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Hypothetical incubator - I will not promote
The long-term strategy for my business involves incubating brands which will remain in the company as subsidiaries. We’re working on a regenerative model of steward ownership, where financial upside and operational control can be decoupled. The incubator (CPG) will bring brands in after they’ve independently arrived at a specific gap in the market and their initial R&D is done. The goal is full integration at the end of a 3 year MVP -> Scaling process. It will be a high-touch program and could be likened to more of a venture studio than an incubator where there’s 3 full years of support and financing. We’ll end up putting a total of $1M + R&D/production services into companies who make it through all 3 years and are selected for integration. We would like the brands to be largely self-determined but we still need final say on high-level ops matters to keep things organized at the Holding Co level. The idea is that the founders agree to stay in the company for an additional 2 years after integration and will be fully vested after that point. As long as it’s mutually agreeable, they’re encouraged to stay on as leadership or join advisory, but can leave if they want to. There will be earn outs aligned to certain revenue milestones even after they leave. My industry runs on a broken and extractive model of acquiring innovation which doesn’t usually lead to longevity for the acquired brands. The day they’re acquired is typically the day they’re most valuable. I’d like to hear from founders about what you like/don’t like about this model especially as entrepreneurs who probably value freedom above most things.5
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