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Thanks for watching!
Welcome to the Community Call Podcast.
I am Melissa Travers, Director of Community here at BevNET & NOSH, here with my co-host Jackie Brugliera and Mike Schneider.
If you're enjoying the show, please follow and review us on Apple Podcasts or your listening platform of choice.
Jackie, Mike, it's so great to see you.
I have to say that coming back from a week in Maine has given me a little bit of a whiplash, but seeing the both of you makes it all worth coming back.
It brings you right back into BevNET life.
Exactly.
I gotta say, I definitely enjoyed your Instagram bathroom view.
So for the last week, I was in Maine.
We were camping in Acadia, and then we stayed with a friend of mine, her husband's, family has this camp in Deer Isle right on the water.
There's no running water.
There's electricity, but no running water.
So there's a composting toilet in a boathouse, and they open the doors, and it's-
In true Melissa fashion, she takes a toilet view photo, and it is the best view you could possibly have from the bathroom.
From the crapper, right?
That's what I was gonna say.
You gotta get the crapper in there, because otherwise no one would believe there was one in there, right?
Right, no, it was a beautiful view.
It looked like you had a lot of fun and ate a lot of different things.
Both of those things are certainly true, and every time we go somewhere, we have to share what our favorite little treasures were.
And mine isn't new, but I just can't get enough of Little Lad's popcorn.
Now, I don't know how many people in our audience are familiar with them, but it's a Maine product.
It's actually made in a factory.
MAINE.
So it was actually a brand that was started by a group of Seventh-Day Adventists that used to have this vegan buffet that I would go to when I lived in Portland, Maine, and they believed in making vegetarian food as available to people as possible in terms of cost, that kind of thing.
And so they used to make the popcorn and sell it out of the restaurant, and it was so popular that they packaged it.
And it's just, it's basically popped corn with nutritional yeast.
Are you guys familiar with this?
Have you had it, Mike?
No.
Oh my god, I'm so, oh, I'm so mad I didn't bring any back.
No, you ate it all, clearly.
And we definitely ate it all.
And I don't know if you guys do this thing with food where like, you isolate the things that you want and then you bury them.
Oh yeah, it's called hiding, hiding them away.
So that was what I buried.
I would do that with everything except for a lobby that doesn't last more than a sitting.
The blue is fairly enough.
If you can't finish it in one sitting, you gotta hide it.
Yeah.
Mike, I wasn't the only one who was summer vacationing this past week.
You were down the Cape, is that right?
I was, yeah, at Buzzards Bayside, marrying, doing all the Cape stuff.
Seafood, ice cream, kayaking, swimming.
Yeah, pickleball.
You went to a fish concert, didn't you?
I did.
I went to see fish and I've never been to fish before, so I was a fish noob.
There's so many things to like about it, and the experience is just, it's brilliant.
Everyone's dancing, everyone's having a good time.
It's like when your team is winning.
Which happens all the time.
Which for Arsenal happens all the time.
So, yeah, I could see I could see why people loved it.
I did take some of my favorite products with me to the show.
Do tell.
We took Fable Cannabev, which is a 3-milligram tall boy, really, really tasty cannabis beverage with 3 milligrams of THC.
We also took Jackie Nose, my favorite.
Magic Cactus.
Magic Cactus.
Magic Cactus, of course, right?
Which was also well enjoyed.
2 milligrams THC, 4 THCV, and then 6 of CBD, which is their big nephreniator.
Great flavor, great founder.
I mean, just so much to love there.
And also brought some flyers along.
Perfect.
Which I also love.
Pre-show, I had a Fable and a Magic Cactus, and then post-show, I had a flyers.
Is it me, or is this amping up your...?
That's definitely amping for me.
Oh, Jackie was scared.
Yeah.
Excellent.
I was asking him if he melted, because that was a lot for him.
But at the fish show, the environment, I feel like it's the right time to do this.
Right time, I spaced it out.
I definitely waited for onset before I had more.
I did all the things you're supposed to do this time that I did not do when I took three Keeva gummies at once on an empty stomach.
You got to have an experience like that to then learn the proper way.
Right.
It's great.
All right, Jackie.
It's great.
You have a good point of reference for what not to do.
You know how to trip balls.
So right when I was leaving, we were joking because you were going to a fish show, and I jokingly said...
Yeah, don't let them take you because my entire life, I've identified myself as someone who does not like fish or the Grateful Dead.
I like pretty much anything else except for those two things.
On my vacation in Maine, I got suckered into liking the Grateful Dead.
Wait, how?
So, okay.
So my husband has loved the Grateful Dead for the last five years, like very intensely, and he keeps playing it, and it drives me nuts because I hate it so much.
But we just had this perfect day where like everything was fantastic, and we were driving at the top of this town that looked like murder, she wrote, and there were boats in the harbor, and like we were getting lobsters, and I was having such a good time.
I was having an Angela Lansbury day.
And he was playing the Grateful Dead, and it snuck into my brain, and now I associate it with things that I like, and I got tricked.
