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Learning The Secret To Cultivating Successful Beauty Brands With True Beauty Venture’s Cristina Nuñez · Skin Anarchy

• 0:06
  SPEAKER_01: Hi guys, welcome back to another episode of Free True Anarchy.
• 0:09
  SPEAKER_01: This is your host Ekta, and I have the wonderful Christina Nunez here today.
• 0:14
  SPEAKER_01: She is the co-founder of True Beauty Ventures.
• 0:17
  SPEAKER_01: And um, I'm sure a lot of you have heard about Tree True Beauty Ventures.
• 0:21
  SPEAKER_01: We actually hosted Rich, uh, Rich is her co-founder, uh, I think about you know a few months ago.
• 0:27
  SPEAKER_01: And we had a really great conversation with Rich.
• 0:30
  SPEAKER_01: And I was so, so excited when Christina agreed to come onto the show.
• 0:33
  SPEAKER_01: So welcome, Christina.
• 0:34
  SPEAKER_01: I'm so honored to host you.
• 0:36
  SPEAKER_01: I'm such a fan of everything you guys do.
• 0:38
  SPEAKER_01: So welcome to the show.
• 0:40
  SPEAKER_00: Thank you so much for having me.
• 0:42
  SPEAKER_00: I'm really excited.
• 0:43
  SPEAKER_01: Yeah, no, I'm really excited to talk to you because you know, I don't get the chance.
• 0:48
  SPEAKER_01: I think, you know, a lot of times brands will reach out to me asking about venture capital, you know, and it's really hard to give them answers because I mean I have I know nothing.
• 0:57
  SPEAKER_01: You know, you're the expert here.
• 0:58
  SPEAKER_01: So I it's really, really a great opportunity for me to kind of pick your brain a little bit and also just get your perspective.
• 1:04
  SPEAKER_01: So thank you for allowing that.
• 1:06
  SPEAKER_01: But um, I want to get started.
• 1:08
  SPEAKER_01: I know that when I had spoken to Reggie told us a little bit about True Beauty Ventures, but I want to get, you know, um the story from you.
• 1:15
  SPEAKER_01: You know, if you could walk us down memory lane and tell us about yourself and the whole company and how everything started.
• 1:22
  SPEAKER_00: Absolutely.
• 1:23
  SPEAKER_00: And I love how you use the term venture capital because obviously we play in early stage investing, and we have a lot of VCs in our orbit in the space that we're investing in, and we have ventures in our name.
• 1:40
  SPEAKER_00: Um, but it's so funny.
• 1:41
  SPEAKER_00: I mean, we Rich and I both don't consider ourselves venture capitalists.
• 1:45
  SPEAKER_00: And maybe that's because the traditional sense of the word is very different to the way that we approach investing and the way that we approach partnership.
• 1:57
  SPEAKER_00: And I think that really stems from the two of our backgrounds, um, both of us having come from um years of private equity investing, and in Rich's case, um, a little bit longer than than me, but you know, both kind of playing in that space for a long time.
• 2:14
  SPEAKER_00: And then, you know, my experience as an operator in beauty, working with several beauty companies in leadership positions, I think we we like to approach it from investing from a different angle.
• 2:30
  SPEAKER_00: And as true, true sector specialists, very dialed into one industry with a very clear mandate of what we're investing in.
• 2:42
  SPEAKER_00: We know we can't operate like traditional venture capitalists that invest more broadly across a ton of different categories and kind of in some cases will sprinkle smaller checks and have really large portfolios with a lot of investments, hoping that, you know, one or two of them become unicorns.
• 3:02
  SPEAKER_00: Um, that's not that's not the way we approach it because quite honestly, I don't think you can invest successfully in beauty and wellness with that strategy.
• 3:10
  SPEAKER_00: But just to kind of circle back to to the genesis of it all, um uh, you know, again, you know, I never thought I'd be a venture capitalist or capitalist or be in this space, but you know, my background really um started off in finance, um investment banking, uh, followed by uh two private equity roles, one at L Catterton and another one at Tengram Capital, both of which I worked um with Rich, my co-founder.
• 3:38
  SPEAKER_00: So um loved those experiences because um, you know, it brought us together.
