Black Female Founder Attracts Venture Capital With Allergy-Friendly Snacks
Finding foods that are nutritious and taste good to a one year old is a challenge for any parent. Add in the fact the child has life-threatening food allergies and the difficulties only increase. In 2016 that was the situation that Denise Woodard found herself in. With 8% of children in the US have food allergies, according to the Centers for Disease Control (CDC), Woodard knew that she couldn’t be the only one, that’s why founded Partake Foods. From experimenting in her kitchen, trying to develop a good tasting, good-for-you snack, to the challenges that many black female entrepreneurs encounter as they begin their start up, Woodard’s story is one of perseverance and success.
By Geri Stengel
April 28, 2021
In 2016, Denise Woodard, CEO and founder of Partake Foods, was frustrated by the lack of food options with the nutritional profile that she required and the taste appeal to her one-year-old daughter, Vivienne, who had life-threatening food allergies.
According to the Centers for Disease Control (CDC), 8% of children in the US have food allergies. That's 1 in 13 children. Woodard and her daughter's babysitter spent weeks in the kitchen unsuccessfully experimenting with developing a good tasting, good-for-you snack.
Woodard's entrepreneurial journey has been bitter-sweet. Bitter, because it took George Floyd's murder and Black Lives Matter to focus the world on systemic racism and the inequities that Black female founders face funding their startups. Black female founders have received just 0.6% of all VC investment since 2009, according to ProjectDiane 2020. But sweet, because her company, Partake, has benefited from increased media, consumer, and investor attention.
The death of George Floyd sparked a much-needed conversation about systemic racism. It is creating opportunities. Some corporations, venture capitalists, and government agencies are addressing historic inequities with beefed-up advocacy, programs, and investments. "I'm cautiously hopeful," said Woodard. "We got more inbound [help] than I ever could have expected from influencers, investors, and retailers. And, we were in a position to take advantage of that opportunity."
Woodard had to get comfortable researching people and reaching out to them without an introduction through LinkedIn. It is a muscle she takes pride in having built over the past five years. Using LinkedIn, Woodard found a food scientist and product developer who could bring her vision for a delicious, top 8 allergen-free cookie to life. They still work together.
Only a small number of top allergen-free food manufacturers are in the United States. "Typically, they don't want to work with a small startup," said Woodard. She had her eye on working with one in particular.
"They [the manufacturer] didn't want to work with me because I had no experience," said Woodard. "I'll show them," she thought. And she did. Raising money is just one benefit of doing a
rewards-based crowdfunding campaign. Brands like nutpods, a non-dairy creamer, demonstrated that a successful rewards-based campaign could translate into a ravenous group of early customers.
Partake's 2016 Kickstarter campaign not only raised $30,000, but demonstrated market traction. It showed that people believed in what Woodard was doing and wanted her product. Her campaign generated product awareness among consumers and convinced the manufacturer to work with her. As a startup, Partake didn't have a salesperson or a broker to open the door at Whole Foods. Once again, Woodard relied on LinkedIn.
Woodard's early outreach on LinkedIn has made her comfortable being vulnerable and asking for help. However, she advises not to ask for the whole solution. Narrow the ask to bite-sized questions relevant to the person's area of expertise, which could be product formulation, retailer distribution, or promotional strategy.
Early on, Woodard sought non-dilutive financing by applying for grants and competitions. Unfortunately, there is no one-stop resource for this. "For two years straight, every Monday morning, the first thing I did was a search for grants and pitch competitions," she said. Woodard also set up Google alerts.
Grants and competitions take time and effort, and are highly competitive. The preparation is the time to fine-tune strategy and messaging. Winning them isn't just about the money. You also get bragging rights. Competitions may also come with high-quality advice from mentors. Large grants may come with restrictions on how you use the money and require a fair amount of reporting and accountability.
For Woodard, winning her first competition in 2016, the Start Something Challenge from Rising Tide Capital came with some local New Jersey press. The attention forced her to tell the Coca-Cola company, where she was the national sales director for its Venturing and Emerging Brands division, about her side hustle.
While the company was supportive of what she was doing, once the idea moved to the product stage, she would have to give up her job. "It was the kick in the butt I needed to leave my job," she said. "Without that, I probably would have continued Partake as a side hustle, and it probably wouldn't be where it is today."
Even before the death of Floyd, Partake closed a $1 million seed round, led by JAY-Z founded Marcy Venture Partners. Prior to their investment Woodard received 86 nos from VCs. Sales surged with an initiative organized by Michael B. Jordan’s production company, Outlier, and inspired by the Black Lives Matter movement. It showcased films directed by minority filmmakers at drive-in theaters and offered free snacks from minority-owned businesses, including Partake cookies. Retail distribution increased through Target, which is committed to providing shelf space to Black brands. Partake products are also sold at Whole Foods and Sprouts Farmers Market stores and its website.
In January, the company announced it closed a $5 million Series A fundraising round, led by investors including Marcy Venture Partners, Lotus Bakeries' FF2032 corporate venture fund, CircleUp Growth Partners, Black Capital, Black Star Fund, Bobby Wagner of the Seattle Seahawks, John Foraker, and Robyn Rihanna Fenty.
Importantly, Woodard's investors are values aligned with her, not growth-at-any-cost as some venture capitalists are. "I'm focused on building a sustainable business, no matter the [funding] path," she said. The company might continue to be privately held, raise money through a SPAC, or be acquired by a large strategic," she said. "We have a healthy culture and financial metrics, so we're able to have a choice."
Woodard credits her ability to take challenges, such as scaling during a pandemic, in stride based on two things.
- When raising her Series A, she reached out to Scott Norton, co-founder of Sir Kensington's, a condiment food company acquired by Unilever. He suggested she work with a coach.
- Vivienne, her daughter, is now six years old. Parenting her taught Woodard lessons she is applying to build her team. She is very clear about the expectations. At the same time, she is also kind, empathetic and allows people to be who they are.
Partake has been able to double down on its social mission efforts, including the Black Futures in Food and Beverage Fellowship at five Historically Black Colleges and Universities. It is also partnering with the Food Equality Initiative, a nonprofit that brings allergy-friendly foods to food-insecure families.