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January 2024 box
Highlights from our January box, Founder Pro Tips, and more...
FirstLook
May 13, 2024
Welcome to our 15 new subscribers since our last newsletter. I'll do my best to keep this fun, light, and informative.
Salut! (“Hi” in French)
Welcome back to another consistently inconsistent newsletter.
But first, I’m prepping things for the June, July, and August FirstLook boxes right now. If you’re founder with an cool brand, please apply here.
Ok lets get into things. I’d like to share something I’ve mentioned many times over the past month to founders. While raising capital, there are two primary groups of investors you can raise from. Each have their own pros and cons, so let’s unpack this…
“Inside the Bubble” Investors
These are angels, VC firms, and family offices who are well entrenched in the VC community. Their names pop up often and they put effort into being known/found. These folks see lots of decks and opportunities,
Pros: These folks are typically easier to find (I follow a bunch on my Twitter/X), and typically bring good value-adds to a founder as they’ve seen tons of playbooks and are connected in the space.
Cons: They are very tough to win over because they see so many deals, and they beat founders up on valuation because they know what a respectable valuation looks like.
“Outside the Bubble” Investors
The second group is HNWI’s who typically earned their wealth via high-paying jobs or are self-made. Regardless, they are busy folks building their own empires who also write checks because gambling is fun!
Pros: They can be easier to win over because they don’t see as many startups and they don’t understand consumer goods as well so it’s tougher for them to determine if a brand has a fighting chance (unlike ‘insider the bubble’ investors who know the startup graveyard all too well). For the self-made HWNIs, they’re more likely to bet on founders themselves since they were once in their shoes. Last pro, it’s easier to get a higher valuation because they traditionally don’t know what a good valuation looks like.
Cons: They are muchhh harder to find, and it can sometimes be difficult to pin them down because they’re already busy doing a ton of other things that aren’t investing related. These folks won’t bring much tactical consumer goods knowledge either as they made their fortunes in other ways. They can still be helpful nonetheless on general things like leadership. It’d be a crime to call them “dumb money” as ‘inside the bubble’ folks may label them.
So Who Do You Pitch?
As a founder it’s your duty to find folks who will write you checks so you can keep the dream alive, but also consider what comes with each investor…
‘Inside Bubble’ investors = tough to convince, will beat you up on valuation, but bring a lot of value add and are easy to find.
‘Outside Bubble’ investors = easier to win over, you can get higher valuations, but not as helpful on tactical strategy and overall tougher to find.
I thought I’d share this insight as right now I’m seeing it’s become rather difficult to raise from ‘Inside Bubble’ investors. Now may be the time to up your efforts for the ‘Outside Bubble’ investors if you simply need to get money in the bank.
To wrap up, here is Robert Herjavec’s favorite VC scoreboard:
Founder Pro Tip of the Month 💡
Here are things NOT to do when pitching investors or building decks:
Don’t put an ‘past examples of exits’ slide in your deck that’s going to professional investors (aka ‘inside the bubble’ folks). They know the landscape well which is why they’re investing in your category. Doing this will make them respect you less. Instead, when you’re on the call with investors put your Investment Banker hat on and discuss where you see your industry/category going the next 5-10 years, and which players aka potential acquirers may have a gap in their portfolio that you fill.
Don’t send lengthy or impersonal emails to investors. Their inboxes are noisy and they can sniff out a bullshit email like a bloodhound. Instead, keep it short and sweet, highlight what you do in 1-2 sentences, use bullets to highlight the 3 most exciting things about your startup, and include a deck link.
Don’t make your slides dense, especially in the beginning of your deck. When taking in new information, it’s best to carefully warm someone up. Let them ease into what you’re pitching. Instead, less is more.
Don’t send a PDF copy of your deck. When you do that, you lose the ability to update information or kill a deck altogether. Instead, use a solution like Docsend so you can always control what’s being seen even as your deck gets forwarded around, and in most cases at least see who is reviewing your deck.
Don’t email an investor just because they entered their email in Docsend to view your deck. They hate that, which inspires them to use fake emails, which then makes founders paranoid when they see “xyc@abc viewed your deck” alerts. Instead, just don’t email them. If they like what they see, they will email you.
Did a friend forward you this and now you want to join?
January Box Brands 🚀
Investors: 46 → Apply Here | Brands: 8 → Apply Here | Intros: 38
Investors interested in a brand below, please email [email protected]
Artet
Founded by Zach Spohler + Xander Shepherd + Maxwell Spohler | 📍LA
How We Met Them: Via an intro from my friend Emmy back in 2021!
One Liner ✍️ — Artet is a family founded company that crafts cannabis beverages for cocktail occasions.
What made them stand out: Zach and team did an exceptional job with branding and delivering a premium experience for consumers. Cannabis is a dodgy space given so much is tied to government regulations, BUT, it feels inevitable that it will be deregulated and mainstream eventually. For investors jumping in now, yes they will have to be patient, however they do also enjoy getting in at more reasonable valuations. I imagine the brands putting in the hard work now will be first to really growth (and likely the first to get acquired).
Choppy!
Founded by Brice Klein + Saba Fazeli | 📍LA
How We Met Them: Via an intro from my friend Lily!
One Liner ✍️ — We make beef that’s as healthy as chicken and takes only 4 minutes to cook.