• 3:44
  SPEAKER_00: Um, but I was focused really on consumer um for my whole career, quite honestly, um, from investment banking to private equity.
• 3:52
  SPEAKER_00: I was always in the consumer space.
• 3:54
  SPEAKER_00: Um when I kind of flipped to the operating side, um, I jumped into an industry that I had a lot of personal passion in.
• 4:05
  SPEAKER_00: I was kind of always the friend in my friend group that, you know, would do people's makeup when it was time to go out when I was younger or in college.
• 4:15
  SPEAKER_00: Um, I was applying skincare since I was in high school.
• 4:20
  SPEAKER_00: Um and I just I loved beauty overall.
• 4:24
  SPEAKER_00: And so being an operator in the space was incredibly rewarding.
• 4:31
  SPEAKER_00: Um, and really for me, it was a way to make my experience a bit more well-rounded because I had really spent, you know, my time only on one side of the table.
• 4:40
  SPEAKER_00: And, you know, being on the operator side, boy, does it open your eyes to how hard it really is to build a business and to scale it and to do all of the things that your investors want you to do.
• 4:54
  SPEAKER_00: Um, so it gave me really interesting perspective.
• 4:57
  SPEAKER_00: Um, and so uh my operating roles included um three years at a brand called Laura Geller, which is a makeup brand.
• 5:04
  SPEAKER_00: Um, we eventually sold that business successfully.
• 5:07
  SPEAKER_00: Um and then I became the GM of a skincare brand called Clark's Botanicals, um, which was a small brand, beautiful brand, um, that really was trying to do what a lot of brands in my portfolio are trying to do right now.
• 5:22
  SPEAKER_00: They're, you know, trying to scale.
• 5:24
  SPEAKER_00: They don't have a ton of capital at their disposal.
• 5:26
  SPEAKER_00: They're building out teams, they're trying to expand in an omnichannel way and trying to break through and acquire customers and build their brand awareness.
• 5:37
  SPEAKER_00: Um, and I got a front row seat at that as a GM of Clarks Botanical.
• 5:40
  SPEAKER_00: So very relevant experience to what I'm doing now.
• 5:43
  SPEAKER_00: Um in early 2020, my co-founder Rich and I um, you know, got together.
• 5:50
  SPEAKER_00: And again, we've been coworkers and friends for a long time.
• 5:53
  SPEAKER_00: And we decided we would start a new venture because we knew that there was a massive white space in the investing landscape for what we could bring to the table, which is true sector expertise as both investors and operators in beauty who were willing to take earlier bets on, you know, emerging brands in the space, um, who were willing to write less than$5 million in check sizes, because at the time there were a lot of larger firms who had much bigger um mandates in terms of their um the check sizes that they would write.
• 6:31
  SPEAKER_00: And VC wasn't that interested in beauty at the time.
• 6:35
  SPEAKER_00: Um, I think that quickly changed um post-COVID.
• 6:39
  SPEAKER_00: But at the time, there weren't that many VCs that were truly that active in the space.
• 6:44
  SPEAKER_00: And so we decided to launch True Beauty.
• 6:47
  SPEAKER_00: And we are, you know, a sector-focused fund investing across both beauty and wellness.
• 6:54
  SPEAKER_00: Our first fund was a$42 million fund that we raised all, you know, over Zoom during COVID.
• 7:02
  SPEAKER_00: Um, we have now successfully deployed that fund into 13 amazing brands.
• 7:10
  SPEAKER_00: Um, so proud of those brands and the founders that have decided to join us in this journey.
• 7:15
  SPEAKER_00: And we started deploying out of our second fund, um, which is really exciting, which we're currently still raising in a very tough environment, I have to say.
• 7:26
  SPEAKER_00: So we always tell founders we feel your pain.
• 7:29
  SPEAKER_00: We know what it's like to be raising while you're also trying to build a brand, a company, and you're trying to accomplish, you know, all your day-to-day operational tasks.
• 7:39
  SPEAKER_00: But then you also have this second job called fundraising, um, which can be very challenging and distracting at times.
• 7:45
  SPEAKER_00: So we we feel that.
