Connect with us

Investment

Why Brain Health Is Patrick Schwarzenegger's Latest – And Most Important – Investment – Forbes

Published

 on


Over the past decade, Patrick Schwarzenegger has been one of the most impactful investors in Consumer Products. After the success of his first investment, Blaze Pizza, Schwarzenegger has gone on to be an early check in breakout successes like Super Coffee, Olipop, and Liquid IV. In his latest investment, he’s turned to the role of founder, partnering with his mother Maria Shriver to launch MOSH, the Brain Brand. I sat down with Patrick to discuss how he started investing in consumer products and why launching MOSH was always the ultimate goal for him.

Dave Knox: Before launching MOSH, you were very active as a CPG investor. How did you find yourself on the investing side of brands?

Patrick Schwarzenegger: Really I started as an investor because I was a frustrated customer. I grew up in a household where we weren’t really allowed to have the junk food. We didn’t have Cocoa Puffs and Reese’s Peanut Butter Cups, or Starbucks Frappuccinos with 40 grams of sugar. My dad was very conscious about what he gave us kids, and about the food that he put in his body. And I remember when I started to get into working out, I was kind of shocked at how little options there were out there that were delicious, but also nutritious and really good for you. I made it my mission to go out there and look for different products that were offering customers a better for you alternative. Something that was healthier, less sugar, more protein, and cleaner ingredients.

And investing started as an accident. My first investment was one called Blaze Pizza. I had no idea about investing or about operating a business. I didn’t know anything. But I was working as an intern for a guy named John Davis. And he was a film producer, and I knew I wanted to do film and business. And he had just exited out of a company called Wetzel’s Pretzels. And they were like, “We’re going to start to work on the Chipotle for pizza, the Subway for pizza. And we want it to be very transparent with where we get the ingredients and allow the customers to pick the ingredients and have it made right in front of them.” And I was like, “This is perfect. This is exactly what I want to do. This lines up exactly with how I want to learn about business, I’m gonna invest.” And that was the first investment. And that company grew to almost 400 stores. And I was like, “Wow, this is easy. I just made millions of dollars off my first small investment. I’m gonna do this forever.” And so, I sold out of that and put all the money towards other companies. And it was not as easy as that company was, but it’s been a great time since.

Knox: That first successful investment was in the restaurant / QSR space. Why did you move from that to Consumer Packaged Goods?

Schwarzenegger: Once we sold Blaze and I had my own real money, I was in a unique situation. I was 20 years old and in college studying business. I just made a lot of money. And my generation was the generation that was not only focusing on the ingredients in our products but also one that was starting companies to solve the problems. I decided to go search for other young entrepreneurs and the first one I really ran across was Super Coffee. They were three brothers in their dorm rooms with the idea to tackle the Starbucks Frappuccino, to offer an alternative to the 40 grams of wasted sugar.

I really didn’t know much about investing, CPG or the beverage space. But I really believed in them and their mission. And I was becoming a coffee addict myself. And so, I invested and went on the journey with them. Now that company is doing over $100 million in revenue and has been a fun one to watch. I didn’t have a planned route to go from fast casual restaurants into a bottled beverage. It was just sticking to the passions of what I wanted to get involved with, and the people that I wanted to get involved with. And it’s slowly grown from there.

Knox: Since that first investment in Super Coffee, how has your approach to investing evolved?

Schwarzenegger: Well, it’s completely changed. The whole industry has completely changed. The amount of competition has completely changed. One of the beautiful things about entrepreneurship, and about this space is that anybody can go, and start a company. I’ve heard of tons of success stories of people starting a popcorn company outside of the stadium, and it growing to becoming the BOOMCHICKAPOP. Or you hear about RXbar, where they’re starting it in their kitchen. Or Super Coffee where they were first blending it in the dorm room. The beautiful part about this is that the American dream is very alive and well in the CPG space. But that means that a lot of people are going to go towards it. And today, I get sent brands almost every day. It used to be once every few months you’d get a cool brand. Now, it’s almost daily I get a new brand. So, I’ve had to be more rigorous with the processes of investing. But it really comes down to that I have to believe in the entrepreneur behind it and their mission. I have to believe in the actual product and it has to be something that I would use. And it has to be really applicable towards mass America, something that’s not too extremely niche, but something that can be for the masses.

Knox: After six years on the investing side, what made you want to launch MOSH and move into being on the operator side?

