Building One of the Fastest Growing CPG Companies in History | Peter Rahal of David Protein, Medici Brands & RXBAR

David Senra (0:02)

Okay, I want to start with the fact that you sold your previous company for 600 million. You and your co-founder own 90% of it. You find yourself as a very young man with about a quarter billion dollars in cash.

What happens next?

Peter Rahal (0:14)

The natural thing is to get into investing. Outside looking at investing is like very appealing. It's like, one, you think it's an intellectual exercise. The second real thing is like, it gives you a great lifestyle because you're not operating.

You have no organizational responsibility. I started studying investing and getting into it.

David Senra (0:34)

How did you study investing?

Peter Rahal (0:35)

Figuring out asset classes, how to build a portfolio, grow capital, underwriting deals. Are you having conversations?

David Senra (0:42)

You're reading?

Peter Rahal (0:43)

Reading conversations, best books on it.

Then more of my time was spent was on where I had the best advantage, which is in consumer packaged good investing or just privates, so early startups. In stage agnostic, seed to growth didn't matter. And started doing that and quickly realized that the most important skillsets like is charisma or like with whale hunting. It's like finding the deal that is quite obvious and then trying to get an allocation. That's really like the game. And that's quite, quite gay.

Chasing men for allocations is something I didn't want to do. My previous experience was like, I'm going to sit back.

I'm going to spend my time building a product and my product is going to do the talking. Like my product is going to do the work. Where investing, you're taking capital and then you're trying to allocate it into the thing that's going to grow behind the leader that you're going to bet behind. And that's just two hands off for me. Like I'm used to like fighting, being in knife fights and it's just too passive. So investing is very tempting because you can like make a decision and not have to do anything. And it works, like it grows. The big problem I had with it is the feedback loop is super long. Like in building and operating a business, you make a decision, whether it's a hire, whether it's a product decision, marketing, and you get the feedback right away. Like the feedback loops, it's like immediate. Where in investing, it's like you can develop a thesis, develop this, underwrite this founder as really great. And then you like make a decision and like, all right, five years go by, did it work or not?

David Senra (2:30)

So you're living where when you sell Rxbar?

Peter Rahal (2:32)

Chicago.

David Senra (2:33)

Okay, you have this huge acquisition, you have a bunch of cash. This is when you moved to Miami?

Peter Rahal (2:36)

Yes.

David Senra (2:37)

You moved to Miami before?

Peter Rahal (2:38)

No, after.

David Senra (2:39)

Okay, after. So now you have the money and now you're like, okay, I'm gonna, I have a bunch of money. You start, you had this ridiculous idea, this is your own words, because when we were hanging out a few weeks ago, you said, I had a ridiculous idea of starting a family office. Yes. So you moved to Miami and you're like, I'm gonna start a family office. Okay, explain that part.

Peter Rahal (2:55)

So I was in Chicago and I just needed change. I needed to like change environment. Rx was my identity, I just got divorced. So I looked at the United States and I was like, where's the best place to go?

David Senra (3:04)

Wait, wait, the divorce part, the divorce happened after the acquisition?

Peter Rahal (3:08)

Yeah.

David Senra (3:08)

Was it anything related there? Were you under a lot of stress?

Peter Rahal (3:11)

No, just hubris.

David Senra (3:13)

Say more about that.

Peter Rahal (3:14)

I had success bias where everything I'd done has been successful and so there's blurred lines between your personal and professional and I just moved too fast, thought it was going to be easy. Yeah, because my goal is to have a family, so like career, success, accomplished, next thing's family.

David Senra (3:29)

And you try to speed run?

Peter Rahal (3:30)

Yeah, it went way too fast. And thinking I'm really good.

David Senra (3:36)

So this is, if I remember correctly, me, Mary, divorce all in like nine months?

Peter Rahal (3:42)

Yeah.

David Senra (3:42)

Okay.

Peter Rahal (3:43)

I beat Kim Kardashian. Okay.

David Senra (3:47)

So you moved to Miami. I'm going to invest. And then what I really want to get into is the fact that you are uniquely unsuited to invest. Like all the other founders I know that I asked about you is like this guy is just like a relentless animal operator. Like the idea that he could think that he could sit and be like the guy behind the guy.