9 venture capitalists that every early-stage consumer brand should know if they're looking to raise capital
Jun 20, 2022
Nik Sharma; Willow Growth; Imaginary Ventures; Selva Ventures; Marianne Ayala/Insider
This story is available exclusively to Insider subscribers. Become an Insider and start reading now. Despite headwinds in the space, investors are still looking for DTC brands to invest in. VCs are looking for mission-driven founders who can speak directly to targeted audiences. Insider reviewed past investments and recommendations for this list of must-know VCs. For aspiring founders thinking of starting a direct-to-consumer brand, securing venture capital is likely not as easy as it once was. As the original DTC disruptors have started to go public, disclosing less-than-stellar financials, many venture capitalists who got in early on household names like Glossier and Warby Parker are shifting their investment strategies to focus on e-commerce technology and the metaverse . There are the headwinds to operating a DTC business, such as supply-chain disruptions , rising customer-acquisition costs, and an increasingly saturated market. These trends have made 2022 a banner year for consumer brands partnering with wholesalers . Global venture funding reached $143.9 billion in the first quarter of 2022, down 19% from the prior quarter, according to CB Insights . In the US, the biggest deals went to companies in biotech, security analytics, and logistics. Despite the drastically changing DTC landscape, there are still investors who are bullish on investing in consumer brands — but they won't take a chance on just any brand or founder. "In 2010, when we started investing in the consumer space, we were really excited about new brands taking on old incumbents. You just needed to be smart and savvy and have a great idea in a new space," Caitlin Strandberg, a partner at Lerer Hippeau , said. "Now, there's a lot of competition, and we're interested in these really unique things, like real technology or real applications of science-based innovations, that not everyone can go and build. You have to have real skills." Insider reviewed past DTC investments by investors and fielded recommendations from the venture-capital community to compile this list. Below are the key investors to know if you're thinking about starting a consumer brand or raising cash and what they are looking for. Kiva Dickinson, cofounder and managing partner, Selva Ventures
Key investments: As a partner at his former VC firm CircleUp, Dickinson led funding for Nutpods and Liquid I.V., which Unilever acquired in 2020. Now, he focuses on early-stage investments in consumer brands like Mid-Day Squares and Native Pet. How to get his attention: "We look for brands that are solving a real problem for the consumer that surrounds their health and wellness, making healthier living more convenient, fun, tasty, or engaging. Brands that stand the test of time tend to do so by solving problems that truly matter to the consumer, such that the consumer is eager to sincerely recommend that brand going forward." Kelly Dill, partner, Imaginary Ventures
Key investments: Imaginary Ventures has had a hand in funding a slew of well-known fashion and beauty startups, including Skims, Good American, Mejuri, Nécessaire, and Glossier. Dill, who was recently promoted to partner, sits on the board of Nécessaire. How to get her attention: "Not only are we hyperfocused on brands that can excite new customers in a unique way but founders who are engaging their customers over the long term. If you're adding value to a consumer's life, they'll come back to you, and all the metrics of your business get better." Caitlin Strandberg, partner, Lerer Hippeau
Key investments: Caitlin Strandberg recently led Lerer Hippeau's investment in the sexual-wellness brand Cake, which just launched in Target. Lerer Hippeau has a long record of investing in hot consumer brands, like Everlane, Studs, and Parade. How to get her attention: "It's about a founder-market-mission fit. For a long time, investors thought that a founder-market fit was all you needed, but I personally think the founder needs to be connected to a particular mission, like building in unmet or underserved markets and looking for differentiated communities and groups of people, like women of color and Gen Z." Deborah Benton, founder and managing partner, Willow Growth Partners
Key investments: Benton focuses on early-stage investments in businesses she believes have a strong, realistic chance at profitability. Willow's portfolio includes the baby and kids furniture brand Lalo, the influencer Amber Fillerup Clark's hair-care line, Dae, the makeup brand Kosas, and Manscaped. How to get her attention: "Some of the key values we invest behind are sustainability, ethical production, diversity and inclusion, democratized access, clean and nontoxic ingredients and formulations, better for you or better for the world. Consumers are demanding transparency and authenticity from the brands they support and are looking to spend with brands building like-minded communities whose values reflect their own." Kirsten Green, founder and managing partner, Forerunner Ventures
Key investments: Forerunner was an early investor in the first wave of next-generation consumer brands, including Glossier, Away, Warby Parker, and Dollar Shave Club. The fund's investment thesis has shifted toward e-commerce technology but still dabbles in DTC with recent investments in Oura, Eclipse, and A-Frame. How to get her attention: "Years ago, we were largely motivated by shifting category dynamics and new unlocks on how to engage with the consumer, manage the business, and drive efficiencies while delivering a best-in-class experience. Forerunner remains active in the DTC and CPG spaces but with an evolving focus on where there is real opportunity for newness and better business." Nik Sharma, CEO, Sharma Brands
Key investments: Sharma, who formerly led the DTC business at Hint, is a marketing consultant and angel investor in brands like Brightland, Caraway, and Maude. The self-proclaimed " DTC guy " has attracted over 100,000 followers on Twitter by dispensing regular advice and commentary on running a DTC business. How to get his attention: "Brands today need to act like creators — putting their audience's needs first. The best brands have an understanding of who their customer is, why their customer is buying from them versus a competitor, and have a knack for understanding customer feedback to build a product road map that's aligned with the audience they build." Michael Duda, managing partner, Bullish
Michael Duda, left, and Brent Vartan. Michael Duda
Key investments: Duda invested early in brands like Warby Parker and Harry's. Now, he's focused on the next generation of category-disrupting early-stage consumer brands, like the period-products brand August, the at-home-hair-color brand Hally, and the supplement brand Rae Wellness. How to get his attention: "We don't try to look for trends. We study cultural tendencies and movements. There are great entrepreneurs right now attacking things in the mental-health space, dealing with digital detox, 'do it for me' industries for time-pressed consumers. It's more about a culture fit than a product fit." Ben Lee, managing director, CircleUp
Key investments: Lee's fund is heavily invested in the food category, including brands such as Kettle & Fire, 4th & Heart, Liquid I.V., Super Coffee, and The Good Crisp Co.
How to get his attention: "One of the key things I look for in a founder is clarity of vision — what does the brand uniquely stand for and how will you most effectively reach your target consumer? It's easy to try to represent all the latest buzzwords like keto, Gen Z, or sustainability, or follow the conventional wisdom on how to build a brand. Instead, I love to see when there are one to two areas where a brand really spikes and stands out. That gives it a true differentiation and advantage." Tina Bou-Saba, cofounder and comanaging partner, Verity Ventures
Key Investments: At her previous fund, CTX Investments, Bou-Saba got in early in buzzy beauty and grooming brands like Huron, Kosas, Saie, and Olive & June. At her new fund, Verity Ventures, she's using her keen eye for understanding trends to invest in the next big trendy labels, like the wellness brand Arrae, Dae, and Noto Botanics, a skin-care and makeup line from the makeup artist and influencer Gloria Noto. How to get her attention: "For us, it's critical that founders truly understand their target customers. In many cases, the founder is the target customer, and their connection to the brand is authentic and values aligned. It's also important that founders have solid community-building skills, and/or an existing community to tap into, given the competitive intensity across all consumer categories."