Schwarzenegger: Truthfully, it was always part of the plan for me. I wanted to approach this better for you, health and wellness space and prove out that I could make investments that were successful. Prove that it’s a growing total addressable market and that big companies are buying some of these smaller companies because they lack on the innovation and execution. And then I wanted to take my learnings and go create our product lines. Create something where we could own 90 percent of the company and use the connections we made in manufacturing, branding, and go to market to launch the company fast and self-finance it. Founders have to spend too much time fund raising instead of on the business itself. I wanted to be in a position where we didn’t have to do that, and I could really focus on building the company.

With that as background, when COVID started I moved home with my mom. She has dedicated her life towards Alzheimer’s and towards brain health research. A lot of those activities came to a halt with COVID. We talked about his unique moment in time where things were on pause for both of us and we had an opportunity to create something meaningful and launch a mission driven company where could educate people on how what they eat and drink impacts their brain health. And so that’s what we did, launching the business out of mission that was at our core.

Knox: Where did you start as you took the first steps in building the brand?

Schwarzenegger: We went as granular as possible. On the packaging, the colors and the actual gradation on it is derived from a brain scan. We wanted everything to stay true to the mission. The important thing was to communicate to consumers that we weren’t creating a product that was going to cure anything. It wasn’t going to prevent Alzheimer’s. But we wanted to show people that there are things they can do today that will help their brain health tomorrow.

And food is one of those things. There is a “mind diet”. There’s something about eating less sugar, eating flavonoids, and eating high healthy fats that lead to healthier brains. That became a foundation of creating a product with no sugar and incorporating specific vitamins that were beneficial for the brain like vitamin B12, and B3. We wanted to have good, healthy fats like flax seeds, and chia seeds, and almonds. We wanted to have protein, and we wanted to have some of these other newer functional ingredients like Lion’s Mane to speak towards a brain healthy diet.

Knox: With all of this thought into the product and packaging, what led you to launch in the bar format for the first product?

Schwarzenegger: My mom is addicted to bars. She had to give them up for Lent even – that’s how addicted she is. Launching in a bar made the product true to our story. It wasn’t the best thing to do regarding margins, and the competition in the bar space. However, it was exactly what she wanted to do. But we’re not trying to be a bar brand. We’re not trying to be a protein bar brand. We’re trying to be a brain health brand and create different product lines that speak towards that. So, we have a lot of things that we’re working on ranging from other flavors of the bars to supplements to powders, and other things that all speak towards brain health.

Knox: How has launching through Direct to Consumer impacted the business?

Schwarzenegger: Well, you have to remember, we launched the business at the start of COVID. Retail was down double digits year over year and the bar space was down over 20 points year over year. We also didn’t know if customers would care about eating for their brain health. And we had bootstrapped the launch without outside funding.

We wanted to do direct to consumer for a couple reasons. One, to find out if there was proof in the concept. Number two, to be able to communicate with our customers and figure out what did they like, or not like about the product before we went into retail. Three, we wanted to figure out more information about our customers, who the demo was, who was buying it, why they were buying it, and what other product lines would they be interested in receiving from us? What were the biggest issues that they were having in their daily life that we could help take care of for them when it came to brain health? And those things, and the communication we can have in the community we can build is way better, way easier through direct to consumer than it is in retail. So, those three reasons were the main ones of why we started direct to consumer. It’s in our intent and it is our goal to go to retail probably next year. But we had a very clear path of how we would get there, and what the best route was to continue to speak with our customers before getting there.

And this communication has worked really well for us. We sold out right away in the first day. When we relaunched on Giving Tuesday, we did double what we did on our launch day. And then, we sold out again. And I think people were just really interested in the mission and why we created the product, and the give back. And on Giving Tuesday, we doubled the donations. And in the last year we donated over $20,000 between me and my mom and MOSH when we doubled the donations. So, that’s really cool. That was our dream. And that was our goal was to create a company that was good for the customer, good for their brain, that educated them about brain health. And that also gave back. And we wanted to prove to other people that you can do a mission driven company, that you can have a for- profit, but also give back and raise awareness.

Adblock test (Why?)



Source link

Continue Reading

Investment

Hong Kong Investment Bank’s 2,325% Surge Baffles Local Investors – BNN

Published

 on


(Bloomberg) — Another little-known Hong Kong-based financial services firm is mystifying investors with a dramatic price surge following its US listing. 

Magic Empire Global Ltd., which provides underwriting and advisory services and has helped just one company go public since 2020, surged 2,325% in its debut session Friday in New York to a market capitalization larger than football club Manchester United Plc. Magic Empire is the seventh firm this year from Hong Kong or China to experience similarly surprising moves. 

