Pod Insights How I Invest with David Weisburd E332: Why Family Offices Must Go Risk-On or Go Broke About this episode What if the best investors aren’t generalists at all, but operators who double down on the one place they truly have an edge?
In this episode, I sit down with Nathan Cooper, Founder and Managing Partner of Barrel Ventures, to explore how a family with nearly a century in food transformed itself into a focused investment platform. From early mistakes outsourcing everything to building a differentiated edge in food and beverage, Nate shares how conviction, pattern recognition, and network-driven investing compound over time.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 David Weisburd? Nate, so your family operated in the food business for nearly a century before starting a family office. What did that teach you about building an enduring franchise?
0:08 Speaker 01 So this industry, more than others, is operationally brutal. There's thin margins in this industry, powerful retailers, working capital pressure. And so it really instilled in me that misaligned incentives are not the way to build enduring businesses in this industry, or in life, for that matter.
0:26 David Weisburd? Last time we chatted, you said that your first 15 years of your family office were mired by many costly mistakes. Tell me about some of those mistakes.
0:33 Speaker 01 Building success and wealth outside of the financial services. You are suddenly put into this position of, hey, you're no longer operating a business. Now you're operating a family office, right, a financial industry. And so you need to learn expertise and it's a drastically different operational world. And so we went from, you know, the first 15 years outsourcing everything and figuring out essentially what we didn't want to be, to the past, you know, seven to 10 years saying, hey, here's what we're really good at. And we're going to lean into our expertise and we can still all sorts of things that aren't, you know, a core edge for us, a core competency. But it makes no sense to pay fees on fees of things that we are as good, if not better, at than people are going to be paying them to.
1:18 David Weisburd? So you started by outsourcing everything to large financial firms. You took a step back and you looked at what you're really good at. You in-sourced that and you outsourced everything else. What exactly did you in-source and what did you outsource?
1:28 Speaker 01 We, you know, we said, we're never going to make alpha trading stocks, right? So we're going to use tax loss harvesting and sort of whole blue chips. But what we know how to do is operate businesses in our warehouse, which is the food and beverage world. And so we sort of said to ourselves, let's operate as a small, middle market private equity firm, right? With the viewpoint of a family office that, hey, we don't need to flip these things in three to five years. We don't necessarily want to hold them forever, but we can have more flexibility and operate these from the perspective of, hey, we've been in these shoes before. We've built businesses over decades. And so, you know, we still invest in the typical family office things, real estate, private equity, stocks and bonds and things like that.
2:08 Speaker 01 But we, as I said, the past seven to 10 years have flipped to be a much more hands-on operator perspective. And we sort of view ourselves as.
2:18 Speaker 01 We're the buyer of choice for a lot of these businesses that we're looking at. You know, we have three platforms now and always looking at a fourth and looking to do add-ons on those three platforms.
2:26 David Weisburd? A lot of financial advisors will tell you to build this portfolio, this canonical portfolio of private equity, venture capital, private credit, real estate, et cetera. But the very elite family offices, the top 1%, they play to their strengths. They first start with where do they have alpha? For you guys, it's food and beverage. For somebody else, it might be biotech. For somebody else, it might be venture. They absorb as much alpha as they can and then they have their, the rest of their portfolio play defense on that food and beverage exposure. So maybe you're more hedged against food and beverage than a typical family office. Is that, that how you went about it? And tell me about how you go about integrating your alpha with, I guess, the beta, the portfolio, for lack of a better word.
3:03 Speaker 01 You know, as family office, we're not trying to create generational wealth. We've been really fortunate where that already happened, right? Goal number one is don't lose money. That being said, we need to generate returns and build the assets. And so, as you said, our area of expertise in food is food and beverage. On the operating side, we've got these three platform businesses. And on the venture side, you know, the firm I run, the expertise is also in food and beverage. And so we say where we're going to take risk is in the area that we have the edge, right? Because it makes sense to lean into our expertise and we can get the highest returns in the area that we have the edge.
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5:03 David Weisburd? alongside filings, broker research, news, and more than 240,000 expert call transcripts, turning raw conversations into comparable, auditable insight. Take advantage of AlphaSense AI-led expert calls now. The first to see wins, the rest follow. Learn more at alphasense.com/HowIInvest. So let's talk about your food and beverage investments. You were in the seed round for Olly Pop. Tell me about how that came about and how did you go about building your position?
