The Consumer VC takes a look into early-stage consumer investing and venture capital. If you are interested in learning about consumer trends, have a b2c business and interested in learning about the fundraising process at the early stage, you have come to the right place.
Mike interviews some of the top venture capitalists in the world that focus on B2C and consumer type companies or have a deep track record investing in these categories such as marketplaces, SaaS, social, CPG and non-tech subscription.
Mike also interviews founders that are building some of the most disruptive consumer facing companies in the world. The conversation usually includes the insight the founder discovered, fundraising strategy, and the pitch.This podcast also includes bonus episodes. Each bonus episode dives into a particular subject that might not have to due with the fundraise or venture capital, but still would be helpful to founders. For example, a bonus episode on brand strategy or how to construct a board of directors. All bonus episodes will be clearly labeled.For all episodes, please visit www.theconsumervc.com. For updates, you can follow @mikegelb on Twitter.
Brian O’Malley (Forerunner Ventures) - How he’s investing in the empowerment economy, the evolution of consumer venture capital and raising $1 billion fund
Our guest today is Brian O’Malley, Partner at Forerunner. Forerunner is one of the top consumer venture capital firms that tirelessly champions founders who deliver the innovation they demand. Some of Brian’s investments include Sunday, Canal and Dumpling. Recently they raised $1 billion for Fund 6. We discuss how Forerunner’s thesis has evolved over the past few years, what is the empowerment economy, and current valuation and venture climate today.
How do you define investing in consumer today?
It seems as though Forerunner’s thesis has evolved from only investing in pure consumer companies to ecommerce enablement/B2B, along with other funds that primarily focus on consumer. Can you talk about why the transition?Is part of the reason why because it’s harder than before to pick brands that could generate great returns?
What is the empowerment economy?
In your article “Empowering Main Street”, you mention how OpenTable and Yelp achieved massive local market share, but they weren’t embraced. What do you mean by that and how do identify if a company you’re looking at is being embraced? Partnering up with their customers
Did COVID at all change your thesis when it came the your empowering economy thesis?
When you’re looking at empowering SMBs or bringing them online, when does a white label option make sense vs. a standalone application?
I certainly understand the push for consumers wanting to shop local, but isn’t partly what killed local stores that they couldn’t compete on price with the Walmarts / Targets? How do you think about consumer price sensitivity?
When you and your conduct your consumer insights research, how do you make sure there’s alignment with what people say and how they act?
What are some of the differences between investing and evaluating a business where an SMB is the customer rather than the customer?
How do you also think about the current venture landscape when it comes to valuations?
There’s been a lot of chatter about some of the more high-profile companies folding and there’s been a debate about who is responsible - could the board have guided the CEO to cut burn for example. After you invest, what do you think about a board’s role and board construction?
What’s one thing you would change about VC?
What’s one book that has inspired you personally and one book that has inspired you professionally?The Wright Brothers book
Shoedog by Phil Knight
What’s the best piece of advice that you’ve received?
John Timar (Kill Cliff) - Why they doubled down on their core audience in times of doubt, How the Navy SEALs inspired the creation of the brand, and His approach to partnerships for growth
Our guest today is John Timar, CEO of Kill Cliff. Kill Cliff is America’s best-selling clean energy drink and the official drink of the Atlanta Braves. We discuss how the Navy Seals impacted John and led the founding of Kill Cliff, some of the creative marketing initiatives Kill Cliff has done the past few years including a partnership with Joe Rogan, why at one point they considered a rebrand, and how they doubled down on their core audience and release new SKUs. Without further ado, here’s John.
Why did you want to be a Navy SEAL?
What was the hardest part of becoming a SEAL?
What did you most learn from that experience?
How was the transition to civilian life?
How was the transition from SEALs into business?
What did you first do after the SEALs?Don’t have the community
Why did Todd Ehrlich found Kill Cliff? What was the insight? How did you know Todd?
When you say lost its way, give an example of something that the company did that was inauthentic to the brand?
What were some of the challenges going from enterprise to consumer?
How is it a better alternative to what’s out there?
What’s been the low points and tough moments within Kill Cliff?
When did you get involved? Why did you get involved? What was your first role?
How do you approach distribution since I’d imagine the Red Bull probably try to block you?
You were able to recruit John Brenkus as your CMO. How did you convince him to join and what has been the impact?
How do you approach partnerships?
What is Kill Cliff fight club?
When did you decide to get into CBD and why?
What’s the perception of energy drinks?
How did you raise capital?
Why were you promoted to CEO?
