Investing Billions - E332: Why Family Offices Must Go Risk-On or Go Broke

Episode Date: March 24, 2026

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.

Nate, so your family operating the food business for nearly a century before starting a family office. What did that teach you about building enduring franchise? 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 misline incentives are not the way to build enduring businesses in this industry or in life for that matter. 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. 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 seven to ten years saying, hey, here's what we're really good at, and we're going to lean into our expertise. And we can still outsource the 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. 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 insourced that and you outsourced everything else. What exactly did you insource and what did you outsource? We said we're never going to make alpha trade in 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 real house, 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 a, these shoes before we 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. But we, I'd say the past seven to 10 years have flipped to be a much more hands-on operator perspective. And we sort of

view ourselves as 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. 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 that might be biotech, for somebody else that might be venture. They absorb as much alpha as they can, and then they have 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 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 work. You know, as family alias, 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 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 fruit 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

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how I invest. So let's talk about your food and beverage and investments. You were in the seed round for Oli Pop. Tell me about how that came about. And how did you go about building your position? 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 flow 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, there's a lot. is going to be a portfolio approach. We're going to write a bunch of small checks into a bunch

in early stage companies. In hindsight, I wish I wouldn't have viewed as a portfolio approach and written every dollar I had 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 triple down and we've written a significant amount of this company. 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 end degree. and it's a multi-billion dollar operation at this point. You decided to essentially spin out barrel ventures,

which is a food and beverage VC from the family office. Tell me about that decision. The first check we wrote was in OLLIVOP. And it's sort of spied from there. At its core, I think, as I've said, I'm an operator and the family's operators, right? And so we would invest in these companies, and just because of our expertise in the network we have,

we'd provide a ton of value. And so that spiled from Oliop and was approached years later by some people who said, 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 vertical that we know better the most. And that was the broader food world. So pre-farm, a post-fork, and everything in between all of our LPs, our families, corporate execs, kind of throughout this 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 in the cap table. You do something that's quite unusual, despite many GPs talk about it. You leverage your LPs almost better than anyone that I'd talk to. Talk to me about how you leverage your LPs. How do they actually provide value in barrel ventures in your franchise? We invest pre-farm to post-fork and everything in between. Likewise, our LPs,

These are, we've got everyone from ingredients companies, packaging businesses, large 3PLs, 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 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. You're the only investor who's added more ARR than the metrics size and multiples of it.

which makes me feel great. Are you able to go top of the funnel and leverage your LPs for diligence and de-risk before you even invest? Or is it's just some value add after? 100%. 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, you know, their prospective customer. 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? 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 business to a massive amount. In the world of gLP ones 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 olive pop, right? Nobody thought that the world needed another soda. You know, they created this better for you soda category that is now a multi-billion dollar year category. category, right? Poppy was sold for $2 billion. You know, Holly Poppe 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? Craft had a monopoly. Then you've got Goodalls 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. To play devil's advocate, isn't food more of a private equity player? You have low margins. You Yeah, very capital intensive. Why is it a space for a venture? That's a good question. If you look at beverage, for example,

over the past 15 years, there have probably been 20 multiple billion dollar outcomes in beverage alone, right? These businesses, sometimes, a lot of times they can get to profitability earlier, right? So simple mills sold for $800 million, but it 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 hours of capital, a six or $700 million exit, which is a home run, can have the same sort of return profile. It's another way. There's still room for these 100x,000 X returns.

There might be a smaller universe, but there's also a smaller amount of funds going after that universe. Absolutely. Support for today's episode comes from Square, the all-in-one way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running boutique, or managing a service business, Square helps you run your business without running yourself into the ground.

I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Check out is fast, receipts are instant, and sometimes I even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. Experience is smoother for them and it's smoother for me as a customer. Square makes it easy to sell wherever your customers are, in store, online, on your phone, or even at pop-ups,

and everything stays synced in real-time. You can track sales, manage inventory, book appointments, and see reports instantly, whether you're in your shop or on the go. And when you make a sale, you don't have to wait to get paid. Square gives you fast access to your earnings through Square checking. They also have built-in tools like loyalty and marketing, so their best customers keep coming back. And right now, you can get up to $200 off Square hardware

when you sign up at square.com slash go slash how I invest. That's SQU-U-A-R-E dot com slash go-slash how I invest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square.

Get started today. Support for today's episode comes from Square. The all-in-one way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself

into the ground. I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Check out is fast, receipts are instant, and sometimes I even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. Experience is smoother for them and it's smoother for me as a customer. Square makes it easy to sell wherever your customers are, in store, online, on your phone, or even at pop-ups, and everything stays synced in real time. You can track sales, manage inventory, book appointments, and see reports instantly, whether you're in your shop or on the go.

And when you make a sale, you don't have to wait to get paid. Square gives you fast access to your earnings through Square checking. They also have built-in tools like loyalty and marketing, so their best customers keep coming back. And right now, you can get up to $200 off Square hardware when you sign up at square.com slash go slash how I invest. That's SQUA-R-E dot com slash go slash how I invest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square. Get started today. Support for today's episode comes from Square. The all-in-one way for business owners to take payments, book appointments, man and staff, and keep everything running in one place.

Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Check out is fast, receipts are instant, and sometimes I even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. Experience is smoother for them and it's smoother for me as a customer.

Square makes it easy to sell wherever your customers are, in store, online, on your phone, or even at pop-ups, and everything stays safe. synced in real time. You could track sales, manage inventory, book appointments, and see reports instantly whether you're in your shop or on the go. And when you make a sale, you don't have to wait to get paid. Square gives you fast access to your earnings through Square checking. They also have built-in tools like loyalty and marketing, so their best customers keep coming back. And right now, you can get up to $200 off Square hardware when you sign up at square.com slash go slash how I invest. that's S-Q-U-A-R-E dot com slash go slash how I invest.

