The Startup CPG Podcast

In this Investor Spotlight, host Hannah Dittman sits down with Tara Hyland, Principal at Main Post Partners, to break down how growth equity differs from venture capital and what founders should understand about building an enduring consumer business.


Tara's path to Main Post started in investment banking on a consumer-focused food and beverage team, followed by a move into private equity at Swander Pace Capital. She joined Main Post, a consumer-focused private equity firm known for its "partnership not ownership" philosophy, in 2020, and works primarily with founder-led businesses navigating their first institutional capital raise.


Hannah and Tara dig into the key pillars Main Post considers during diligence, why management team strength is so critical to an investment decision, what investors actually mean when they call a company a "lifestyle business," how investors evaluate exit potential, and what separates a great business from one that's truly ready for institutional capital.

Listen in as they discuss:

  • How Main Post's growth equity approach differs from venture capital and private equity
  • The firm's investment criteria, check sizes, and its "partnership not ownership" philosophy
  • The Main Post mentorship group, and how the firm supports founders beyond just capital
  • What exit potential really means, and how investors evaluate a business's remaining "white space"
  • The financial benchmarks (growth rate, gross margin, differentiation) common across Main Post's successful exits
  • Why a strong, scalable management team matters as much as the product itself
  • The difference between a strategic buyer looking for portfolio protection versus a true portfolio gap
  • What Main Post looks for in early diligence conversations, from brand differentiation to founder buy-in
  • Why omnichannel presence, not just strong DTC metrics, has become critical for CPG investment today
  • What investors mean by a "lifestyle business," and why it isn't necessarily a bad thing

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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.

Tara Hyland
At Main Post, we're not chasing trends, we're not chasing trendy businesses, but we do make sure that the businesses that we get involved with and that we invest in have some level of being on trend with what consumers are needing and what consumers are seeking, and that some of that comes through innovation and new product development. But at the end of the day, we're looking for businesses that, like I said in the beginning, are going to be relevant for decades after our involvement in consumers lives.

00:35
Hannah Dittman
Hey everyone, I'm Hannah Dittman, Finance and Operations host of the Startup CPG podcast and today I'm really excited to be joined by Tara Hyland, a principal at Mainpost Partners. Tara brings more than a decade of experience across consumer investing and investment banking, with previous roles at Swanderpace Capital and KeyBank Capital Markets before joining Mainpost in 2020. Today she works primarily with founder led businesses at Mainpost, a consumer focused private equity firm known for its part not ownership approach and for partnering with high growth companies as they scale toward their next stage. In this episode we break down how growth equity differs from venture capital and what founders should understand about building an enduring consumer business.

01:17
Hannah Dittman
Tara walks us through the key pillars mainpost considers during diligence, why the strength of the management team is so critical to an investment, and what makes Mainpost's approach to partnering with founders distinct. We also discuss what investors mean when they call a company a lifestyle business, how investors think about potential exit opportunities and what separates a great business from one that is positioned for institutional investment. Whether you're thinking about raising growth capital, planning for a future exit, or simply want to better understand how private equity investors evaluate consumer businesses, this episode offers a great look inside the growth equity mindset. Enjoy. Hey everybody, welcome back to the Startup CPG podcast. This is Hannah and today I'm super excited to be here for an investor spotlight with Tara Hyland of Main Post Partners. Tara, welcome to the show.

02:09
Tara Hyland
Thank you. I'm honored to be a part of this and I can't wait to dive in.

02:12
Hannah Dittman
I'm super excited to have you here. It's a long time coming. Tara and I have known each other through the grapevine for quite a while and I have a ton of respect and admiration for you and your investment journey. So I'd love to kick us off with a brief background of your career and the path that led you to Main Post.

02:27
Tara Hyland
Absolutely. I wish my background was more unique, but really not terribly unique to this industry in that I studied finance in college and accounting, although it was at the height of a recession. So I think I had this mindset where I needed something differentiating on my resume and went the finance route. From there I went into four years of investment banking. And I guess that may be a little bit unique in that it lasted longer than most people who ultimately end.

