The Startup CPG Podcast


In this Investor Spotlight episode, host Hannah Dittman sits down with Dan Graham, Co-Founder of Springdale Ventures, a firm writing seed-to-Series-A checks into fast-moving consumer brands. Dan breaks down exactly what Springdale looks for between early traction and institutional readiness - and why founders who lead with data, not narrative, win the room.


Dan's path to venture was anything but linear. After studying computer science and philosophy at UT Austin and starting law school, he co-founded a printing company in 2006 that grew for over a decade before selling to VistaPrint in 2018 for $280 million. That exit funded his family office, Notley, and years of direct consumer investing before he partnered with Genevieve Gilbert to launch Springdale Ventures,.


Hannah and Dan dig into Springdale's investment thesis and check size,how diligence splits between hard metrics and founder assessment, and the most common fundraising mistakes he sees at both early and later stages. They also unpack how forecasts are actually used in diligence and post-close, what "traction" really means in an intro email, and Dan's hard-won perspective on the emotional toll of founding a company.



Listen in as they discuss:

  • The transition from a personal family office to launching a focused venture fund
  • Springdale's thesis: seed-to-Series-A, better-for-you and repeat-purchase consumer products
  • How Goodles exemplifies bringing disruption to an "old sleepy category"
  • The split between quantifiable diligence (margin, velocity, CAC) and founder assessment
  • Why Springdale sees 250 deals a quarter and how warm intros cut through the noise
  • What makes First Day's Alice a "quintessential" founder in Dan's portfolio
  • The narrative-vs-traction mismatch that trips up early-stage founders
  • Why over-forecasting is a big pitfall for later-stage founders raising institutional money
  • How investors actually use (and pressure-test) a founder's financial model before and after close
  • Dan's advice for founders with zero finance background, including using AI as a thought partner
  • What "traction" means in concrete terms when reaching out to an investor cold



Episode Links:
Dan Graham - Co-Founder, Springdale Ventures
LinkedIn: www.linkedin.com/in/maharg
Email: dan@springdaleventures.com
Company LinkedIn: www.linkedin.com/company/springdale-ventures
Website: www.springdaleventures.com
 Instagram: @springdaleventures 


Don't forget to leave a five-star review on Apple Podcasts or Spotify if you enjoyed this episode. For potential sponsorship opportunities or to join the Startup CPG community, visit http://www.startupcpg.com.


Show Links:

Creators and Guests

Host
Hannah Dittman
Operations and Finance Correspondent at Startup CPG

What is The Startup CPG Podcast?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Dan Graham
Founders, by nature, it's like their baby. They think everyone else is going to love their baby as much as they do, and so they tend to focus a lot more on the story and the mission. And in reality, investors are just looking first at like, well, have you sold anything yet? How many doors are you in? Or have you tried TikTok marketing? Or what kind of margin do you have? And so there's a mismatch there. I see a lot.

00:37
Hannah Dittman
Hey everyone. I'm Hannah Dittman, Operations and Finance host of the Startup CPG podcast. And today I'm excited to be joined by Dan Graham, co founder and general partner at Springdale Ventures. Dan is a seasoned and accomplished investor that has lived the entrepreneurial journey himself. He co founded Buildesign in 2005, grew it into a $100 million plus business, and ultimately led the company through its 280 million DOL acquisition by Vistaprint. Today he brings that first hand experience to investing, having backed more than 100 early stage companies across consumer and technology. Having sat on both sides of the table, Dan has a deep appreciation for the realities of building a business and a thoughtful founder first approach to investing.

01:22
Hannah Dittman
In this episode, we dive into what actually matters when building a financial forecast, where founders should start if financial modeling feels intimidating, and how investors really use forecasts during diligence. We also unpack the diligence process itself, the founder qualities that consistently stand out to Dan, and the single most important thing every founder should include in their initial outreach to investors. Whether you're preparing to raise your first round, refining your investor materials, or simply trying to better understand how experienced investors evaluate opportunities, this episode is packed with practical advice and actionable insights. Enjoy. Hey everybody. Welcome back to the Startup CPG podcast. This is Hannah and today I am thrilled to be here with Dan Graham of Springdale Ventures. Dan, welcome to the show.

02:14
Dan Graham
Thanks. Thanks for having me. Happy to be here.

