Contribution margin, not revenue growth
Every conversation with a serious consumer investor starts in the same place: contribution margin after fulfilment and marketing, cohort repeat rates, and payback on acquisition spend measured in months rather than years. Brands that can evidence a 40 per cent-plus contribution margin and a repeat cohort that funds its own growth are financeable today at terms that would have been unavailable in 2023.
Working capital is the real constraint
For most consumer brands the binding constraint is not equity — it is inventory. Growth is funded by stock that must be paid for months before it converts to cash. Solving that with equity is expensive and usually unnecessary: asset-backed and structured facilities exist for exactly this profile, and getting the capital structure right is often worth more to founders than a higher headline valuation.
The omnichannel transition is where value is made or lost
The brands that scale past their owned channel do so by choosing wholesale, marketplace and retail partners deliberately and negotiating terms that protect margin and data. The ones that stall treat distribution as a revenue opportunity and discover the working-capital and margin consequences afterwards. We advise on the sequence as much as the deal.
Commerce infrastructure is the institutional trade
Checkout, subscription, logistics and post-purchase software attract institutional capital more readily than brands, because the revenue is recurring and the exposure is to category growth rather than to taste. For owners of these businesses the strategic buyer universe is broader than most expect, and it moves earlier than sponsors do.
This commentary reflects the views of Avertis Group at the date of publication and is provided for information only. It is not investment, legal or tax advice, nor an offer or solicitation in respect of any security. Forward-looking statements are estimates and may not materialise.