I think that's the beauty of music.
I used to hate EDM music, and then I went to a music festival that was all EDM, and now I love it because that's what I think of when I hear the music.
Also with music, if you close your mind off to music, you just miss so much, and you can learn so much about lifestyles and the human condition just by listening to music.
I mean, whether it's jam band music or hip hop music or indie music or whatever it is, it's usually connected to some kind of lifestyle, and it's just like building a band is like building a brand.
You should do like Elsa and let it go.
Jackie, I know that you guys had an event at the West Coast branch.
We just had an event with Naturally San Diego.
We hosted at Novo Brazil Brewing in San Diego, and there was a bunch of brands that exhibited.
And one of them was actually really tasty and was hitting all the notes as far as what I like during the summer and vacation is like a meat gelata, something that's salty and tasty and refreshing, and there was a brand called Umlaut, with the umlaut on top of the U.
I think it's like um, like yum.
Yum.
And it is a line of functional mushroom beverages, of course.
Oh, shocking.
Of course.
I just went straight for it, but they had a chili lime one that was just really, really delicious and it has no caffeine, no sugar and four functional mushrooms.
It's really, really tasty.
Putting the fun and functional.
Yes.
And then there was also a company called Alive Ferments.
I have their probiotic gut shot right here.
This is garlic.
I just love anything garlic.
And you can drizzle this on things.
You can just shoot it raw.
But they also have other things too, like pickled carrots and sauerkraut and all the yummy raw probiotic.
Did you do a shot of the garlic shot?
Last time I had a shot that had garlic, it was ginger and garlic, and I burned my throat.
You can do that.
Yeah, this is just garlic.
It's not garlic.
But your sinuses are just clear.
It's so clear at that moment.
Jackie, did you do it?
I did do it.
Oh, yeah.
I am a sucker for punishment.
I love anything that's painful.
Yeah, I can appreciate that.
So I like her.
Remember our farmhouse called...
Yeah, right?
You have to suffer to truly enjoy yourself.
I mean, Jackie, she plays Gaelic football, camogie, she's taking all the licks.
She's a badass.
I just love injuries and pain.
Nicest person you could ever meet until she gets on the field, I'm sure.
Watch out, these elbows are pointy.
Glad you're on my team.
I would never mess with Jackie, though.
That would be something only a fool would do.
Mike, what do you have there?
I've got some gummies.
Speaking of gummies, these are the safe kind.
They do have hemp seed oil, so it could be a little confusing.
But these are called oku, conscious energy, gummy snacks.
And they've got yerba mate, green tea, goji berry, coconut water, hemp seed oil.
This is pineapple.
We've got grape and we've got orange blossom, if you care to try.
I have tried them and they are pretty good.
The oku team was kind enough to send us samples.
And I have to say, I've enjoyed every flavor that I've tried from them.
And I really appreciate that.
I think there are 60 milligrams of caffeine in five gummies.
And I think it's just the right hit of caffeine ratio to the amount of gummy that you want to eat.
Yeah, because you don't want 60 milligrams in one gummy.
Just like you don't want like 50 milligrams of THC in one gummy, you want to be able to eat a few gummies, like as a snack, although with THC, you're definitely not doing that.
But with these, and I think these are more similar to say like a honey stinger where you get your six, and that's giving you the energy that you want.
And then this one also, these also happen to have some caffeine, and I think they're a little better ingredient panel too.
So yeah, it's cool to see.
I think there's like more energy gels and gummies and things for especially athletes or people on the go, that you can find these things that may be in REI or somewhere where like a lot of athletes shop.
I mean, these are packaged right up for REI.
Look at that.
I mean, that is, if that's not an REI package, I don't know what is.
A hundred percent.
These are beautiful.
Beautiful.
Well done.
Thank you so much for sending these.
Yeah, they were absolutely delicious.
Well, speaking of things that are delicious that got sent to our office, I also would love to talk about ARIA.
ARIA makes these absolutely delicious roti.
They were at the Fancy Food Show and I had a chance to try them there and then they sent these samples.
They come in a few different flavors.
We've got the whole wheat, cumin, spinach, chia multi-grain, golden curry.
You heat them up like a tortilla and the ingredients in here are so clean.
There's three grams of fiber, four grams of protein, and I think there are like five ingredients in each one and they use avocado oil, right?
And that's not cheap.
That's like a serious commitment to quality ingredients.
Yeah, I've been using a lot of avocado oil recently for its high smoke point and also for its, you know, just health benefits.
And I think that's a great idea.
But you're right.
It just, it makes a, unfortunately jacks up the cost a bit of the product because our food system is a mess.
Like it costs a lot more to be healthy.
Yeah, it costs a lot more to make avocado oil than soybean oil.
And I think the packaging just reads quality as well too.
Like I love the packaging.
It's very clean.
I love the bright colors, it's clear what the product is.
Very clear and very clear what the purpose of it is.
