The startup and growth investment system is fraught with inefficiency and information asymmetry. The current system relies on “warm introductions,” “cold emails,” or hiring expensive brokers such as investment banks to facilitate deal flow. All of these mechanisms rely on leveraging social networks, require immense amounts of human capital, and are prone to both systematic biases and random errors as they rely on imperfect recall and distributed access to information. This inefficient, decentralized system has arisen due to a lack of compiled and streamlined information on the specific interests and capabilities of both funders and startups. As a result, an enormous amount of effort is expended on simply collecting information on a company (preliminary diligence) and managing high communication volumes (email overload). Similar challenges exist with other forms of funding like loans, research grants, and inventory financing—innovators and capital often fail to find each other.
A centralized online platform for alternative protein funders (investors and open-access research funders) and those seeking funding can significantly reduce transaction costs. The platform will serve as a mechanism for two-way information exchange. It will allow startups and researchers to submit information on their project and funding needs. Funders can review for the database for relevant deals or research efforts that fit within their investment mandate or funding scope. In parallel, funders can also post information on their interests and what further information they require for exploring deeper engagement, which those seeking funding can review for fit.
In some cases, a proposed project or a specific area of funder interest may be competitively sensitive, and therefore would not be appropriate to share on a platform that may be visible to competitors. In order to mitigate risks associated with sharing sensitive information, the platform could additionally offer more actively facilitated matchmaking by allowing a third-party curator to suggest possible matches based on access to requests or proposals that are hidden from the platform’s other users. In a more sophisticated iteration, the platform could even facilitate the due diligence process through deal rooms, checklists, and data auto-population.
Reducing transaction costs associated with labor-intensive aspects of fundraising and investing (like deal flow and due diligence) would free up time and resources for companies, researchers, investors, and other funders to use for higher-value activities. A centralized platform to connect funders with fund-seekers would lower the barrier to entry for both, thus facilitating more capital flow into alternative protein projects from new funders. Likewise, the transparency of the platform itself may spur interest from new investors who are able to more readily see that their peers are making investments in alternative proteins. Further, this platform could be used to promote transparency in negotiations and syndicated deals, improving information flows that contribute to efficient use of time and human capital and reducing the risk that less experienced actors will be saddled with an unfair or sub-optimal deal.
- GFI’s Investor Directory connects investors interested in alternative proteins with actively fundraising alternative protein startups.
- GFI’s research funding database maintains a list of grants (government and private) available to alternative protein researchers.
- GlassWall Syndicate coordinates early-stage venture capital deals among their members.
- Tools like Proseeder can facilitate collaborative diligence and Peerbook can facilitate matchmaking.
- Beyond Animal is another fintech and vegan investing platform.
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Investment platforms are needed for deal flow and coordinating hand-offs from pre-seed (angels and accelerators), seed/early-stage, and growth/later-stage investors and acquirers.
Investors specializing in alternative proteins should be leveraged to educate the broader investment community through coalitions, syndicated deals, and co-investments with industry-agnostic investors, and spearhead efforts to facilitate later-stage funding…
The success of early-days products has demonstrated strong consumer interest, but investment is needed to enable alternative protein supply chain companies to build out the infrastructure needed to capitalize on…
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