02:53
Hannah Dittman
Up in private equity.

02:54
Tara Hyland
But I was in the consumer group and I think that all stemmed from this deep obsession with consumer brands. And that stays true and remains true today. From my investment banking years, I was working mostly on our food and beverage team. We were working on a couple of sell side opportunities where a firm called swanderpace Capital, a consumer private equity firm, was looking at several of these opportunities. So I got to know them through various processes and ultimately was recruited to move out to San Francisco, something I never thought I would say, and someplace that I thought maybe I'd only live for two years, although it's 12 years and counting today. So needless to say, I love it there. And I had such an incredible experience transitioning into private equity. I became obsessed with the industry and I still am to this day.

03:37
Tara Hyland
But when I met Main Post Partners, which is where I'm an investor today, I loved the approach, thesis and the opportunity to work closer with founder owned businesses. Particularly in the fact that we really only focus on consumer and we'll talk a little bit more about that, but also the opportunity to invest in both a minority and majority position, which I think really opened the aperture and the opportunities for us to get involved in really cool business. This is.

04:01
Hannah Dittman
Yeah, Main Post is really unique in the first institutional capital angle, but also the stage of business that they focus on, all the cool stuff that you guys have going on there. I'd love to dive right in and go through a firm overview. If you could give a little bit more color to the criteria, mandate and differentiation of Main Post, we'd all love to hear it.

04:19
Tara Hyland
Great. Well, Main Post was founded in 2014 by a group of partners who had worked together for decades. And today we remain very similar focus where we invest in both minority and majority positions in very high growth businesses in the consumer and services industries. Today we are looking at businesses and we think about this a lot more from a check size perspective. But businesses that typically range from 25 million of revenue and profitable on the low end to up to 200 plus million on the top end on revenue. And our equity check is similar. Our equity checks range from 25 to 30 million dollars on the low end, up to 100 million plus on the top end of that.

04:58
Tara Hyland
We're currently working with 3.6 billion in assets under management and our criteria is really around Growth financial profile and founders buy in for the next stage of the company's life cycle.

05:13
Hannah Dittman
Super well said. You've got that down pat. I have a special place in my heart for Main Post and just separately cannot say enough great things about all the people that work there. Some of the smartest, most passionate investors in the space and you all really know what you're doing. Could you also kind of give us a little bit of a double click on the difference between venture capital, private equity, growth equity and the kind of style investments between those different institutional funds or classes? I guess you might say obviously you're focused on founder owned businesses. Venture capitalists are focused on founder owned businesses. If I'm a founder, how do I know where to target my approach and what's the best fit for me?

05:50
Tara Hyland
Absolutely. And I think everyone defines it a little bit differently. There's not really a black and white answer to this. It's a very big sliding scale. I think growth equity and venture capital are similar in a lot of ways, but when I think of venture capital I think of a fund that is putting small amount of dollars in a lot of different companies and they're much less involved from a day to day perspective, from a resource perspective. Whereas Main Post operates more in the growth equity, maybe even closer to private equity. Once you get into private equity we can talk a little bit about that, but that's where usually you're structuring the transaction with debt and levering it up and it's a little bit of a different mindset.

06:29
Tara Hyland
Where we play is growth equity and this is where the businesses are more than just an idea. The businesses are typically somewhat scaled like I said earlier, probably 25 million plus of revenue and generally profitable or on a very quick path to profitability. We're looking to invest in a business where that money is going, majority of it into the business to reinvest in marketing, building out a team and where they really want a partner that can help surround them with amazing resources, sources, a board and really thinking about how we can help professionalize these businesses together. More of a partnership I would say.

07:01
Hannah Dittman
What's the tagline?