5:30 Speaker 01 I was an entrepreneur for a while and had a failed business and was sort of figuring out what I wanted to do next. And was, you know, we had this good fortune of, hey, we see a lot of deal flows just in this vertical because of my history and the family history. And was introduced to the two founders eight years ago before they had done a dollar in sales. Had one of them over for dinner and sort of viewed it as, hey, this is going to be a portfolio approach. We're going to write a bunch of small checks into a bunch of early-stage companies. In hindsight, I wish I wouldn't have viewed it as a portfolio approach and, you know, written every dollar I had in the zero. Obviously, you know, we're very happy, but the first check was small. The more you see, the more you see team operate and grow a business, you get more comfortable with them. And then we sort of doubled down and tripled down and we've written a significant amount of this company.
6:13 Speaker 01 And, you know, these guys have built an incredible business. That's one of the fastest-growing beverages of all time, exceeded everyone's wildest expectations to the nth degree. And, you know, it's a multi-billion dollar operation at this point.
6:24 David Weisburd? You decided to essentially spin out Barrel Ventures, which is a food and beverage VC from the family office. Tell me about that decision.
6:31 Speaker 01 First check we wrote was in Olly Pop and it's sort of spiraled from there. At its core, you know, I think, as I've said, I'm an operator and the family is operators, right? And so we would invest in these companies and just because of our expertise and the network we have, we'd provide a ton of value. And so that spiraled from lollipop and was approached years later by some people who said, hey, you know, you built this track record, would you ever consider raising a fund? And my first response was no. I think there are way too many people in venture with way too much money who don't necessarily know what they're doing and have drastically misaligned incentives. And I said, look, the only way I'd want to do this is if humbly, we could build a firm at a vertical where it could be better than anyone else. Is that was the broader food world. And so I said, let's go see if we can raise a small fund at a
7:13 Speaker 01 vertical that we know better than most. And that was the broader food world. So pre-farmed, a post-fork and everything in between, all of our LPs, our families, corporate execs, kind of throughout the food and beverage world. And if you talk to every single one of our CEOs, they would say the value we add is more than anyone else on the cap table.
7:33 David Weisburd? You do something that's quite unusual, despite many GPs talk about it. You leverage your LPs almost better than anyone that I've talked to. Talk to me about how you leverage your LPs. How do they actually provide value in barrel ventures in your franchise?
7:45 Speaker 01 We invest pre-farmed, a post-fork and everything in between. Likewise, our LPs are, we've got everyone from ingredients companies, packaging businesses, large three PLs, distribution businesses, brands. We've got one of the largest farming families in the country. And we talk to them and say, hey, what are some problems you're trying to solve within your industry or your business? Okay, let's have a thesis and let's go out and find something there. Or when we see interesting businesses, we look at them and say, hey, what do you think about company XYZ? And then when we decide to invest in these companies, we sort of leverage our LPs as almost operating partners, right? And they're happy to do this because it is helping their business and helping their returns. These will be the first customers of our portfolio companies. These will be advisors to our portfolio companies. These will be mentors to our portfolio
8:30 Speaker 01 companies. And it's worked really substantially to the tunes of millions of dollars in sales, millions of dollars in ARR. I think one of our companies said, you're the only investor, and this is a company we've got a significant investment in, you're the only investor who's added more ARR than the track size and multiples of it, which makes me feel great.
8:49 David Weisburd? Are you able to go top the funnel and leverage your LPs for diligence and de-risk before you even invest, or is it just some value add after?
8:57 Speaker 01 A hundred percent. The first thing we're doing when we look at a company is let's look at our roster of LPs and who could benefit from this and what do they think of it? Right? And if they like it, we're going to go talk to more. And if they hate it, we're going to figure out why. And that doesn't necessarily mean we're going to invest or not invest, but we want their perspective because it's more valuable than their prospective customer.
9:17 David Weisburd? Last time we chatted, you said that food is a misunderstood industry and that there's much more opportunity than people realize. Why is food so underrated? And what's the real opportunity?
9:28 Speaker 01 It's the only industry in the world that every human being interacts with three times a day. In a world where AI is going to eat and kill everything, I think it's the best place to be investing. It's very antiquated, right? It is traditionally unsexy, right? Lower margin than SaaS, lower margin than software than AI. But there are interesting use cases where software and AI can affect these businesses to a massive amount. In a world of GLP-1s and changing tastes and preferences and people caring more about their health, on the brand side and the ingredient side, there are going to be fortunes made, right? Where, you know, take, you look at Ollie Pop, right? Nobody thought that the world needed another soda. You know, they created this better-for-you soda category
10:13 Speaker 01 that is now a multi-billion dollar a year category, right? Poppy was sold for $2 billion. You know, Ollie Pop will likely sell for more. And there's, you know, a dozen other competitors in the category. They're building substantial businesses. You look at something like mac and cheese, right? Kraft had a monopoly. Then you got Goodles and Bonza and all these other things. And, you know, they're taking significant share from Kraft. Consumer preferences change on a regular and there's going to be very, very significant businesses built.
