Monogram Capital Closes Debut Fund

Carol Ortenberg

Yesterday, investment group Monogram Capital announced that it had closed its first fund at $152 million. The round was oversubscribed and included commitments from family offices, foundations as well as institutional investors.

Monogram has previously invested in food brands including Ellenos greek yogurt, jerky producer Country Archer, frozen food brand Kidfresh and fast casual restaurant concept, Dig Inn. In total, the fund has made 14 investments across nine companies, the last three of which will be part of this fund. Likely Monogram will have eight to ten investments in their portfolio at any one time,

Founded in 2014, Monogram initially was primarily funded by family offices. The group decided to shift to a fund model in order to evolve. “We started with bigger opportunities and wanted to bring in other folks into the fray so that capital was never an issue,” Jared Stein, founder and partner at Monogram, told NOSH.

The change also streamlines the investment process, he added, so that conversations with brands are simply about fit and not where capital would be coming from.

The company’s sweet spot, Stein said, is investing in companies with roughly $10 million in run rate revenue. Typically the firm will initially write a smaller check of $5 to $10 million and then invest more in follow-on rounds, up to $30 million. However, Stein noted, that’s not a hard and fast rule, citing Country Archer as an example. When Monogram invested in the the jerky brand, Stein said, it had limited marketing support and door count, but excellent velocities — indicating that with capital, the brand could quickly scale.

Monogram additionally has Venice Brands, a drop-down from the fund, that invests in smaller, more emerging brands.

“The whole thesis behind Monogram was originally seeing that emerging brands were getting traction earlier and earlier and there was a gap in the market from $5 million in equity to up to $15 million in equity… A lot of the established consumer funds, which we have a lot of respect for, had done really well and moved up market,” Stein said. “But getting in business and seeing what was going on, we said ‘hey, actually there’s an opportunity to disaggregate or disintermediate Monogram too. Let’s start Venice brands and have a pocket where we can seed these companies that much earlier.’”

Along with establishing Venice Brands, Monogram has also honed its investment thesis. While initially targeting a broad set of categories, food and beverage has increasingly become the firm’s biggest sector focus with pet care coming in second. The shift came as Monogram found brands wanted an investor that was more focused on specific segments. Underscoring that focus is the use of entrepreneurs as members of their investments’ boards of directors. For example, at Kidfresh, Monogram brought in Michael Allen, a former Kellogg’s and Boulder Foods executive, to fill their second board seat.

While healthy, “clean” or natural food and beverage brands are all top of mind as targeted investments, Stein says that indulgent products still have their place in the Monogram portfolio. Where Stein knows the group won’t invest in are brands that don’t have a clear point of view or positioning.

“For us, where we never want to play is in the undifferentiated middle where you are getting squeezed on both sides. I think that’s a tough value proposition,” Stein said. “Where you’re maybe part of the way there on health, and part of the way on taste and indulgence, but you don’t really have a point of view or perspective.”

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