07:02
Tara Hyland
Partnership, not ownership partnership, not ownership investor. And I think we really take that so seriously. Like we it's not just words to us and I not really want to get cheesy about all of this, but I think what differentiates Main Post two in where we're investing, you know, these businesses have real scale. They have proof of concept, but what they are looking for is a partner that can bring resources. And what Main Post has really done well is invest in the resources that we have available to our portfolio and prospective portfolio companies. And we've called this the main Post mentorship group. We have resources throughout the whole portfolio and we can talk about those specifically. But this meme Post Mentor I think is important because it's really differentiation.

07:41
Tara Hyland
We have a team that's led by Drew Frazier, an incredible leader who was formerly the CEO of Method Home Products twice over through its sale to SC Johnson. And underneath him, he's available to help founders really think about how they can become the best leaders and versions of themselves. And underneath him we have a head of talent who's available. You know, these founders are so busy running the businesses day to have to pick up your head and do everything from making sure that your cost savings and your supply chain is built and ready for scale. Which we have somebody to help lead on that front.

08:11
Tara Hyland
We also have somebody who is ahead of talent, who can help recruit anyone from the VP levels and up and really fill out that table around the executive leadership table around the founder to make sure they have the best people in place and help them make the best decisions. We also have a head of brand and technology and various other resources that we invest in. We buy tons of data through Nielsen and so we don't just come to the table offering capital. We really do think about this as a partnership of how can we make these businesses long lasting, enduring brands that are relevant so long after our involvement that we think about them. An example of being like Jimmy John's today we're still all ordering Jimmy John's, right? And that was one of Paint Post original investments from Western Presidio.

08:51
Tara Hyland
And it's not a copy and paste for every playbook. It's not the same for every investment that we make. But what is the same is our commitment to partnering up and bringing really great resources to the table.

09:00
Hannah Dittman
Very well said and totally agree. It's a very hands on, passionate shop. And I think as a founder that's something to think about. You know, you hear a lot about passive capital or investors that provide a lot of value to the cap table in different ways to structure the capital needs that you have and what you're actually getting for that money, whether it's just pure money or network or advice or partnership and different things. And I think it's super important for founders to be aware of not just the capital needs, but who they're asking capital from and the different opportunities or options that are out there and what the secret sauce of each of these individual funds really is.

09:40
Tara Hyland
There is a fine line like we are really pay close attention and really make an effort not to be micromanagers. We do not know this business better than the founders. The founders DNA and involvement we can talk more about. It is so important to us as we evaluate what deals we do, we want them to stay involved. We're never going to come in and drop in a team of consultants and tell them how to run their business. What we really do on that partnership front is just surround them with the best resources on an as needed basis.

10:05
Hannah Dittman
Yeah. And I think that's music to a lot of founders ears. Especially as you know you hear with especially for first institutional capital which means oftentimes the first time institutional money is coming into a business so they've been self funded or bootstrapped or gone a different road up until then. That can be a scary thing for a founder taking on capital for the first time and worry about what their future is or what the future of their business baby is. So really appreciate that you double clicked on that and said that. I'd love to pivot a little bit into the concept of exit potential. You know, you hear a lot of times investors factor in their deal evaluation the exit potential of a business or ask founders to be able to explain what that might be.

10:48
Hannah Dittman
What is exit potential and how do investors think about it and evaluate it when they're looking at potential new deals.

10:56
Tara Hyland
So I think taking a step back, something that we do when we first get introduced and start to get to know founders and their businesses is to make sure that we're aligned on what a successful exit looks like. There are some founders who are vehemently against selling to a strategic buyer or one of their competitors. And so we would want to make sure that everybody is on the same page of what a successful outcome of a partnership looks like. Because not every deal is the same. You see a lot of exits that go and they're wildly successful exits but they're going to another financial buyer, another private equity firm because the business has scaled so successfully or it goes for a strategic buyer and sits as an independent brand within a conglomerate. And so it can be defined a lot of different ways.

