The untold story of starting up

Having been to a few alt protein conferences lately, I’ve come away with the feeling that there is tremendous long-term optimism in the sector. There’s also a healthy dose of short-term realism, of course, given the challenges of the funding landscape. The consensus is that we have significant work to do before we can achieve meaningful commercialization – and scaling will depend on unlocking capital in a variety of ways, including strategic partnerships, creative financing mechanisms, and government support. All of which is to say, we’ve only just begun. Along the way to shifting the food system, we will see alternative protein startups of all sizes and across all technologies take unexpected turns, some promising and some heartbreaking.

Heartbreak is a strong word and one rarely used in startup culture. But it should be. Behind nearly every new venture is a founding team with deeply personal reasons for wanting to launch a company. There are dreams involved – of success, impact, game-changing breakthroughs, and building a team. Most founders live and breathe their companies, which seem to take on lives of their own. Launching and scaling a startup can be exhilarating, backbreaking, rewarding, lonely, and nail-biting, often simultaneously. Employees, especially the ones who join in the earliest days, can become like a family with shared war stories and a mutual sense of purpose and accomplishment.  

In recent months, we’ve seen some of the sector’s companies go through acquisitions, lay-offs, and closures. This is the norm for a new industry. Yet we need to pay attention to what these changes mean for those involved. We need to actively work together to find new roles for displaced talent, ensuring that expertise and experience remain in the space rather than exiting to other industries. We need to be especially sensitive to founders of shuttered companies as they go through an emotional roller coaster while trying to attend to the endless details of wrapping up a business. And, importantly, founding teams should embrace opening up, if possible, about lessons learned and best practices so that others may benefit from their wisdom. A great example of this is the Agtech – So What? podcast episode, Reflecting on Nowadays, a Tenacious Portfolio Company Wind Down.

The greatest advantage a founding team can have is knowing when to punt, pivot, or pursue

Of course, the best defense against an undesired outcome starts long before a startup finds themselves out of money and options. The decisions made early in a company’s trajectory matter greatly. GFI Europe – in conjunction with GFI USA and GFI APAC – is releasing a scaleup blog series to help early-stage companies ask the right questions to guide their decision-making, put in place key building blocks at the right moment, and anticipate roadblocks that will inevitably arise based on learnings from similar sectors. Part 1 is available now on the GFI Europe website.

As a former founder who exited through acquisition, along with years of helping startups across many sectors, I can say with confidence that the greatest advantage a founding team can have is knowing when to punt, pivot, or pursue. (Pithy words for direly serious decisions.) It’s critical to do the things every founder hears on repeat: adapt to market changes, differentiate the value proposition, understand the target market, correctly assess customer demand, and de-risk investment.
The harder and less talked-about decisions, however, revolve around more nuanced challenges like changing the product or service, assessing when to grow or shrink the team, knowing whether to put steel in the ground, and understanding how and when to exit. It’s important for founders to not only think about these things early but to seek guidance from their network. Being a silopreneur is a force-multiplier for risk.  

Sometimes, however, founders can still experience the pain of shuttering a business despite a long history of sound decisions and supportive networks (including customers). It’s often hard to know what leads one talented team to great success while another equally talented team fails. That’s why we can’t define the sector by the outcome of one or two companies. As an industry, we should align on being sympathetic and empathetic when a company is in the middle of laying off employees or closing the doors. After all, entrepreneurship is not for the faint of heart, and even a defeated founder has demonstrated uncommon courage just by acting on their dream.

Laine Clark is the Senior Corporate Engagement Manager, Innovation at The Good Food Institute, the international nonprofit working to shift the global food system to options that are better for the planet, people, and animals. This article is republished from the Q3 2024 edition of Protein Production Technology International, the industry's leading resource for alternative proteins. To subscribe to all future editions, please click here