• 7:47
  SPEAKER_00: Um, and you know, we've expanded our team from Rich and I to five people in total.
• 7:53
  SPEAKER_00: Um, I have three other amazing investment professionals, all of which are women, which um we're very proud of.
• 7:59
  SPEAKER_00: So we're an 80% female invest in investment team.
• 8:03
  SPEAKER_00: And um, and it's great.
• 8:06
  SPEAKER_00: It's been an incredible uh journey.
• 8:08
  SPEAKER_00: I I I reflect on the last three and a half years, and I can't believe this started off as a pitch deck, literally an idea on a sheet of paper.
• 8:19
  SPEAKER_00: Um, and two founders with, you know, great backgrounds, but you know, having never proved that they could raise and deploy, you know, a first-time fund.
• 8:28
  SPEAKER_00: Um, but people believed in us, and um, and I'm so grateful.
• 8:32
  SPEAKER_01: Yeah, I mean, that's amazing that you guys have expanded.
• 8:36
  SPEAKER_01: I mean, you're doing such great things, you know.
• 8:38
  SPEAKER_01: I every time I see you guys on LinkedIn and every time I see the work that you're you're doing, I'm just always floored because I feel like, and I and I said this to Rich because I was literally like, I swear you guys have a knack for just finding the best brands and really getting them, you know, on their feet and just doing whatever it takes, you know what I mean, to bring them into their full like self, you know what I mean?
• 9:02
  SPEAKER_01: Like really blooming them.
• 9:03
  SPEAKER_01: And I feel like that is so rare to see, you know, in this industry because I have heard about, you know, like, you know, you had mentioned the whole terminology of venture capital, you know, but I really have seen a lot of um, you know, early stage investments and stuff, and the news pops up, but then I don't really hear about those brands again.
• 9:22
  SPEAKER_01: You know what I mean?
• 9:22
  SPEAKER_01: I'll hear about them once or twice, but you guys really hit it on the head every time.
• 9:27
  SPEAKER_01: And I feel like your work really speaks for itself because it's like, you know, it's like guiding a brand into becoming who they're supposed to be and making that vision come to life.
• 9:38
  SPEAKER_01: And I really, really admire that about you both, you know, and your team because that's really important and it's needed, you know, especially right now.
• 9:45
  SPEAKER_01: And I'm sure you know better than I do.
• 9:47
  SPEAKER_01: You know, yeah, I mean, I mean it, it's true.
• 9:49
  SPEAKER_01: And and anyone listening, if you guys, you know, follow Christina or you follow Rich, you know, on LinkedIn or anything, you will see it, you know, firsthand.
• 9:57
  SPEAKER_01: And it's magical, you know, sometimes because I've, you know, there were brands that I was following from the beginning, you know, and you guys really brought them um, like, you know, you put them on my radar, right?
• 10:06
  SPEAKER_01: Through LinkedIn, and I would see them like, you know, six months later.
• 10:09
  SPEAKER_00: And it was like, oh my gosh, you know, and that's the most that's honestly the most rewarding part of it is to see the brands flourish.
• 10:19
  SPEAKER_00: And I think, and I appreciate thank you so much for for those kind words.
• 10:23
  SPEAKER_00: We we do spend a lot of time on the partnership piece, um, the the nurturing of the brands.
• 10:31
  SPEAKER_00: And, you know, they're all at various stages.
• 10:34
  SPEAKER_00: Um, they all require very varying degrees of of help in in different areas.
• 10:42
  SPEAKER_00: Of course, there are some similarities, and we try to leverage that, but you know, we spend our time being everything from a colleague to a counselor to a coach to a cheerleader.
• 10:54
  SPEAKER_00: I mean, you name it.
• 10:55
  SPEAKER_00: That that is our job.
• 10:57
  SPEAKER_00: That is the part I love the most.
• 11:00
  SPEAKER_00: And, you know, it allows me to very lightly flex my operator muscles.
• 11:06
  SPEAKER_00: Um, and I I really enjoy that.
• 11:09
  SPEAKER_00: And it's not easy because you have to be available to your founders all the time.
• 11:15
  SPEAKER_00: I've I joke around, you know, sometimes I have a founder that's you know called me at six in the morning, and sometimes I've hopped on the phone at 10 o'clock at night.
