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Vermont gluten free cookie company raises capital locally to expand business and create jobs
Vermont’s alternative financing options seal the deal for economic and food industry growth for Mad River Valley’s Liz Lovely Cookies
By: VSJF Flexible Capital Fund, L3C
Sixteen varieties of gluten free, vegan, non-GMO Liz Lovely cookies are handcrafted in Waitsfield and distributed to over 2000 grocery retailers nationwide. Liz Lovely was at capacity in their space at Irasville Business Park in Waitsfield and an estimated $200,000 in capital was needed to grow and expand the company.
Last fall, Liz Lovely owners, Liz and Dan Holtz, competed on Shark Tank, a national television show where entrepreneurs pitch their business to multi-million dollar investors. The “Sharks” did not offer Liz Lovely the $200,000 they were seeking in exchange for a ten percent ownership in the company, and while financially disappointing, the publicity was huge and skyrocketed demand, putting even more pressure on the need for expansion.
“Our Shark Tank appearance and related publicity inspired interest from a deluge of out-of-state investors, but it would have been the wrong fit. They were solely seeking an unreasonably high financial return. They were not interested in sustainability, in Vermont, or in creating jobs in the Mad River Valley. But the Flex Fund was on our wavelength in terms of mission.” Dan remarks. “The Flex Fund does not take equity and we know exactly what our pay back is going to be. We can grow the business in the way we want, without giving up control or compromising our ethics.”
Alternative financing packages unique to Vermont are on the rise and encompass a variety of funding options. Liz Lovely’s working capital to hire a sales force, cover marketing expenditures, and increase inventory came from The Flex Fund. Northfield Savings Bank was able to refinance the business and offer additional capital for equipment. The State of Vermont provided an employee training grant and the business park landlord agreed to lease the additional space.
Janice St. Onge, president of the Flex Fund explains, “Our royalty financing program preserves owner’s equity and decision-making abilities, which was a good fit for Liz Lovely - whose mission is ‘real food, good jobs, and environmentally sustainable business practices’. In turn, we saw great market opportunity and a strong management team with good advisory capacity, and, it fit with our mission. Liz Lovely has a strong consumer following, passionate entrepreneurial owners, and a track record in growing good paying jobs. Additionally, through their continued support and mentorship of other emerging value-added agricultural businesses at the Mad River Food Hub, Liz Lovely is helping to advance the Flex Fund’s food system goal of conserving and protecting agriculturally productive land in Vermont and the region.” The financing package was complete February, 2012.
“Liz Lovely has been a customer of the food hub since we opened. We provide them with over-flow cold storage as needed and distribution services to Burlington and Montpelier. The Mad River Food Hub's ‘very local distribution’
Farmers to You is also a recipient of financial capital through the Flex Fund as are Vermont Smoke and Cure in Hinesburg and Aegis Wind in Waitsfield.
Liz Lovely currently employs 16 full time, salaried, full-benefits employees and may reach 20 by the end of the year. Growth plans include launching a new, single serve gluten free cookie line for the purpose of selling to institutions such as hospitals and ski resorts. Many of the ingredients used in Liz Lovely’s bakery are not currently part of Vermont's agricultural landscape (except maple syrup, which they buy exclusively in Vermont). However, Liz Lovely is committed to working to facilitate demand and/or access to the nascent market of wheat and rice production in Vermont and the region. They are looking to source unbleached wheat flour this year from Vermont producers. Learn more at http://lizlovely.com.
The VSJF Flexible Capital Fund, L3C is a mission-based investment fund that provides “equity-like”
Learn more at www.vsjf.org/