02:16
Hannah Dittman
We're super excited to have you here. It was so fun getting to see you in Austin recently at our founders and funders roadshow. And now we're full circle virtual on the podcast to share some more learning. So it'll be a great chat today and I know you have a lot of nuggets of wisdom and exciting experiences, so I'm super excited to dive in with you.

02:35
Dan Graham
Yeah, likewise.

02:35
Hannah Dittman
I'd love to kick us off with starting out with a brief background and the path that led you through your career journey and ultimately to investing into Springdale.

02:44
Dan Graham
Yeah, my journey was a little strange. I was born in Austin, Texas. I went to the University of Texas and got a degree in computer science and philosophy, which seemed really random at the time, but now seeing with AI seems really prescient for a degree combo. I then went to law school thinking I would do intellectual property or patent law, and was building websites in my spare time to earn some extra money and had partnered up with a couple of friends of mine that I had grown up with who had moved back town after undergrad. And were working with a bunch of different kinds of businesses and throwing out these ideas for intricate web solutions. And one of the companies that we pitched that rejected our website proposal ended up turning into the business that I started with them back in 2006.

03:29
Dan Graham
So we ended up launching a company in the printing space selling everything from T shirts to home decor, wall art, signs, flags, bumper stickers and bootstrapped, and grew that business for just over 10 years before selling it to Vistaprint in 2018 for $280 million. And out of that transaction, my wife and I set up our family office called Notley, started to do a lot of direct investing, primarily in consumer brands, since that's where I had made my money and had my expertise.

04:00
Dan Graham
So did a bunch of direct deals and a bunch of SPVs with other investors and then ultimately started working with a local accelerator in Austin called Skew and really noticed that even though we had great brands coming through Skew like Dude Wipes and Siete and Epic Bars and others, that when these companies were growing and hitting kind of 1 to 2 million in revenue and needing to do smaller venture capital rounds, they were really struggling to raise money despite the fact that they had great growth traction and data behind them and there wasn't a lot of capital available in that one to $2 million check writing category. And so I had met my Springdale Ventures co founder, Genevieve Gilbreth. She had exited her company and was also working at Skew.

04:47
Dan Graham
And we decided to launch Springdale Ventures to provide capital in that gap, where for whatever reason, tended to be an awkward place for founders to raise money.

04:56
Hannah Dittman
Wow, Dan, what an incredible background. You have mastered so many different things and have had so different experiences in your life. You've lived many lives before you ended in consumer.

05:09
Dan Graham
My kids also tell me that I'm old and they say things like that as well.

05:13
Hannah Dittman
How exciting to have been on the founder journey side and so many other different ways that you've experienced the world and bringing all that knowledge into investing. And it is so true. There is that awkward gap and that's oftentimes the hardest phase for a founder also because when you're the most resource constrained, not just from a capital standpoint, but from a human capital standpoint and have so many things that you're needing to tackle and build out and grow. So really great to have awesome partners focusing on that stage of the business and the world. I'd love to learn a little bit more about Springdale Ventures now that we've got the tee up.

05:52
Hannah Dittman
If you could share maybe criteria, stage focus, mandate, check size, AUM or any other information you'd like to share with us to help us paint a picture of what you've got going on there. I think that'd be a great way to dive into the conversation.

06:05
Dan Graham
Yeah, for sure. So Springdale invests in all manner of consumer brands. I would say primarily it's fast moving consumer so consumables or beauty products or products that consumers need to buy more than once. Although we do have some amazing brands in the portfolio like Caraway, which is more of a one time purchase like a pots and pans and kitchenware. But we tend to invest in what we think of as like the seed to a stage bridge zone where we're writing on average probably one to one and a half million dollar checks into rounds that are two to four million in size. And these are usually companies that are getting close to or are already doing about a million in run rate revenue.

06:49
Dan Graham
So basically the earliest you can get but still see some sales data and some unit economics or margin data for the brand to get some confidence that there's product market fit and that the founders have figured out at least one or two channels to really leverage and increase growth over time.

07:09
Hannah Dittman
Yeah, that makes a ton of sense and definitely a sweet spot in the inflection point right before a big rollout or you really start catching fire at that stage where you've got enough traction to kind of show that something is brewing, like you're smelling something in the kitchen and you think dinner's going to taste good, but it hasn't fully come together all the way yet.

