- Angela Sutherland and Evelyn Rusli left their jobs in finance and journalism, respectively, to cofound an organic baby-food company.
- Sutherland realized there was room in the organic baby-food market after having her first child.
- The company, Yumi, now has $12.1 million in funding.
- The pair garnered support by leveraging their unique professional backgrounds, digging into data, networking, and seeking out investors who understood their product.
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The cofounders of Yumi — a company that makes fresh organic baby food and delivers it right to your door — both started off on much more traditional career paths.
Angela Sutherland, Yumi's CEO, was an analyst at Goldman Sachs and a director at SierraConstellation Partners, LLC.
"I loved learning about the internal mechanics of businesses and finding the commonalities in their operations," she said. "It was an incredible opportunity that gave me hands-on operational experience and fostered a deep passion for scaling companies."
Evelyn Rusli, Yumi's president and chief marketing officer, started out as a journalist before teaming up with Sutherland, most recently as an innovation reporter at The Wall Street Journal and before that, reporting for The New York Times, TechCrunch, and Forbes.
Despite being happy with their respective careers, the pair traded in their salaries and perks to follow a mutual dream.
"Starting Yumi was an opportunity of a lifetime," explained Sutherland. "Never before had I seen such a huge market with such market consolidation that needed so much innovation. The chance to change the health of millions of lives and represent this generation of new parents was something I simply had to explore."
Rusli felt the same way. "Eventually it was my fascination with the story of early childhood nutrition and how truly broken the market was that ultimately pushed me to leave journalism," she said.
Let's cut to the chase: Despite the risk, they made it work. Sutherland and Rusli reached out to investors and ultimately secured $8 million in capital in December 2019. (The strategic round took a total of five months to close.) This brought the company's total funding to date up to $12.1 million, following their $4.1 million seed round in June 2017.
Of Yumi's over nine series A funders — many of which are household names like Allbirds, Warby Parker, Harry's, Sweetgreen, SoulCycle, Uber, and Casper — several were founders of billion-dollar businesses.
Parent to entrepreneur
When Sutherland had her first child, she went down what she described as "a long rabbit hole of research" and was stunned to learn about the critical importance of the first 1,000 days of a baby's life for nutrition and development.
"There were seemingly countless clinical studies on how this period determines a child's neural and physical development, and even their taste preferences and future risk for metabolic diseases," Sutherland said. "I was also shocked by the lack of nutritious options at the grocery store — the shelves were dominated by products that were high in fructose and older than my child. It didn't register as real, nourishing food."
The then-finance exec shared her frustrations as a working mom with her close friend Rusli.
"It felt like I was stuck between two bad options: become a dietitian overnight and cook every meal, or feel like I was compromising at the center of the grocery store when I needed something convenient," she said.
After initially floating the idea of starting some kind of consumer advocacy campaign, they struck upon a solution.
"The answer was in plain sight," Sutherland said. "From my experience turning around companies and Evelyn's experience covering businesses, we both knew how powerful businesses can be as agents of change."
Within a few weeks, in May 2015, both submitted their notices to their employers.
"In retrospect, it was a little nuts," Sutherland admitted. "We didn't just jump, we flung ourselves off the cliff — cut ties with decade-long careers that by every measure were going just fine."
Networking their way to $8 million
The cofounders began with a plan to find investors who could double as mentors as they scaled the business.
"We believed there was immense value in finding other entrepreneurs who had likely experienced the same challenges and opportunities that Yumi would over the next few years," Rusli said. "These founders and operators represent some of the strongest minds in consumer, and they've all built uniquely modern companies that are completely revolutionizing the relationship between brands and people."
Before their financing round, Sutherland and Rusli made a short list of brands and founders that they deeply admired, and then leaned on their existing network of advisors and investors for connections.
"Although the business world can feel vast and fragmented, it's far more interconnected than it seems, and one entrepreneur is usually connected to many, many others," Rusli said.
The cofounders asked every investor who they wanted to bring on board to refer at least one other investor they found to be particularly insightful and helpful to portfolio companies. The pair said that this simple request yielded many strong referrals.
But Rusli added that to get to the right investors, they ultimately had to talk to a lot of people.
