 Sees 'Sticky Customer Engagement' in Digital Business, First Ocado Automated Warehouse Goes Live
• Parents Are Spending More Time Focusing on Children's Nutrition During The Pandemic, Study Says
• Seebo Announces $24M Funding Round as More Leading Manufacturers Adopt Its AI Solution to Predict & Prevent Production Losses
• A Dream Deferred: Bean Sales Soar as Shoppers Seek Nutrient-Dense, Plant-Based & Diet-Friendly Foods

EVENTS

Naturally Bay Area's 2021 Quick Bites Series
Food & Beverage M&A Landscape in 2021: Challenges and Opportunities

Wednesday, March 17, 2021 - 12:00 – 12:45 pm PT

Panelists:

• Nick McCoy: Managing Director, Whipstitch Capital
• Kevin Krouse: Managing Director, Piper Sandler
• Jonathan Marshall: Partner, VMG Partners
• Don Buder: Moderator, Naturally Bay Area & Davis Wright Tremaine, LLP

Learn more on Naturally Bay Area's Events page

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.

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.