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

Our guest today is Nick Saltarelli one of the Co-founders of Mid-Day Squares. Mid-Day Squares is the first functional chocolate bar. Nick founded the company with his wife, Leslie and brother-in-law Jake. We discuss how and why his family wanted to start a chocolate company, why they decided to vertically integrate instead of outsourcing manufacturing, their combination of marrying content with a CPG and much more. Without further ado, here’s Nick. And there you have it. I hope you all enjoyed Nick’s story of how and why he started Mid-Day Squares. Did you always want to know you wanted to be an entrepreneur? What were some of the pivotal moments in your life that helped shaped you personally and professionally, how you wanted to work with people? Why did you focus on CPG? How did you meet Lez? How did you land on chocolate? Why did you decide to share everything publicly? How did Jake come on board? Is it a tough dynamic working with your wife and your brother-in-law? What was your process for raising capital? How did you think about brand and branding? Why did you decide to create your own manufacturing plant vs. outsourcing manufacturing? How do you think about storytelling and building a passionate audience?

Our guest today is our second second time guest, Mike Duda. Mike is the General Partner at Bullish. Bullish is a consumer only venture capital fund and creative agency. Some of their investments include Sunday, Spark Grills, Hu, Care/of. I mention these brands specifically because all the founders of those companies have been on the podcast but they’ve also invested in Peloton, Harry’s Warby Parker. If you want to learn the founding story of how Mike founded Bullish, highly recommend his first episode in 2020. In this episode we focus on his process to identifying a consumer insight, what needs to happen in order for an insight to become an investment opportunity and his analysis on consumer behavior. I was delighted Mike was willing to come back on the show for a chat, without further ado, here he is. Questions I ask Mike: What’s your process to identifying a nascent consumer insight? I’ve had investors come on the show talk about their jobs are to identify the difference between a consumer trend and a fad. How do you make that distinction? What has to happen in order for a trend to become big? One of the massive trends in 2010s was home fitness, and you were big winners with your investment in Peloton. I’d love it if you could walk through how you made that investment? What's the next big thing in consumer that you think is under-appreciated or contrarian? What’s often misunderstood investing in consumer oriented companies? If the bet is right when it comes to a trend, how important is having a competitive advantage in your product? When you think about the major themes and changes in consumer behavior, what comes to mind? Is investing in consumer products saturated since it's easier than ever to launch a company? What do you think is misunderstood by tech when it comes to CPG? What’s misunderstood when it comes to brand? What’s under-appreciated when it comes to building a brand? What’s one piece of advice you have for founders?

My guest today is Sumi Das, who is a Partner at CapitalG. CapitalG is Alphabet’s independent growth fund. Some of their investments include Airbnb, Lyft, and Duolingo. We discuss CapitalG’s relationship to Google, Google Ventures, and the advantages of a single LP, Sumi spends alot of time not only thinking about consumer opportunities in North America,, but also in emerging markets so we focus on some of the differences building consumer technology and evaluating opportunities in different regions and what makes technology transferable to other markets and not transferable. Without further ado, here’s Sumi. Here are some of the questions I ask Sumi: What was your interest in technology? How did you end up at CapitalG, and also, can you tell us a little about what CapitalG is and your relationship to Alphabet and Google?The future is mobile - what’s the future today? What’s your definition of growth-stage investing?How big can this market be? Can they scale to adjacent markets? How do you think about the differences when investing and building companies in emerging markets vs. the U.S.?What makes a piece of technology transferable into other markets? What type of market do you have to start by building everything at the same time vs. focusing on one specific use case? How does this translate into your theory of when it makes sense to bundle vs. unbundle? How does scale look different? When you’re investing in emerging markets, what consumer characteristics are you looking for or are appealing? How do you think about engineering talent abroad and recruiting for your companies? How do you think about valuations at the growth stage in this current market? They say that growth stage happens when you have product-market fit. How do you analyze on a deeper level if a company does have product-market fit and the depth of that connection? What’s one thing you would change about VC?l What’s one book that inspired you personally and one book that inspired you professionally?Professionally - Sam Walton biography What’s the best piece of advice you’ve received? What’s one piece of advice you have for founders?

Thank you Ashish for introducing me to our guest today, Nuno Gonçalves Pedro, General Partner at Chameleon. Chameleon typically invests at the seed and series a level principally product led technology companies. Some of their portfolio includes Draftkings, Robinhood and Keepsafe. We discuss the evolution of eCommerce, if companies actually create new markets, and how he uses quant to make investment decisions. Without further ado, here’s Nuno. Questions I ask Nuno: What was your attraction to technology? What led you into venture capital? When you look at consumer investing and the evolution of ecommerce in Asia, what technologies do you think are going to make its way to the west? How did Chamaeleon come together? Why has your focus been consumer? What makes you excited as a consumer investor?Where do you think some of the big opportunities are in consumer? Walk me through your due diligence process -How do you analyze teams? How do you use quant to help make decisions? What are the important insights and data points? How do you think about the next consumer platform? There’s lots of buzz around the metaverse, web3. How do you think about what’s coming next after the iPhone? What tends to be the reason why you pass on a consumer tech company? What’s one thing you would change about venture capital? What’s one book that inspired you professionally and one book that inspired you personally?Professionally - Post Capital Society - Drucker The How of Happiness - Sonia Modern Physics Ancient Faith What’s the best piece of advice that you’ve received? What’s one piece of advice that you have for founders?