• 11:24
  SPEAKER_00: And but that's that's what we're supposed to do.
• 11:26
  SPEAKER_00: We are here in service of our brands and and our founders are really, really important to us, which is why we end up spending so much time getting to know people before we invest.
• 11:40
  SPEAKER_00: I think that's another major difference between other VC funds who are a bit more transactional than relationship driven.
• 11:51
  SPEAKER_00: And for us, we need we spend six months, nine months, you know, up to a year with with founders, getting to know them way before they are looking to raise money.
• 12:02
  SPEAKER_00: Um and that's part of our diligence process.
• 12:05
  SPEAKER_00: And quite frankly, it should be a part of their diligence process too, to make sure that you are aligned with with us and we're aligned with you, that you we like each other and we like spending time together and we can communicate well.
• 12:20
  SPEAKER_00: Um and that's the communication is in the good times and the bad times, and and you need that both ways.
• 12:27
  SPEAKER_00: So there's a lot that goes into the relationship building, and um that happens way before even, you know, documents are signed and and money is wired.
• 12:38
  SPEAKER_00: And that that's a big component.
• 12:40
  SPEAKER_01: Yeah, no, I I I bet I mean I think that I what you said really resonated with me is this idea of, you know, you're I mean, you're creating an environment, right?
• 12:49
  SPEAKER_01: It's like a support system.
• 12:50
  SPEAKER_01: And I think that that's something that is so unique in the industry in general, but especially coming from, you know, this perspective of also this venture capital perspective.
• 13:01
  SPEAKER_01: Because, you know, as an outsider, I've always thought of, you know, just any kind of investing as like, well, here you go, here's some money, we expect a return.
• 13:09
  SPEAKER_01: You know, like that's what I used to think before I started Sync Anarchy and before I got to even speak to anybody.
• 13:14
  SPEAKER_01: And sometimes consumers also get confused, you know, with the terminology because a lot of people don't understand what it takes and what goes behind it.
• 13:21
  SPEAKER_01: But I mean, you guys are working overtime, you know, to make these brands succeed.
• 13:25
  SPEAKER_01: And I I can't tell you how amazing that is because that's literally having your own team, you know what I mean, always like supporting you, always backing you.
• 13:34
  SPEAKER_01: And I mean, I can't see any better situation for a brand.
• 13:37
  SPEAKER_01: You know, I I couldn't imagine having a brand with no support, you know what I mean, in that sense where you don't have a support system.
• 13:44
  SPEAKER_01: So that's amazing that you do that.
• 13:45
  SPEAKER_01: I think it's huge.
• 13:46
  SPEAKER_00: Um and I would and I would say just one more thing on that.
• 13:50
  SPEAKER_00: I tell founders all the time, you know, spend time vetting your investors, you know, whether you're looking at angel investors or institutional investors, you know, spend time talking to them and just like really seeing what makes them tick and do your homework too.
• 14:07
  SPEAKER_00: You know, talk to other founders, other brands that they've partnered with to make sure if that's what you're looking for.
• 14:14
  SPEAKER_00: Sometimes founders just want to check.
• 14:16
  SPEAKER_00: They don't want that additional advice and help, or some might view that as an interference, right?
• 14:23
  SPEAKER_00: Like, leave me alone.
• 14:24
  SPEAKER_00: I'm I know what I'm doing.
• 14:25
  SPEAKER_00: I'm gonna run my business, just write me a check.
• 14:27
  SPEAKER_00: And there are plenty of investors that are passive that will do that.
• 14:30
  SPEAKER_00: But if you're looking for more and you want that, do your homework because not all investors are clearly um cut from the same cloth.
• 14:41
  SPEAKER_01: Yeah, 100%.
• 14:42
  SPEAKER_01: That makes sense because I feel like you don't really know somebody till you actually, you know, talk to them for a while.
• 14:47
  SPEAKER_01: I mean, I think it's like we all have to chop around.
• 14:50
  SPEAKER_01: Does that make sense what you're saying?
• 14:51
  SPEAKER_01: I mean, I can definitely see that.