11:33
Tara Hyland
But what I think about is what does that look like when we get involved is does this business have enough white space for us to grow into and really scale the business double or triple the size of the business under our involvement and our investment. And at the end of the day when we think about exiting, because every fund has some level of we're going to need to return capital to our own investors. But at the end of the day, well, there'll still be white space, whether it's through innovating and new product development, whether it's through, you know, we tapped out all the distribution at Target and Kroger, but we have not yet gone into Walmart or the Club channel. So you really want to make sure there's still a bite of the apple for the next buyer to get.

12:11
Tara Hyland
And I think that's something that we really think about is what does this roadmap look like for the next five years and then what will we leave for the next buyer? And that's really important in addition to financial profile and some of the KPIs that I'm sure we'll dig into. But will the business be financially accretive to the next buyer and is there still going to be white space for them at the end of the day?

12:30
Hannah Dittman
I think that's really well said, Tara. And I would add on to that maybe a little bit just to bring it a little bit higher level or even more applicable to very early stage founders. To be able to get to that scale or to leave something on the table, or to be financially accretive, you have to be able to access mainstream customer bases or at least a big enough scale with a big enough customer base, that's evergreen potential avenue for your company to go down. So if you're really focused on mom and pop shops only or farmer's market avenue or your product is just so incredibly niche that maybe it will never scale to that point or a super, super high price point or something like that.

13:14
Hannah Dittman
I think those things, there's always exceptions to the rule and there's always ways that businesses that fit in those avenues might become high exit potential one day. But I think those are the other thoughts circulating around some of this as well is the idea of the magnitude of scale that a brand can reach,.

13:30
Tara Hyland
The total addressable market is critical. Like is it a big enough market? And also how important is it in a consumer's daily life? How often is it super purchase that they're making that's super episodic or for special occasions only, or they're only going to be eating it or putting it on their face and using it for special events because then the purchase cycle is a lot slower, it's harder to get to scale and to have it be an incredibly important everyday item in a consumer's life which most buyers at the end of the day are looking for. They're looking for something that has high velocity.

14:00
Hannah Dittman
Very well said. And I know mainpass is no stranger to exit. So you guys have had a lot of amazing exit stories and companies that you've partnered with. When you're thinking through reflecting on those, are there any benchmarks or KPI targets that you think matter most for a successful exit? Or what are those businesses that have been able to successfully exit all have in common to you?

14:21
Tara Hyland
Yeah, so I think it varies. I know that's kind of annoying answer, but it varies based on sector. So I'm not going to give a specific KPI, but what I think they all have in common because our most recent exits, most of them have gone to strategic buyers and we got involved with them pretty early on and in a first institutional capital situation. So they'd never raised capital before we got involved. And so I think what they had in common from a KPI perspective and a characteristic perspective is they were all at least 15 top line growth when were looking to exit and closer to 20%. So having a nice strong, consistent double digit growth that is accelerating, not decelerating over time, having gross margins that are accretive or very attractive to the next buyer.

15:02
Tara Hyland
I think everyone talks about EBITDA and of course EBITDA is important, but it's fundamentally going back to the gross profit line that is so indicative of whether or not you can continue to reinvest into the business. Third is how different is the product and how important is it in a consumer's everyday needs if it's super replicable or at risk of being copied by private label? I think there's a little bit more discernment by the strategic buyers and by buyers in general. So really having a core differentiation, having a strong growth profile, having gross margins that are strong and allow for the business to continue reinvesting in itself and a really good management team.

15:39
Tara Hyland
I think a lot of times we get involved and the management teams are exceptional, but the business has since doubled and the same team that grew the business to 25 million of revenue is not necessarily going to be the same team or the same number of people in that team that needs to grow it to a hundred or a hundred plus. So adding to that team and bringing really great leadership to the table is another thing that main post does really well.

16:01
Hannah Dittman
All great points and very succinctly and eloquently stated. You know, as I'm thinking about this too. From a strategic point of view, how important do you think it is that capturing some of their market share or being on their radar in some way like that is important for their appetite or interest in a company? Is a strategic really looking at this purely from a financial gain perspective, or are they thinking about things a little bit more competitively or portfolio protecting or something like that?