And I like the, I like the, like as you said, the clear front so you can see exactly what you're going to eat.
You know what my favorite words on here are?
Soft and bendy.
Yeah, totally.
But the call outs are also wonderful too.
Three grams of fiber.
Who doesn't eat fiber?
Four grams of protein.
No artificial ingredients, no preservatives.
Get in.
100% whole grain.
26 grams or more per serving.
Get in my belly.
Right.
We're going to slam on this table until that happens.
It's an eight pack too, and they're big.
They're big.
So yeah.
Well, certainly we would love to thank Aria for the samples.
They are also one of the newest members of our Slack community, which all of you can join as well at slack.bevnet.com.
All of you can join us in Slack at slack.bevnet.com.
Tell us about your favorite products.
We would love to see you there.
Well, whether you're popping vegan popcorn and fusing beverages with cannabis or making delicious roti, having a great team behind you makes all the difference in your path to success.
In this community call, I chat with Jamie Borteck, board member and advisor to several brands, including RIND Snacks.
Matt Weiss, founder and CEO of RIND Snacks, also joins the show to talk about how to build and grow a strategic support system as you develop your brand.
Enjoy.
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Today on Community Call, our guests are Jamie Borteck, board member and advisor whose past experience includes executive roles at Grillo's Pickles, Justin's and Food to Taste Good, among many others.
Also, we have Matt Weiss, founder and CEO of RIND Snacks.
We're going to be talking about how to build a support network as part of your brand, and eventually how to build a board to help take you to the next level of growth.
Jamie and Matt, thanks so much for joining us.
It's such a pleasure to be chatting with you again.
Great to be here.
So we're going to be talking today to folks who are building a brand.
You need support, and that kind of support evolves as your business grows, of course.
So today we're going to walk through some of the specific kinds of support available and how to best leverage those options.
We're going to be talking about mentors, advisors, and then finally, what goes into building a board.
So let's start off with mentors.
Matt, could you explain how you started RIND Snacks as a sole member LLC and how you integrated mentors and folks for support?
Thanks, Melissa, for putting this together.
It's a pleasure to speak with everybody.
Jamie has been a mentor and advisor and a board member throughout this process.
So I hope people get a good sense of kind of the life cycle of building a great support network with great people.
I think it all starts with, you are probably actively or in the background, interviewing great people as you are building a business.
When you don't know what you're doing and when you're building the plane while flying it, you need people who have been there before, who can provide guidance, contacts, wisdom, and you're collecting great people throughout the journey.
And the process isn't really formalized at the earliest stage.
So the first thing I would recommend doing is, it's the same path that I followed, is you incorporate, right?
You have an idea, you have a business you want to get started, you incorporate LLCs.
For me at least, they are the most typical for early stage founders and companies, they're faster and easier to set up than a corporation.
And there's tax benefits in the early years of doing so.
So starting with an LLC, which you can do in a day, if not hours on legal Zoom or wherever, the more middle part of finding and assembling advisors and mentors is a very personal thing.
It can take shape any which way.
It could be people in the industry, out of the industry, people you admire, people you respect.
It's sort of left to a very personal thing.
But for me, the number one thing in building RIND at least has been a philosophy of just collecting great people as you go and treating your network as sort of your net worth.
It sure does.
Thanks for that.
Jamie, you're a great person to chime in here because you have participated in RIND as a mentor and advisor and now as a board member.
Can you explain the nature of mentorship you've participated in?
And a question I'd love to hear you answer as well is how do brands not cross the line of involvement?
So if this is typically not a compensated position, what can a brand ask of a mentor and how do you not cross the line for asking for too much?
There is no one way of all this.
I think that's one theme I would throw out there.
Relationships happen, there's no one set way.
But I would say that the way I've seen it very often in the industry is there's, at least the way I would term a mentor, usually there's like, you meet someone at an industry event or you're part of an accelerator or something and you're helping an entrepreneur who might be in a really early state.
There's a mutual respect that you're doing some great favors, you're rooting for them, great people, you love the brand.
But you're not really doing as much, right?
You're available when you can, but that entrepreneur is a little bit respectful of your time because you've got other stuff going on, let's say in a non-paying function.
Moving to what I would term as the advisor, might be a little bit more like we're together, we're part of it.
I, let's say as an advisor, you're maybe more accountable to always be there to help that group that might be in recurring meetings, accessible for certain things, advice along the way.
That might be as traditional, let's say paid or some equity, things of that nature.
And then that evolves in the spectrum.
Like Matt said, that like at times, it'd be a tipping point for brands that form a board.
And then you might actually need an official independent board member, which often can be like a good advisor, continues to advance in that relationship.
And how long were you a mentor with RIND before you came on more officially as an advisor?
No, I don't know if I can even remember, Matt, the timing of it.
I think I like Jamie's explanation of sort of the roles and responsibilities roughly of mentor to advisor all the way to board member.
There's a lot of nuance in all of it, but that makes a lot of sense.