With your partnership with Rogan, has the controversy around him had any affect with Kill Cliff?
How do you approach new flavors and products?
One piece of advice?
Patrick Chun (Juxtapose) - What is an inception stage investment firm, why it’s less risky than modern venture capital, how he recruits CEOs to lead each business he incubates
Our guest today is Patrick Chun, Founding Partner of Juxtapose. Juxtapose is an inception stage investment firm. Some of the companies that they founded include Tend, Care/of, and Dayforward. Their process for how they build companies is pretty unique for this show. We discuss their model, why their model is less risky than traditional venture capital, and his process for finding the right CEO to lead each business. Without further ado, here’s Patrick.
What is Juxtapose? What was the initial insight or prior experience that influenced your decision to found it? Why did you choose to found it?
Why do you believe your model is less risky than traditional venture capital?You are incubating
When you say do the work, what do you mean?
What’s your process identifying an observationTrue verifiable fact in the world
Lots of observation
How many observations do you have a week
Insights you can pull off of an observation
Track 500-1000 observationsTalk about 50-100
What’s your process for building businesses step by step – from the ideation stage to creating beta products / product is in market?
Recycled and reentered the funnel
How do you think about timing as well?
Obsolete assumptionYou can never have an investor home
When do you bring on an experienced CEO and team? How do you think about that process?What are qualities you’d like to see from the CEO?
From 0 to 10 at what stage is the company in when you bring on a CEO?
How do you source “Michael Jordan” CEOs? If they are the Michael Jordan’s, what typically get them excited to join the company - since I’m sure they get alot of offers to lead different teams?Can it be difficult to attract since these companies are still small?
How do you hire the team?
Once a company has a CEO, how do you think about the role of Juxtapose moving forward with the business?The best supporter of the company from 0-200 people
Is the shift from operator to more of board member/observer type role?
Do you ever get the itch to become a CEO of one of your companies?
How do you approach hiring for your studio? Are you looking for people who have operational experience or more investor experience since it seems the studio model is at the intersection of both?
What are the challenges with the studio model? What can get overlooked?
What are the shortcomings of the venture studio model or what do studios tend to struggle with?
Was there a prior experience that led you to want to build a different type of firm than traditional VC?
What’s one thing you would change about venture capital?
What’s one book that inspired you personally and one book that inspired you professionally?4,000 weeks Oliver Burkman
What’s the best piece of advice for founders?What is it that people will see in the market and if you’re right
Patrick Schwarzenegger (MOSH) - Why he's creating the tools for a "mindstyle" lifestyle, why he co-founded a brain bar brand and how he got into angel investing in health and wellness brands
My guest today is Patrick Schwarzenegger, CEO and cofounder of Mosh. Mosh is a brain wellness brand co-founded by both Patrick and his mom, Maria Shriver. They’re on a mission to change the conversation about brain health through food, education, research and providing the tools for a "mindstyle" lifestyle. Patrick is also an actor, angel investor in a number of health and wellness brands. We discuss what attracted him to innovation within health and wellness, how he became interested in investing, what he looks for in companies and the founding story of how he and his mom founded Mosh. Without further ado, here’s Patrick.
What was your initial attraction or introduction to investing in consumer brands and consumer technology?
How would you describe your due diligence process as an investor?What’s your process for discovering new brands and having a pulse on the latest trends? Do you consider to be more top-down or bottom-up?
What are trends within CPG that you’re particularly excited about and a trend that you think is maybe past its prime or no longer special?
Is there any common threads that you’ve seen when it comes to what makes a successful founder or company? KPIs that stand out?
How early do you typically write a check in a company?
For your investments that didn’t work out. What tended to be the reasons why the companies failed?
What were your takeaways from Expo West?
How do you spend your time? You’re a CEO, actor, active angel investor, how do you juggle it?
How do you also think and analyze brands that are co-founded by celebrities and people of influence?
How did you found Mosh with your mom, Maria?
What was the pain point you both wanted to solve?
How did you approach building the product?What’s the goal of the brand?
Currently, you’re only selling online. Are we going to see Mosh in retail channels? How do you think about what the right channels should be for Mosh?
How do you juggle being CEO and also an actor?
What’s one thing you would change about the fundraising process or venture capital?
What’s one book that has inspired you personally and one book that has inspired you professionally?Number one book - Atomic Habits
What’s the best piece of advice that you’ve received?
What’s one piece of advice that you have for founders?
