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Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

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Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#51

Post by cjisakow »

motives wrote: post #48
cjisakow wrote: post #13

Earlier quoted context omitted.

We plan to be long term holders, eventually taking the company public. We look at Constellation Software up in Canada (where Allan is based) as a great model. The entrepreneurs often stay with the company since they know the customer and product better than anyone. Then with shared resources, best practices, and talking to their peers they can grow their business.

Forgive me for my naivety, but whats the point of the founders staying when you're taking out almost all the potential upside for them by acquiring them? Surely if they believed in the ability for their company to succeed long term they'd stick by it without taking an acquisition early. If your advantage is capital and experience, why would they not just go for a debt based option like clearbanc and retain their pote…

Clearbanc and others super useful to help short term cash flow, but its tough to get enough money out to take money off table (a lot of founders have a chance to take money off to go buy a house etc...). For example one of our portfolio company was started by 4 guys with $20K, and we just were able to pay them $4M, and then if they keep growing it they get more upside. One of the ways to grow is to increase the inventory and then increase the velocity of sales through new channels and increase in advertising. They didn't grow it in the past because they didn't want to make that investment but we have access to capital to make that investment.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#53

Post by austinpena »

cjisakow wrote: post #33
austinpena wrote: post #29

You should partner with adleaks. They love this stuff.

cool, will have to check it out, do you know them? feel free to intro or i can find them.

I’d just head to their partners page on their website.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#54

Post by ghufran_syed »

motives wrote: post #48
cjisakow wrote: post #13

Earlier quoted context omitted.

We plan to be long term holders, eventually taking the company public. We look at Constellation Software up in Canada (where Allan is based) as a great model. The entrepreneurs often stay with the company since they know the customer and product better than anyone. Then with shared resources, best practices, and talking to their peers they can grow their business.

Forgive me for my naivety, but whats the point of the founders staying when you're taking out almost all the potential upside for them by acquiring them? Surely if they believed in the ability for their company to succeed long term they'd stick by it without taking an acquisition early. If your advantage is capital and experience, why would they not just go for a debt based option like clearbanc and retain their pote…

Berkshire hathaway used to do a lot of this. Also, if the sellers want to retain upside, they can accept some portion of the purchase in stock from Moonshot

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#55

Post by trashhagcute »

cjisakow wrote: post #50
trashhagcute wrote: post #47

You mention taking companies public. I actually used to do consumer PE for a family fund with a buy and hold / long term growth strategy like yours. We advised founders, grew cpg companies, took them public. I really never saw a CPG company go public without expanding into brick & mortar at some point - do you think this has changed? Are you planning to help your brands enter b&m retail if it makes sense down the roa…

would be awesome to talk and hear more about your experience. we absolutely are looking at omni-channel, something that is different from some of the early players in the space. We are starting with ecommerce because these founders have developed product market fit and are doing it profitably. As a platform we can help them get on other marketplaces (e.g. walmart, target, international amazon) and then into physical…

Thanks for the response. That makes a ton of sense. Best of luck to you- I totally agree that the consumer vc space needs improvement. I don't know why YC decided to get into probably the most risky space that exists in the investing world!? but happy for you that they did, and perhaps it speaks to your experience which is very impressive.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#56

Post by WORMS_EAT_WORMS »

motives wrote: post #48
cjisakow wrote: post #13

Earlier quoted context omitted.

We plan to be long term holders, eventually taking the company public. We look at Constellation Software up in Canada (where Allan is based) as a great model. The entrepreneurs often stay with the company since they know the customer and product better than anyone. Then with shared resources, best practices, and talking to their peers they can grow their business.

Forgive me for my naivety, but whats the point of the founders staying when you're taking out almost all the potential upside for them by acquiring them? Surely if they believed in the ability for their company to succeed long term they'd stick by it without taking an acquisition early. If your advantage is capital and experience, why would they not just go for a debt based option like clearbanc and retain their pote…

Big, fat cash bonus...

Equity in big, fat growing company...

Help from shared pool of resources/experts taking a company from $5-20MM (easier) in sales to $100-300MM+ (harder) in sales much, much faster...

Help widening margins on high revenue...

Probably some sweet incentives if they do... Etc...

It makes sense. This isn't particularly innovating, but I have a feeling everyone here will be cleaning house soon enough.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#57

Post by cjisakow »

ghufran_syed wrote: post #54
motives wrote: post #48

Earlier quoted context omitted.

Forgive me for my naivety, but whats the point of the founders staying when you're taking out almost all the potential upside for them by acquiring them? Surely if they believed in the ability for their company to succeed long term they'd stick by it without taking an acquisition early. If your advantage is capital and experience, why would they not just go for a debt based option like clearbanc and retain their pote…

Berkshire hathaway used to do a lot of this. Also, if the sellers want to retain upside, they can accept some portion of the purchase in stock from Moonshot

for sure Berkshire inspired Mark Leonard at Constellation which informs our approach

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#58

Post by bsid »

Just want to preface by saying - this is not a comment on you but rather YC. You're trying to improve the VC process for consumer brands, and I'll take you at your word for that.

I'm surpised, and a bit saddened, to see YC investing in a PE rollup kind of play. I’m probably reading too much into it, and maybe I had a misconception about YC was supposed to be, but to me, the brand was about innovation and scrappiness. YC founders use technology to move the world forward, usually through a better product. This brand conglomerate is way more blatantly of the form of “lets try to take a pile of money, and turn it into a bigger pile of money”.. of course they need $160M in funding, it is a fund. That money will go chiefly to buy companies, not into massive scale.

Not many entrepreneurs start out hoping to engage in raw capitalism, guided purely by returns. YC seemed like a place that catered to that dream of building something for yourself. Maybe that was never true, and I just had stars in my eyes. Maybe there’s no longer those low hanging fruits and everything’s become harder. But this seems almost of a betrayal of that original dream, only showing that YC is the same as everyone else in our capitalistic society.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#59

Post by AllanFischMB »

jsonne wrote: post #46

Most of the bigger and better DTC marketing agencies I know are making the same move as your concept. Buying or starting internal brands as they can scale them better and more effectively than their clients can. Why are you different / better?

What makes us different than DTC marketing agencies starting or buying brands is that we are looking to grow our portfolio of companies not just through growth marketing strategies, but by providing a better customer experience overall. We're also looking to create a founder-friendly company; one that simplifies the acquisition process, is transparent about how we value companies, and that offers founders a seat at the table after an exit.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#60

Post by skeeter2020 »

55555 wrote: post #10

What's the actual business model here? Y Combinator shouldn't be backing a tiny PE fund, so this can't be that. What's the angle? There must be some financial engineering in the buyout or some unique plan for post-sale.

"Selling your eCommerce business is broken. We're disrupting this space with AI-informed ML that doesn't suck. We're building Uber for SaaS companies, where we're Uber and the owners are drivers."

There, now it's YC compatible.

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