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Date who you want to marry: a new approach to raising capital

Entrepreneurial agility is valued in a large corporation—especially as an independent partner.

Date who you want to marry: a new approach to raising capital
[Adobe Stock/ Mangostar]

I’ve performed for the angels. I’ve danced the VC two-step. I’ve ridden the roadshow, a smile locked on my face as I strutted and gestured, all the time wishing I could be doing the important thing: building my business.

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As a serial entrepreneur in the F&B space, I’ve believed utterly in every product I’ve produced—you have to. But just like we all know that people do love their children differently, I knew my next venture was something special.

Nonalcoholic spirits that taste just like gin, rum, tequila, and whiskey, without the calories or consequences. When my business partner and I developed the notion for Ritual Zero Proof, we knew it was a winner. A category-creating, lifestyle-changing product.

But the hurdles ahead were more like mountains. We’d used our own resources to fund product development, but creating a genuinely new category requires major investment.

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I wanted to spend my time building the business, not chasing capital. But how? Cicero was talking about war when he wrote that its sinews are money, but it’s no less true for entrepreneurism. Without significant funding, we’d end up stalling out, or worse, watching our idea be capitalized upon, literally. Once we’d proven concept, what was to stop a liquor producer from simply making their own version?

Whoa. Lightning bolt. What if instead of using outside funding to build a company we would one day sell to a major distiller, we instead went to that distiller for the funding?

On the surface, it was a crazy notion, like pitching almond milk to a dairy producer. But what if an almond milk company had? What if the dairy producer had been willing to look to the future? What seemed competitive could actually be complementary—and profitable. It’s like dating. It’s fun to date a lot of people, but aren’t you really looking for your forever partner?

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After all, Ritual Zero Proof isn’t anti-alcohol. It’s meant to give people options. In some moments you want a full-strength margarita, and in others you want an unleaded version. In fact, our research tells us that the vast majority of the people who purchase spirit alternatives also buy liquor.

With that revelation, a whole new path opened up. Our perfect spouse was a major player in the spirits industry with the funds to support innovation and the vision to see how it could benefit them.

If you’re going, go big. So we went to Diageo, one of the world’s largest distillers, which operates in 180+ countries at a $100B market cap.

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The advantages to both sides were clear. Ritual would be able to move at full speed and build the category, and Diageo would benefit from the energy and agility of an entrepreneurial team.

Now, I’m not going to say it was easy. But then, neither is dating. What begins with flirtation moves to coffee, and then dinner. We had to present a compelling business case and a product we knew was great. We had to listen, absorb objections and concerns, and adapt. Our courtship lasted months.

But in the end, we bought into each other, making it official with an eight-figure investment. It’s a partnership that has meant everything to us. Instead of spending my time raising money, I get to focus on my baby.

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If you’re in a similar position, here are some actionable tips:

1. Identify your biggest threat—or the market to which you are a threat. That’s your ideal partner.

2. Too many businesses act like customers are simple, or binary. Our proposition was that if people like tequila, they’d like a tequila alternative, too. Diageo understood that. Your partner should, too.

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3. Seek out the development team. Many multinationals have accelerators or outside R&D arms. These provide an established pathway for partnership.

4. Know that entrepreneurial agility is valued in a large corporation—especially as an independent partner. It’s like being in a carrier group. The aircraft carrier is enormously powerful, but it moves slowly. But a corvette can turn fast, react to changing conditions and take bigger risks.

5. Don’t be afraid they’re going to steal your idea. An idea is nothing. It takes years of sweat to turn it into a reality. Offering to take on the hard part is a compelling pitch.

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The category we invented is now a thriving space, with dozens of new options popping up. In fact, according to Nielsen, spirit alternatives are the single biggest growth category in the entire non-alcoholic beverage market. We couldn’t have done that alone. And man oh man are we enjoying the benefits of a long-term, committed relationship.


David Crooch is the Co-Founder & CEO of Ritual Beverage, America’s leading non-alcoholic spirits brand.

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