10:41 David Weisburd? To play devil's advocate, isn't food more of a private equity play? You have low margins, you have very capital intensive. Why is it a space for venture?
10:48 Speaker 01 That's a good question. If you look at beverage, for example, over the past 15 years, there've probably been
10:56 Speaker 01 Twenty multiple billion dollar outcomes in beverage alone, right?
11:01 Speaker 01 These businesses, sometimes, a lot of times, they can get to profitability earlier, right? So, simple mills sold for eight hundred million dollars, but they only raised, I think, one round of capital, maybe two rounds of capital, right? And so, the returns can be like the returns of a multi-multi-billion dollar software or AI exit, but because they only raised one or two rounds of capital, a six or seven hundred million dollar exit, which is a home run, can have the same sort of return profile.
11:28 David Weisburd? So, another way, there's still room for these hundred X, thousand X returns. There might be a smaller universe, but there's also a smaller amount of funds going after that universe.
11:35 Speaker 01 Absolutely.
11:36 David Weisburd? Last time we chatted, you really stressed the importance of seeing a thousand deals before making a decision. Tell me about that.
11:42 Speaker 01 This is a world of pattern recognition, right? And so, when I first got into this industry, I was naive, and, you know, you think everyone is the smartest person in the room, and you think everyone is going to change the world. When you see a thousand, two thousand deals a year, you start to recognize who's full of shit, what are the traits that actually matter, who's going to really deliver and find product-market fit? And not to say that you're going to be right a hundred percent of the time, but you start to recognize that there are certain characteristics of founders and certain traits in founders that you recognized with Ollie Pop eight years ago, that you now see in another portfolio company of ours nowadays, eight years later, right? And you recognize what are the early signs of product-market fit, right?
12:25 Speaker 01 What are the things that people are saying about a product that went vertical? And what do you recognize in a new product you see? What are the tech stack that these companies are using, right? What are they solving problems for? How are they solving it? And what does product-market fit look like?
12:40 David Weisburd? What does product-market fit look like at its very early stages? How do you know that a company has product-market fit?
12:46 Speaker 01 I'll take another, one of our newest investments is a company called Ultra. It's a zen, alternative, nicotine-free pouch company that is, contains L-theanine, vitamins, and nootropics to sort of give you that caffeine boost without the nicotine. This company in
13:05 Speaker 01 More likely to north of $75 million in their first full calendar year, which is absolutely insane. I was on a plane last week on my way home from Disney World, which I was exhausted. And the guy next to me, I was next to two kids and the guy across the aisle from me puts it in his mouth. And I had a full one of these in my bag and I said, hey, try this. And he said, what is it? And I explained it to him. He goes, oh, it's cool. I've been trying to get off this. Right. And halfway through the flight, he tapped me on my shoulder and goes, you're now my wife's favorite person in the world. I just quit Zins. I'm an ultra customer for life. Like that's me as product market fit. And then he emailed me after the flight and said, you know, he owned a trucking company. And he said, how can I get this for every one of my drivers? They're all on Zins all day long and all they talk about is how they want to, how they want to quit.
13:49 Speaker 01 You know, it's that natural flywheel of virality.
13:53 David Weisburd? It's that difference between theoretically saying something's good and saying, I want it.
13:57 Speaker 01 Yeah. Now that I want it, I want to tell everyone I know about this.
14:01 David Weisburd? You mentioned that you got a pattern recognition for good founders versus great founders. What's that distinction between an A founder and an A plus founder?
14:09 Speaker 01 There was a term I used earlier this year, functional lunatic. I want people who are functional lunatics, like people who are going to will this business to be successful. It is their dream. It is their desire. It is their want. Like nothing is going to stop them from making whatever they're trying to build a home run. And, you know, if you talk to entrepreneurs, you look throughout the world, like
14:36 Speaker 01 99.9% of the world's most successful entrepreneurs are a little bit crazy, right? But at the same time, they're functional, right? And so like you need functional lunatics to build really big businesses.
14:46 David Weisburd? They have a screw loose, but it doesn't keep them from burning down their company. They, they're able to function.
