A People-First Playbook for Acquiring and Growing Small Brands
A GOODONYA Case Study
Hey, I’m David Sherry. I Founded Death to Stock and now guide founders through the personal and professional transformation needed when scaling a business.
The Elevator is my newsletter where I explore business through the lens of personal growth and lifestyle design.
When Matt Jung picked up and left LA and the venture world behind, our coaching conversations shifted. For the first time in a long career of founding and running companies, Matt was able to “hit pause” and get a wider perspective on what he truly wanted to build and who he wanted to build with.
That reflection led him to acquire GOODONYA (Details below) as well as an insight into how we can help good founders and good brands grow by aligning the right people, capital, and vision.
About GOODONYA
GOODONYA is a small but beloved brand selling organic hydration powder, ideal for health-conscious people seeking a natural, balanced alternative to sugary electrolyte drinks.
*Not an affiliate but I am a small investor :)
The Problem: When good founders running good brands hit a ceiling.
Founders pour their heart into building a brand, and when it catches fire, the first few years are thrilling. As the brand matures, these founders can hit a ceiling. Here’s what that looks like; revenue plateaus, exhaustion creeps in, and while customers are loyal, the founder may feel that they’ve lost perspective or that they can no longer scale alone.
These founders are typically bootstrapped and are unsure how to get to the next phase, or don’t have a realistic next phase in mind.
The thing is, not all brands need to be the next billion-dollar CPG exit.
There is a great opportunity for amazing companies, that are profitable with loyal customers and strong brands…
Why they stay stuck…
What I tend to see is that Founders can be underpaid, overstressed, and not see enough of the fruits of their labor. Sometimes they self-sabotage or are coasting as-is. Often they are in a structure that is simply not working for you.
Here are some ways that I see them stay stuck…
Founders lack operational structure: They feel like they’re putting out fires every day, that they’re not operating like a “real company.” They don’t have a plan for the next year, or they just take things as they come.
Founders struggle to “let go” and build a team/delegate: They struggle to go from their expertise driving business outcomes to having team members who drive growth. They struggle to make senior-level hires and provide them with the right structure.
Founders feel that “If only we could raise that money, we could finally grow.” There is a ton of capital looking to invest in great opportunities. If capital is the thing holding the business back, usually there are other major issues that are the reason that capital isn’t actually accessible?
Founders hit a ceiling in mindset around growth. They are comfortable with their current level of revenue and feel stretched imagining going from say, $1 to $10M in revenue. They also haven’t communicated this vision for growth clearly to the team.
GOODONYA Case Study: Unlocking Growth, Adding Structure, and Creating Value for Everyone Involved
Yes, you could do something drastic (I’ve seen it before, Founders self-sabotage in these moments), but I hope that you don’t do that!
First, I hope that you think through your options, including the path I recommend here as the opportunity. Rather than throwing the hail mary for growth, you can professionalize the business. How? By upgrading the structure to align the right people to help you grow the company.
Bring in a Proven Operator: Identify a hungry, experienced CEO for hire in your category who can run the day-to-day operations of the business.
GOODNYA Case Study: Matt who is the new/current CEO has run or founded 4 DTC brands previously.
Bring in strategic capital: Bring in capital partners to infuse some cash into the business, pay off debt, give liquidity to the Founder (get them paid, as well as keep future upside), and kickstart new growth for the brand.
GOODONYA Case Study: Myself and others invested into the company to help with this transition. Matt created a creative structure to make the above possible.
Elevate the Vision: The founder can retain input on the parts of the business they do best (maybe its’ product, design, or customer experience) while the new CEO focuses on the operations and growth plan.
GOODONYA case study: Kris, who founded the company is still involved and leading the product formulation while allowing others to help grow the brand and deal with the day-to-day.
A Model for Growth with Intentionality
GOODONYA exemplifies what happens when “good” people align around a shared vision. In just 6 months this business is already growing with great potential on the horizon for next year.
If you can coordinate the capital, founder, CEO/operator all together aimed toward a shared vision, I believe you can 10x a GOOD brand and break through the growth ceiling.
I believe everyone can win in this scenario.
The founder can get paid with future upside, and see their business grow.
The CEO/operator can get equity and a great opportunity to run a brand.
Capital partners can take medium-sized risks to get a strong return through future cash flow and potentially even an exit.
I also believe there are many other Founders, Operators, and Investors out there who might be interested in participating in future deals to help brands with product and heart continue to grow their value for everyone involved…
LOOKING FOR MORE GOOD PEOPLE: If you or someone you know (Founder, Operator, CEO, Investor) are interested in talking about these types of small brand acquisition deals, we’re building our network so reach out if you’re interested! Hit reply.
Incredible case study and breakdown… as a founder, this read my mail. 👏👏