07:31
Dan Graham
That's right. Yeah, exactly.

07:33
Hannah Dittman
Is there any categories that you're particularly excited about right now or any market trends or behavior shifts in the consumer world that you're really anchored on or thinking through? As a thesis standpoint, we really focused.

07:46
Dan Graham
On better for you, better for the planet types of brands, which is fortunate in that these days that's pretty much most of the brands that we see. I think that's then longevity and health and wellness are kind of a long standing. I Don't even hesitate to call it a trend now. Maybe a trend line. And so that's where we tend to focus. I think we're always thinking about what are the old sleepy categories that no one has touched for a long time. One of our fun one companies, Goodles is a great example of that coming into an old market and bringing a better for you better branded product and just absolutely crushing it. And so we're thinking about brands from a disruption perspective, but also thinking about what are the companies that are really trying to fit into this new ethos.

08:31
Hannah Dittman
Of buyer that makes so much sense. And a huge fan of Goodles. I remember the first time I saw them in store, they were a bit earlier on the ancillary isle. Disruption better for you flips. And I remember thinking like God, so smart. How has no one done that yet? Like so smart, so well done. I think now we're seeing it happen in a lot more places and categories across health and wellness or food or even outside in different areas.

09:00
Hannah Dittman
But it makes a ton of sense that consumers are looking for not just like a better option, but a modern option too that resonates a little bit more strongly with them and is of course cleaner and better for them and all of those things, but also serves the modern palette in a better way or the function in the format of modern day living in a better way too. There's so many different ways to tackle what better for you actually means now. Now that health has been a little bit more ubiquitous, it's kind of just optimized sometimes in a way.

09:32
Dan Graham
Yeah. And I feel like the retailers are helping a lot. And finally, or the big brands starting to think about innovative products and disruptive products as the way that they could be growing as well. And so you see not only big brands like Pepsi doing a lot more M and A instead of developing their own products. I may be old enough versus most of the people listening to remember things like Crystal Clear Pepsi and OK Soda and back in the days when the disruptive products, the big brands were trying to develop those in house themselves and they just didn't resonate with the consumer at all. And so they've really moved to supporting new brands.

10:08
Dan Graham
And at the same time retailers are doing the same thing and creating more shelf space for new brands, boutique brands, and using that as a place to try things out to maximize their square footage per shelf revenue on the sell side as well.

10:22
Hannah Dittman
Well said. And yeah, it is such a combined effort in consumer between distribution, strategics, emerging brands and investors. All those things need to fall into place for something to really gain a ton of traction and be super successful. And that makes a lot of sense. And I think retailers, of course, lean into what's going to be driving growth and business for them. So it all kind of ties back to consumer behavior and consumer demand. And the people listening the closest, I think end up probably doing the best.

10:55
Hannah Dittman
When you're looking at a new brand, something like Goodles, and you're evaluating it and getting through your diligence process and your investment evaluation process, what are the kind of big milestones in that process for you and what are you hoping to see as the story of a company unfolds along that timeline of you diligencing and reviewing and understanding them?

11:18
Dan Graham
Yeah, I think generally there's kind of a checklist of. Here are the quantifiable, harder numbers measurables that we're looking at. And that's things like gross margin and velocities if they're already in retail or customer acquisition costs online, if the brand is starting with D2C and things like that. And then there's other track of diligence, which is not really as quantifiable, which is really about like the founder, the team, and trying to get a sense for how resilient and how successful is that founder going to be in a whole set of things, not just developing a brand, but being able to sell the product, being able to hire the right team around them, do they have a good head around the business and the metrics and the numbers thinking about, most companies are going to need to fundraise multiple times.

12:06
Dan Graham
How are they going to do during that fundraise process when the brand inevitably needs more capital? And that's a much harder kind of a softer set of evaluations that we're making. And so those things are happening usually in parallel as we're looking at a brand. The traction and data side and then the soft entrepreneurship and team assessment side.

12:25
Hannah Dittman
I have so much admiration for the founders like yourself that have been able to do it all successfully because it is no small checklist of what you need to have going on to really make something happen. When people go out for dating and they kind of have their like checklist of all the things they're looking for in a partner. Like the founder checklist is so long and so impressive of what you need to be able to hone in your own skillset and achieve in so many different ways of thinking and different capacities to be able to build a business.