14:52 Speaker 01 Yeah. I mean, to, to be an entrepreneur, you have to be a little bit crazy, right? You gotta take crazy risks that the vast majority of people won't take.
15:00 David Weisburd? Do you think for those entrepreneurs, it's the absence of fear that most people have, or do you think it's really some pathological mental issue?
15:08 Speaker 01 I don't think it's a mental issue, you know, because I've been an entrepreneur my whole life and I hope people wouldn't meet me and say I have mental issues. But it's also not without fear. I think it's a
15:21 Speaker 01 It's this innate desire to change the status quo, right, to not accept what is out there and to say, there's got to be a better way.
15:28 David Weisburd? Your family is almost a century into the food business and the family wealth has now gone down several generations. You talk about family offices going from risk off to risk on, which your family office is going through. Tell me about that transition. How does a family office transition from risk off to risk on?
15:46 Speaker 01 It depends what generation you're in, right? There's the old adage of rags to riches to rags, right? And if you don't have unlimited money, money's not going to last forever. You know, as you get generation to generation to generation, if the average person has two and a half kids and our family's got many, many more, right? The, while G1 was two people, you know, by G4 can be 45, 50 people. And the slices of the pie get much smaller. And so to sustain a quote unquote family office, you got to increase the asset size, right? Especially as consumption rises and more and more people are becoming part of this. And so you need to figure out what, what do we want to be?
16:31 Speaker 01 You got to think about this in decades, right? Where do we want to be 10 years from now? Where do we want to be 20 years from now? Do we want to be doing the same thing? Do we want to split up, right? By the time you get to G4, G5, you're talking about second and third cousins, right? And maybe it doesn't make sense to have it all under one roof. Look, if you don't have unlimited money and you don't at some point from G1 to G5, transition from risk off to risk on, as the amount of people eating gets larger and the slices of the pie gets smaller, you're not going to have any money left.
17:01 David Weisburd? Family offices are default dead. If they continue to compound at 6, 7%, it's just going to be attrition. And by generation three or four, the wealth will evaporate.
17:10 Speaker 01 I mean, you know, the, the story of rags to riches to rags like, isn't a myth for a reason, right? It exists.
17:16 David Weisburd? It's a math equation.
17:17 Speaker 01 It's a math equation, right? And it's told generation to generation to generation. And I think it's a lot to do with values and how people are raised, but it's also a math equation.
17:25 David Weisburd? I want to double click on that, actually. So you obviously come from a wealthy family, but you have that entrepreneurial drive. You have that entrepreneurial edge. So many billionaires and so many single family offices ask me, David, how do I make sure that my kids are not swallowed? It's like their number one fear. What do your parents do that instill that drive in you?
17:44 Speaker 01 I remember like it was a very conscious and upfront thing of like money's not gonna hook us up, right? Here's how we're gonna act and
17:55 Speaker 01 it's a as much a
18:01 Speaker 01 responsibility and a privilege as it is a good thing to have, if not more responsibility and privilege and to be philanthropic and to give back and to be respectful and the the lesson that I think about consciously and subconsciously every single day is just because you can doesn't mean shit.
18:21 David Weisburd? Tell me about that.
18:23 Speaker 01 You don't need to be loud, right? You don't need to spend everything you have. You don't need to it's just a matter of how you sort of choose to live, right? Where
18:36 Speaker 01 there's a way, in my opinion, and the way I was raised, there's like a respectful way to deal with success. And a lot of people agree with that and some people don't.
18:47 David Weisburd? I had the former CEO of the Walton family, Stephen Roach, and he talked about how giving in a family office is really critical because it provides a purpose for the wealth and for the foundation. Do you think that giving is a prerequisite for building this purpose and in keeping younger generations from just spending all the money on frivolous things?
19:05 Speaker 01 Wouldn't say prerequisite, but I think it's certainly very helpful. I think education is a prerequisite and figuring out like understanding the story, understanding the how, understanding the why, understanding the what, right? If you don't understand where where you came from and how things were built, then you just sort of assume like this is how it's been and this is how it's always gonna be, right? And you don't understand how hard it was to get to where you are, then you don't you sort of take everything for granted.
19:32 David Weisburd? Nate, you have three kids. How are you raising them? And what values are you instilling in them to continue a family's legacy?
19:40 Speaker 01 So I have a five-year-old, a four-year-old, and a one-and-a-half-year-old.
19:46 Speaker 01 My five-year-old is in kindergarten, the one-and-a-half-year-old is not in school yet. Obviously, my four-year-old's in preschool. It's something that we think about, right? And it's teaching them.