"If you want 20 yes's, you'll probably speak to hundreds," she said. "In this process, you have to figure out who you need to speak to, how person A in your existing network can get you to person B, and you're constantly backchanneling, conducting your own diligence, on all prospective investors."
She suggested any business owner looking to raise funding ask for investor introductions in a way that's mindful of a contact's time.
"I make sure to provide a tight blurb and personalized email templates," the former journalist said. "Similarly, I try to be extremely thoughtful in my emails so I'm communicating everything in a succinct manner that is highly relevant to the receiving party. People have taken years if not decades building up their networks, [so] one should always appreciate what a gift an introduction is."
Proving product-market and investor-founder fit
Sutherland explained that by the time she and Rusli were speaking to many of the founders, Yumi was already feeding one in 10 babies in San Francisco and areas of Los Angeles. That reality gave the founders real insight into Yumi's customer base and proved what Sutherland called "an almost undeniable product-market fit."
"We had reached a key inflection point, in regards to traction and scale, that made it easier for these seasoned founders to see the parallels to their own businesses," Sutherland said.
Ahead of their pitch meetings, Sutherland and Rusli prepared dozens of additional slides on different aspects of the business so that they could easily tailor their conversations to the prospective investor and their interest areas.
Sutherland shared that in one of their early conversations with Nicolas Jammet of Sweetgreen, she and Rusli spent considerable time talking about brand building and how Yumi's chef series — which is a partnership series that Yumi does with the country's top chefs — was inspired by Sweetgreen's original chef series.
"Immediately, Nic peppered us with ideas on how to build upon the chef series, create high-impact experiential moments, and offered ideas on who to partner with next," Sutherland said.
She added that while sometimes it's fairly obvious how a founder investor's insights will help the business, she and Rusli are continually amazed by how their founders have shaped the business in less obvious ways, too.
"With Nic, we've also learned a lot about how Sweetgreen scaled their culture and how to best communicate a company's mission and values as you take a team from 30 to 300 and beyond," Sutherland said. "We find that the best meetings with founder investors quickly devolve into work sessions."
Leaning on data
Sutherland pointed out that while there are many layers of their business, one of the most powerful is how the company intelligently leverages data.
"Many of our investors were blown away by how we were driving so much of the business and customer experience through smart applications of data," Sutherland said.
Yumi creates a custom experience for each family by tailoring each child's food and content to his or her stage of development. The company also makes future product recommendations based on each customer's journey and what Yumi learns about the customer's likes and dislikes. In aggregate, Sutherland and Rusli use data to inform upcoming flavors — since they can change their offerings every single week — and their product roadmap.
Sutherland added that data also drives incredible efficiencies in the production process.
"We have well over 10 times less food waste versus other fresh food companies," Sutherland explained. "Meanwhile, with our algorithm-driven forecasting, we can lock in better pricing on produce based on anticipated future demand."
Rusli summarized that all of these insights, along with the structure of their business, adds up to a fundamentally different relationship with the consumer, which ultimately helped to win over investors.
"Investors were impressed by the clear gap of what we were offering versus the traditional players, and how we're better built to address the needs of the modern consumer," Rusli said. "We painted a clear picture that this is not a subscription model stapled on a product."
Drawing on their professional backgrounds
The cofounders stressed that their past experiences in finance and journalism were extremely valuable in informing their strategies for the fundraising process.
"Coming from private equity and having a background in finance helped significantly," said Sutherland. "Being able to make a working financial model and accurately predict cash flow has helped not only in raising money but also in our capital efficiency."
She added that for the initial "friends and familly" round, most people are betting on the founders and their vision. But after a couple years of operation, investors expect the founders to know their numbers and have a firm grasp on the different levers of the business.
"We set out to build a scalable business with sound business fundamentals and unit economics; that might sound crazy, but that's not a given in the startup world," Sutherland stated. "In my prior life, I spent several years turning around distressed debt companies and cleaning up balance sheets, and while starting a business is a very different beast than turning one around, I was very focused on margins and creating a fundamentally sound business from day one."
Rusli, too, found her previous career to be a helpful training ground.
"So much of journalism and company-building is driven by people and networks, and as a founder you're constantly doing extensive research to identify the key people needed to build your business — and that's especially true in the fundraising process," she said.
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