12:54
Dan Graham
Yeah, and just breaking through the noise is hard Enough. I mean, like Springdale, we see 250 deals a quarter, like pitch decks, and just getting to the stage of getting out of just like the process of looking at all of those and putting them in different piles depending on what's observable from the deck. And so that when we get someone who is a mutual connection reaching out and giving us more context on the business or the founder, that's fantastic because it really helps cut through effectively. It's like a hiring, like you have a pile of resumes and if you know someone who knows someone already, then it shortcuts a lot of that initial process. And that's tough on our end.

13:34
Dan Graham
And so it's always nice when a founder is able to cut through that a bit and help us out by coming in through a different channel on top of what I would call like our normal intake process.

13:45
Hannah Dittman
Yeah, very well said. Is there any example of a founder in your portfolio or one that you've worked with that you think exemplifies just the quintessential best in class founder or some of the traits that you really look for in new deals that you're evaluating or new founders that you're evaluating, working with?

14:02
Dan Graham
Yeah, and I think we try only to back those founders. And so there's a big list of those.

14:08
Hannah Dittman
You're like, yes, all of them.

14:09
Dan Graham
Yeah. But like Alice with first days, top of mind. I was just talking with her this weekend, which is a gummy vitamins and supplements company, just super sharp when we first met and we're talking to her about the business. I mean, she just has such a command over every single aspect of the business, whether it was like the digital marketing metrics or she was flying out last minute to meet a supplier to work through a manufacturing issue. And you could just in the conversation sense her commitment and grit and resilience within the business already, as well as just her command and intellect that had grasped all of the different, like, minutiae around the company and which at the startup phase is so important for a founder to do.

14:50
Dan Graham
A lot of times you meet founders who have intellectually outsourced really critical pieces of the business, whether to outside firms or friends or whatever. That could be like finance or performance marketing or something. And for us, that's a bit of a flag at the early stages for a founder to not have that full command over the business and then to be able for Alice, like the willingness to, at the drop of a hat, fly out somewhere to take care of an issue. You're looking for those signals when we're evaluating a business. And all of that has turned out to be amazingly true for her, and the business has grown and become massively successful as a result of that. As a result of her.

15:25
Hannah Dittman
Yeah, really great, tangible examples that I think help paint the picture so clearly about what is so critical in needing to see from a founder and why. It's like understanding all of the problems that you have going on in your business and kind of the vision of where you're going to go at the early stages matters so much because you're essentially going to have to go build and execute that roadmap once you get capital. And so if you're lost in the sauce of one whole area of your business or you really don't really understand something, it's a huge risk area for a lot of mistakes to be made or a lot of money to be wasted if you're not able to plug all the holes in some way yourself, at least a little bit.

16:03
Hannah Dittman
And not saying that you have to be the best person at every single capacity in your company, I'm sure you expect people to build teams and to hire and to manage effectively, but I think what I'm hearing you saying, at least having an understanding and a management vision and a direction and an ability to troubleshoot, to problem solve and to create strategy in every aspect of your business is really important.

16:27
Dan Graham
Yeah, absolutely. I think especially at the earlier stages, the one thing that is a near certainty is that the business will need to change, that things won't go exactly as planned in the roadmap or in the forecast. And so if all were investing in was a product and an exact forecast with a specific output for where those products are being sold, it would be a bad investment nine times out of 10, if we don't have a founder who's capable of making changes and pivoting with the business. And so the importance of getting the founder decision right is that when the company inevitably changes, you have someone in the seat who can adapt to the business to fit the new circumstances. And so it's a complete necessity when looking at businesses to invest in.

17:14
Hannah Dittman
When you're dealing with founders going through a fundraising process, what are the most common pitfalls or oversights, I guess you would say, that you've noticed founders fall into or make.

17:26
Dan Graham
Yeah, it probably depends a little bit on the phase. So early stage, I think the lack of focus on talking about and presenting the narrative around traction is probably one of the biggest things I see missing. Where the founders, by nature, it's like their Baby, they're like super bought in. They think everyone else is going to love their baby as much as they do. And so they tend to focus a lot more on the story and the mission. And in reality, investors are just looking first at like, well, have you sold anything yet and how many doors are you in? Or have you tried TikTok marketing or what kind of margin do you have?