What made them stand out: Choppy! is genius. They use a blend of real meat and plant-based meat in their products which strikes a perfect balance for consumers (just like hybrid cars, I see you Toyota!). Choppy! is just as tasty, costs less, is healthier, and designed for easy cooking. This easy cooking part is key as folks are busier than ever but still want something healthy and delicious. This has proven to be true for brands like Kevin’s Natural Foods which did around $190M in 2023 revenue before getting acquired by MARS. As a cherry on top, Choppy! went through Y Combinator so you know Brice and Saba are wicked smart (seriously, check their LinkedIns) and are backed by a big network to help them succeed.
Groomie Club
Founded by Ashley Handa + Anant Handa | 📍Chicago
Shop Here + Product Demo Video + Instagram + Tiktok + LinkedIn
How We Met Them: Via an intro from my friend Ryan
One Liner ✍️ — We make bald look good!
What made them stand out: I was impressed by Groomie’s founding team. Anant is a serial entrepreneur with $100M+ in sales generated across multiple ventures and has led teams of over 60 employees, while Ashley is a sales, marketing, & creative guru who has managed multiple national retail partnerships and generated over $25M in historical sales. A perfect combo IMO. That aside, I was blown away by their capital efficiency. They have raised very little outside capital but have still managed to generate millions in revenue. They achieve this through a masterclass execution of spending marketing dollars at precise moments where it will be most effective, and then retaining those customers via their subscription model long term. I think Groomie will go far and hardware is a moat.
The Humble Seed
Founded by Sarah Meis + Steve Shaffer + Jennifer Mancuso |📍Denver
How We Met Them: Via an intro from my friend Tom.
One Liner ✍️ — The Humble Seed transforms seeds, a simple hero ingredient, into delicious, nutrient dense, reimagined versions of our favorite snacks.
What made them stand out: This was one of the most experienced founding team I’ve seen in a while. Sarah held c-suite marketing roles at top natural foods companies including Lily’s Sweets (exited to Hershey in 2021), Purely Elizabeth, Good Karma, Van’s Natural Foods (exited to Hillshire in 2014) and WhiteWave (now Danone North America). Steve spent 25+ years at Kellogg’s, led natural channel sales during Kashi’s hyper-growth years, and was SVP of Sales at Van’s Natural Foods prior to the acquisition by Hillshire. Experience aside, these crackers are so tasty and I trust Sarah and team will grow this brand into something special. They simply know this world so damn well. Incredible Team + Incredible Product = Early Winning Recipe.
OSQUO
Founded by Danielle Kar + Dr. Venessa Pena | 📍Austin
How We Met Them: A cold outreach email from Danielle!
One Liner ✍️ — OSQUO creates advanced clinical solutions for adult acne.
What made them stand out: OSQUO was on the earlier side, but I really liked their science driven approach to acne. Dr. Pena is a Harvard-trained, board-certified dermatologist, 1 of only 67 follicular disorder specialists in the United States, and her insights guided their IP and R&D to reach the right formulation. I look at this category maybe more simple than other investors: if the product works, people will keep coming back because this pain point is so potent. A winning formula here can equate to big bucks down the road. I also respect Danielle’s hard work in generating a ton of buzz via building their TikTok account prelaunch.
Viv for you V
Founded by Katie Diasti + Anna Sise + Kelly Donohue | 📍NYC / Boston
How We Met Them: An intro from my bff Nate Rosen of ExpressCheckout
One Liner ✍️ — Viv is a sustainable period care brand driven by a modern approach to health education.
What made them stand out: Viv was an all around strong company. I really liked the sustainability and non-toxic aspect to their products, and the work they are putting into around education for their customers. Viv feels like an example of a much better product where the challenge is reaching scale to drive down COGS. Scale unlocks products at even better price points, which invites more consumers in, sales go up, COGS go down more, and the cycle continues. I’m confident that Katie, a Forbes 30 under 30 winner, and team will continue marching forward. They’re already in 2000+ doors and counting. The world needs more Viv!
WICKED Protein
Founded by Josh Eichel | 📍Boston
Shop Here + Instagram + LinkedIn
How We Met Them: Via an intro from my friend Josh
One Liner ✍️ — WICKED Protein is Clean Label sports nutrition that is tested safe for the short and long term for consumers, which other brands can’t say.
What made them stand out: I liked WICKED for two primary reasons. First, Josh is hella talented when it comes to ecom. In 2021, he launched Ten32 Media to help brands scale on e-commerce and since then has already worked with 117 brands across all categories. This leads to the second reason, Josh has helped WICKED achieve millions in sales all while raising very little capital. Because of his background, he is very capital efficient which is always a breath of fresh air for investors. The sports nutrition category is busy, but Josh’s background lends well to rising above the noise and not wasting money.
Wild Bay + ICARO
Founded by Adam Bufano + Sergio Malarin + Sid Sharma |📍Baltimore
How We Met Them: Via an intro from my friend Scott
One Liner ✍️ — Wild Bay is a vertically-integrated beverage manufacturer and distributor.
What made them stand out: Wild Bay is so smart. I LOVE this company because they self distribute AND self manufacturing. Owning their own manufacturing and distribution allows them to achieve higher margins, innovate faster, and have hundreds of wholesale partners to test within the market. They are not dependent on outside distribution or grocery category reviews to continue to grow. Through this strategy, Wild Bay has generated many millions in revenue all within 75 mile of their HQ. GTFO! I think Wild Bay has insane potential and investors would be wise to know them well. There are many previous examples of self-distributing brands who went on to be acquired.
Discount: Use “FirstLookInvestor” for 25% their Icaro Yerba Mate
That's a wrap, February box is next. Keep on building my friends.