16:30
Tara Hyland
I think there's certainly circumstances where it's portfolio protecting, but I also think it's usually or in our experience where this fills a gap in their portfolio where they are. You know, for instance, when were investors in Dr. Dennis Gross Skincare and ultimately sold it to Shiseido, they were looking to add something that they didn't have in their portfolio, which was very clinical skincare and a brand that has a very strong relationship with Sephora. And so it's more accretive or additive to the existing portfolio rather than competitive.

16:59
Hannah Dittman
Very well said. I think bringing in a new customer base makes a lot of sense. I think when you look back in the acquisitions that were kind of happening a decade or so ago, a lot of them were about bringing in a younger consumer, a more digital consumer. There's kind of always this idea of growing the customer base, growing the traffic that's coming into a brand portfolio or something like that, in some way getting a piece of the puzzle that might be missing. So that makes a ton of sense. And congratulations on the Dr. Dennis Gross exit. That was a really exciting one. We've talked a lot about the kind of end stage life cycle of investment, but I'd love to rewind back towards a little bit more of the beginning.

17:36
Hannah Dittman
When you guys are first evaluating a company's or deals, you know, what are you really looking for if you had to break it down into kind of a couple of pillars of success? I think you've alluded to some of these already. But what does a company really need to be having going right for an investor, a growth equity investor, to be excited about that deal?

17:55
Tara Hyland
It's a really good question and I think everybody defines it a little different, I think from our perspective and thinking about it more like a funnel is more of the larger intangibles. Is there true differentiation if the brand and the products that are being offered, are they really thinking about this in terms of depth and breath? Instead of trying to be everything to everybody and launching new products and relying on new products constantly, is there a real need for these products to exist? How important are they to their retailers that they're in? Do they really earn that shelf space. I mean that's precious real estate for the retailers. And so we really think about is that product going to be a part of the consumer's everyday lifestyle and is the brand truly differentiated? And of course, is the founder super bought in?

18:36
Tara Hyland
Is there real fire in that founder's belly to really be involved in the management team as well, to be involved in the next stage of the company's life cycle. So those are the more intangible things that we look at. And then I did mention it earlier, but once you start peeling back the onion and start getting into more financials and more, I would call it, numbers oriented diligence, we really look at the growth profile, the financial metrics, whether those are improving over time and if there's a continued path for improvement or at least stability if they're already at a really high margin profile. So we look at top line growth margins, quality of all of their financial reporting, we look at their pipeline, their product pipeline, their innovation, the quality of their team innovation for them to continue growing at this pace.

19:20
Tara Hyland
I'd say we start there and then there's always, that's more of the business diligence that we start digging through. And then there's confirmatory diligence, which is more making sure that through quality of earnings and other third parties that everything that we're seeing is checked off on and a third party is kind of weighing interest in their specific sectors.

19:38
Hannah Dittman
No stone left unturned.

19:40
Tara Hyland
Never. We try not never to come across as accusatory and we're not going to. Again, we understand that these businesses and the management team are spending day in, day out running the business. Trying to avoid disrupting that at all costs is something that we really think about. So we're not going to send endless diligence request lists until their founders and their management teams are burned out that they don't even want to work together after the process. I think there's a very fine line between making sure we're doing the appropriate amount of diligence and not being so persistent and disruptive to the ongoing business operations.

20:16
Hannah Dittman
I think that's a really great point. And Tara, you definitely are so founder friendly and the firm is as well. It's also really interesting when you're kind of going through the larger growth deals, they're often working alongside an investment banker who's kind of lubricating a lot of this process as well. And some of the burden is taken off of the founders of having to populate and do all of this. Stuff and hopefully they're operating at a level where a lot of this information is readily available in their own business practices, which is probably how they've gotten to the scale and success and traction that they've gotten to already by the time that you all are interested.