18:04
Dan Graham
And so there's a lot more focus, I think on the investor side on the traction and the metrics and the founders at the early stages tend to focus more on the story and the narrative and the mission and the reason that they launched this because they had this issue with their dog or their brother. And so there's a mismatch there. I see a lot. And then later stage, when you get to more institutional investing, the biggest gap I see is around over forecasting. So I think like when you first raise, your forecast chart always sort of looks like this with today being right before it's about to explode. And so when you're an investor, we just sort of ignore the forecast chart and just look at historicals and where you are today.

18:41
Dan Graham
Well, the forecast actually becomes a tool in later stages for the investor to underwrite the deal. And usually the process to close the financing takes a while. And so if you over forecast and then the investor's watching your actuals come in and you start missing your forecast because you over forecasted, then the whole deal can blow up or the valuation gets retraded. And that's very, very common. And so when we talk to our later stage founders, it's very much under promise over deliver with your forecast type of strategy so that as you're going through a process to raise money, you're just delighting and creating a larger sense of urgency with every passing month of actual numbers coming out.

19:21
Hannah Dittman
I'd love to double click on this idea of modeling and forecast that we're talking about and kind of understand the so what of what it is all used for on your end and then the reality of what happens in an investment process specifically with that model once an investment closes. So if you could shed some light on the rundown of what a forecast model is, why a company is creating it, and then how you all use it as investors in the diligence process and then post investment close as well, I think that would be super helpful.

19:52
Dan Graham
Yeah, so when we're looking at a deal and we're looking at the forecasts, we're trying to figure out a couple of things. One is how big can this company get? Like, what's the ultimate vision for the business? Is there a big market for this business? We're often thinking about here in five years, seven years, what kinds of multiples? After our investment horizon at like the five to seven year mark, suddenly we're trying to get an exit. And so we're thinking about, well, how big will the company be then? And what's the multiple of profit or of revenue that might be possible? And is that, what multiple will that be for us? Is that a 10x50x3x?

20:30
Dan Graham
And we have our own model on the back end where we say, all right, if a certain percent of our portfolio companies exit at these different valuations, what does that mean for us as a fund and our return for our investors? So all that math is going on. And so we want to make sure that each company, if it performs the way that we hope it will fit into our model to provide the return that we need to provide to our investors. So that's sort of the big picture. And so the forecast helps us figure out what the founder thinks is possible at the very least. Sometimes we see forecasts and we always assume the founder's being overly optimistic with their forecasts. So sometimes we see forecasts that are really small. And so then that causes us to wonder what the actual potential is.

21:13
Dan Graham
Or maybe the founder is not interested in growing the business aggressively. So it creates a line of questioning for us if the forecast is too tiny. And then I think like, if it's too big, then it's a different kind of flag, which is like, maybe this founder is crazy and thinks that there's an unreasonable expectation for the business. And so it's kind of one of these weird things, I think at the early stage, where we all know the forecast is unreliable at this early stage, but it's an indication of where the founder's headspace is and then also a little bit of what's the overall market that everybody around the table like thinks is possible for the company.

21:50
Dan Graham
So it's something that like, you kind of want to hit this sort of middle of the road forecast, even though everyone knows that it's not probably accurate anyway.

21:58
Hannah Dittman
Yeah, really well said, Dan. And I think important to double click on that. It's trying to get a sense for the headspace and the management's view of a business in a lot of ways and the understanding of the levers of a business as well, I will say so to kind of like break it down into blocking and tackling in an investment process. A founder will be asked to present a model which is essentially the financial statements forecasted out, primarily focused, I would say probably in the early stage, mostly on the P and L and for three or five years. And that essentially becomes like the operating budget, which hopefully you're kind of already doing within your own company to track and manage your business anyway.

22:37
Hannah Dittman
And you're driving through what are the levers of retail sales, the highest lever of the P and L all the way down through the bottom. And understanding what's going to change in two years. If you're expecting your door counts to double because you're going to get more distribution potential or you're bringing on a marketing hire, so you think you're going to have a lot of ROI from that or the things that are happening in your business from a narrative standpoint, then get reflected into this forecast model. An investment firm is taking that model and they're kind of combing through it with a fine tooth comb and building their own version of it on the side, but using some of the inputs from yours.

