Founder guide
Series A Funding for Scale-Ups: What Guinness Ventures Looks For
A guide for founders raising Series A or scale-up funding, including what Guinness Ventures looks for in traction, growth, team, economics and investor fit.
When Good Is Not Enough: What makes a consumer brand attractive to buyers?
We recently caught up with David Cockcroft, Managing Partner of Blackrose, a specialist consumer M&A boutique. Given our focus at Guinness Ventures on consumer brands and consumer tech at Series A (EIS) and now at SEIS, this was exceptionally useful and a timely reminder that planning starts early when founders engage with venture capital investing.
A few points stood out to us and should be helpful for any founders at Series A who are making plans for the ultimate exit.
Our experience with Pasta Evangelists and MORI provides perspectives from opposite sides of a transaction: one as an investee company acquired by a strategic buyer, the other as a portfolio company that has itself become an acquirer.
A good business is not necessarily a sellable one
A company can have an attractive product, loyal customers and solid growth without being especially valuable to an acquirer. Buyers are looking for something that might be difficult, slow or expensive to build themselves: access to a customer group, entry into a category, a trusted brand, strong distribution, proprietary technology or data, specialist expertise, or a route into another market.
The test is whether ownership would materially improve the buyer’s own position. A direct competitor or aggregator may regard the target as an incremental opportunity, while an international group, new entrant or adjacent business may see it as the fastest way to enter a market or acquire a capability.
The obvious buyer is therefore not always the one prepared to pay the highest price.
Why profitable growth matters
The strongest position is straightforward, although not always easy to achieve; build a company that is both growing and profitable.
A consumer brand making losses at EBITDA level may still attract interest, but it will be harder to sell and less likely to achieve a premium valuation. The buyer must fund those losses until the company reaches break-even, and that future requirement will usually be reflected in the price.
A strategic owner may improve the economics through wider distribution, better manufacturing terms, lower cost of goods, cross-selling or removing duplicated overheads. In sectors such as beauty, food and drink, a seemingly high headline multiple can look more logical once the buyer’s scale and synergies are applied.
Those synergistic benefits should enhance an already sound acquisition case, not be the only reason the numbers work.
Profitability also gives the seller control. A company that does not need to raise capital or sell urgently can resist poor terms and continue trading if a process goes off the boil. The position with the most negotiating leverage is between a motivated buyer and a seller that does not have to sell.
Customers, community and distribution
Consumer companies naturally devote considerable attention to brand. Buyers will look beneath it.
An email database is not, by itself, a strategic asset, however beautifully segmented. Its value depends on what the company knows about its customers and whether those relationships can support further profitable growth.
A buyer will want to understand which cohorts retain best, how frequently they purchase, which products lead to repeat orders, how acquisition costs develop and what else those customers may buy. It will also look for genuine loyalty or community, rather than a continuing need to buy the same audience again through paid advertising.
MORI’s acquisition of KIDLY provides a useful example. Akin Onal, MORI’s founder and chief executive highlighted two things:
“KIDLY built something special with its brand and customer community” and there is “real cross-sell potential between our audiences.”
MORI gained a trusted relationship with a complementary group of customers and the opportunity to serve those families across a broader range of needs. Its subsequent acquisition of the Storksak and Babymel brands extended that logic into adjacent categories.
Customer analysis should go well beyond subscriber numbers or social media reach. A business should know who its best customers are, why they stay and what they may buy next.
Community has commercial value when it supports repeat purchasing, recommendation and lower acquisition costs. Buyers will distinguish between that and an enthusiastic following that produces rather less revenue.
Clear positioning matters too. Premium businesses can succeed through quality, service and experience; value operators through affordability, convenience and scale. Companies caught between the two may struggle to explain why customers choose them. The fitness market offers a useful illustration: premium operators such as Third Space and value-led gym chains have established clear propositions, while propositions in the middle have found the market less forgiving.
Distribution should also be examined properly, rather than presented as a collection of retailer logos. A buyer will want to know how widely the product is stocked, how quickly it sells, whether orders repeat, whether distribution is expanding and how dependent the company is on particular retailers or distributors.