• 14:52
  SPEAKER_01: And I will I will keep that in mind if I ever launch a brand, which I don't think I could ever have the guts to do.
• 14:58
  SPEAKER_01: I know so much goes into it, but I yeah, I think it's really, really solid advice.
• 15:02
  SPEAKER_01: And I for I know a lot of small brands and um, you know, aspiring entrepreneurs tune in.
• 15:07
  SPEAKER_01: So I would really love for you know, anyone who is thinking about starting a brand or you're in, you know, you already started one, definitely uh take that advice to heart because I I can definitely see that being so important.
• 15:19
  SPEAKER_01: But I want to ask you, Christina, what are some brands you're working with right now, if you don't mind sharing?
• 15:24
  SPEAKER_00: Um the ones that are currently in our portfolio.
• 15:27
  SPEAKER_00: Yeah, yeah.
• 15:28
  SPEAKER_01: The ones that are or any new ones that you might have added on, or you know, anything you want to share.
• 15:33
  SPEAKER_00: Absolutely.
• 15:34
  SPEAKER_00: Um, so as I mentioned, for fun one, we have 13 brands.
• 15:39
  SPEAKER_00: I would say I, you know, I won't list all 13, but you know, some notable ones um that you know many people would know of are brands like K18, um, Moon Juice on the wellness side, um, Crown Affair, um, Beauty Stat.
• 15:57
  SPEAKER_00: We have a brand called Kinship as well, um, Maud in Sexual Wellness.
• 16:04
  SPEAKER_00: Um, you know, we've uh one of our more recent ones where um was Euthoria Um and Vacation and SPF.
• 16:11
  SPEAKER_00: We've got, you know, we've got brands across almost every category in um in beauty, with the exception of fragrance, um, which we're very um interested in and have been actively um exploring opportunities.
• 16:26
  SPEAKER_00: Um most recently, uh to close out fun one, we invested in a brand called Evolve Together.
• 16:32
  SPEAKER_00: Um, and that one we're super excited about the potential um for that one.
• 16:38
  SPEAKER_00: And and they have really evolved, um, no pun intended, but they she started talking about a founder and and you know, belief, a gut belief in a founder, someone who launched um masks during COVID because she wanted to create a better, more functional, more comfortable and stylish mask, who then took that brand um and pivoted into launching an entire line around um skin and body, uh, natural deodorants and other really exciting categories with the lens of elevated sustainability.
• 17:18
  SPEAKER_00: Um, and she has really created something beautiful out of a necessity.
• 17:23
  SPEAKER_00: Um, she started off filling a gap in the market and then evolved her business as the market evolved and as um demand for those products shifted.
• 17:33
  SPEAKER_00: Um, so care a characteristic like that in a founder is something we absolutely love.
• 17:37
  SPEAKER_00: People who, you know, failure for them is not an option and they will run through walls to make their business succeed is is really important to us.
• 17:49
  SPEAKER_00: So we're excited to have closed out fun one with Evolve Together, but we've got some, you know, pretty exciting brands in our portfolio.
• 17:56
  SPEAKER_00: We've backed founders who um are second-time uh beauty founders, like Wendy Zomner, who started Cali Ray.
• 18:04
  SPEAKER_00: Um she was the she was one of the founders of Urban Decay.
• 18:08
  SPEAKER_00: And um she, you know, talk about experience and and knowledge of building a very successful beauty brand.
• 18:16
  SPEAKER_00: Um, you know, my partner Rich has known Wendy for you know 13, 14 years.
• 18:21
  SPEAKER_00: And when we invested, we really took a bet on her as a founder and and the beautiful brand that she was creating.
• 18:28
  SPEAKER_00: Um and so we're super excited to have them in their portfolio.
• 18:31
  SPEAKER_00: Um But you know, we're we're not um we're looking for amazing founders with differentiated product who are at an inflection point for breakout growth.
• 18:44
  SPEAKER_00: And what we found investing over the last, you know, three plus years is you know, that breakout growth can come at various stages in a brand's life cycle.
• 18:55
  SPEAKER_00: It can come sometimes really early on, it can come sometimes later.
• 19:00
  SPEAKER_00: Um, and that can be the launch of a new retailer, that could be the launch of a really innovative uh new-to-market product or expansion into a new category.
