"Keep taking shots. You’re bound to be successful at some point in time."
Jonathan Jachimiec is the Chief Financial Officer of MycoTechnology, a food ingredient company that is on a mission to solve some of the hardest challenges in the food and beverage industry. Jonathan has helped MycoTechnology raise over $225M in funding and recently negotiated a joint venture in the Middle East. He is also the Co-founder of Molly Brown, a true "Grain to Glass" spirits company.
Tell us about MycoTechnology. What’s it all about? How did it start, and how did you get involved?
MycoTechnology at this point is almost nine years old. It started in a basement in Longmont, Colorado, between two of the co-founders trying to find ways to make food taste better. From there, they have brought on two additional co-founders that ultimately created MycoTechnology. And what that is, is really debunking the myth that if food tastes bad, it’s good for you, and if it tastes good, it’s bad for you. Our first product aims to do exactly that: be able to reduce the sugar, sodium, and fat content of food without sacrificing the flavor and taste of said product. From there, we moved into a number of different protein sources as well, being able to ferment protein isolates to make them taste better and be more functional.
So Myco has a bitter blocker - What does that really mean? Instead of being a sugar additive, it’s actually blocking the bitterness in coffee or chocolate?
Exactly that, Matt. So what our bitter-blocker does is it blocks your bitter receptors on your tongue. Now, why do we taste bitterness in the first place? It was a defense mechanism to keep us from eating things while we were looking in the forest and elsewhere. If it tasted bitter, typically it was toxic, so that was our defense mechanism of not allowing us to eat products that could ultimately kill us. At this point in time, there are a lot of products that are inherently bitter. It’s not just toxins in the world. It’s coffee, chocolate, tea, grain, wheat, ancient grain, quinoa, and the like that all have bitter attributes. So a lot of things that you just don’t inherently think would be bitter do make it a challenge for food formulators to create products that taste how we would expect them to taste. Our bitter-blocker is able to block the bitterness on your tongue and allow the flavors to reduce the sugar, sodium, and other flavorings that are in the product and ultimately make it more healthy for you. The two cheapest ingredients on the planet, sugar and salt, are used as masking agents quite a bit. That’s why when you look at the back of the label, a lot of products, especially products that are bulk packaged, will tend to be very high in both sugar and salt because it’s cheap and is able to add an additional bulk to the product.
There’s a lot of attention in this space and that’s led to a lot of investment from some of the groups that I mentioned, including Kellogg’s investment arm. What is it for them that that is so interesting about MycoTechnology and what you’re doing? Is it a strategic opportunity for them?
Absolutely. Customers like Kellogg’s, for instance, do want to create products that are ultimately healthier, but then there is that market perception that if you put on the side of the box or on the front of the box that you’re 50 percent less sugar, the product must not be as tasty, just like back in the day when a lot of CPG firms were significantly increasing the sugar content. Now you’re looking at a place where they’re secretly taking out the sugar because of that perception, but it doesn’t end there. A lot of our strategics are in the protein field as well. Customers like Tyson and investors like Tyson are no longer a chicken company. They are a protein company. We realized that there is a need still for animal-based product, but animal-based product alone, nor cultured meat alone, will be able to feed a population of nine billion people by 2030 to 2040 timeframe.
Recently, you got a new investor, and really a joint venture, in the Oman Investment Authority. How did that come about and what’s the joint venture for?
This joint venture is a way to allow the Middle East to diversify away from oil as well as decrease their dependence on food importation. We used to say, and it’s really bad timing that the next war would be about food, that is a significant concern for the world in general. As we continue to grow our population, as we continue to use other energy sources and diversify away from oil, the next limited natural resources will be food and protein. And so being able to vertically integrate that into your country is very much on the minds of not only the Middle East but the world as a whole.
That’s really exciting. From your perspective as a CFO, what’s a joint venture like and how do you put it together?