23:16
Hannah Dittman
Vetting and pressure testing some of the things you're saying, like you really think revenue is going to double just because you have this one marketing campaign that's launching or something like that, vetting the sanity of some of these things and like you're mentioning how overly optimistic someone is going to be about what is going to drive growth in their business. And it's the right costs are associated with that growth. And then after the investment, though, that it's not just like a one and done. Okay, well, we double check that we're going to get a return on our investment based on kind of the middle ground we found between our model and your model. And it all checks out. And that's great, as you're alluding to, becomes the roadmap for the investment down the road.

23:56
Hannah Dittman
And eventually you get, I wouldn't say evaluated, but in some ways evaluated against your operating budget. And if you're sticking to the plan, because that is the plan that investors need to see to be able to get the returns that they originally underwrote. So it's all really important to understand your numbers and kind of like go into all of these things in a diligence process, thinking through the long term, like you're saying what's realistic and not being too overly bullish, not sandbagging yourself, but not being so overly bullish that you're just like totally setting yourself up for failure in an investment process. And then post close as well.

24:29
Dan Graham
Yeah. And ultimately where we get to with founders during the diligence process is kind of looking at each channel in more detail and thinking of the each channel as almost its own P and L and with its own forecast and talking about the justifications for the growth expectations for each one. And so if it's very prospective, like in your example in making a marketing hire and they've got no revenue in a channel and then a huge spike in the forecast and they say, well, that's because we're hiring someone here and they're going to figure it out. Well, that's really hard to like actually bank on that. Versus, hey, we've been increasing our spend on TikTok by 20% a month and we've seen a corresponding increase every month in revenue.

25:16
Dan Graham
And we think that based on X, Y and Z data that can continue for the next 12 months with us ramping up spend and in fact we could ramp it up higher, but we don't have the cash to buy more inventory, so we'll just sell out. That sounds really good and it's a really promising narrative. And so trying to figure out which of those two extremes. Each channel that is feeding the forecast it is in is part of the diligence process that we work through with the founders that we're talking to.

25:43
Hannah Dittman
Super helpful and great color and example to use for that as well. And a great picture of why you care about this and why you care about understanding how someone is thinking. Because as you can just tell from that quick example, the two different schools of thought, one gives you a lot of confidence and command and control over a business and that like sound business decisions will be made and one sounds like, we're just gonna figure it out. That's not something that an investor typically would want to hear. If I'm a founder and I have zero experience with modeling or finances and I'm building this out for the first time or thinking through some of these things for the first time. Do you have any recommendations for me of where I can go to educate myself or how I could best approach this?

26:25
Hannah Dittman
If you were in my shoes and needing to really want to take a stab and get this right on the first go around?

26:32
Dan Graham
Yeah, I would say, like first and foremost, as a founder, like, you have to be intellectually curious. Like, you actually have to want to understand these things and to understand how these levers work and understand the different forecasting strategies and what it means to talk about different channels of growth and how to break out the unit economics of each of those channels and to think about that over time. And so that's the first step because I think if you're not intellectually curious and you just kind of write it off as well, that's not my strong suit. Or I've never been really a finance person. I'm more of a brand marketing person. So I'm going to focus on that within the company.

27:07
Dan Graham
It's going to be really hard, I think, to have total mastery over those concepts and to be able to engage in a thoughtful and really productive way with a potential investor, especially an institutional investor. I would say once you've gotten to a place where you're intellectually curious, there's a couple of ways to do that. I would have said probably like hire like a part time or virtual CFO type person to help build those things out, but in a way where they're teaching you as you go, as opposed to just saying like, deliver me a spreadsheet that I can forward to the investor. I would add AI to this and say like open up a project with Claude or ChatGPT and engage them like a thought partner and a tutor in this process. They're fantastic.

27:49
Dan Graham
These AIs are really good at explaining challenging concepts and breaking things down. Specifically after you feed it some of your information about the business, like breaking it down in a way that's very practical for your company is also, I think, a really great place to start. But you have to get to a place where you're really comfortable having dialogue with potential investors about your business in all of those like economics level type ways.