• 19:11
  SPEAKER_00: Uh so there's different ways to define that breakout growth, but it's something that we look for.
• 19:15
  SPEAKER_00: It's a major characteristic in any of the brands that we invest in.
• 19:19
  SPEAKER_00: And so um what we found is we've invested anywhere from series C, so you know, early, very early, sometimes pre-revenue, we've done that all the way through series C.
• 19:30
  SPEAKER_00: And that's because that inflection point for breakout growth um can happen at various stages.
• 19:35
  SPEAKER_00: And uh so our portfolio is is reflective of that strategy.
• 19:39
  SPEAKER_00: And yeah, we're excited.
• 19:41
  SPEAKER_00: Fun two is um, you know, been officially kicked off.
• 19:45
  SPEAKER_00: And um, you know, we continue to look at all categories within beauty.
• 19:50
  SPEAKER_00: Um, you know, while we focus mainly on skincare, makeup, hair care.
• 19:55
  SPEAKER_00: Um, as I mentioned, fragrance is one that we're spending a ton of time on.
• 19:59
  SPEAKER_00: We would love to have a fragrance brand in the portfolio for fun too.
• 20:03
  SPEAKER_00: Um we're, you know, we're looking across everything and um wellness too.
• 20:08
  SPEAKER_00: We haven't even really talked much about wellness, but that's one where, you know, it's an amorphous term.
• 20:13
  SPEAKER_00: It can mean a ton, it can span a bunch of different categories.
• 20:17
  SPEAKER_00: So we're a little bit more flexible on what we look at in wellness.
• 20:20
  SPEAKER_00: We're just looking for where, you know, the best intersections are between beauty and wellness.
• 20:25
  SPEAKER_00: Um, but that's one where we're going to be spending a lot of time on for fun too.
• 20:30
  SPEAKER_01: I love that.
• 20:31
  SPEAKER_01: And you know what?
• 20:32
  SPEAKER_01: I can't wait to see the first uh fragrance brand that you take on because I feel like you guys would just, you know, because fragrance right now is so interesting to me as well, you know, just as a consumer, like I feel like it's kind of, you know, you had mentioned wellness, it's kind of treading that line, you know what I mean?
• 20:47
  SPEAKER_01: That like of wellness and fragrance, because I recently interviewed a few people that, you know, they are kind of leaning more towards, hey, we're creating fragrance, but it's really for your overall wellness, you know, that we're looking at.
• 20:58
  SPEAKER_01: And so I know people are changing the way they're marketing their products, you know.
• 21:02
  SPEAKER_01: And so that really leads me to the question of, you know, you had mentioned this inflection point, which makes total sense to me.
• 21:09
  SPEAKER_01: But, you know, when you look at the industry right at large, like what are some things you've like noticed that have changed?
• 21:15
  SPEAKER_01: You know, the things that have changed in terms of whether it is about the inflection point or not, you know, it could be about that in the sense that, you know, well, before it was like this, and now we're noticing that it's happening in certain ways or in certain scenarios or you know, environments, like anything you can share in terms of insight, right?
• 21:33
  SPEAKER_01: Like, because I feel like it's always changing.
• 21:35
  SPEAKER_01: You know, sometimes I'll look at a brand and I'm like, well, I knew about you about three years ago, but all of a sudden you're huge.
• 21:41
  SPEAKER_01: You know, I had no idea what happened, but I don't know if it was an influence or what, but like I'm always wondering, right?
• 21:47
  SPEAKER_01: And the curiosity is there is in terms of what changed, you know, was it the environment?
• 21:52
  SPEAKER_01: Was it the person you worked with?
• 21:54
  SPEAKER_01: But um, I would love to get your perspective on that.
• 21:57
  SPEAKER_00: Yeah, you know, I think over Overall, just a comment on the industry.
• 22:02
  SPEAKER_00: The industry, I think, is definitely as dynamic and momentous as ever.
• 22:08
  SPEAKER_00: It's a, you know, we know this, it's a large industry.
• 22:10
  SPEAKER_00: It's highly fragmented and it continues to grow.
