[A] Middlebury startup that sells curated seed arrangements to make gardening easier has received financing from a Vermont-based investment company to help it create 10 jobs over the next year or 18 months.
Seedsheet was started in 2014 by Middlebury architect Cam MacKugler, 31. It now has nine employees and placement on the shelves of large national retailers such as Home Depot and the grocery chain Wegman.
Vermont Works, a venture capital firm that aims to make a positive social impact, invested earlier this month to help Seedsheet automate its manufacturing and hire management staff.
“We’re trying to bend the demographic curve here in a more promising direction,” said Vermont Works co-founder Bob Zulkoski, noting recent reports that ranked Vermont No. 2 in the nation, after Maine, for its rate of aging and population decline. Vermont Works is looking for small companies that will grow, or scale, beyond the state but remain based in Vermont.
Seedsheet sells gardening fabric imbedded with organic non-GMO seeds, about 95 percent of them purchased from the Wolcott-based High Mowing Seeds, said founder Cam MacKugler. The user can create a garden by laying the sheet on the soil and watering it. The fabric comes with ingredients for herbs, salads, and garnishes; users can also order flowers and custom blends.
Zulkoski and MacKugler said Seedsheet is also researching a cannabis version for the Colorado dispensary market.
Seedsheet, which makes its sheets in a former Geiger of Austria clothing plant in Middlebury, started in late 2014 with a successful $30,000 Kickstarter campaign and then raised its first $500,000 from local investors after its story came out in the local media.
Its products started appearing at Home Depot in 2016. A successful appearance on the Shark Tank TV show in 2017 yielded another $500,000. The company also secured a loan through the Vermont Economic Development Authority.
MacKugler said Seedsheet just signed a deal to sell its products in the global grocery chain Aldi next year, and has hired a distributor to help it reach smaller independent stores.
Vermont Works is trying to raise $50 million, mostly from out of state, to invest in Vermont companies. The firm doesn’t disclose the amount of its investments, and is “industry agnostic,” said Zulkoski, looking for companies in any field where its founders can identify and manage risk. Zulkoski learned about Seed Sheet after seeing it on Shark Tank.
Vermont Works support comes with a seat on the board, mentoring and direction. Vermont Works partner Skip Wyer will sit on the Seedsheet board, and he, Zulkoski and Koster will be involved with the company’s day-to-day operations, Seedsheet said. The fourth partner is Louisa Schibli, co-founder of Vermont investment platform Milk Money.
https://www.milkmoneyvt.com/index.php
“Our entrepreneurs here, in comparison to so many other places, have been starved for mentorship,” Zulkoski said.
Vermont Works is filling a need that can’t be met by traditional financing operations like banks, said Michael Schirling, secretary of Vermont’s Agency of Commerce and Community Development. Fresh Tracks Capital in Shelburne is another firm that provides social impact financing.
“Vermont has historically been a more insular place that liked to bootstrap things, where deals were done on a handshake,” Schirling said.
“The nature of financing has changed. You can’t do those handshakes anymore because of the nature of banking regulation,” he said. “The world is more complicated, and the startups and complexity and speed in which they move lend themselves more to the venture and the equity investment rather than traditional debt financing.”
Vermont Works has also invested in a Burlington construction project called the Vermont Innovation Commons, a Burlington software and device company called Packetized Energy, a Bristol woodworker called Vermont Farm Table, and University of Vermont’s sustainable innovation MBA program, where Zulkoski sits on the board.
Zulkoski said he and co-founder Frank Koster are using their own money for Vermont Works’ early forays into Vermont investing, but hope to raise 85 to 90 percent of their capital from out of state, not only to bring in money but also to bring in new ideas and mentors.
They’re looking for ideas and money outside Vermont because “within the state, we don’t have the financial wherewithal to address the problems we have, let alone take us to a more sustainable plateau,” said Zulkoski, who has managed large international private equity funds for much of his career. “We’re not connected to ideas, we’re not connected to mentorship, we’re not connected to capital outside the state.”
MacKugler said he expects the vote of confidence from Vermont Works to yield other capital for his company in the future. Neither MacKugler nor Zulkoski would say how much money Vermont Works had invested.
“A lot of other venture capital firms in Silicon Valley and Boston, they all want to see buy-in locally first,” he said. “With having another VC firm in Vermont, there are more opportunities for entrepreneurs like me to prove our local traction from a funding perspective, which will facilitate getting other money and outside investors too.”
