Consumer VC: Venture Capital I B2C Startups I Commerce | Early-Stage Investing I Brands | Technology

On today’s episode we’re talking about cooking oils. Thank you Craig Shapiro for the introduction to our guest today is Jeff Nobbs, who is the founder and CEO of Zero Acre Farms. Zero Acre Farms is on a mission to remove destructive vegetable oils from the food system. Zero Acre Farms is an oil that’s instead made from fermentation. Some of the questions I ask him: When did you start to care about health and the science of nutrition? You’ve started quite a few businesses before and you’ve been very successful. When did you start thinking about alternatives to vegetable oil? What is the origin of vegetable oil? How did you land on microorganisms and fermentation? What were other processes you were considering? Can you walk us through the process? What’s been the challenging part on the R&D side? How do you think about your competitive advantage? Why did you choose to raise $37 million? How were you able to raise it? What resonated with investors? What’s the most expensive part to Zero Acre Farms? Have you seen tech investors shift away from investing in CPG or only in CPG where there isn’t product innovation? How do you approach the price point? With innovation comes a premium. How do you think about premium pricing vs. maximum impact? There’s kind of a bifurcation within better for you products – do you value products that are better for the planet or products that are better for your body, It’s hard to create products that can fill both those requirements. How do you think about it since you’ve been an entrepreneur within health and wellness for a long time? What were some of your lessons learned since you started a CPG brand before and a restaurant before that has impacted how you think and operate Zero Acre Farms? What’s the company you most admire (Craig Shapiro asked this question)? How do they impact you? What is the vision for Zero Acre Farms? What will be the most challenging to fulfill that vision? What’s one book that has inspired you personally and one book that’s inspired you professionally?The Three-Body Problem Think and Grow Rich The History of the World What’s the biggest piece of advice to founders?

My guest today is Mark Achler, who is a serial entrepreneur and Managing Partner at MATH Venture Partners. Recently he published his book that he co-wrote with Mert Iseri called Exit Right. which is about how to position and think about a successful exit way before it happens. So on this episode, we discuss how to Exit Right. What were your biggest learnings from those interviews in “Exit Right” Trust - we wish CEOs would come to us before Is there misalignment between VCs and founder/CEO How should you go about picking the right investors? Seems like there’s kind of a one way street when it comes to acquisitions with VCs and founders. It’s ok if the VC thinks about it and as it analyzes investing in certain companies, what an exit could look like, but founders aren’t allowed to talk about it or bring it up at all when they pitch because it means they “aren’t focusing on the growth of the business”. Do you both think there is a disconnect and a certain awkwardness that exists in these discussions? When should founders start to think about building relationships with corporate development teams? What were your learnings after you conducted these interviews and conduct this research project? In the FAIR framework, you emphasize how culture and values are critical for success. But it’s hard to know if the culture is the right culture for the team. How do you suggest founders understand the culture of the potential acquirer? On the fit question, what do you think about culture? How do decisions get made? What are your values? Is there a place where you want to live? Waterfall distribution - how much money goes through which share of class Should founders accept money from corporate VCs? We also talk about being aligned with your VCs. Of course, VCs are looking at a particular exit horizon. It could range from 5-10 years. Of course, it’s hard to know how the company is going to pan out and when you should start shopping for exits when it makes sense. How do you make sure you have alignment as a founder when you’re approaching VCs? How do you make sure it’s not a phishing expedition? I had on a founder who was building the business for acquisition and what that meant to him was growth at all costs, but it didn’t happen and he had to pivot to make the business sustainable and profitable. When you do build relationships with corporate development, should that impact how you build your business? What are ways founders can ensure they aren’t going on a fishing expedition? What are common mistakes founders make in the diligence process? What’s one book that has inspired each of you personally and professionally? What’s one piece of advice that you have for founders?

Our guest today is Justine Palefsky, Co-founder and CEO of Kindred. Kindred is the trusted home swapping network and harnesses the power of community to allow you to travel more for less. We discuss the opportunity within travel and house swapping and how to construct a marketplace where one unit of supply equals one unit of demand What is Kindred? How did you both meet? Did you both always have the intention of founding a business? When was the aha moment that led to Kindred? How is Kindred different from other home swapping sites? What was your first test to test this theory that people would be open to a house-swapping community? Why did you think you both would make good co-founders for this business? How did you first construct Kindred? It started off as a private Instagram group, right?What did you learn from that experience? How did you think about the marketplace dynamics in this type of business? How did you decide how to monetize since this is actually quite a complex business? Once you’re part of this private community, how do you incentivize people to actually house swap? Monetization. How did you approach? How did you approach fundraising? What are typical demographics? How do you approach customer acquisition? What was your approach to fundraising?When did you begin fundraising? What were the biggest reasons for passing? What did investors like the most about this business? Now that the world is beginning to open back up, how do you think about change in consumer behavior and scale?Were people doing house swaps during the height of the pandemic? What’s one thing you would change about fundraising? What’s one book that inspired each of you personally and one book that inspired each of you professionally?Undaunted Courage by Lewis and Clark The Courage to be Disliked What’s the best piece of advice you’ve received?

