Bello to chair venture capital fund

(c) Copyright 2003, The Journal News. All Rights Reserved.

John Bello of Rye – the former chief executive of SoBe who left the company last December just before the announcement of a $1.79 million settlement over sexual harassment allegations at the PepsiCo Inc. division – has landed a new job.

Bello is an investor and the chairman of Quest Capital, a venture capital group dedicated to investing in early-stage health and wellness companies.

He said the fund will be focused on consumer goods, such as food, clothing and personal-care items. Quest will seek out products that can be branded such as health and energy bars, vitamins and minerals and cereals.

Bello was the co-founder of the South Beach Beverage Co., better known as SoBe, which he sold to Purchase-based PepsiCo in January 2001. SoBe, based in Norwalk, Conn., sells nutritionally enhanced teas and juices.

Bello said he and SoBe investors put $8 million into the fledgling alternative beverage business with the lizard logo and sold it to PepsiCo for $370 million.

Bello remained at SoBe until announcing his retirement in December last year. Shortly afterward, the U.S. Equal Employment Opportunity Commission announced PepsiCo had agreed to settle sexual harassment allegations from five women formerly employed at SoBe.

Although the EEOC settlement did not directly implicate any SoBe executives by name, Arnold Lizana, an EEOC attorney, told The Journal News in December that “there’s been solicitation for sex by managers, including high-level officials, including the CEO and CFO” – a reference to Bello and former Chief Financial Officer Norm Snyder of Connecticut.

Both Bello and Snyder have denied the allegations and are pursuing a lawsuit for slander against Lizana.

Sanford Goldman, an attorney for Bello and Snyder, said Lizana “went well beyond the proper scope of his responsibilities by slandering” them. He said their reputations have been seriously damaged, and they are asking for a retraction “in a form which is satisfactory to them.”

“There has been no determination of guilt or wrongdoing by a court,” Goldman said. “These men never had a day in court. They were not part of the settlement.”

A federal judge dismissed the case after it was transferred to the U.S. District Court for the Southern District of New York. That ruling is being appealed to the U.S. Court of Appeals for the Second Circuit.

Both Bello and Scott Eisenstein, a spokesman for Sherbrooke Capital, a venture capital fund in Newton Lower Falls, Mass., that is backing Quest Capital, declined to comment on questions about whether the sexual harassment settlement and the slander lawsuit had been discussed as part of their negotiations to start the new fund. They said they couldn’t comment because it was pending litigation.

Bello will be joined at the venture capital fund by Ed Slade, the former president of Fiji Water, who will be Quest Capital’s president.

Bello said Quest Capital will be operated out of several offices, including his offices in Norwalk and Rye.

Sherbrooke Capital has $100 million to invest in the rapidly growing health and wellness industry, and Bello said he will also put some of his own funds in the mix.

“The one deal we’re now working on I’ve put some of my own money up,” he said, “personal money, family money.”

Bello said he is not working for a salary, but expects to receive compensation in equity for deals Quest makes.

Bello said Quest Capital will fill a need because too many good ideas never get past the critical startup stage because of lack of capital, and limited or narrow management. But he said that Sherbrooke and Quest Capital can work together to change that.

“It’s a good team approach,” Bello said. “You have street-savvy entrepreneurs like Ed and myself working with very smart people who are managing money. It should result in a very good combination that should result in more deals.”

Sherbrooke’s portfolio includes investments in Oregon Chai, a leader in the market for chai tea, a spicy tea.

It also has invested in HealthTech, a developer of non-invasive healthcare devices and tools. Healthtech’s flagship product is the “BodyGem,” which measures how many calories an individual burns.

Bello said Quest Capital will generally work with companies at any stage of development that have annual revenues of less than $10 million.

Bello said the fund hopes to invest in five companies in the first year and could invest as much as $3 million to $5 million in each. Quest is now negotiating a $5 million deal with an all-natural fiber apparel company.

“We’re not looking for turnarounds,” Bello said. “We’re not looking for companies in trouble. We’re looking for concepts on the way up. That can be very risky but also very rewarding.”

Barbara Woller