“This price level has clearly shown it is not sustainable,” said Ken Shih, head of wealth management in Greater China at Saxo Capital Markets HK Ltd., adding that without knowing who is doing the buying, it is hard to be definitive. “At this point, downside risk for investors clearly outweighs upside.”  

Last week, Hong Kong financial services provider AMTD Digital Inc. briefly became bigger than Goldman Sachs Group Inc. after a 14,000% gain in less than a month. The moves are particularly notable at a time of otherwise muted IPO activity and with Chinese companies Alibaba Group Holding Ltd. and JD.com Inc. threatened with delisting if they fail to comply with American auditing standards.

Magic Empire reported revenue of $2.2 million in 2021, a 17% drop from a year earlier. The company’s operating entity, Giraffe Capital Ltd., completed just one IPO in 2020 and none last year “due to COVID-19 and volatile outlook of the Hong Kong capital market,” according to the prospectus. Friday’s price surge brought Magic Empire’s market capitalization to $1.9 billion.

“The wild swings are likely due to the concentrated ownership, which certainly raises red flags,” said Kakei Lam, fund investment officer at Metaverse Securities Ltd. “I don’t see a resemblance to the meme-stock mania, given the thin trading volume.”

Magic Empire’s chairman Gilbert Chan Wai-ho and chief executive officer Johnson Chen Sze-hon co-lead Giraffe Capital, which obtained a license to provide corporate finance services in 2017. The firm mostly works on IPOs on GEM, the small-cap exchange, and often engages other small local brokerages as underwriters, including KOALA Securities Ltd., HKMonkey.com and Yellow River Securities Ltd. Chan and Chen own most of Magic Empire, with a combined stake of about 63%. The firm had just nine employees as of December 2021, according to its prospectus.

Hong Kong’s Scandal-Plagued Small-Cap Exchange Left for Dead

About half of the companies Giraffe Capital has taken public jumped on the first day, some by as much as 125%. Seven are now trading 30% to 92% lower than IPO price and another has been delisted.

Magic Empire didn’t respond to an email request for comment and calls to the phone number listed on its website weren’t answered.

In the first half of this year, fundraising in the Hong Kong IPO market dropped 92%. With the tiny companies that make up their customer base under close regulatory watch, small- and mid-sized financial advisory firms like Giraffe Capital have had a particularly tough time.

In 2017 and 2021, the Securities and Futures Commission and the Hong Kong stock exchange issued two rounds of warnings about so-called ramp-and-dump schemes tied to small-cap IPOs. These schemes manipulate very thin trading volume to inflate prices, luring unwary investors before shares collapse. 

The SFC declined to comment for this article, but has previously identified four typical features of problematic IPOs: 

  • Market capitalization barely meets the minimum threshold
  • Price-to-earnings (P/E) ratio is very high given the firm’s fundamentals and the valuations of its peers
  • Underwriting commissions or other listing expenses are unusually high
  • Shareholding is highly concentrated in a limited number of shareholders

Magic Empire’s relatively modest revenue means it qualifies as an “emerging growth company” under American legislation, according to its prospectus. These firms enjoy reduced reporting requirements compared to larger US-listed public companies, with only two years of audited financial statements required and disclosure obligations regarding executive compensation pared back. 

(Updates with Kakei Lam’s comments.)

©2022 Bloomberg L.P.

Adblock test (Why?)



Source link

Continue Reading

Investment

Investment in Alberta's tech sector soars – CBC.ca

Published

 on


Several Calgary-based tech companies are planning to hire more people and expand their office space as hundreds of millions of dollars flow into the sector.

Through the first half of the year, Alberta has attracted nearly $500 million in investment, according to briefed.in.

“We’re growing very, very quickly,” said Nic Beique, the founder of Calgary-based Helcim, which offers online payment services for small businesses across Canada and the United States.

The company recently received $16 million in venture capital funding from investors in Toronto and New York.

“We’ve doubled our business in the past six months alone, so our investors are already quite happy with that progress,” Beique said from the company’s headquarters in Eau Claire. 

Nic Beique is the founder and CEO of Helcim, a Calgary-based fintech company that offers payment solutions for businesses. The company recently received $16 million in venture capital funding. (Bryan Labby/CBC)

Beique says the company has grown by 400 per cent in the past year. It’s gone from 80 employees late last year to 145 today. He plans to hire 100 more people by the end of next year.