• 22:13
  SPEAKER_00: I don't know if you saw the latest NPD data for Q2, but um, or I should say Circana.
• 22:20
  SPEAKER_00: Um, now they rebranded.
• 22:21
  SPEAKER_00: Um, but Prestige Beauty grew 15% year over year for Q2.
• 22:28
  SPEAKER_00: And beauty remains the only tracked CPG category that Circana tracks that is grown both in dollars and units.
• 22:38
  SPEAKER_00: So it's not just price growth.
• 22:40
  SPEAKER_00: There's, you know, people are buying actually buying more units as well.
• 22:45
  SPEAKER_00: So all that to say is that there's the industry is always evolving, and there's really exciting innovation that's being launched that addresses new consumer needs, that that's creating pockets of growth.
• 23:00
  SPEAKER_00: There's the convergence of beauty and wellness, which I mentioned, which by the way means that from an investor perspective, our total addressable market also continues to grow because those categories, that pie, those categories are converging, and then that pie is getting bigger.
• 23:15
  SPEAKER_00: Um and but all this says from our perspective, as we take a step back, that what that means is there's a ton of opportunity for brands, but the bar keeps being raised for what you need to be successful.
• 23:33
  SPEAKER_00: And it's not enough to have success solely on DTC when you're a young brand.
• 23:42
  SPEAKER_00: And that's the easiest place to launch.
• 23:44
  SPEAKER_00: We know that it's becoming more expensive to scale there, but it's the easiest place to launch.
• 23:50
  SPEAKER_00: But you need to have proof points and traction at wholesale, ideally with a key anchor retail partner, which is what we look for.
• 24:01
  SPEAKER_00: Uh, but you need to prove that you can be an omni-channel brand.
• 24:06
  SPEAKER_00: Because one, that lets you scale faster, but it also positions you very favorably for an exit.
• 24:14
  SPEAKER_00: Um, again, from an investor perspective, we would hope to be able to exit um the investment at a certain point in time.
• 24:23
  SPEAKER_00: Um and I think the other thing it means is that if you're a small brand, you have to have a very well-structured business and PL, essentially, with a very clear path to profitability, even if you're at a smaller scale, because it is going to take more capital to be able to get to the scale, the volume that you need to be attractive to investors and eventually to um, you know, when you want to exit down the road, it's going to require a lot of capital.
• 25:00
  SPEAKER_00: So, what we're I'm seeing is if you're a small brand who in this market is looking to raise, which this market is a little bit different than 2021, where there was much more investor activity and capital was easier to come by.
• 25:16
  SPEAKER_00: But in today's market, which is tougher, you have to demonstrate not only that you have an amazing product and brand that has this engagement and in some case, you know, viral, viral attributes to them that you know is growing like a weed, but you also have to demonstrate that you have a viable business that can achieve profitability.
• 25:38
  SPEAKER_00: And so the bar keeps getting higher for brand founders in order to attract investment and in order to attract, in order to be able to successfully, you know, scale and hit the right milestones.
• 25:49
  SPEAKER_00: So I take a step back and I'm I look at founders today, and I'm not envious at the task that they have at hand because it's hard enough already to create a product that has product market fit that you know is that it has demand from consumers.
• 26:07
  SPEAKER_00: But then on top of that, you have to claw your way into retail and then you have to be profitable.
• 26:14
  SPEAKER_01: Yeah.
• 26:15
  SPEAKER_01: Eventually.
• 26:16
  SPEAKER_00: It's a huge order.
• 26:18
  SPEAKER_01: I mean, it's crazy, right?
• 26:19
  SPEAKER_01: Because you mentioned retail, and I actually this was a question I had for you because retail to me, like I I remember speaking to somebody, I I I forget the exact conversation, but we were talking about retail, and we were talking about how retail has been kind of a hit or miss a lot of times, you know, because there have been brands.
• 26:38
  SPEAKER_01: I know that there was that whole Sephora thing that happened a while ago where a lot of influencer brands dropped out, right?
• 26:43
  SPEAKER_01: Of Sephora.
• 26:44
  SPEAKER_01: And it's like you look at numbers sometimes and there are numbers behind brands, but then retail stores will drop them or they won't be there anymore.