And I think we probably started as, you know, that rooting for you, friendly mutual respect phase as a mentor in 2020, maybe even 2019.
We had a lot of folks in common.
You know, we had great connections and had some great sit downs just pre-COVID, if I recall.
And then obviously, you know, formalized more of an advisor relationship just when we needed it, when the world locked down.
So a lot of phone calls.
It's definitely a situation you want some strong support in.
Matt, you actually shared some information about compensation that might help our audience understand what some of the options are.
I think that can be a sticking point, too, with brands understanding what kind of compensation is expected and what the different formats are, whether it's monetary, equity, that kind of thing.
But what have you seen out there as possible options for compensation for advisors?
Yeah, again, there is no one size fits all.
Some brands, really, equity is what they have as a form of compensation.
Others may have raised a small friends and family round and can afford more of a frequent, regular cadence, advisor, startup relationship.
So it's really going to vary.
I think most commonly, and what I would even take a step back, is that you are bringing in additional mind share to help you accelerate your growth and make really great judgment calls and decisions.
And you should look at that as a huge advantage relative to living in the echo chamber that you've done when it was just an idea living in your head.
And as part of that, for someone who's really in your corner, and there could be milestone-based triggers, et cetera, but I think you should really think about, I'm not giving up control when I'm offering somebody equity in my company, but I'm bringing someone onto my team in a way that we're really aligned to solve a big problem.
Or build a big brand.
And so that's the framework I would start with.
And then as far as compensation, it really kind of depends on the stage of where your business is at.
Some people build in from mentors to advisors when they are at the idea stage, where it probably makes sense to offer more equity.
They could be at a more advanced stage of growth, but still have informed a board.
So the type of advice and counsel they need is different as the business has evolved, and that has a different compensation structure.
It's such a personal, individual situation that it's hard to just quantify it.
But what feels right to you at the time is go with your instincts.
I see a comment here from Paul Beaucre, who mentions that Fast Advisor Agreement has some good frameworks that capture a lot of what you're talking about, Matt.
And do you want to quickly give that example of that three-tiered system?
And we'll say it over and over again, there's no one way to do it, but I think sometimes putting numbers to an example can help.
Matt, would you mind just like super high level explaining what some of the options might be?
Sure.
Again, Fast template is actually what I had in mind, so that's a good call out.
Great.
I see we traffic in the same websites.
What is a nice little kind of framework is to have on one side, like I said, the stage of growth of the business, right?
And then on the other side, the degree or expertise of the advisor that you're bringing on.
Do they have like super deep domain expertise in the field that is directly related to what you're building?
Are they more of a successful entrepreneur in their own right, but in a different field, but they're offering their take on what they would do?
And then you kind of have them converge at different points in a 3x3 grid.
And each one of those theoretically could connect back to a percent of equity compensation that is fair and reasonable in a range for the degree of expertise you're getting and the stage of growth that you're at.
So that's kind of what that fast template is all about.
And how did you choose Jamie as an advisor?
Why was that partnership the one that you wanted to lock in?
Because Jamie is awesome, objectively speaking.
Yes, of course.
He is a Duke alum, so that was a huge point in his favor.
He is that perfect example of it is anything but transactional.
I mean, when he finds a brand he's excited about and his natural inclination is to just help.
So I think he's like a perfect and quintessential mentor.
We had a friend in common who connected us, and I found a lot of value, myself and my partner Ben, in the early conversations we had with Jamie.
And we just jumped into the vision of what we were building, Jamie's background and experience, which he can share better than me, has really, with brands that I've admired and respected, he just was the perfect voice to help us in the early years and to grow with us.
So it was effortless, and it was not even a debate when it came time to formalize the board that Jamie would be a part of the team.
This is definitely a mutual admiration society.
Jamie, what are some of the different ways you've participated as an advisor and you've seen it play out?
And that could be from a compensation perspective, from an involvement perspective, because again, there really isn't a set structure here.
First of all, thanks, Matt, for the kind words.
And back at you, he's an amazing CEO and founder.
It's a pleasure to work with.
To your question, Melissa, I think usually it's coming from a question of like, let's just say we meet each other through some various means, whether someone's reached out or we've met at a trade show party or whatever it may be.
And it just kind of like, okay, what do you need?
That's, I think, the first question.
And so I'll assess.
I think I could help you there or that's, I'm not the right person to help you there.
And for certain people, it's sometimes timings everything with their bandwidth, with what they've got going on.
Can it be a mutual fit?
So sometimes I think people do it very differently, but I just think sometimes in the beginning, it might be more just like small retainer based compensation that's just starting the wheel that mutually everyone feels is fair and grows and grows to a point at some point, especially if a board role turns into equity, some combination of still retainer and equity would be more common.
And I would just say like a shout out to guys like Bob Burke and Brad Barnhorn.
Those guys are just like phenomenal people in the industry.
They've been doing this for a while that I admired.
And I just think everyone has their own set up.
So it goes back to there's no one size fits all.
It's kind of where is the company at its stage?