“My long-term goal is to build an anchor tenant in the Calgary tech scene. So when people think about Calgary, they think about Helcim … the way Shopify was able to do that with Ottawa, where they really kind of put them on the map for tech. I want to do that in Calgary as well.”

According to briefed.in, Alberta’s tech sector recorded $268.6 million in venture funding in the second quarter alone — in the same quarter a year ago, only $16 million was raised. 

Hirings, office expansion

Another rising star in the city’s tech scene is Virtual Gurus, which provides companies with virtual assistants to carry out a range of administrative duties for businesses in Canada and the States. 

Two years ago, the company had five employees. It now has 40 and plans to double that number by the end of the year, which will require more office space.

“We’re looking at expanding upstairs in order to facilitate that growth,” said Margaret Glover-Campbell, the company’s chief operating officer.

Margaret Glover-Campbell, chief operating officer of Virtual Gurus, is looking to more than double its number of employees in downtown Calgary by the end of the year. (Bryan Labby/CBC)

Virtual Gurus, which aims to hire more people from minority groups, including people with disabilities and members of the LGBTQ community, recently received $10 million in funding from several venture funds. The money will be used to help the company grow and launch a new app in the coming months.

New funding sources

Calgary-based startup ZayZoon, which previously relied on individual, private investors, recently raised $25.5 million in funding to help it expand. ZayZoon offers people early access to their earned wages and has partnered with approximately 3,000 businesses in the U.S. The company has 70 employees but plans to hire 15 more by the end of the year. 

One of its investors is Alberta government-owned ATB Financial, which is providing a $13-million debt pool for the company to use when clients seek an advance on their earnings.

Darcy Tuer, left, Tate Hackert, middle, and Jamie Ha are the founders of Calgary-based startup ZayZoon, which provides clients with early access to their earned wages. (Tate Hackert/ZayZoon)

Tate Hackert, one of the company’s founders, says ATB’s support is a boost for his company and the city.

“It’s just such a great story for Calgary,” he said.

“It just shows that there is more to invest in here than oil and gas, and we’re really looking forward to being part of that success story, right?”

Finding employees a challenge

An ongoing challenge for most tech firms is finding employees to support their expansion plans.

“We’re absolutely hiring as many people as we can. It’s a really tough market in Calgary because we do have so many tech companies here that are trying to hire people,” said Glover-Campbell.

Helcim says it takes a unique approach to hiring and provides greater opportunities for recent graduates of post-secondary schools. It aims to hire young professionals right out of school and provide on-the-job training and mentorship. 

Employees of Helcim in downtown Calgary. The company plans to add 100 more employees by the end of 2023. (Bryan Labby/CBC)

“Our focus is on giving these young professionals the ability to start their career at Helcim instead of fighting for senior talent,” said Beique.

He also says recent cooling off in the sector could help level out the demand for talent and help his company attract and retain staff.

Calgary has a lot going for it, Beique says, including an affordable cost of living and a good quality of life. He says 20 per cent of the companies’ recent hires are coming from outside the city.


Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at bryan.labby@cbc.ca or on Twitter at @CBCBryan.

Adblock test (Why?)



Source link

Continue Reading

Investment

Investment industry faces widening skills gap around big data and ESG – The Globe and Mail

Published

 on


This is the weekly Careers newsletter. If you’re reading this on the web or someone forwarded this e-mail newsletter to you, you can sign up for Globe Careers and all Globe newsletters here.

Radhika Panjwani is a former journalist from Toronto and a blogger.

The investment industry in Canada has a somewhat vexing problem.

It will need to retrain and reskill – with some sense of urgency – a sizable cohort of midcareer, and middle-aged workers, and nudge them into the age of technology.

“There has been a disruption in the industry, especially with respect to a demand and supply gap in skills,” says Viveck Panjabi, 32, a research associate at National Bank Financial. “The recent trends I have noticed across the investment management industry have been around Fintech, blockchain, machine learning and environmental, social, and governance (ESG). In the next five years, I believe fund managers and investment management firms will pivot more toward ESG-centric companies and look to integrate more of clean energy stocks as a percentage of their portfolios.”

When there’s sufficient data around ESG, these are integrated into the investment process.

Mr. Panjabi works in sell-side equity research covering 16 publicly listed companies on the Toronto Stock Exchange focused on the sustainability and cleantech sector, and he admits big data technologies will soon become an important driver.

