Raising Capital? BFG’s $125M Fund Should Be In Your Sights.

Venture capital firm BFG Partners invested in Mid-Day Squares when the brand’s founders were still hand crafting their functional chocolate bars in a Montreal apartment. BFG managing partners Tom Spier and Dayton Miller described their decision as “a leap of faith.”

On the surface, it may seem like BFG, which has a track record of investing in high-growth companies, as a somewhat surprising move. But Tom and Dayton note that their evaluation of Mid-Day Squares was – as with every business they fund – based on four key criteria: people, product, brand and strategy.

Established in 2014, BFG is focused on investments in better-for-you and sustainable brands seeking seed through Series B rounds of capital. The firm recently announced the activation of its third fund, which according to a February press release, has commitments “already approaching 70%” of its $125 million target size. Fund III follows ones valued at $54 million and $108 million, respectively. 

BFG’s portfolio includes stakes in several food and beverage companies, including OLIPOP, Mid-Day Squares, Barnana, Athletic Greens, Caulipower and Graza. Successful exits include Chameleon Cold Brew, which was bought by Nestle in 2017, and Birch Benders, acquired by Sovos Brands in 2020.

We sat down with Tom and Dayton at Expo West 2024 for an expansive conversation that dives deep into BFG’s investment strategy and includes their evaluation of fast-growing categories, how they assess gross margin in the near- and long-term lifecycle of a brand and what a polished pitch says about a founder.

Show notes:

0:35: Tom Spier & Dayton Miller, Managing Partners, BFG Partners – Tom and Dayton reflect on the five years since their last appearance on Taste Radio, how they identify differentiated package design and why great taste is at the heart of a sustainable business. They also discuss mainstream opportunities for ethnic foods, how the founders of Mid-Day Squares got the attention of BFG via a cold Linkedin message, how they evaluated the potential for better-for-you soda before investing in Olipop and how they assess hype-fueled brands. Later, they explain their enthusiasm for some refrigerated and frozen brands despite supply chain and other challenges associated with the categories, what founders should include in their initial outreach and follow up, and engage in a rapid-ish fire word association about kids’ foods, dairy, candy/confection, beverage alcohol, plant-based meat, ultra-processed foods and cereal.

Brands in this episode: Coyotas, Evol Foods, Fly By Jing, Mid-Day Squares, Obi, Olipop, SmartSweets, Oats Overnight