What would it need?
And what's fair compensation for that particular person with that experience?
I'd love to build on that for a second, because I think there's formal advisors and then there's informal advisors.
And I think what was really helpful was as we started talking with Jamie and the depth and quality of the feedback we were getting that was actionable and helping us, it was clear that he was in this capacity, he was also helping other brands.
There was like cross learnings, and Jamie had essentially like, I hope it's not a bad word to say, but like a consultancy set up that made it very easy to understand, well, what is the next step versus an informal advisor who may be a fellow founder, but you're both at sort of, well, what do we do here, right?
This was very clear cut where it made sense.
I want to hop on a regular, organized, scheduled call with Jamie.
That made sense as our relationship first evolved.
And I think there is that distinction between finding people that can really be formal advisors for whom they are actively spending time both on your call and afterwards thinking of ways that they can help you as you navigate the business.
And when you say formal, does that relate to compensation or signing a document?
Yeah, more often than not, I think that would entail a real work product and a regular cadence to the mentorship, advisorship that sets you on that path.
Informal could include that as well, of course, but those tend to be the ones where you catch up every now and then.
There may not be a set meeting in place.
They're there when you need them, but there isn't that regular connection that really helps and I look forward to.
So anything goes, but the formality of it is great.
And by the way, we're not formal either.
It's more the concept of just having a regular conversation and team session.
So we've talked a little bit about mentors, advisors.
Let's move into building a board.
That's where we get into a lot of the idiosyncrasies.
There is legality and the compensation is more firm, that kind of thing.
Matt, can you explain when you formed RIND's board, how and why?
Sure.
I think for a lot of brands, RIND included or businesses, the first outside investment that capitalizes the business, assuming it's been bootstrapped up to that point, is often the catalyst.
It doesn't have to be.
I know of brands that have raised capital that are at the point where they're now forming boards.
But I think by and large, it gets real when you take outside dollars into the business.
And there is a sense of wanting to have a really amazing team of people that can challenge you when things are going great and that can lift you up when things are really tough.
And you want to bring that expertise in the room.
It's not giving up control, per se.
It's making you better.
And so for us, at least, it was when we raised the first round of seed round brought in institutional capital in 2020 that it made sense to put together a board.
There was also a clear request from that investor that they wanted a board seat.
So the question or the issue will be forced whether you like it or not.
When you were negotiating with that investor, were you taking into consideration what it would be like to have somebody from that organization on your board?
Did that play into your decision?
I mean, partnering up with an investor period was whether it was going to be a board partner or they were just going to be an investor.
Partnership was top of mind.
They had to be somebody that I would be excited to be in a room with and discuss openly about the ups and downs of the business.
So that came connected.
It was the first time I started a business.
It made clear sense to me, and I always felt I would be better served, the business would be better served, having an investor that I had done my diligence on, just like they've done on me, as somebody I want in my business, and I want advising us in the hard decisions.
So it kind of came naturally, but I know some brands or some early stage founders may find that they want to push back on a board seat as one of the requirements of completing a round.
I respect that too, but for me, it was bring great people around the table and great things will happen.
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What should a brand do if they really are in a position where they need to take on investment to continue growing, but perhaps they're not so excited to have somebody from that firm as a board member?
I don't know, what do you do?
I think we may get into this in a little bit.
I think there's, you know, when you own control of the company, you can kind of dictate the pace of how formal a relationship can be beyond just capital.
But I would say there's such nuance to the degree of board role.
There's something called a board observer, which we may discuss in a little bit, where if you can set a parameter, if the check size is smaller and you can set a limit of, if someone contributes a check to the business of X amount, there's an opportunity for a board observer role.
And maybe not a board director role.
Let's expand on that now.
So a board observer, what is that and what capabilities do they have?
Jamie, chime in as well.
But I would say we take our, you know, as a founder in the business and in partnership with my brother-in-law, who's my partner, we really take our board meetings very, very seriously.
We put together pretty exhaustive board books, decks that are detailing all the opportunities and challenges that we're facing.
And we really want to get down to a robust discussion and not just a reporting of here is how Q1 went, but your board is there to help and support.
So you just have to jump into it and be frank and candid to set up really healthy dynamics.
But as part of that board book, there is a deliverable that is provided typically.
It's sort of good standard practice to your board members 24, 48 hours before so they can review, come armed with great questions.
Board observers can get that same book or a lighter version of that, right?
Maybe the summary slides.
And furthermore, observers can, in our case, join a board meeting in a sort of open session for the first two hours.
And then there is an executive session where it's just the board of directors that are sort of having a discussion about any action items that need to occur.
So there's something also called information rights.
Again, I think this can all be discussed, but there are some basic parameters that I think guide good dynamics.
So I would just add to that, just from myself in executive roles presenting to a board and then experiencing different boards, another common way is that there might be an investor that has like two great people that want to be involved, but one has the voting board seat and the other has the ability to observe a joint.
That's a very common observer role.
And that's a great win because you're getting more minds and more help.