19:57 Speaker 01 You know, you get, you have a big birthday party and you get 25 birthday presents. Hey, you don't need all 25 of these things. What do you want to give? Who do you want to give to? Right? It's volunteering. There's only so much you can do with kindergartners and preschoolers. I have those little lessons and the little things you teach them one by one. They add up and they, you know, subconsciously when they're seven, eight, nine, 10, 11, they remember them. And it's these little lessons that they learn at an earlier stage that sort of helps them become really good kids as they get older.
20:25 David Weisburd? There's nuance there because you want to wire their brain in a way where they're not being punished by having to give, but they're enjoying it. They kind of have this intrinsic motivation.
20:33 Speaker 01 Exactly.
20:34 David Weisburd? If you could go back to before you started your first company in the food business and before you started your venture fund, what is one piece of timeless advice you'd give a younger Nate?
20:43 Speaker 01 You know, I was always someone growing up, I did really well in school, I did really well in tests, went to a great college.
20:50 Speaker 01 Coming out of college, I had no idea what I wanted to do. And if you ask me like, hey, what are you good at? What are your skills? Like,
20:58 Speaker 01 I didn't have a clue, right? Like, I don't know, like, what's my superpower? And I didn't know. Out of college, I didn't want to use my network. I wanted to sort of get something on my own, get a job on my own and not use the network that I had. It took me a little while to realize that my network is my superpower. Like, if you talk to people who know me, spend time with me, like, they say, what's Nate really good at? Like, I'm one degree of separation and I just like connecting people. Generally, even if there's no benefit for me, I'm really fortunate that I did discover that, you know, at an early enough age, but telling sort of the college Nate, like lean into that network and cultivate it because that is your superpower that most people don't have.
21:34 David Weisburd? You ever read the book Never Eat Alone?
21:37 Speaker 01 I think I have.
21:38 David Weisburd? I'm preparing for my interview with Keith Farazzi. It's one of the books that really influenced me.
21:43 Speaker 01 10, 15 years ago, I need to read it again now.
21:46 David Weisburd? In many ways, we, we grew up on the opposite side of the tracks. I grew up in Section 8 housing as an immigrant. You grew up, obviously, in a privileged background. But one of the things that I learned early on is that the one thing that a low status person could do is actually connect to extremely high status people. And that is a token that I use over and over to kind of build my network and it's powerful. And it's something that really compounds. As long as you have, there's a lot of rules to it. You have to make sure that's double opt in. You have to make sure that both parties are benefiting. It has to be something where you use a token, you get two tokens back versus use a token and that's gone.
22:16 Speaker 01 And you've done an incredible job of that. This is an overgeneralization, but there's two types of people in this world. There's givers and there's takers, right? And I fully believe myself to be a giver, right? Where I can't tell you how often that I connect people without any clear line of sight of how it's going to benefit me. But I believe that it's all circular and karma is going to come back to benefit me and it's worked out really well.
22:39 David Weisburd? Have you fine tuned your system? A lot of givers burn out and feel taken advantage of. Is this the sixth sense? You know when not to give and talk to me about that.
22:48 Speaker 01 I don't have a system. I think it's like, goes back to my superpower of this like innate ability and like photographic memory to remember where I met someone, how I met someone, what did they do? Who were they connected to? I do think the double opt in is really, really important, right? You know, I, I get in, there's someone I know that often makes connections and introductions without getting a double opt in. And it really bugs me like, because it's often to me and like, it's something that it's a time killer and like a soul crusher, especially from the other.
23:14 David Weisburd? It doesn't benefit anyone, including the person that they introduce.
23:18 Speaker 01 Especially from the other person's side, because if it's, hey, you should meet, you might be like Nathan, Nate runs a venture fund and so and so's running a business. If I'm not interested, it's just like, why even send that email? It's better to stop it before it happens, right? And so I think the double opt in is really, really important.
23:33 David Weisburd? If you could ask for one thing from the community you're always giving, what would be one thing that you, Nate, could benefit from our listeners?
23:40 Speaker 01 Pay attention to the food industry. As I said earlier, in a world that people are so afraid that AI is going to kill us all and, and in the world. What better industry to be invested in than something that literally can't be disrupted by AI, right? These are, for the most part, they're physical products and AI will certainly help and make them more efficient parts of the industry. But you're not going to out AI food.
24:02 David Weisburd? On that note, Nate, thanks so much for jumping on.
24:05 Speaker 01 Thank you.
24:05 David Weisburd? If you found this conversation valuable, please click follow how I invest so that you don't miss the next episode with the world's top investors.
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