Mr. Panjabi’s observances are in line with the findings of a CFA Institute report, which says the largest gaps between interest in learning and supply of expertise is in the area of emerging technologies in Canada. The sector needs tech-savvy professionals comfortable around artificial intelligence (AI), machine learning (ML) and decentralized finance. Also, Canada needs investment professionals who are adept at analyzing data related to future pathways for getting Canada to net zero by 2050, but their numbers are small.

No greenwashing, just facts

“ESG has introduced a level of complexity into investing that I haven’t seen before in my career,” noted a CFA Institute expert who was surveyed. “That complexity comes principally from two sources: the values introduced and the materiality differences by sub-sector. It is the latter source that introduces the opportunity for a skill-based investment approach.”

Sustainable investing is built on the idea that ESG/climate considerations are significant to both investors and society and that we need to develop sustainability accounting for both purposes.

But to incorporate ESG/climate into the investment industry, the sector will need to develop and refine the skills and abilities of its work force. It will not only need new talent, but may have to create new learning pathways for its current workers.

AllianceBernstein, a New York based global asset management firm, in partnership with Columbia University established a Climate Change and Investment Academy. The academy delivers climate-aware investing learning for its clients and partners so they are aware of the science of climate change and its impact on investment decisions.

T-shaped skills

More than a third of CFA Institute members surveyed acknowledged their roles would be significantly altered over the next five to 10 years. And the biggest disruptive factors will be new analytical methods, including AI and ML.

“The good news is that most investment roles are going to be changed in an interesting way because you will have data feeds that are much more reliable,” noted Rebecca Fender, head of strategy and governance for Research, Advocacy and Standards at CFA Institute and lead author of the report. “As a result, professionals will have more time to do in-depth analysis.”

Soft skills such as the ability to influence, persuade, manage time effectively and communicate remain critical. Hiring managers said finding candidates with T-shaped skills remains an ongoing challenge. ‘T-shaped skills’ refers to qualities that make an employee valuable. The vertical bar in the ‘T’ represents deep subject matter expertise, while the horizontal bar is the ability of that individual to connect to cross-disciplines and bring it all together.

Road ahead – training, reskilling

Fewer than half of survey respondents in the CFA Institute report said they receive support from employers to develop the new skills they need. And that may be the stumbling block to introducing reskilling initiatives. Reskilling appears to be the antidote for the skills gap.

In 2018, Guardian Life, a U.S. insurance company, partnered with General Assembly to create a data science curriculum and gave the actuaries on its payroll time away from work to learn.

Similarly, Verizon’s upskilling program offers free technical and soft skills training to its employees. The program was developed in partnership with Generation USA, a non-profit. The 10-to-15 week online programs are for roles including cybersecurity analyst, IT support specialist and junior cloud practitioner.

Investment bank JP Morgan has earmarked more than $350-million for its upskill plan, New Skills at Work. As part of this plan, the company will spend $200-million to train people for new, in-demand tech jobs; invest some $125-million to improve existing training courses through community colleges; and it will direct $25-million toward research initiatives to understand current and future labour market trends.

“One of the things that’s interesting when you compare our 2017 report to the current one is that there were a lot of skills that people were thinking of acquiring, but in the last few years we have seen more people take action,” said Ms. Fender. “The action to aspiration ratio has changed and that’s good.”

What I’m reading around the web

  • A recent Microsoft Work Trends Index 2022 report found the average Microsoft Teams user now sends 42 per cent more chats per person after hours. And weekly meeting time has increased 148 per cent since February, 2020. Some key findings are employees have now found a new “worth it” equation; managers are caught between leadership and employee expectations.
  • In this article Sam Dogen, 45, an investment professional, shares how he negotiated a severance package with his employer in 2012 and decided to retire, thanks to income from his rental properties, stock dividends and e-book sales. But one year into it, he realized a life of leisure wasn’t for him. Today, Mr. Dogen considers himself a “fake retiree” because he now takes on side-hustles to fill his time.
  • A study by the Oxford Internet Institute of 39,000 video gamers found “little to no evidence” that time spent playing affects their well-being. The results contradict a 2020 study by the same department, but with a smaller test group, which suggested those who played for longer were happier. “Common sense says if you have more free time to play video games, you’re probably a happier person,” said Professor Andrew Przybylski, in a BBC News article. He worked on both studies. ”But contrary to what we might think about games being good or bad for us, we found [in this latest study] pretty conclusive evidence that how much you play doesn’t really have any bearing whatsoever on changes in well-being.”

Have feedback for this newsletter? You can send us a note here.

Adblock test (Why?)



Source link

Continue Reading

Trending