Life Cycle of Ventures in the APM

comparison to the prevalent clustering into VCs, CVCs, Accelerators, and BAs, the suggested model might seem more complex and in-depth. A clear advantage would be the opportunity for the ventures to find a tailored vehicle in a more transparent way. The actual application, although, would highly depend on the level of information and insight sharing of the vehicle. Some of the included clusters can be seen as rather unique for alternative protein, as for example, portfolio scope, but the majority of clusters could eventually be applied on other areas and sectors besides from alternative protein.

In comparison to the vehicle classification, however, this framework does not omit the chronological description of the former concept entirely. Instead, the different courses of the three ascertained types of ventures are described according to the conventional funding stages. In this regard, the emphasis is placed on the varying course of business and sales development between the venture types.

However, risks are not further aligned to that as they tend to decline over time even though these have different main drivers and were not sufficiently covered through the empirical findings. Furthermore, the adjusted life cycle model is supplemented by the dual role concept, which was introduced in the EVC theory. In this way, a brief verdict on the investment attractiveness of the venture types can be given from the perspectives of both the investor and mentor role.

Recipe Ventures

Within the four considered verticals, particularly but not exclusively, plant-based ventures can be labeled as a recipe or brand-driven venture. Due to the low level of technology of their products, they are able to develop and validate these in a reasonable amount of time. The reason behind this is that their R&D mainly consists of assembling common ingredients until they meet certain taste criteria similar to a real meat experience. This relatively fast development cycle enables them to generate their first sales as early as within the seed phase and subsequently allows them to concentrate on the growth of their business. Accordingly, this kind of venture is characterized by a typical progression along the funding stages. However, to compensate for the lack of technical uniqueness, a considerable amount of effort must be invested in branding and marketing to stand out from the large competition.

Besides the challenge to gain a sufficient share in this competitive market, the lack of real technological innovation or IP presents a further risk that these types of ventures are facing, concretely, the lack of protectable assets. To a certain extent, this risk can only be offset by a well-established brand or a particular market reach.

From the perspective of the vehicles, these ventures offer a certain degree of planning security, but eventually with little prospect of sustaining great commercial returns in the long run. In addition, the investment in these Recipe Ventures cannot be protected sufficiently due to limited IPs. As stated before, they typically depend on their marketing and branding activities in order to prevail in this competitive market. As long as these latter factors are not extremely unique, the general investment attractiveness is rather low from an investor side of view for most vehicles. Likewise, in the context of mentoring, these ventures are primarily suitable for vehicles that have an affinity and expertise in commercial aspects.

Hybrid Ventures

Given that not all ventures are strictly brand or tech-driven, the second type of ventures comprises precisely those that fall in this space as they are hybrid of both. Insect and fermentation-based ventures are most prominent in this category. In both of these verticals, ventures exist that employ either novel and protectable technologies or others that rely on more common methods and redeploy these, for example though increased branding activities. Unlike Recipe Ventures, these are not only characterized by longer development cycles and more regulatory requirements but also by a more thorough market validation. Regardless of the technological focus, Hybrid Ventures must still penetrate a rather scarcely explored market and test the product on its potential customers. As a result, the first profits and the establishment of the business can be deferred until the end of the early stage.

On the other hand, this also discloses one of the most significant leverages. As compared to most Recipe Ventures, there is less competition to be expected. In case that enough consumers are willing to accept the relatively novel product, these ventures provide a higher potential for the future growth of the business as it is easier to gain market shares. At the same time, it is possible to miss the target market easily or to fail to convince the consumer of the new and unusual ingredients.

From both a mentor and investor perspective, this broad-spectrum and mix of characteristics offers the most leeway and thus leverage potential for vehicles. After all, they can fine-tune either the branding or IPs, if necessary, to build a venture that can be successful in the long term. Moreover, this more or less untapped market potential yields highly attractive financial returns. Thus, the investment attractiveness of these ventures can be regarded as high, since they tend to possess a sufficient number of IPs, are further in the technology development process and at the same time leave room for further enhancement.

Moon-shot Ventures

The last type encompasses all ventures that have a strong focus on the creation of a novel and disruptive technology within the APM, which is why they can be labeled Moon-shot Ventures. While ventures from the plant-based vertical can be located at the other end of the spectrum, lab-grown meat ventures are typically placed at this end. As this technology has only been around for less than a decade within the APM, the development of a market-ready product has not yet been completed, nor has the infrastructure been created to offer it at a competitive price. On top of that, they have to face numerous regulatory hurdles in this already lengthy process, since it involves such completely new processes and substances. However, judging by the funding stages, many of these tech-focused

ventures can be positioned in the early or late stages without having sold even a single piece of meat.

These high and early funding rounds are mostly driven by the high expected impact and resulting financial reward of the product. In contrast to Hybrid Ventures, the level of uncertainty is quite different, as the effects on the market, the feasibility of production, customer acceptance, and competitiveness cannot yet be measured accurately at this stage. Other players in this space are likewise still in the development stage, making a comparison not feasible.

Despite this lack of future perspective, these tech-driven ventures require enormous amounts of upfront investment just to reach a point where they can initiate to estimate these factors. As a result, these Moon-shot Ventures tend to be less interesting from an investor perspective for a variety of vehicles, as they entail high risk and high stakes at this point in time. The reasoning behind the perceived current unattractiveness is mainly time-driven, as the long development time of Moonshot Ventures does not fit their respective investment cycle of many vehicles but not all of them. Looking at it from a mentoring standpoint, many vehicles simply lack the capabilities to really contribute to these ventures and thus pave their way. Consequently, it can be said that for most vehicles operating in the APM, this type of venture is out of reach and, therefore, less attractive as an investment case.

As in the case of the vehicle classification, this framework does not intend to replace the established models but rather provides a complementary perspective for understanding the entrepreneurial landscape and consequently helps to describe the assessment process in the context of the APM in a more detailed way.