20:48
Tara Hyland
But it's really not always the case. And I would say even for Main Post we do tend to have a, you know, we are in that growth equity phase. Going back to one of your original questions on the venture capital side, that diligence is not usually readily available. There's not necessarily an ERP system where they can easily pull it. Sometimes they're still operating on QuickBooks and that's okay. Actually, one of our most recent investments was not brokered through an investment bank and so they were really doing a lot of the diligence and preparation on their own and we really try to give them the time and a space to focus on the business and the diligence comes second.

21:20
Hannah Dittman
Yeah, I think that goes back to this idea of flexible capital and really being understanding what it's like to work with a founder in whatever capacity they may be coming through. And it looks very different and might be a one off situation somewhere or more rinse and repeat elsewhere. But personally I've seen Main post do a great job of have a great bedside manner and being able to get it. I think the thing that people also hopefully realize on the founder side is that diligence isn't meant to be like judge and jury trial. It's meant to be.

21:48
Tara Hyland
It comes across that way in certain situations, but not hopefully you'll never see that from a main post approach.

21:53
Hannah Dittman
No. And I think especially with the early stage investors, it's maybe because it's a little bit of a lighter process, it's a little easier to get through it quickly. But the goal is really to affirm and provide insights in business planning, strategy and evaluation so that both parties feel really comfortable going into the next chapter together. It's a long 5, 7, 10 years that can happen after an investment and I think both parties get a chance to get to know each other in that diligence process. And as much as a firm might be diligencing a company is welcome to diligence a firm too. And I would empower founders to do so and use that time on their side evaluating as well.

22:33
Tara Hyland
The best marketing that we have is by handing over a list of references from founders that we have invested alongside in the past and saying please call these people. They will tell you how we work and we are happy to do that. We stay in very close communications with all, even the businesses that we've ultimately sold alongside the founders to strategic buyers and we're no longer involved with on a day to day basis. We keep very close relationships with all of them. And so the best marketing that we can do is the founders that we've worked with.

23:03
Hannah Dittman
And I think it's really important or how a firm is operating during diligence is probably more or less what it's going to be like to work alongside them down the road. And I think you really want a partner that handles that with a lot of care and rigor, is thoughtful about their decision making, is data driven. A lot of the attributes that you want to have in your boardroom later on you want to make sure that you're seeing in the diligence process. And I think that's where the value can really come from. An investor bringing new insights, bringing a lot of wisdom and experience from other portfolio companies or other experiences that they've had, market learnings.

23:35
Hannah Dittman
You should definitely squeeze the fruit and get what you can for yourself out of a diligence process as well as a business leader, be able to use a lot of that to hopefully fuel your growth even more so after the transaction closes. So it's not just a side arc for no reason. There's probably a lot of positive externalities that can come out of it too.

23:54
Tara Hyland
100%. I think a lot of our business diligence, what comes out of that is alignment on a plan of after this transaction closes and capital is infused into both the business and sometimes into the pocket of the founders because we are very flexible about the deal structures that we get ourselves involved in. But there's usually an alignment on what do the next three years look like. And it's not necessarily a playbook that has to be adhered to specifically on a quarterly basis, but it is. You learn a lot through this diligence process about yourself. These founders do, we do and we can learn where are some of the blind spots, where are the, some of the opportunities that we can kind of come together and materialize on and act on.

24:30
Hannah Dittman
We've touched on a little bit on founder evaluation, on diligence, on how important teams are, what the exit potential of a business can look like. I'd love to look at a little bit more of the market layer, the industry. Do you have any thought leadership or perspective on how trends affect your sector focus at main post or any consumer behavior shifts or market insights that you think are particularly relevant for what you all are doing or your thesis writing?

24:57
Tara Hyland
Absolutely. At Main Post we're not chasing trends, we're not chasing trendy businesses. But we do make sure that the businesses that we get involved with and that we invest in are have some level of being on trend with what consumers are needing and what consumers are seeking and that some of that comes through innovation and new product development. But at the end of the day we're looking for businesses that, like I said in the beginning, are going to be relevant for decades after our involvement in consumers lives. And so that being said, I think there are certain characteristics about businesses that as consumer preferences and behaviors change, we also have to monitor that so closely.