At the beginning, it’s all the negotiations, and it’s separate from the traditional term sheet negotiations that both parties would be working on. But ultimately, for the joint venture, it was finding ways to work, what Myco can bring to the table at the size that we’re currently at, and what resources the OIA would be able to bring to the table to really help get this started and move forward. So now that the term sheet for the joint venture is signed and the LLC has been created, we’re working on the standard, typical business logistics that you would have to do to start any company. That means building up your relationships with external parties, whether those are banks, legal teams, vendors, or customers. We’re currently doing all of that as we speak.
Did you end up going forward with the joint venture instead of the series E then?
We did both. We closed our series E officially back in February for eighty-five million dollars. On top of that, we’ve now officially announced our joint venture in Oman.
Since you’re the CFO, let’s talk a little more about investment – As you look back over the last 6 years, what has had the best Return on Investment for the company?
It’s ultimately the technology. And where our technology comes from is ultimately our people. Yes, we’ve created a massive tenant improvement project and built out an eighty-six-thousand-square-foot facility right off Tower Road near the airport. But ultimately, it’s our people. And you have to understand, in food tech and food ingredients, there’s a very big manufacturing aspect to it. But for what we’re doing, there’s a lot of R&D as well. People have been eating mushrooms for millennia, but no one had been using it as a catalyst for fermentation like we have. That really does require a special set of individuals, from microbiology backgrounds, mycology backgrounds, chemistry backgrounds, you name it. We need all that to create the novel products that we have started and that will be coming down the pipeline in the future years.
It also seems like you’ve done a really good job in R&D as you’ve continued to innovate and build new products. How does an organization divide focus and invest in new product lines while still trying to make the existing ones succeed?
The shiny-object syndrome is real. Where should we pivot? Should we not pivot? How many lines should we have? We have finite resources, and that resource is ultimately people. Where should we focus our time? A lot of it comes down to the time frame. If there’s something that we can get to market in the earlier time frame that we’re able to get through regulatory wise, we’re going to push that first, but we don’t want to forget about the other aspects that may take a lot longer.
Speaking of focus, where is your focus as the CFO?
Yeah, it changes all the time. When we’re heavily fundraising, I spend a lot of my time there, but I wouldn’t be able to do that without the support of my team.And that means being able to take a step back in the day-to-day operations of production and of month-end closes and being able to really lean on a strong team. Culture is a big part of that. You need to be able to get the team aligned, get the company aligned, and all drive to that common purpose. And without that or doing it the wrong way where you are pushing from the back, it’s not going to work. You end up getting massive amounts of attrition. That’s something that’s already happening to probably everybody at this point in time that owned not only small businesses but large business as well. So that means we have to work even harder to make the culture a place where people want to work and not leave just for another dollar somewhere else.
Your industry is constantly changing. How do you stay on top of those trends?
I don’t think any one person can. It takes a village. Whether that’s the marketing team or an analytics team, being able to source this stuff to get a number of readings done in a given month is extremely helpful, but also utilizing keywords in Google and being able to track that and, ultimately, to digest in your inbox on a daily basis is more than meaningful.
Let’s talk about your career. You started at Myco six plus years ago as the controller and quickly worked your way up to the CFO role. What do you put that down to?
Early on in my career, I really learned the difference between just a tenure in a position versus really being able to understand and get that substance in. Those are two totally different aspects. Especially in finance, you need to be a sponge. Looking back at it, people are like, “Are you a biochemist? Are you a chemical engineer? What’s your background? You’re able to explain the story so well.” It’s taking the time to do that, especially right from the beginning: learn from the rest of your leaders in the organization and really just be a sponge and grasp information and practice it. And that helps a lot to get finance away from being perceived as a cost center to being somewhere where you can actually generate wealth for the organization, and it doesn’t have to do with money.
It probably makes you more dangerous in the fundraising side and in the joint venture negotiations because you know the business so well, but you also know the products so well, which isn’t always the case with the CFO.
