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Sold for $600 million, miserable
Moving to Miami
Peter Rahal moved from Chicago to Miami after the sale of RXBAR, planning a reset and a family office. Investing looked like an intellectual exercise with a good lifestyle, since there was no organization to run. In practice, the game turned out to be finding the obvious deal and then chasing an allocation, which he disliked.
The slow feedback loop
The feedback loop was the other problem. In operating, a hire or a marketing decision shows its result right away, while an investment bet takes years to reveal whether it worked. He had also assumed every founder shared his tenacity, and he kept ending up as the one pointing out the problems, the person saying the car is on fire. In his view, that is a bad sign in an investor and a founder relationship.
Back to what he knew
He felt like he was on the sideline with all his anger and drive and nowhere to put it, and reporting on a portfolio gave it nowhere to go. It took about a year, from 2020 to 2021, to admit how miserable he was. After that came about three years of convincing himself to return to what he knew, protein bars, at 34.
Why do investment results take years to show?
A venture fund commonly runs on a ten-year life, because the companies it backs often need many years to reach a sale or public listing. Psychologist Robin Hogarth described kind learning environments, where feedback is quick and accurate, and wicked ones, where it is slow or misleading. Running a business gives daily signals such as sales and customer reactions. Investing returns its verdict on a decision years after it was made.
How did RXBAR get its start?
Peter Rahal and Jared Smith started RXBAR in 2013 in Chicago with a plain idea: print the ingredients on the front of the package, such as egg whites, almonds, and dates. The bar grew quickly through specialty and grocery stores. Kellogg announced its purchase of RXBAR in October 2017 for a reported $600 million.
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