Our guest today is Bilal Zuberi, Partner at Lux Capital. Lux Capital Investing in people inventing the future. Some of their investments include Happiest Baby, Citizen, Carbon Health and Duck Duck Go. Bilal also founded GEO2 Technologies and comes from an extensive technical and science background. What we explore on today’s episode is how to invest at the intersection of deep tech and consumer. Some of the questions I ask him: One of your focuses is investing in Deep Tech. We haven’t covered Deep Tech yet on the podcast, what is deep tech?Business model innovation vs technological innovation Mission-oriented go to market chops When you think about consumer deep tech companies, what do you think about? What are the use cases where consumers could benefit from deep tech? Betting on teams that own the problem, not just the solution How is investing in deep tech different to other types of categories when you think about return timeline?How flexible are you with the length? Even if you do have an incredible consumer tech product with a clear competitive advantage or compelling value prop, how do you analyze the marketing and branding?Would you invest in a company that has compelling technology, but you don’t understand the branding or how it would work? Can brand be a sustainable competitive advantage? How do you analyze deep tech products? What’s your diligence process? What’s tends to be the reason why you pass on a consumer-focused company? Why did you join Lux and how do you describe Lux’s investment philosophy? How are you thinking about today’s market when it comes to price? 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? Professionally - High Growth Handbook Personally - Engineering Marvels of the World What’s the best piece of advice that you’ve received? What’s one piece of advice you have for founders?

Thank you Erin Grant for pitching this as an episode idea and making it happen. This episode is all about storytelling. What does a good story need, what are the mechanics, and how to build a compelling brand through the power of storytelling. To tackle this topic, I’m joined by Brentos Fernandez, Head of Creative at Listen Ventures and Jeff Cantalupo who is the founder and General Partner at Listen Ventures. Listen Ventures. Backs and builds the brands of tomorrow Including Calm, Kiwi Co, Factor, Catch Co, I/D, & Slumberkins. Without further ado, here they are. How do you craft a good story? What are the elements? Is there a part to storytelling that brands or people typically miss? Point of view When you think of aspiring, young brands, what do they tend to do right vs. the incumbents?How are they able to stand out from the rest of their peers with storytelling? How do you analyze brands that have a face to the brand vs. brands that don’t? How do you shape the persona of the brand? When you invest and consult with brands, what is usually missing that you can help with the story? Story being built out of human need Story Emotional connection - Post-brand Organic growth stories How do you define community? How have brands leveraged their authentic story for growth? What’s an example of an inauthentic story? After a brand gets acquired, what must incumbents do in order for keep that brand authenticity alive? In this era where you don’t have the growth arbitrage channels do you need to have a celebrity part of the brand in order to help tell that story and be seen? When founders pitch to you, what do they usually do wrong when they are telling a story? Brand - sum of all the experiences What does brand mean to you? What’s one thing you would change about the perception of storytelling and/or branding? What’s one book that inspired each of you personally and professionally? What’s one piece of advice you have for founders?

Thank you Radha Kapoor for the introduction to Michele Romanow, co-founder and CEO of Clearco. Clearco offers fast affordable funding for ecommerce companies to fund your inventory or marketing needs. Michele is a serial entrepreneur and also one of the dragon’s on Canada’s Dragon’s Den. We discuss what’s misunderstood about scaling ecommerce companies, when venture capital makes sense vs. revenue based financing, her aha moment on Dragon’s Den that led to founding ClearCo and much more. Without further ado, here’s Michele. You’ve been an entrepreneur your whole career. What was the origin story behind Clearco? How did you and Andrew start Clearco? What was your first test if this new finance model could work? How did you think about scale for and what was the early diligence process like when trying to work out if you’re going to finance these companies?What are the requirements? How have those requirements evolved? What were some of your learnings as you were growing Clearco that was most surprising? How did you approach raising capital from VCs? What was their initial response?Did you have any VCs that thought what you were doing was a conflict to venture capital? How do you work together with venture capital? There are no more Facebook arbitrage opportunities, some consumer VCs have shifted to investing in eCommerce infrastructure where the customer are brands, What’s your assessment of the current landscape within DNVBs when it comes to growth and financing options?We say on the podcast a lot - it’s easy than ever to build a company, harder than ever to build a brand. What’s key for brands to be able to get past the noise and become large sustainable companies? What makes a brand compelling to you to invest in (either with Clearco or as an angel/investor on Dragon’s Den)? ClearCo probably sees a lot of DTC metrics from 1000s of companies.Which are the best measures of success? Which metrics are most misunderstood? If she could only pick 3 metrics to understand health/growth of a brand — which 3 would she pick? How do you also think about the competitive landscape now for the alternative capital financing that you pioneered? What are some of the other products you offer founders? I know the focus is eCommerce businesses, but do you also think about helping DNVBs as they head into retail?How do you think about launching new products at Clearco? Tell you where you can improve in your business? If you build a killer product people will come Recently, Andrew stepped back and became Executive Chairman, you became the CEO from President. What was the reason for the change? How do you think about launching new products at Clearco? 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? What’s the best piece of advice that you’ve received? What’s one piece of advice that you have for founders?