25:30
Tara Hyland
And I think one specific example is I joined main post in 2020, which it only accelerated because Covid happened, but it was a very digitally native, I would say couple few years where businesses that have very strong DTC and DTC metrics were always at the core of our diligence. And while I think that's still critically important, we are now very focused on from a CPG perspective at least. I think we also invest in multi unit and service businesses. But thinking about cpg, we're really focused on businesses that are or have a very strong path to being omnichannel. Because the consumer, you have to be everywhere that the consumer is. I think for a long time there's also this black box of, you know, should we be on Amazon or is that going to piss off some of our other retailers?

26:12
Tara Hyland
Is that going to create a monopolization or is that going to create cannibalization of our revenue? But you really, I think now the way that we think about it a few years later is omnichannel is so critically important at the end of the day and being where the consumer is and successfully too, you know, how are you activating retailers and how are you activating your online and how do those work? Two and two together.

26:31
Hannah Dittman
Very well said Tara. And I totally agree with that insight. I think meeting your customer needs in every capacity is so important from a branding perspective, from a product perspective, obviously from a channel perspective as well. Best consumer companies are ones that meet consumer demand in any way versus trying to force their path onto a consumer instead. And that's where you see channels get really expensive because the more friction and dissonance there is of trying to pull a consumer to you instead of running to meet where they are, the more you're going to have to spend to do that, which obviously can be a big challenge for a lot of different brands. So I totally agree with that and I think it makes a lot of sense that you're not chasing trends.

27:12
Hannah Dittman
I think there's the fad novelty that maybe earlier stage investors might be a little bit more willing to take a swing on because they're all about big bets. But as you go later stage I think you really, as you mentioned earlier in this conversation, you really need to have high resolve that what you're underwriting is going to continue on the trajectory that you think it is versus believe in the pie in the sky dream. You need to have a North Star that there is a big dream, but you need to see that it's already unfolding that way and going to continue to unfold that way. And that typically is where something is already a long term trend or has already been a consumer behavior shift versus a one time maybe this will take off or maybe it won't.

27:51
Tara Hyland
I would say maybe no betting at all in growth equity compared to venture capital.

27:55
Hannah Dittman
Yeah, a lot more traction as we like to say focus on traction and focus on the historical experience. And that makes sense too. There's a lot more data available by the time a company reaches 25 million plus of revenue than there is when a company has as sub 100,000 or maybe is even pre revenue. So makes a ton of sense. I'd love to pivot us into a slack case study 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 founder that might have a similar question. Today's question is investors often say lifestyle business.

28:34
Tara Hyland
What does that actually mean without context? First comes to mind is a lifestyle business is typically something that a situation where the founders and management teams are running the business to be really successful for what they want and how they want to live their lives on a day to day basis as opposed to building it and continuing to reinvest in the business and really thinking about building it for scale and ultimately to exit and sell the company. And I don't think that there's a right or a wrong. You can be very successful in building a lifestyle business.

29:04
Tara Hyland
But I think that's where investors get a little bit nervous because we it is our mandate to be able to return capital and so we really want to find businesses and founders who are aligned with growing the business to scale, reinvesting that capital into the business, whether it's marketing Team building, operational excellence and ultimately selling the company for a return that benefits everybody down to hopefully every single employee who's involved.

29:27
Hannah Dittman
Very well said. I would echo that and I think that kind of harkens back to the earlier conversation we had on exit potential. Those are two different paths. Whether you're going to be, I mean in a lifestyle business could definitely have exit potential, but it's a different mindset to be approaching whether you're really driving towards one kind of outcome or another. Like you mentioned with a KPI to have a 15 or 20% revenue growth rate. Like when you think operationally what needs to happen for that to be achieved and what the day to day needs to look like versus if you're not really managing that metric too closely. And as long as the cash flow is supporting your lifestyle needs, that's where you're really anchored and growth isn't as big of a concern.