Ariana Thacker (Conscience VC) - What it means to invest in deep tech x consumer, How she raised her first VC fund, and Her definition of a moat
Our guest today is Ariana Thacker, founder of Conscience VC. Conscience invests into early-stage & science-led consumer startups. We’re going to discuss why science-led consumer startups is contrarian in itself, what are real tangible defensible moats, and her approach to fundraising her first fund.
Why did you want to break into VC?
Why did you decide to start your own fund?
What was the fundraising process like?
How do you partner with founders?
What’s your approach to portfolio construction and fund construction? I.e. are you more concentrated or less concentrated, what are your Gen-Z apprentices role within the fund / scout program
What do you mean by the intersection of deep tech and consumer?
How do you think about defensible competitive advantages?
Walk us through why you invested in Nimbus or gained conviction?
How far along does a founder need to be in order for you to be at your stage?
Are there specific categories that you mostly focus on?
What are some of the challenges investing in deeptech? Why do alot of fund managers stay away?
What’s your approach to sourcing opportunities?
Go through multi pronged approach
What’s one thing you would change about venture capital?
What’s one book that has inspired you personally and one book that has inspired you professionally?
4 agreements - dont personally, dont make assumptions, always do your best, be impeccable with your word
Disciplined entrepreneurship ->
What’s the best piece of advice that you’ve received?
Paul Voge (Aura Bora) - Why he decided to found a sparkling water company with weird flavors, How he entered retail during COVID, and What perception he would change when founding a CPG business
Our guest today is Paul Voge, one of the founders and CEO of Aura Bora. Aura Bora is sparkling water made from real herbs, fruits, and flowers for earthly tastes and heavenly feelings. The flavors are definitely one of kind and different like Lavender Cucumber, Cactus Rose, Peppermint Watermelon. I was skeptical at first but when I tried it, I must say I LOVED it. My personal favorite is lemongrass coconut. Paul has a pretty fascinating story about how he started and his approach to building a sparkling water company with out-there wacky flavors that are delicious.
How would you define your relationship with Sparkling water before you started a sparkling water company?
Did you always want to be an entrepreneur?
What was the “aha” moment?
What was the first flavor you LOVED that you felt you perfected?
How did you think about different flavor profiles/expanding SKUsI had Seth on last week
How did you think about experimenting with flavors? Was this something you did yourself, did you hire/partner with a food/drink scientist?
You didn’t have any experience within CPG. How did you go about building your network?
Why invest in beverage brands?
What was the hardest part fundraising?
How do you think about ads?
When did you feel like you were on to something?
At what point did you quit your job?
What was your distribution strategy? Was it to start DTC and then go into retail or go into retail from the getgo?
How did you get into Whole Foods?
Why did you move from Boulder to San Francisco?
What were some of the things you had to pick up on quickly since you didn’t come from CPG prior to starting Aura Bora?How much should you spend in tradespend?
You were in SKUs accelerator, what was so valuable about that experience?
It’s March 2020. COVID happens and your cranking, trying to get into stores. Walk us through what’s happening during that time?How did you approach developing relationships with stores during that period?
How did COVID change your distribution approach?
We talk to a number of CPG retail investors on this show that emphasize it’s all about velocity rather than the total number of stores you’re in. What’s good velocity to you? How do you measure success?
Why did you decide to go on Shark Tank? What was that experience like?Was the intent always to take a deal no matter what?
What was your approach to raising a fundraising round?
How do you think about SKUs and flavor approach today? What’s the strategy?
What’s one thing that you’ve been surprised in the consumer response - could be positive or negative. Negative could be more interesting.
What’s one book that has inspired you personally and one book that inspired you professionally?Seth Goldman - Mission in a Bottle
Mark Rompolla - Build Something Great
The Last Lecture
What’s the best piece of advice that you’ve received?Amateurs talk strategy, experts talk logistics
What’s one thing you would change about the CPG industry?
Whether you’re well established in the VC world, or just getting started, this is a must-listen podcast for you! Mike does an incredible job leading engaging conversations with industry leaders who’ve actually experienced success themselves and every. single. episode. is jam-packed with helpful takeaways. Highly recommend listening and subscribing!
I ALWAYS LEARN SOMETHING.
I’ve been a CEO for decades and have started several startups. But I always learn something from each episode of The Consumer VC.
As good CEO is always studying his/her craft. That means ongoing reading, listening, and watching experts. Mike has them on in an entertaining format but very, very informative. Beside each person’s launch history and delving questions about practical tactics and overall strategies, I particularly like the book recommendations that are highlighted. And I always gain insights, even after decades of launches. Thank you.
Great Pod for Founders and investors in CPG
Amazing guests, great insight, highly recommend!