Being listed is useful. Being established is considerably more useful.
The international buyer will see the UK differently
An international buyer may see the UK as mature, competitive and affected by pressure on household spending due to an uncertain macro-economic and political outlook. Strong performance in those conditions can demonstrate resilience, but the buyer will still ask whether the proposition can travel.
Evidence might include overseas sales, interest from foreign retailers, international demand or distribution partnerships. The company need not have completed a global rollout, but it does need a credible account of why the business can succeed beyond the UK.
Pasta Evangelists is relevant here. Guinness Ventures first invested in 2018, and in January 2021, Barilla acquired a majority stake. The transaction provided an exit for Guinness EIS investors and gave the business the support of an international owner with considerable expertise and distribution in the category.
Start talking to buyers early
Exit planning should begin well before a company intends to sell. That does not mean quietly putting the business on the market.
It means learning what possible acquirers are trying to achieve and what would make the company relevant to them.
Those conversations can shape priorities. One buyer may care about international reach, another about proprietary data, a retail channel, product breadth or profitability. It is better to learn that several years before a sale process than several weeks into one.
Familiarity can also shorten due diligence. Lengthy transaction periods consume management time and increase the chance that trading moves off plan. A buyer that knows the company and trusts the management team may be able to move more quickly. It may also mean they buy your business, rather than funding a competitor.
Different buyers require different handling. A successful process is not necessarily one in which every bidder receives the same treatment.
Create leverage and choose the right moment
The strongest valuation is usually supported by genuine competition. The seller needs several buyers with sound reasons to act, each aware that someone else may acquire the company.
Less obvious buyers can be particularly important. A new entrant, international group or adjacent business may place greater value on customer access, data or distribution than an incumbent does. The buyer that appears least obvious may sometimes pay the best price because the acquisition matters more to them.
The strongest pressure arises when a buyer believes that, if it does not act, a competitor will.
Timing matters too. Growth normally increases value, but it can reduce the number of buyers. There may be more organisations capable of completing a £50 million acquisition than a £100 million one. Boards and shareholders should understand how the buyer pool changes as the company becomes more valuable and whether there is a point at which it is large enough to matter strategically but still within reach of a broad range of acquirers.
It should not come as a surprise to the founders of a venture capital-backed company that a profitable exit is part of the plan. That does not mean building for a quick sale. It means recognising that founders and investors are working together to create value, and that realising it successfully requires preparation well before a formal process begins.
Building the most attractive companies
The most attractive companies combine profitable growth with a strong brand, loyal customers, clear positioning, deep distribution and a convincing international opportunity. They know which buyers may value those qualities, build relationships early and create several realistic alternatives rather than depending on one obvious acquirer.
Pasta Evangelists shows how a strategic acquisition can provide an exit for investors while supporting a company’s continued development. MORI offers the view from the buyer’s side, showing how customer community, complementary categories and cross-selling can matter alongside current financial performance.
For founders, the lesson is to build the qualities that will make the company important to a buyer long before a sale is considered. For investors and advisers, it is to look beyond headline growth and ask whether the business is becoming more distinctive, resilient and difficult to reproduce.
Related resources
These pages may be useful for founders considering the relationship between fundraising, scale and a future exit.
Frequently asked questions
Common questions for founders considering how to build a consumer business that may ultimately attract strategic or financial buyers.
Speak to Guinness Ventures
Guinness Ventures backs ambitious UK companies as they scale and works closely with founders on the decisions that shape long-term growth and, ultimately, a successful exit.
We welcome conversations with founders seeking an experienced investment partner, and with financial advisers, wealth managers and other professional investors interested in our approach to investing in private growth companies.
Thank you again to David and the team at Blackrose.
Risk warning: Investments in early-stage and unquoted companies place your capital at risk. The value of an investment may go down as well as up and investors may not get back the full amount invested. Past performance is not a reliable indicator of future results. Tax reliefs depend on individual circumstances and may be subject to change. This article is for information only and does not constitute investment advice.
Sources: Barilla Group press release, January 2021; MORI acquisition announcements, April and September 2025; Yahoo Finance UK interview with Alessandro Savelli, July 2025.