28:15
Hannah Dittman
Yeah. Great pieces of advice and double click on the AI. I think what an amazing era in some ways to be a founder and that's such an awesome resource and so capital efficient as well. And I would say, of course, like you don't need to boil the ocean and go get a finance degree overnight. And I don't think anyone would expect that of a founder. But I think being fluent in the language that an investor is speaking doesn't only help your fundraising process, but it also really helps you pick the right partner and have agency and power in the decision making process and kind of power over your own destiny as a founder.

28:49
Hannah Dittman
And that's really important because when there's a knowledge gap it can make the power dynamics feel really off or you can quickly default to the person who seems to know more. So allowing yourself to be an equal partner in the room I also think is a kind of side benefit of some of these things as well. Yeah, and that's important.

29:07
Dan Graham
I think it's intuitive for people to recognize that if you have a food product as a founder, it would be weird if you didn't know what the ingredients were in your product. Yet at the same time, there's a lot of founders who don't think it's unusual that they don't know what the cost to acquire a customer is in their own business. And those are both really essential building blocks and important pieces of information to be able to build and grow a successful company. And so what are the ingredients of your product? Mentality across every aspect of your company is where founders, I think, need to be.

29:39
Hannah Dittman
I love that. Very well said. Great little mantra to keep in the back of your mind. I think that's awesome. Reflecting on your career and investments, do you have any lessons learned or compelling anecdotes that you think might be helpful for other founders or operators to learn from?

29:55
Dan Graham
I think the hardest thing is just how hard it is to be a founder. Growing my company. Our business nearly went under three or four times for various reasons, Product issues. Our first printer that we bought didn't work, and we had spent all of our money getting it. When we did start to grow really rapidly, the bank was worried about chargebacks. They just started freezing all of our credit card transactions and not giving us any of the revenue and saying they were going to hold 100% of our money for six months. And, like, there's just so many different things that happen at the early part of a business. I think finding a great network of peers and mentors. It's very lonely to start a business.

30:34
Dan Graham
We were talking about it, I know, before the show started, but it's just being a founder is very hard. It's one of those things that looking back on it, I think everyone should experience it. Like, it's by far the best learning experience I've ever had in my entire life. But I wouldn't wish it on anyone. Like, it's very brutal. And I think my favorite expression is that the definition of an entrepreneur is someone who repeatedly runs headfirst into a brick wall. It takes it as a sign of encouragement, and it's really true. Like, it's very tough. So I think, like, taking the time to network and build community of other founders and people in the industry is critical to maintain the energy that you have to just make it through that gauntlet.

31:20
Dan Graham
Especially in those early days where every mistake or pivot is existential and you're always worried about payroll or the company running out of cash. And it's just tough. And so I guess, like my main just thought is an emotional empathy kind of one going out to everybody who's going through that.

31:40
Hannah Dittman
Yeah. And I think that's so important as an investor to have that lens and bring that to the table. I think that's a really big differentiator. That's a hard relationship dynamic sometimes and the expectations are really high and the pressure is really high. And having a partner who is very thoughtful and very understanding about the headspace that you've been in to get to where you are and where you need to go and really be able to kind of connect on a personal and emotional level in that way makes that journey, I'm sure, so different. It's like anything in life. Like doing XYZ with a person who's great makes that experience so fun. Doing XYZ with a person who's not great makes that experience the worst experience of your life.

32:25
Dan Graham
So, yeah, so true.

32:27
Hannah Dittman
I think I love the showcase of how thoughtful and empathetic you are. And hopefully this is encouraging to all the founders out there that everyone is in a similar boat who's on that journey and you're not alone in your struggles and your investment partners hopefully will understand that too. And what an exciting feeling to be able to kind of bring on some additional people into the boat to help row it forward a little bit as well. When you get to that point, I'd love to pivot us into a slack question. As you know, startup CPG has the largest slack community in the industry with now over 35,000 members. I'd love to pull a question directly from our channel and have you answer it as a case study for any founders that might have a similar question.

33:08
Hannah Dittman
Today's question is what do you need to hear in the first communication with a brand or in an intro email for you to want to learn more about the company?

33:17
Dan Graham
Yeah, by far the best thing would be traction data, because most funds, including ours, we have a very specific thesis and there's a bunch of sub parts to that thesis, but the main part is phase of company. And so the traction data gives us kind of that initial piece right off the bat versus having to dig for it. And sometimes when we have to dig for it, we miss it and we write the company off even though maybe it was in our window. And I think a lot of investors are at least interested in seeing that information and or just stating up front. Here's where we are doing some research too. If you're emailing a fund knowing before you contact them, where you fit relative to their thesis is great.

