Richard Thompson has led three emerging companies to exits valued at $3 billion – American Italian Pasta Company (which in 15 years grew from a start-up to the second largest pasta manufacturer in the world), Meow Mix and Freshpet.
Tim Pollak was CEO of a top-20 global ad agency and vice chairman of two top-5 agencies, Y&R and Dentsu. He met Rich while serving on the board American Italian Pasta Company, and also served on the boards of Meow Mix and Freshpet.
While Richard and Tim have had a lot of CPG successes, they’ve also witnessed a lot of promising brands and products fail. So they started thinking about all the things that can go wrong, even when an entrepreneur has a great idea.
They figured it generally came down to three things: experience, resources, and relationships.
There’s a lot of money available to entrepreneurs, and a lot of people willing to give or sell them advice. But when most start-ups get done hiring teams, funding infrastructure and cost-of-goods, and squirreling away working capital, there is often not much left to build the brand, support distribution and drive velocity. Brand building and scaling-up are both very challenging, and it is foreign territory for most entrepreneurs. Experience is invaluable, as are the relationships built over years in the industry, and the resources that can make or break a new venture are often unaffordable.
So Richard and Tim partnered with Keith Caldwell, a financial guru who previously managed $8 billion in assets with a leading international investment group. Together they started Factory – an operating company with funds to invest. They raised $250 million, began assembling a team of seasoned consumer products veterans across all operating disciplines, and bought a building on the old Bethlehem Steel campus in Pennsylvania, which they re-habbed into an innovation and scale-up resource facility. Their goal was to partner with a select group of highly ambitious founders/entrepreneurs to help small businesses quickly become big brands. One of Factory’s first brand partners summed it up this way: “Factory gives a $2 million company the resources of a $200 million company.” That can make all the difference.