With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square. Get started today. Last time we chatted, you really stressed the importance of seeing a thousand deals before making a decision. Tell me about that. This is a world of a pattern recognition, right? And so when I first got into this industry, I was naive. and you think everyone is the smartest person in the room

and you think everyone is going to change to the world. When you see 1,000,000, 2,000 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 100% of the time, but you start to recognize that there are certain characteristics of founders and certain traits in founders

that you recognized with Alipop 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? What are the things that people are seeing 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? What does product market fit look like at its very early stages? How do you know that a company has product market fit? I'll take another, one of our newest investments is a company called Ultra It's a Zinn alternative nicotine-free pouch company that contains Lthianin vitamins and neutropics to sort of give you that caffeine boost without the nicotine. This company will likely do north of $75 million in their first full calendar year, which is absolutely insane.

I was on a plane last week. I'm my home from the 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, put his in his mall. And I had a full one of these in my bag, and I said, hey, try this. He said, what is it?

And I explained to him, he goes, cool, I've been trying to get off this, right? And halfway through the flight, he taps me on my shoulder and goes, you're now my wife's favorite person in the world. I just quits in. I'm an ultra customer for life. Like, that's a 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 everyone of my drivers? They're all on zins all day long and all they talk about is how they want to quit. You know, it's that natural flywheel of virality. It's that difference between theoretically saying something's good and saying I want it. Yeah. Now when I want it, I want to tell everyone I know about this.

You mentioned that you got a pattern recognition for good founders versus great founders. What's that distinction between an A founder and A plus founder? 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, look throughout the world, like 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. They have a screw loose, but it doesn't keep them from burning down their company. They're able to function. Yeah. I mean, to be an entrepreneur, you have to be a little bit crazy. You've got to take crazy risks that the vast majority of people won't take. 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? I don't think it's a mental issue, you know, because I've been an entrepreneur my whole life. And I hope people would meet me and say I have mental issues. But it's also not

without fear, I think it's a, 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. Your family is almost a century into the food business, and the family wealth has now gone down several generations. You talk about family office is 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? 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

and generation, if the average person has two and a half kids and our family's got many, many more, right? While G1 was two people, you know, by G4 can be 45, 50 people. And the slices the pie get much smaller. And so to sustain a quote-unquote family office, you've got to increase the asset size, right, especially as consumption rises and more and more people have becoming part of this. And so you need to figure out what do we want to be? You've 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? 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 the pie gets smaller, you're not going to have any money left. Family offices are default dead. If they continue compound at 6, 7%, it's just going to be attrition. And by generation three or four, the wealth will evaporate. I mean, you know, the story of Rags to Richers to Rags, like, isn't a myth for a reason, right?

It exists. It's a math equation. 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. 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 spoiled? It's like their number one fear. What did your parents do that instill that driving you? I remember like it was a very conscious and upfront thing of like money's not going to fuck us up. Right. Here's how we're going to act. And it's a as much a 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 lesson that I think about consciously and subconsciously every single day is just because you can doesn't mean you shit. Tell me about that. 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 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. 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 keeping younger generations from just spending all the money on frivolous things? I 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 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 going to 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. Nate, you have three kids. How are you raising them and what values are you instilling in that? to continue a family's legacy? So I have a five-year-old, a four-year-old, and a one-and-a-half-year-old.

My five-year-old in kindergarten, one-and-a-half-year-old is not in school yet. Obviously, my four-year-old is in preschool. It's something that we think about, right? And it's teaching them, you know, you get, you have a big birthday party, and you get 25 birthday presents. Hey, you don't need all 25 with these things. Where do you want to give? Who do you want to give to, right?

It's volunteering. And there's only so much you can do with kindergartners and preschoolers, right? With those little lessons and the little things you teach them one by one, they add up and they, you know, subconsciously, when they're 7, 8, 9, 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. 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. Exactly. If you could go back to before you started your first company and the first, food business and before you started your venture fund. What is one piece of timeless advice you'd give a younger, Nate? You know, I was always someone growing up. I did really well in school. They did really well in tests once in a great college. Coming out of college, I had no idea what I wanted to do. And if you asked me like, hey, what are you good at? What are your skills? Like, I didn't have a clue, right? Like, I don't know. Like, what's my superpower? I didn't know.

Out of college, I didn't want to use my network. I didn't want 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, you 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 for that. You know, I had 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. You ever read the book? Never eat alone? I think I have.

I'm preparing for my interview with Q. for Azi. It's one of the books that really influenced me. 10, 15 years ago, I need to really get now. In many ways, 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.

That is the token that I used over and over to kind of build my network. 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 the token, you get two tokens back versus use the token. Now it's gone. And you've done an incredible job with that. This is an over-journalization, but there's two types of people in this world. There's givers and their takers. 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 up really well. Have you fine-tuned your system, a lot of givers burn out and feel taking advantage of. Is this a six sense you know when not to give? And talk to me about that. 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 do they do? Who are they connected to? I do think the double opt-in is really, really important, right? You know, 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, into me and like it's something that it's a time killer and like a soul crusher especially from the it doesn't benefit anyone including the person that they introduced especially from the other person's side because if it's hey you should meet you might be like Nathan run 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 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.

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 in the world, what better industry to be invested in than something that literally can't be disrupted by AI? 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. On that note, Nate, thanks so much for jumping on.

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