33:59
Dan Graham
Like I had a founder reach out a couple days ago and say just right off the bat, like, we're too early for you, but we just want to get on your radar and build a relationship. And I had a great conversation with them and put him in our system as some founder to watch. And that was fantastic. Not making us kind of guess or dig for the information. And frankly too, it's a way to just supercharge the conversation to the exact place you want it to be. Assuming you have the traction that fits thesis of the fund that you're talking to.

34:27
Hannah Dittman
So helpful and clearly said. If I could double click a quick follow up question when you say the word traction, if you could like bullet point out a laundry list of examples of what that actually means intangible terms. If a founder sitting there being, okay, what do I actually write? What is traction? What are the bullet points you want me to put in this email?

34:46
Dan Graham
Yeah, Traction is the set of data that displays as much as you can interest in your product. At the most obvious level, that's like revenue. Maybe it's the number of doors, maybe it's how quickly your product is selling in the few doors that you're in. If you don't have revenue and you're not selling anywhere, is it followers online? Like any kind of data that at some point is a proxy for revenue, then that's what I mean by fight Traction. Something that's indicating interest in the product at the highest level with revenue being the gold standard, I would say for Traction.

35:21
Hannah Dittman
Yeah. So well said. And I would even like add extra point to that to say like repeatable revenue is probably even more exciting, even better.

35:30
Dan Graham
Yeah.

35:30
Hannah Dittman
Then you get into like the quality of revenues and all these different things too. But yeah, I think reviews all these things, like you're saying there's so many ways to skin a cat and hopefully your company's shining in a lot of different ways and you're able to provide a lot of proof points there. But I think the takeaway on Traction, to just kind of summarize what you said, is the momentum in the business that proves that there is some growth, scalability and revenue that will be built off of a company or is already being built and kind of leading with your best fit forward there and saying, hey, we matter because we have traction and now we can tell you all the amazing things that we've got going on because we've crossed that barrier to entry.

36:09
Dan Graham
Yeah. And I love the word momentum that you used. There's an expression that investors invest in lines, not dots and that's really about momentum and showing over time interest in the product.

36:20
Hannah Dittman
So well said. Well Dan, this has been such a fun chat. You're so wise. You have so many cool experiences and tons of knowledge and awesome things going on in your world. For founders that might want to get in touch with you or continue the conversation think they may be a good fit. They want to show off their traction to you. What's the best way for them to get in touch? And second part of my question is do you have any advice or opportunities for those interested in joining Springdale Ventures or investing in general?

36:49
Dan Graham
Yes. So first off, email is by far the easiest way to get a hold of me. Dan at Springdale Ventures. You can also Message me on LinkedIn. Please connect with me. I'd love to connect with everyone and if you're a brand or an investor like I would love to talk to you. So please reach out and we can schedule a call or a coffee if you happen to be in Austin. But yeah, I think it's a fun space to be in. I feel super fortunate to be on the investor side of the line after spending so many years on the entrepreneurial side of the line. And really I am in this business because I want to meet amazing founders and work with great brands. And so getting to do that, I feel super lucky every day.

37:27
Hannah Dittman
So much humility and passion for what you've got going on. Your empathy and the emotional context you come with totally comes through. Dan, you're an amazing investment partner, I'm sure and I'm sure the brands working with you are very lucky. Thank you again so much for sharing all of your insights and your time today. Super grateful for all of the color and the anecdotes that you shared and I think it'll be really helpful for other people to learn from.

37:52
Dan Graham
This was so fun. Thanks Hannah for having me and it was great visiting.

37:57
Hannah Dittman
Well friends, we've now arrived together at the end of another episode of the Startup CPG Podcast, the top globally ranked podcast in cpg. And if you love this podcast, you'll love our Slack community even more. Here at Startup cpg, we're a community of brands and experts and you should join sign up @startupcpg.com you'll then get an invite to our online Slack community of over 35,000 All Star CPG members, hear about amazing events near you and all our special opportunities to get you in front of buyers, investors, brands and more. It's a free community. So what are you waiting for? I'll catch you on the next episode and I'll see you on the slack.