Investment Made via the Zebras Unite Community - A Case Study
A deal that came about because a founder and an investor found each other in the Zebras Unite community.
We are so happy to see this case study from zebra companies Chisos and Re-Nuble Inc.
One significant value that Zebras Unite provides founders and funders is a community, a platform to connect with and learn from each other. The Zebras community facilitates deal flow between aligned entrepreneurs and investors, proving the thesis of profit through purpose while strengthening the zebra business ecosystem.
One such coming-together is Chisos CISA’s investment in Re-Nuble Inc. The founders, Will Stringer of Chisos and Tinia Pina of Re-Nuble, notably connected in the online Zebras Unite community.
Here is their zebra case study - Chisos CISA Investment - Investment in Re-Nuble Inc. -
Transaction Summary -
Re-Nuble became Chisos’ first portfolio investment in May 2020. Re-Nuble hit a number of criteria that Chisos looks for when making investments:
Impressive founder with a proven record of ambition and achievement
A company solving a problem with important real-world benefits
A clearly articulated and well researched growth and execution plan
A number of market validation points: non-dilutive capital awards, executed sales contracts and previous investors
Chisos invested via Convertible Income Share Agreement, which consists of two components: an equity ownership instrument and an income share agreement. This instrument (explained in more detail here and here) allows Re-Nuble to recapture their equity and reduce dilution to the company over time.
Transaction Background
At the beginning of March, Re-Nuble connected with Chisos after viewing a post in the Zebras Unite community platform. Re-Nuble had recently pivoted strategies to adapt to the new operating environment post-COVID-19. The company needed a specific amount of capital quickly to make an equipment purchase in order to stick to a production timeline. Early-stage capital for manufacturing is often hard to come by despite Re-Nuble operating in two sectors (agtech and climate tech), experiencing significant investor attention due to supportive macroeconomic trends. Often, larger investors wish to see a company’s first manufacturing facility already running before capitalizing a company which removes the risk beyond what early-stage is known for. With $300,000 in signed contracts and $500,000 verbal agreements awaiting signature, Re-Nuble is positioned to meet its sales goal of over $1.5 million dollars in the next year. For Re-Nuble, an investment from Chisos made sense because Chisos allowed Re-Nuble to test a hybrid model of revenue based financing prior to achieving a $1 million ARR typically required by larger revenue financing based funds. The investment also allowed Re-Nuble to increase its network access beyond the east coast for scaling purposes. For Chisos, investing in Re-Nuble was a bet on Tinia as a founder, further strengthened by Re-Nuble as a company with traction tackling an important problem.
About Re-Nuble
Headquartered in New York City, Re-Nuble is an MWBE-certified agriculture technology company that uniquely converts food waste into high-quality organic fertilizer for soilless farming. We strive to be the world’s enabler of closed loop food. We make this possible by our organic cycling science method. By diverting the valuable resource of food waste from entering landfills, we successfully eliminate a significant amount of methane emissions that would have been circulating in our ecosystem. Our proprietary nutrient delivery system, enables soilless farms to rapidly convert waste streams into water soluble compounds for quicker plant uptake and yields comparable to the current dominant fertilizer, synthetic mineral salts. Re-Nuble’s current product caters to hydroponic farms, enabling them to produce more profitable organic produce with fertilizers at half the cost of inorganic equivalents. These soilless farms can more competitively enter the growing organic produce market, growing 2.5 times faster than total food sales in 2018 (Organic Trade Association), continuing a multi-year trend.
About Chisos
Headquartered in Santa Monica, Chisos provides capital to early-stage and side-hustle businesses, and was founded to achieve one main goal - democratize entrepreneurship. Chisos has created a new investment product called a Convertible Income Share Agreement (“CISA”) for companies and ideas not served by other forms of capital. By focusing on the founder’s ability to succeed and achieve in business and more generally in life, Chisos can provide capital quickly and in more uncertain situations than other traditional forms of financing. Chisos is a solution for many companies without a financing solution today. Pre-revenue companies, companies that do not fit the “grow at all costs” venture capital funding model, and companies that do not fit the “5-year predictable growth with hard asset collateral” model that is usually required for a traditional bank business loan are all examples of companies that fit the Chisos investment model.
Are you in our online Zebras community, making connections, finding like-mind investors, driving deal-flow?