What happened to The Very Good Butchers?

Hi,
Mitchell here.

Many of you have been wondering what happened to my former company, The Very Good Butchers. In January of 2023 the company went into receivership (similar to bankruptcy) and then shortly after went out of business. I had been let go close to a year earlier (April 1st 2022). I wanted to quickly share my perspective on the overall journey and what went wrong and ultimately led to this.

I’d like to acknowledge my part in both the rise (and fall) of VGB. As co-founder and CEO I had tremendous say in our decision making and the trajectory of the company. I think we made a lot of very good decisions while building and scaling the business but we also made some poor ones.

Firstly, a massive thank you to everyone who was involved over the years. We've been lucky to have had the most incredible customers, fans, employees, and investors. 

A Promising Start
We got our start on Denman Island. My co-founder James and his wife Tania started the business out of their kitchen making the most incredible veggie meats and selling them at the local farmers market. I tried their products and instantly fell in love. We joined forces and ended up opening the first vegan butcher shop on the west coast of Canada in Victoria, B.C. We had 1000 people show up on our opening day and had to shut down for a week after that just to restock everything. What followed was a few years of incredibly hard work as we slowly built and scaled the business. We launched a Kickstarter campaign to help grow but we still couldn't keep up with demand and ended up going on Dragon's Den. While the deal with the Dragon's didn't end up going through, we ended up raising 600k via equity crowdfunding platform FrontFundr.

An IPO?
In a bit of a surprise move, we decided to go public. We needed more growth capital and a small IPO on the Canadian stock market was one way to do this. We had a great offer on the table and it allowed us to remain in control without having Venture Capitalists own a large part of the company. Beyond Meat had also recently gone public and there was significant retail interest in the sector with very few options available for public investment. The next few years were wild. We IPO'ed at 25 cents a share and ended up going as high as $9.50 CAD, valuing the company at just under a billion dollars (on a few million dollars in sales). In an effort to justify this valuation, we decided to grow like crazy. We raised close to 60M CAD and invested most of it in a large scale manufacturing facility in Vancouver and on expanding the team. Sales grew from 1M to 3M to just under 10M over 3 years. Unfortunately, the market conditions we went public in didn't persist. Almost overnight, investors went from valuing growth at all costs to demanding profitability. In our bid to capture market share and scale, we'd grown too quickly.

Nasdaq
In November of 2021 we uplisted to the NASDAQ. This gave us access to a larger investor base and more opportunities for capital. We raised 30M at the same time. This would also spell the beginning of the end for me. Shortly after our uplisting, our CFO and Board of Directors decided to loan me 500k. I'd been caught on margin and there was a risk that it could have jeopardized our financing. A month later, I repaid the loan in full and with interest. For those not familiar with margin, I'd borrowed money using my company shares as collateral. When the stock traded down and hit a certain point, the loan was called due. In hindsight, this was a foolish move on my part. Believing in the long term potential of the company, I hadn't wanted to sell a single share so thought the margin loan made sense. This upset many of our investors and rightly so. One particular shareholder decided to take further action. He'd been around since shortly before our IPO and has a reputation for getting over-involved with his shareholdings (to their detriment). He was convinced that a management change was required at the company. He'd managed to get his close friend's relative on our board of directors and over the next 6 months they waged a campaign (war) to get me removed. On April 1st, they were ultimately successful and I was terminated. James left at the same time and with that, the heart and soul had been ripped out of the company. Unfortunately There was no clear plan in place for what would happen to the company next and many key employees departed shortly afterwards.

To me, this really underscores the importance of having a good, experienced board of directors. We hadn't put a ton of thought into putting this group of people together and it showed. They had no real stake in the company and didn’t seem to care. They were very susceptible to manipulation and politicking. Despite myself and my co-founder being the two largest individual shareholders (by a long shot), there was nothing we could do.

They went on to make a series of silly appointments and mistakes which ultimately led to the company going out of business less than a year later.

When I left the company, there were two things that needed to be done. Reduce our burn and raise money to get us to profitability. Concrete actions were already being taken to reduce the burn and I was 2-3 weeks away from raising the money we needed to survive. Having raised 60M for the company, I was best positioned (relationships, pitch, etc.) to continue raising them money. With my departure, many of those relationships went out the window.

Salary
There’s a narrative out there that myself and other executives at the company bled it dry. Nothing could be further from the truth. For the first 2-3 years of operation I didn’t take a salary (while pouring my life’s savings into the company). For the next couple of years, I made $15-$25 an hour. Once we went public and the stock took off, our compensation committee and CFO set the salaries and I was making $285,000 a year (yes, a ton of money but in line with industry averages).

The End?
One of the hardest moments in my life was being let go from The Very Good Butchers. Another was when they went out of business. 8 years of blood, sweat, and tears seemingly down the drain. Surely something could  have been done to save the company. We had great products that were highly sought after along with an incredibly engaged community. I did what I could from the sidelines but it was incredibly difficult to watch.

What's Next?
As you may  have surmised from the other content on this website, I’ve started a new company. The Better Butchers. Call it an evolution or love letter to my previous company. There was something there, in that idea of a vegan butcher shop that I couldn’t let die. I’ve teamed up with a former colleague and incredible food scientist Celeste and together we are focused on making meat alternatives from Mycelium (mushroom protein). We’ve built a small but passionate team and I believe the products we are developing will be the next generation (and the future) of plant-based meat. We are also researching cultivated (lab grown) meat technologies. I learnt a lot from my  time at The Very Good Food Company. Lessons I will take to this new company. We are building something sustainable that’s going to be around for the next 20 years. I’d like to invite you to follow along on this new journey. You can subscribe to our newsletter or check us out on Instagram. 

To all of the VGFC shareholders I realize that while many of you made a great return on your investment many may have also lost money when The Very Good Food Company went under. As the largest single shareholder, I was similarly affected. The vast majority of my shares were sold at well below our IPO price once the company was in receivership. I’ve come out of this with just enough to start this new company. 

With the power of hindsight would I have done things differently? Absolutely. I can only take everything I’ve learned and apply it as I move forward in life. At the end of the day we need more people and companies working towards solutions that will remove animals from our food chain and bring forth alternatives that are tastier, healthier, and better for everyone involved.

Thank you for your time spent reading this.

Cheers,

Mitchell Scott

p.s. If you have any questions, comments, or feedback please feel free to send me an email at mitchell@thebetterbutchers.com