As long as it just doesn't get too crowded, that's usually like a really good thing.
And is one of the main difference between a board member and a board observer that the board observer doesn't have voting rights?
Matt, how many board members and how many board observers do you have?
So initially, you know, the board was just three people.
It was myself, my wife, and then our first seed investor.
As we've grown, we've had a board that got to a five-person board.
My wife had to sort of recuse herself because of her role in the legal world in a field where she can't serve on for-profit boards.
So now we're a board of four, and we also have three board observers.
And for that first board member that you took on during the seed round, are they still on the board?
They are.
And often what happens in that case, at first we had an individual that sort of led the deal, sourced the deal, negotiated with me on the round as our board member.
And then it made sense to bring in somebody with a little more operational expertise from the same firm to take the same board seat.
So it was kind of similar to Jamie's point, where you kind of get multiple minds in the room, but there's one seat for that firm.
Jamie, is that, do you typically see that board members stay on forever, maybe until an acquisition?
How does that typically work?
I also think there's variations of sizes.
Sometimes they'll set up a board term that could be five years, three years, you know, that can happen.
But usually, I'm speaking to more of the, let's say independent or added board members.
From an investor standpoint, usually those stay on unless there was some other greater investment that changed the structure of it.
An investor sold their portion and now moves off the board, but typically they would stay on.
And I would just add, I think Matt's done a really good job at talking to really good people that have added, when we think of these people like Jock or Ali and Brian, the people that have joined, I think, have been carefully thought out as really good, added value, good positive chemistry in the board that makes it a good productive conversation.
So I think that's another piece of the puzzle that's really important just to add to what Matt was saying.
Jamie, you're an independent board member.
It's something you just mentioned, and that was something that you brought up as a best practice.
So certainly you have these board seats that sometimes you have to give out.
But can you talk a little bit about what an independent board member is, when it makes sense to take them on, and why?
You know, the way I look at it, this is where for me, and I think several do a similar thing, is that you're at that perfect center.
It's just got to fit with your nature that you love it, that you're someone who could, you know, for me, comes with operating experience to understand what the founder, president, CEO, operating team is going through and also has enough experience in the industry to understand what investors are asking for or need and be that kind of middle ground to see what's fair and think it through that lens.
But what I have found very often is that typical investors, and this is not all, but many investors, often have, let's say, people who come from maybe more of the financing investment community but may not have experienced, in our case, like a CPG experience, like in a startup, in a fast growing, so an independent board member who has that type of experience, I think, adds extra value to complement the investor profile and the conversation and feedback that might happen in a board meeting.
So that's one piece.
I'd love to ask you another question about, so if, you know, Matt brought on a board member during that seed round, how soon after were you brought on as an independent board member?
And this can happen in different things, but sometimes things can often work in odd numbers for the voting, right?
So I think it was when we brought on capital for VSV, which also added an additional board seat, it brought room and sometimes the investor will come in and say, and let's add an independent board member that we mutually agree upon.
So that was the impetus, and that's what happened here with RIND.
It's happened in a couple other similar situations.
I try to keep more specifics out of companies, but one that already had private equity money and had a larger board was adding two more to continue the odd voting.
It specifically wanted someone who had more of the emerging brand entrepreneurial flavor thinking in it and recruited me to be that board member.
So odd numbers typically strike it, and in this case, I think that was the case here with RIND.
How many board seats do you hold now, Jamie?
I think it's about six, if I'm not mistaken.
So it's busy, and for me, I love it.
Just saw being in the seat as, you know, in the operating side in startups and presenting to boards.
Sometimes there's some great mentors and board members that are really helpful, and then there's many that maybe weren't.
And so it was really inspiring to just be someone that you just have that, like, empathy for the founders, for the operators, you understand enough that you've seen lots of different things that you could add value.
So for me, I love it, and to your question of, like, the number of boards, I think it actually...
Not only is it just fun diversification and just thought, you know, new things that are always happening every week, but I think the continuous changes in the environment of CPG are always...
the odds are you're seeing it in one of those companies, and then you can kind of think through how is that affecting others while keeping really good boundaries of confidentiality, but understanding how X may apply to Y, it makes you more holistic in seeing what's going on, where the puck is going.
Great point.
I've seen it in practice with Jamie.
And one other point about Jamie, and it's all we know from an independent board member, and it's something we really value, you know, in addition to being an awesome kind of coach, Jamie has kind of become the quarterback of the board, which is just very helpful in being, and it makes sense, right?
He speaks the same language.
He's been in CPG.
He versus coming from finance and pure investment.
And so what I really value is there's a major, just the logistics of board meetings, scheduling them out.
You're dealing with people that are very busy, and it's hard enough for the CEO running day to day, putting together this big board book to also corral everybody around the action items, the agenda, making sure everyone's on the same page.
One quick example is we held our first off-site board meeting last week in Vermont where our new manufacturing facility is.
And it's hard enough to pull off an in-person meeting in your New York office space.
