Depending on the circumstances at a portfolio company at a given time, our role as an investor will vary dramatically. Governance activities are, of course, always at the height of concern. At times, we simply attend board meetings, monitor performance and cash, offer advice and support management. At times we help with strategy: doing analysis, working directly with the team. And at other times, we get involved with company fundraising activities like writing/co-authoring a business plan, putting together a PowerPoint presentation to use for syndication purposes. It's the rare occasion that we take a very active, management-like role.
In late 2007/early 2008, as a director for The Natural Pasta Co. d/b/a Putney Pasta, I took an active, board-designated almost"Acting CEO" role. When the fund I co-mange, CEI Community Ventures, first invested in Putney in May 2006, co-founder Carol Berry joined as COO. Carol's passion and expertise were in product formulation, production, development. So those areas became her responsibility. We had (and continue to have) big goals for new products for the brand, so this role was critical. The board then decided that the next major hire should not be a President/CEO, but rather a VP of Sales. The way I often described things, this was a relatively simple business: we made product (COO) and we sold product (VP Sales). The board acted as the marketing and strategic sounding board and ultimate decision-maker. While we'd have obviously much rather have had a President, spending the company's cash wisely and using the talents of the board to fill in the holes, seemed like the most prudent approach.
And to help that, we had a board with experience. Paul Jaggi, founder of the Ethnic Gourmet and Baji foods was (and is) a director, and my partner at CEI Community Ventures, Michael Gurau, joined me on the board as well. Together, Michael and I had worked with Rustic Crust to transform their brand from Ever Better Eating to Rustic Crust (as a result -- in part -- of the new name and packaging, the brand moved from 7th in its category to 1st in just six months). The board worked with management to change the Putney packaging, move the product from just 9 oz trays to 16 oz bags (better value) and develop the new product strategy.
This gets me back to the active, acting CEO role. In late 2007, Putney entered the equity market. The board decided that to execute on the next phase of the strategy, the company would require additional capital -- and that we needed to start strategy execution simultaneously. In order to manage the process, my role changed and I became directly involved on a day-to-day basis with the team so decisions could be made more quickly and authoritatively (not easy to do necessarily when a board and not a person is technically "in charge"). The board decided to develop a skillet meal line, raise capital and hire a President. I wanted the team to focus on the tasks at hand to run the business, so I hit the road to raise capital and make investor presentations. I also brought in consultants to work on sourcing and product development and worked directly with the company's marketing and design firm to develop the skillet meal packaging. I also started looking for someone to come in and run the business. Expanding from frozen filled pasta (ravioli and tortellini) to also skillet meals and execute the desired growth required a top-notch person. When we closed the new round of capital , it was time for me to step aside and become a director again -- this time as Chairman.
So (in my opinion) we've created the best skillet meal line on the market. We started shipping into distribution this past August and the product is starting to hit retail shelves now. Customer reception has been phenomenal -- it's really good. We brought in a great new investor and partner with the Sea Change Investment Fund -- these are good people with which to work. And we hired industry veteran Rick McKelvey as President. My time involvement with Putney went from 30 hours week to around 5 (my family liked that) and I could move on to the next major need in the portfolio.
I know that I have a good job. It's not easy, but it's fun. And I can now go to the store and buy products that I've helped create: Putney Pasta, Putney Skillet meals, Rustic Crust, Be Fine Food Skin Care. Good stuff.
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