Why This Danish Startup Is My First Official “Pre-Seed” Investment
Earlier this year in a Medium post, I planted my flag in the ground as an official “investor,” and now, I’m excited to announce my first investment.
Based in Copenhagen, Denmark, the company is called Empirical Spirits. Yep, a spirits business. I’d never envisioned investing in a spirits startup, but once I learned about Empircal’s innovative approach to building this company, I knew it was a great fit. Now, I obviously can’t share all the specifics of their intellectual property and strategy, but I can speak generally about the team and how they blew away the 5 criteria I delineated for making investment decisions.
Empirical Spirits is co-founded by Lars Williams and Mark Emil Hermansen, who met while working at the famed restaurant Noma, which has been voted #1 restaurant in the world four times and changed the way the world views Nordic cuisine. Beyond all the accolades, most impressive to me is that Noma closed the Copenhagen location on 3 separate occasions, and moved the entire staff of 85 people to Tokyo, Sydney, and Tulum to open short term popups with entirely new menus using 100% locally foraged ingredients.
With Empirical, Lars and Mark Emil are calling on their past experience of doing things that many thought could never be done. In similar fashion to how Noma redefined what it means to be a restaurant, Empirical is redefining what it means to be a spirits company. From their focus on the base ingredients, to the distillation process, to the distribution model — everything Empirical is doing is innovative. They’re literally taking a bottoms up (pun intended) approach to spirits.
The Team:
Lars Williams. If you’re a chef or foodie you already know Lars. His resume is a greatest hits of the top restaurants in the world. Before joining Noma he did R&D at Fat Duck, WD-50, and Aquavit. During his 8 years at Noma, he ran the Nordic Food Lab, built the Noma Fermentation Lab and ran the test kitchen. If you’ve seen the Noma Japan film, Ants on a Shrimp, you saw his mug quite a bit. Bonus facts: He’s literally one of the fastest bicyclists on the streets of Copenhagen, so don’t try to keep his pace. Also, I’ve never heard him drop a name, which is extremely rare in my business.
Mark Emil Hermansen. My initial love affair with the city of Copenhagen was due in large part to Mark Emil and his work while running the non-profit MAD Symposium. (Mad translates to “food” in Danish and the MAD Symposium is an annual TED-style event for chefs and cooks from around the world). I’ve attended 3 MAD’s, not because I’m a chef or cook, but to soak up the permeating creative energy. I’d suggest you go, but tickets sell out in minutes, so you gotta know someone… like Marks Emil :) He also ran partnerships and business development at Noma and was lead on the development of the new Noma. He’s a Global Shaper at the World Economic Forum, Oxford educated, and student of cuisine and identity. Bonus fact: He’s a former competitive violinist.
My Criteria:
When I decided to take on this investor thing, I laid out 5 criteria of what I’m looking for in a company. Here’s how Empirical stacks up.
1. Industry Expertise. The Empirical team has vast industry expertise in flavor and food. They studied this from a theoretical level, but also literally got their hands dirty. They foraged for ingredients, crafted them into new flavors, and presented them to the most critical audiences in the world. And they’ve blown people’s minds, mine included. Now you might say, yeah, but they don’t have any experience in spirits. Well, you’re right. They do have ancillary knowledge of spirits from their significant work and study of fermentation, but true, they have never built or worked a spirits’ business until now. Here’s why I’m making an exception to this first criteria: their concept is truly innovative. Massive innovation most frequently comes from outside of the industry it’s actually innovating. For example, my background is in travel. When I started my first company I was a travel outsider, and we built something that was truly innovative for it’s time. I wasn’t bound by any rules or legacy that burdened those within travel. Over the years I became a travel industry insider, and then watched the only major innovation in travel come from other industry outsiders, namely Airbnb and Uber. Their founders, being such outsiders, don’t even show up at the biggest executive travel conference of the year, yet that doesn’t stop all the attendees from talking about how Airbnb and Uber are disrupting travel. Lars and Mark aren’t confined to stay within the guardrails which hundreds of years of legacy has put upon those within the spirits industry, and therefore are free to innovate.
2. Grit. Maybe the years of long hours in the kitchen or practicing violin would prove to someone that these guys have grit; however, for me, it’s been years of watching them, getting to know them, and experiencing first-hand what they’ve created. I’ve learned they will run through walls to get things done…and they’ll do it gladly.
3. Respect of colleagues. Their friends are top chefs, batshit crazy farmers, and nerdy microbiologists, literally, from around the world. They run in diverse and beautifully goofy circles of creative folks all with a bias toward non-conformity. These are their colleagues, and the respect is mutual.
4. Big Idea. The spirits industry is huge and has historically been dominated by large players whose success has rested on their legacy. Almost every big brand tells the story of how long they’ve been at it, and therefore they have a vested interest in maintaining the status quo to strengthen their market dominance. Many of the “craft” beers and spirits that have been launched lately take advantage of this existing system and the opportunity that it creates, i.e., that the largest players don’t have the organizational DNA to create new brands as much as they do to maintain their already successful brands. This has allowed successful smaller craft brands to sell to the big guys. Empirical is different from these other craft stories in many ways, but especially in their vision. They aren’t looking to exploit the inefficiencies of the existing system, to one day sell to the big players. Instead, they are creating a new system where flavors and innovation replace legacy. From the ingredients, to process, to distribution, Empirical will reshape the way we as consumers think about spirits, buy spirits, and consume spirits. So yeah, it’s a big idea and it’s in an industry that frankly could use a shot of innovation.
5. Interesting Story. I’ve raved enough about Lars and Mark already, so needless to say, they check the box of people I’d like to spend time with.
I wrote the first check for Empirical. It was a pre-seed investment. Immediately thereafter, we set out to raise a seed round which was quickly over subscribed. We closed on double the original amount we wanted and it took only 3 months to close. Our group of investors includes venture capitalists, a media tycoon, brand experts, entrepreneurs, chefs, spirits distributors, and friends and family. When I first spoke to Lars and Mark Emil about raising their seed round, I warned them that you can’t get rid of your investors, so let’s be choosey. Think of it like a dinner party…who do we want sitting at that table with us? They nailed it. It’s a great group and I’m proud to be an investor in the seed round as well.
Stay up to date on their progress https://empiricalspirits.co/ and follow them on Instagram: https://www.instagram.com/empiricalcph/. I plan to be the first one in the US sharing this product with a few friends, so hit me up if you’re into trying it.
Here’s a recent write up on the company if you’re looking for more information. https://munchies.vice.com/en_us/article/neep4q/this-once-abandoned-warehouse-might-contain-the-future-of-booze
And… if you know another Lars and Mark Emil, please send them my way!