This was a lot of logistics, and Jamie was the consummate quarterback and made for an incredible 36 hours of very productive meetings and a board dinner and a tour, et cetera.
So I think that's really valuable to find in somebody who can also take some of that burden off of the CEO who's kicking off the board meeting and running it to help them with a lot of that setup.
It certainly does sound like a very valuable role.
Jamie, what should a CEO expect to provide in the way of compensation?
Again, I know there's no set structure, but just so that when a CEO or an operator is thinking about making that move, are there any general recommendations or observations that you have around what compensation might look like?
It's a hard one.
I wish I could nail it specifically, but I would just say I know that maybe in ranges, there's, I'll speak very broadly, that sometimes in equity compensation, that might be anywhere, let's say, up to like 2%.
Very average, it could be less than that.
It depends on the situation and how much equity in the cap table, but maybe on average, it's closer to 1% or a little less.
That way that gives you a range.
And then depending on some people, at least for me, like I still, I think it's helpful for accountability to have compensation as a small retainer.
So that might be a few thousand dollars.
It's nothing small that's coming to company, but you're at higher and you're paid.
Obviously, your travel expenses are paid for as well, just like any employee.
Hopefully, that gives you a roundabout piece of advice.
But again, there are some people that have been in the industry many, many years doing it and may be at the higher side like it's deserving.
They have, that's what they need to do.
So I don't think there's one specific number.
Let's get into some of the misconceptions that folks have about a board.
The one that we all talked about was that you lose decision-making power.
Matt, you mentioned your board meeting in Vermont at your new manufacturing facility.
Could you talk a little bit about the Small Batch Organics partnership and how your board helped facilitate that to sort of dispel the assumption that a board is sort of an onerous thing and that you lose all decision-making power?
Yeah, no, it's a great example to talk to and it was an interesting evolution how it came to pass.
I think at the end of the day, the board has a responsibility around governance and compliance, and you don't want groupthink in a board.
You want to be challenged.
You want to be held to account and reach better decisions and think about externalities you may not have thought about.
And I think in the case of SmallBatch, when you're making a really big decision, like an acquisition, when it is not your core business per se, the CPG was a piece of that, but they were a manufacturer and we were more of an asset-light, traditional comand brand.
But it was frankly the depth of pushback and questions and rigor around, and this goes back like a year and a half, right?
Because the wheels were in motion on this acquisition, this idea.
And at first it was met with a lot of skepticism, which is totally understandable.
And it was perhaps viewed as more of a, well, could this be a distraction from the inch-wide, mile-deep strategy and focus?
And the more we laid out and made the case and the more we shared about the business, the more we invited board members to see a sneak peek, to get on the call, I think it became clear that there really was something to do here.
And so it wasn't that we needed to convince the board per se, it was always having a healthy discussion with the facts as they were at that moment in time about what was best for the business, the resources, the focus of the team, and to get a ton of counsel and advice.
In addition to, guys, this just doesn't make sense, and we would object to something like this, versus prove it, show us, let's reevaluate and make those decisions collectively.
Using that example, what is the degree of disclosure that CEOs and operators should expect to provide during board meetings and with their board?
Jamie, I'd love for you to take that one first.
Yeah, I think you really, at best, you want to have this fully transparent disclosure of everything going on, and that's what the board is there for.
We're all have that fiduciary responsibility to maximize shareholder value.
However that is, do things in the right way and keep winning.
And so if you create that culture as a board, you're going to do great, and it's going to keep and open up.
I think the onus is also the board members to encourage that trust and support, to let the entrepreneur and CEO open up and provide that transparency versus being kind of scrutinized.
So I definitely think it's paramount.
And I'll just say these are good examples where each board has its own culture and own set of things based on all the dynamics.
In the case of RIND, Matt and his president Ben are just this two-headed amazing group that the board sees.
Wow, these guys keep doing this.
They are like when you bet on the jockey, that is happening that gave us as a board enough comfort to be encouraging and positive to say this idea is pretty bold.
But I think if there's any two people who could put this off, it's you two.
And let's maximize it, let's think about it this way, let's do it that way.
But as a board, you're only as good as those operators that are running it.
So that makes it really a lot easier and certainly more successful when you have the operators like Matt and Ben.
One other point to bring up that perhaps as you grow and mature as a business or start to really hit growth milestones, that comes into play is the importance of presenting a budget and a set of forecasts to the board that do require approval.
And further to that, building accountability at subsequent board meetings, Jamie has done a great job of helping us with a KPI dashboard or scorecard that we can refer back to over the course of a quarter.
How did we do relative to how we had set out when we had the budget approved and what we thought we could achieve and what goals we set?
And that's just a great level setting.
You know, black and white, you sort of are tracking within your guardrails, above, below, and can really help spur a lot of great discussion at these meetings.
But there are some formalities that really help create structure.
I think at the end of the day, you really want structure.
And that's part of the evolution of what we're talking about here is the informality of a mentorship, a coach, a cheerleader into a formal advisor and then into a board member or observer.