30:10
Hannah Dittman
That's kind of where the mindset, I think can shift dramatically between the two schools of thought.

30:15
Tara Hyland
Yeah, and you can have lifestyle businesses in consumer products. I think there's a lot of situations and a lot of categories where there is lower varied entry. They're not as capital intensive, they can outsource the manufacturing and the margins are quite enjoyable. So you can definitely have a business like that. But. But I think it's more of a mindset shift of is this something that I want to really live and breathe and die on this hill, to grow this business and surround myself with amazing partners and ultimately exit this strategic buyer?

30:44
Hannah Dittman
Yeah. And it might be something else too, like an Amazon drop shipping business or something that maybe just wouldn't categorically be very attractive to investors but can produce a very healthy lifestyle and be very lucrative to live off of or something like that. So.

30:57
Tara Hyland
And that mind you can also change too. I think we've encountered several businesses that started as a lifestyle business and started as a drop ship on Amazon and a category that there's just a lot of passion around it and it was something that they liked to do every day and the next thing they know they're like, wow, this is really something that consumers are resonating with and I'm starting to hit scale. And you know what, actually I really do want to dive in. It's not necessarily black or white. There's a lot of situations that start as lifestyle businesses and ultimately become very successful outcomes.

31:24
Hannah Dittman
I think a lot of times in your guys all case, I think probably more of the story than not.

31:30
Tara Hyland
I'm like Wait, I heard that story before.

31:32
Hannah Dittman
More? Yeah, because it makes a lot of sense too. And why a founder might have already had a successful business that is profitable and of scale that might be looking for an investment partner. A business shift like that or taking off into a more growth minded trajectory could definitely be the impetus for a lot of these type of things. So well said and a lot of nuance and color that I definitely appreciate and echo and think is totally right. Tara, I could sit here and talk to you all day long. I have so much personal respect for you as a human and also a ton of respect for you as a professional and an investor.

32:06
Hannah Dittman
For any founders that they might be a good fit or want to get in touch with you and continue the conversation, what's the best way for them to get in contact? And the second part of my question, do you have any advice for anyone interested in joining Main Post or maybe investing in general?

32:20
Tara Hyland
First and foremost, the feeling is mutual. So much respect for you and what you're doing at Startup cpg. I'm a part of the Slack Channel. I absolutely love being a part of it. I read it in my free time, which always sounds like a nerd alert. But in order to get a hold of me, the best way is to reach out to me via email. My email is available on our website on mainpostpartners. Com, but also just for ease of anyone who's listening, it's t hyland@mainpost partners plural. Com and for advice on getting involved or getting into Main Post. I think what differentiates Main Post too is some of the people that we hire. I think we really appreciate diversity of thought around the table. So we're not as strictly hiring only investment bankers who come from specific school sets.

33:00
Tara Hyland
I think for us it's really having a extremely relentless curiosity, a strong track record in whether it's consulting or whether it's investment banking, and a strong, I would say, obsession almost with the consumer industry to the point where that's really something that you're researching in and outside of your daily life and your job. And I would say making sure that you reach out and network. And there's a whole host of junior team members that I have the pleasure of working with every day who would be happy to speak to you. And so I always recommend reach out on LinkedIn. You never know. Shoot your shot at the very least. All of us are so happy to meet with people and to share our experiences and what we're doing at Mainpost that relationship can go a long way and you never know.

33:44
Tara Hyland
It's happened before and we've hired some of our incredible team members through. That is a LinkedIn message and that's where I always suggest people start.

33:52
Hannah Dittman
Great advice and definitely a friendly group with a ton of passion. Can't say enough good things about you. You About Main Post as I started the chat with so thank you so much for joining us today and shedding some perspective on growth, equity and all the exciting things that you guys have working on. Congratulations on all the success and I can't wait to continue to follow along on the main post journey and see what you all get up to next.

34:14
Tara Hyland
Please do and don't be a stranger.

34:18
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 and 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.