Exactly—and then being able to tell that story in layman’s terms. It’s different to have our head of science or CSO reach out to a bunch of scientists and speak at a different level. But for the standard institutional investor, they won’t have that knowledge set. So how can you translate that into an investable vehicle? That’s what’s important. For us, we spent a lot of time looking at a number of different aspects of the organization, and it hits home to our investors and the needs and challenges of our strategics and customers.
On top of being the CFO for MycoTechnology, you also co-founded a distillery in Colorado. Would love to hear how that originated and what you’re doing.
That’s going to be a story for another podcast for sure. But I have co-founded Molly Brown with a couple of other individuals, and it’s definitely a passion of mine. I’ve spent some time owning a bar and having a brewery, but the distillery, especially bourbon, is really what I’m passionate about, and that goes all the way down to our brand. There are plenty of Jims, Jacks, and Ezras in the world, but you’re going to have to look really, really far to find a female-centric brand. There’s a number of different aspects for this. I’ll start with the major one, and that’s all of our wives and our mothers that helped us out along the years that we’ve been on earth and got through some really tough times. Everyone has that story about how their mom or their wife or their sister have done that, and we wanted to be able to bring that to the masses, and so we’ve called it Molly Brown. All of our drinks in the tasting room are named after prominent women, both historical and fictional, as a testament of being able to showcase that love. A great side aspect of that is that as it comes to distilled spirits, the brown spirits are the fastest growing, especially for females. So why not take be able to take an entrepreneurial ride and be able to bring that to the masses. That’s what we’re doing here in Colorado. It’s all grain to glass. So we get our grains from, from Loveland, Colorado. We do everything but malting. So all the distilling is done in-house: barrel aging and bottling all in-house in our facility, which is up on roughly 77th and York Street.
How do you handle two demanding roles?
It’s difficult; it’s a lot of sacrifice. It goes back to the sacrifices that my wife makes on a daily basis with two small kids at home as well. When I’m not traveling or working long hours in the office, I’m making a commute out to the distillery to continue that brand and to help with negotiations accordingly. It’s time-consuming. You have finite resources. You have to find the time that really makes you happy, and ultimately, being able to change and impact lives on the food side as well as the spirit side is where I find my calling, at least for the time being.
Do you have a favorite quote?
This is a bit cheesy, but I truly believe it, being a big hockey fan. The Great One [Wayne Gretzky] said it: “You miss one hundred percent of the shots you don’t take.” Something that happens to come with the profession is being conservative, but don’t let that conservativeness ruin your passion. It’s not cheap to start a distillery. It takes a lot of guts to invest in a number of different companies. But you find ways to make that happen, and if that means you end up driving a jalopy, so to speak, in order to fund some of those things, do it. Stay away from depreciating assets; buy the ones that appreciate.
Well said by a true finance person. What about a favorite book?
Yeah. Rich Dad Poor Dad, especially from where I came from. Not many in my family have been formally educated past high school. I’m the first in my family to get a master’s, at least in my immediate family. Ultimately, make the right investment decisions, which I just spoke about prior. The second one was How to Make a Spaceship. What I really like about that book is it really showcases the entrepreneurial journey, probably the farthest-reaching journey that man can take at this point in time. It really showcases why capitalism still matters and why the entrepreneurial journey is not for everyone. I really commend everyone that is willing to take it a step further, start their own company, whatever it is. If it’s a space company, more power to you.
It takes a lot of guts. What got you over that fear to make the leap
Failure. I’ve failed before this. I’ll probably fail again. But again, keep taking shots. You’re bound to be successful at some point in time. It’s not what you learn in school, it’s what you learn about what not to do, ultimately. That is the biggest thing that I would part with to everyone listening right now. You gain a lot of experience from your failures and how not to do it the next time.
And what would you say are some of your biggest lessons of what not to do?
Get the right people on the bus and get the wrong people off the bus as soon as possible. It all comes back to the people that you’re working with on a daily basis. You spend more time with your colleagues than you do with your own family sometimes, and it’s not worth sticking around and having people that ultimately can bring an entire organization down.