And the degree of structure tends to be commensurate with the stage of growth the business is at.
I had a question about sort of a vernacular detail.
When we're talking about degree of disclosure, what's the difference between a closed session and an open session?
Well, I think there's different examples of closed sessions so for example, there might be some closed session that's just about some fundraise or legality or something like that that is kind of very specific to voting members that needed to vote on something as an example.
In other examples, this can be different as well.
I don't want to complicate, but as the team grows, sometimes like in another company, there's a chair, so chairman or woman who maybe is not the CEO in that case might have a closed session just with other board members just to kind of check in and just say, hey, are we giving good feedback or is there anything we need to talk about with the CEO or man, like this CEO is just rocking it.
We need to talk about bonus structure and things like that that you might not have had with that person or with other people in play, which makes it closed and more of a topic.
Sometimes that is can be compensation of the team can be, and some bonus structure might be an example of a closed session topic.
So would a compensation committee be the organization that decides on that?
Yeah, good question.
So as the board grows and gets more sophisticated, very often you'll break into little subcommittees, so to speak, to help.
So let's say if you get together quarterly as a board, and maybe on some one-offs between now and the next quarter, there's something to tackle.
A compensation committee might be taking a first goose at like, okay, let's look at this, look at that.
Let's get feedback from maybe a CEO, a president, whoever.
Okay, now let's round this out.
We think this.
We got it pretty tight, but let's bring it to the board meeting, engage everybody for last final feedback, instead of taking up a really long work session within a quarterly board meeting.
Does that make sense?
Similarly, you might do a sales and marketing committee.
You might have a specific in your life stage finance committee.
It all can change.
And certainly like that, you know, a lot of our world and what we're talking about, in more cases than not, is just like RIND, we're all in as a core group of board members and really good, great discussion.
Public companies might start to have like 11 board members, and these functional board people and this, that's a whole other beast.
But I think the majority of our space is smaller level of committees, because most of the stuff you tackle in those quarterly meetings.
What is the goal of a board?
It sounds like it's not to give the CEO a hard time.
So if it's not that, what is the goal of a board?
And I'd love to hear from each of you.
Jamie, if you want to take that one first, then I'd love to hear from you, Matt, as well.
I mean, I think in the essence, it's to maximize shareholder value and run by your fiduciary responsibility to do that at the core.
But when you think about it, it's a good team of people that are engaged to see through success.
In many of these cases of emerging brands, there's one day maybe a goal of an exit.
And this team is really engaged in there, whereas if you were just, let's say, your CEO and let's say your head of ops or marketing, that team is like in the weeds.
And I've dealt with that for 13 years of startups.
You're in the weeds.
You are constantly to think about what's the forest.
You're in the trees like dialing in.
So the purpose in many ways of the board is to kind of like take a step back from that day to day in those weeds to Matt's point, like take a look at some of the results and some cadences.
But also, especially for board members, is to see what does tomorrow look like?
Where are we going next?
Where could this be a challenge for us?
Because if you don't, you're in the weeds and you might miss something that's great.
And I think that's in essence a good purpose of the board.
I don't know, Matt, what would you add to that?
I would agree with all that.
And I would also just add that I think what's really important is the role of a board is to help the executive team, the CEO sort of distill what is a need to have for the long-term success of the business versus what could be pitfalls and distractions along the way.
So to help distill the essence of what are the most important drivers of value creation here.
And sometimes sharing and delivering the hard truths, right?
And when something's not working and you want to hold on or telling you, you know, you guys really should come back next quarter and give us some thoughts or feedback on XYZ because you have something here and you're not capitalizing on it.
So distilling what's most important.
And then the softer points, which I mentioned earlier, I think what we have in our great board dynamic at RIND is a real sense of challenging you when things are smooth, right?
And making you vigilant about continuing to progress and thrive.
And then being there to uplift from a morale standpoint as the CEO, I'm going back and keeping my team motivated and excited when you hit speed bumps that are inevitable.
And I think a really good board can balance those and keep the CEO sharp, motivated and focused on the right things.
And if I would just add, I think, well said, Matt, and I think in a way, you're there as a service.
You're there to service the business, to service the CEO.
You have that mentality.
I think that's what I believe in and I think good board members is you're serving that founder.
You're trying to help rather than be like, I'm a board member.
Now we're going to see what's wrong.
So I think that is the theme of serving.
It is a really good way to describe it.
I also think what's really important is listening, understanding, because you're not in the day to day of the business every day.
So it's really important to listen and hear out, to learn and absorb.
Someone's told me, I was thinking about this morning, like the great phrase, it's like, we have two ears and one mouth.
So we can do a lot more listening than talking.
And I think a good board member can really absorb and listen and then come in with really good value added additions to the board.
Jamie Borteck, Matt Weiss, thank you so much for joining this discussion and for giving such great advice.
It's been a pleasure to have you on Community Call today.
That concludes another episode of the Community Call podcast.
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