Our guest today is McKeever Conwell II or as he’s most well known Mac the VC, Founder and managing partner of Rarebreed Ventures. RareBreed Ventures is a pre-seed fund that invests in exceptional founders primarily outside of large tech ecosystems, earlier than everyone else. We discuss how Mac built relationships on Twitter with investors and founders and was able to raise a VC fund all on Twitter, his due diligence process and how he thinks about customer acquisition. What led you to becoming an entrepreneur? Why investing? Why did you decide to become a VC and start a fund? How were you able to leverage Twitter to become an investor?What was your strategy? I know you invest in both consumer and enterprise. What makes consumer investing hard? Where are you seeing the opportunity within consumer? How do you approach sourcing and finding diamonds in the rough? What's you diligence process? How do you validate how large a problem the entrepreneur is solving?Rebundled What's the most common reason why you passed? What are some of your favorite accelerators that are still under the radar? Do you believe in pattern recognition is important when it comes to investing? What is a day in the life of an emerging manager? What have founders needed the most help from? What motivates you everyday? 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?Why should white guys have all the fun? What's one piece of advice that you have for founders? What's the best piece of advice that you've received?

Our guest today is Michael Ronen, co-founder and President of Branded. Branded acquires and partners with top performing Amazon sellers. So as you can imagine, we’re going to be talking about creating brands on Amazon. Previously, Michael was one of the Managing Partner’s at SoftBank Investment Partner’s historic Vision Fund 1. We discuss the opportunity within eCommerce while at SoftBank vs. Branded, building brands on Amazon vs. off Amazon. What was your initial attraction to invest in early and growth-stage companies? How did you end up at Softbank? Why did you leave Softbank to start Branded? What was your initial attraction to the Amazon ecosystem? Was there anything you thought some of the earlier aggregators were missing that lead you to want to jump in? What are synergies amongst your portfolio? What categories are attractive? What’s the goal of a brand? What’s a successful revenue goal? Modern foreign thinking brand focused on personal care Brands that have patent or design - how is Amazon as a partner? One company is building an incredible infrastructure - AWS You have the intent to buy How do you build a brand based off of a listing? How do you build a brand on Amazon where you are just another listing? What’s the strategy at Branded? How do you think about differentiation from others? Why the focus on consumables? How do you think about synergy amongst your brands? How did you go about building your team? What’s your approach to retaining founders? What was your approach to fundraising? How many companies do you look to buy? How do you think about the best categories? Do you get nervous about Amazon private labels? How is Amazon a great partner? What are your criteria for acquisition? What are the advantages of acquiring Amazon brands vs. Shopify / DTC brands? Does there have to be a retail / brick-and-mortar strategy in order for you to be interested in the brand? What’s one book that inspired you personally? One book that inspired you professionally? Lea Coca - CEO of Chrysler - Autobiography Swim with the sharks without being alive - Harvey MacKay “Play Nice But Win” - Michael Dell What’s one piece of advice for founders?

So this was our first LIVE episode, which we recorded at Cosmic Coffee & Beer Garden in Austin, TX during SXSW. To everyone who came out and was there in the flesh, thank you thank you thank you and a special thanks to Marc Nathan for organizing the event as it was a ton of fun. I chatted with Jason Karp, Founder of Hu Kitchen, Hu Chocolate and CEO of HumanCo. HumanCo is a holding company that’s invested in healthy living. We’re going to learn more about their brands Snow Days, Against the grain and Cosmic Bliss. We discuss the rebrand of Coconut Bliss to Cosmic Bliss and question if there is a current bifurcation within the better for you movement. Here are some of the questions I ask him: How has your health journey shaped your professional journey? Did you have experience in the CPG space before? Was the goal always to start a chocolate company and eventually create other products? Why did you sell Hu to Mondelez? What is HumanCo? When you think about introducing new products at HumanCo, what is your value system within better-for-you? Your products, both at Hu and now HumanCo, are premium-priced. Can you talk about the pros/cons of premium pricing and why you believe people are willing to pay more? A couple of years ago you acquired Coconut Bliss, which was a plant-based ice cream company. You recently decided to introduce dairy ice cream and rebrand Coconut Bliss to Cosmic Bliss. What was the thinking behind that decision? What was the reaction? Do you think there is a divide or polarization within BFY? As we take a step back and look at the marketing/branding within better-for-you products overall, what marketing resonates with you and marketing that you don’t like? What’s your approach? It seems like the term “plant-based” is everywhere within the better-for-you space (it certainly was all over Expo West). Do you think the term has lost its meaning? What are your thoughts about adding genetically modified ingredients to food to make it sustainable? Do you consider lab-grown meat genetically modified? What’s one part of the better-for-you movement that’s most misunderstood? What’s one piece of advice that you have for founders in this current climate?