What to do when your business loses money – lessons from Ārepa’s $2M comeback

Pictured above: Angus Brown.

From hyper-growth to near-collapse, Ārepa co-founder Angus Brown shares the hard lessons, tough calls and strategic pivots that helped steer the business through crisis and back toward stability.

In the volatile world of New Zealand food-tech, few stories are as educational as that of Ārepa. Founded in 2012 by university friends, the brand became a supermarket staple as the “brain drink” backed by clinical science. However, following a period of hyper-growth where revenue doubled year-on-year, the company faced a “perfect storm” in 2023: A high-profile regulatory crackdown on health claims followed by a costly product recall.

Co-founder Angus Brown recently shared the highs and lows of the brand’s growth story on an episode of Notes From The Executive. In a raw and reflective conversation, he shared the hard-won lessons of navigating a public “smear,” restructuring a team from 23 down to seven, and how to manage a business when the bottom line takes a hit.

During the conversation he spoke to four lessons on recovering from and turning around a business after a significant loss.

1. Audit your “moat” and intellectual property

When revenue drops, Angus says your value lies in what you own that others cannot copy.

• Identify defensible assets: He explains how Ārepa’s patent-protected formula and unique research provided a “moat” that kept the business alive when competitors emerged.
• Pivot to high-value IP: Instead of just selling a finished beverage, Ārepa pivoted toward a “molecule business”, centering on the discovery of a unique compound called Saramitosin.

2. Radical financial restructuring

If your business is losing money, he suggests moving toward “break-even” profitability immediately.

• The funding rule: His number one piece of advice for founders: “Raise a lot more than you think”. He explains why small rounds leave no room for crisis.
• Strategic partnerships: In the episode Angus shares how Ārepa reduced overhead by licensing its beverage business to a larger manufacturer, shifting the risks of sales and manufacturing to a partner.

3. Reputation and damage control

A financial loss is often tied to a loss of credibility. To win it back, you must double down on what makes you credible.

• Publish the proof: Following their public setback, the team published three more clinical studies to prove their formula was “informed by studies” and “backed by science”.
• The hard phone calls: Angus details the challenging conversations he had to have with shareholders to ensure they continued to back the vision during the “kerfuffle”.

4. Managing the “uncontrollables”

Business loss takes a heavy toll on a founder’s mental health. Angus’ strategy for handling extreme pressure includes:

• Focus on the controllable: Learn his method for letting go of what you cannot control to focus entirely on execution.
• The “reset” button: He discusses how picking up his children from daycare served as a grounding moment where business problems “didn’t even matter anymore”.
• Physical Resilience: Discover the specific habits – from breath work to “drinking his own product” – that Angus used to keep his mind sharp during the company’s darkest hours.

Want the full story on how to navigate a business through a crisis? Watch the full episode with Angus Brown here.