Our guest today is Juan Pablo Cappello, founder of Nue Life. Nue Life is a mental wellness company that offers in-home ketamine therapy. This was a fascinating conversation about where our current healthcare system has failed us with the wrong incentive structure, new alternative therapies, his own mission and inspiration, and what the goal is for Nue Life. Some of the questions I ask Juan Pablo: When were you first exposed psychedelics and ketamine? What inspired you to found Nue Life? How did you develop a program? What are some of the regulation speed bumps that you’ve had to go through in order to launch? What’s the business model? How much do you charge? How long is the program? What was your approach to acquiring new customers? Do you see your customers going through your program multiple times / on going or is it a quest to always bring on new customers? What’s been your approach to scale? What’s been your approach to raising money? Shat was your attraction to entrepreneurship? What were your learnings from starting Patagon, the first online bank in LatAm? What’s one thing you would change about venture capital? What’s one thing that’s misunderstood about psychedelics? What’s one book that inspired you personally and one book that inspired you professionally? What’s the best piece of advice that you’ve received?

My guest today is Luke Vernon, Managing Partner of Ridgeline Ventures. Ridgeline Ventures is an independent investment group that provides founders and brands a unique alternative to traditional investment firms. Some of their investments include Cotopaxi, Bobo’s, OROS, and Pro’s Closet. Previously he was the CEO of Eco products, which he grew from $1mm to $80mm. We discuss his learnings as an operator, why he invests in consumer brands where other investor interest has softened, the benefits of being a family office and how he thinks about investment timelines. What were three of your biggest learnings growing Eco Products from $1mm to $80mm? Since you also started Luke’s Circle and helps companies find talent, what is the key to hiring the right people? After Eco Products sold, what eventually got you thinking of becoming an investor? How did Ridgeline Ventures form? Why doesn’t Ridgeline take outside capital? There’s been alot of funds that have pivoted or moved away from investing in consumer brands. What are the opportunities that you’re focused on? What’s your due diligence process? Pricing strategy in each channel How to scale the operations of the business How long does it take to scale? Food manufacturing Self manufacturing Great vehicles to finance CAPEX What were some of your learnings during COVID? How can a board provide value to a company? What’s one thing you think is overlooked when investing in consumer businesses? What’s one book that inspired you personally and one book that inspired you professionally?Endurance by Ernest Jackelin Blue Ocean Strategy What’s the best piece of advice that you’ve received?

Our guest today is Joe Spector, Founder & CEO of Dutch. Dutch is the online vet care when you need it. Previously Joe was one of the founders of hims & hers. We discuss the opportunity he saw within pet insurance and care, how his approach to fundraising is different than hims & hers, why he wants to change the incentive structure within the vet industry. Why did you decide to leave hims & hers? What was the aha moment that led to Dutch? What was the opportunity that you saw? Why did you decide to focus on telehealth for pets? What is the major pain point for pet owners? Can you lay out for us the value chain for healthcare for pets? How are the regulatory requirements different from healthcare for humans? How did you approach raising capital? In the early days, they have to be good at multiple things What was the first problem you wanted to solve? How did you approach distribution and sales? Paying vets $80 an hour Hims & Hers raised money every 90 days and raised lots of money. How do you approach fundraising and the capital structure of Dutch?What was it like fundraising during COVID? Don’t use a recruiter There was a substantial increase in pet ownership during COVID and telemedicine was more widely adopted as a whole during this period. How was Dutch affected? Did you grow faster than you expect? Since only 2% of pet owners have insurance, how do you approach consumer education? How do you think about the incentives for vets - they make money off selling the drugs, so they would want to recommend more drugs for your pet - and what is Dutch doing to create better alignment with the vet and the pet owner/pet?

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. We discuss: 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? Where customer 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?

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? Kill 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?

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 When your Lots of observation How many observations do you have a week Insights you can pull off of an observation On-demand dispatch 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 4-6 months 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

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?