Choose the right stakeholders: Why we never took outside investment

Last Updated on January 16, 2024

There are lots of different stakeholders involved in ButcherBox that play crucial roles in bringing delicious steaks or pasture-raised bacon to your plate.

There’s the farmer.

There are the facilities that are cutting the meat into individual steaks.

There is our growing number of employees, and there are all our members — whom we consider to be the vital part of our community.

The ecosystem involved in getting our boxes to the doorsteps of our members is quite robust.

From the start, we wanted to make sure that everyone in that ecosystem was getting an amazing experience. For some, like the farmers, we wanted to make sure that they can run a business and that they view our relationship as having high-value beyond that of a standard business partnership.

For instance, it is vital that the farmers we work with are well-supported. We want them to have the opportunity to invite their children to take part in the same vocation and be confident that they can pass down their farm to the next generations. We want young farmers to be able to grow a business utilizing humane and environmentally beneficial techniques.

More than anything, we want our members to receive a great product at an amazing value. A key to that is also making sure that they can trust that we have done everything possible to source the highest-quality meat.

The ability to continue to do all the above is made possible by a decision my co-founder, Mike Filbey, and I made in the early days of ButcherBox.

Even before the success of our Kickstarter campaign, we wanted those mentioned above — farmers, the supply chain, employees, and ButcherBox members — to be the only stakeholders to whom we answer.

Because of that belief, we haven’t raised money from outside investors. It is quite amazing, in the current climate, what we’ve been able to accomplish without money from outside institutions, even as we hit a new phase of growth for the company or face some unexpected challenges.

In the past ten years, startups have become trendy. Entrepreneurship is now the number one concentration at many business schools. People really want to get into startups and build a company. And that’s really great.

I think the uptick in entrepreneurship is going to spur innovation in this country, help the industry in the nation grow in unimagined and positive ways, and bring incredible new services to lots of folks.

The challenge in the startup world right now, unfortunately, is that everyone who is building these companies is obsessed with raising money from venture capitalists.

I continually talk with people interested in starting their own business, seeking my advice, and, generally, all they want to know is how to go out and raise venture capital. I’ve found that there are very few people focused on actually building a company that is interesting, enduring, and profitable.

In the current climate, too many founders and executive teams have their focus on trying to figure out how to get the next round of funding from venture capitalists.

This is something pervasive in startup world. If you look at the major tech news outlets right now, almost every single article about early-stage companies is about how much money somebody sold a company for or how much somebody took from a VC. There’s no real depth, no exploration of companies doing cool things; no one is interested in companies that are actually making money.

ButcherBox started with a Kickstarter campaign and $10,000 that I took out of my personal investment account. At the time, I thought that if this venture doesn’t work out, it would be a great experience and that I’d hopefully learn some valuable lessons, things that couldn’t be taught at business school.

I was willing to risk that money to create ButcherBox, and that’s all we’ve done. We’ve never raised money. We don’t plan on raising money.

I like to tell people that we are building ButcherBox the old-fashioned way. But the reality is that we want to build this company our way. That means that we aren’t beholden to stakeholders that are only concerned about a return on their investment.

There might be — I should say — a couple of instances when getting money from a VC is a necessity. The only two examples I can think of are if you have cheaply and efficiently found product/market fit and need some money to scale, or if you are building a very tech-focused company that requires funds up-front to help you build your innovative product. Otherwise, I believe venture investments can be not only quite bad for a business, but also a massive waste of time for the team who should be focused on building a great business.

And while good investors can help, they could also try to change the vision of what ButcherBox can be. The minute you get venture backing, you also get an investor that has his or her own motivations.

That person might want want to focus on when and how you will make more money or have some concern about a trendy metric, and suddenly the idea of building an amazing company for our employees, for our members, and for our farmers could change.

The only way to build ButcherBox the right way — that we could keep total control, have an incredible product, and deliver an awesome experience — was not to raise money and to just make a go at this ourselves.

And so far, so good.

To this day, we only answer to our employees, to our farmers, and most importantly, to our community of ButcherBox members.