• 26:52
  SPEAKER_01: So, like this is like almost like, you know, managing expectations and risks, right?
• 26:57
  SPEAKER_01: Like managing risks, I feel like.
• 26:58
  SPEAKER_01: And so how does that play in for you guys, you know, in terms of like, you know, okay, we are going to is there like a timeline?
• 27:06
  SPEAKER_01: Like it, like, okay, you have to be in a retail store by this time, or like how does that really work for you, you know, when you're approaching that strategy with a brand?
• 27:14
  SPEAKER_00: Yeah, I, you know, I have to be honest, I think it would be really uh difficult for us to invest without a retail partner either already launched or secured because of the difficulty, the the competitive nature of getting into um, and when I say retail, for us it's it's we're really focusing on beauty specialty retail.
• 27:43
  SPEAKER_00: So Sephora and Ulta, it it's it's really difficult, um, very competitive, very expensive to you know, to be in those retailers.
• 27:53
  SPEAKER_00: And so if you are a DTC brand that doesn't have a clear path to how you expand in an omnichannel way, ideally with those two partners, it becomes really challenging.
• 28:07
  SPEAKER_00: Now, have we have we done it?
• 28:09
  SPEAKER_00: Absolutely.
• 28:10
  SPEAKER_00: I mean, we have invested in a brand called Do Skin, um, which is uh it's 100% um DT e-commerce, and they don't have um, they haven't launched in a retailer yet, but in that case, they were able to demonstrate such strong organic demand for their brand with the most incredible capital efficiency that I think I've ever seen.
• 28:39
  SPEAKER_00: Um, there's something so special about the relationship that the brand has with their consumers that we knew we'd have to, we knew we we could get in here and ideally help them expand into wholesale, even if they didn't have a partner locked in.
• 28:58
  SPEAKER_00: But that was a very rare exception because of the unbelievable growth that they've experienced with such limited resources and and limited team, quite honestly.
• 29:09
  SPEAKER_00: Um, they're phenomenal.
• 29:11
  SPEAKER_00: And so we were compelled in that case to invest, but for the most part, we want to see that retailer locked in.
• 29:19
  SPEAKER_00: Um and that's how we de-risk it a little bit.
• 29:21
  SPEAKER_00: But I will say uh just because you launch Sephora or Ulta doesn't mean that you're going to be able to successfully scale there.
• 29:34
  SPEAKER_00: That's just that's stage phase one of a very long journey getting in.
• 29:41
  SPEAKER_00: Um and we always tell founders, like, listen, you know, retailers don't build demand, brands create demand.
• 29:53
  SPEAKER_00: So the retailer will give you the space, and oftentimes they will give you support and visibility for you to be able to attract new customers, but it's up to you as the brand to really create that demand.
• 30:08
  SPEAKER_00: And when people walk in the door, they're looking for your brand by name.
• 30:13
  SPEAKER_00: And that takes a ton of work and resources, capital in particular, to be able to help you scale successfully.
• 30:22
  SPEAKER_00: So that's why, yes, it's one proof point we need to be able to invest is you have secured that retailer, but then how successful can you be at growing it?
• 30:31
  SPEAKER_00: And that's oftentimes where we spend a lot of um time with our brands is figuring out that expansion strategy and how you support your retailers and how you win at Sephora or how you win at Ulta.
• 30:46
  SPEAKER_00: And we've, you know, worked hard to bring in even additional resources into our platform to be able to help our brands successfully do that because it's so dispositive to the outcome of whether or not this will be a successful investment for us.
• 30:59
  SPEAKER_01: That makes total sense.
• 31:00
  SPEAKER_01: Honestly, I mean, I think that, you know, we're living in this post-COVID world, and I feel like a lot of people just think, you know, you can just go to any brand's website, get what you want.
• 31:10
  SPEAKER_01: But honestly, I mean, people are still, people are flocking to Sephora and retailers.
• 31:14
  SPEAKER_01: You know, that's something I had a misconception of, you know, and and really thought that we maybe people are deviating away from these retailers.
• 31:21
  SPEAKER_01: But, you know, just the other day I was in the Sephora and I was like floored by how many people are discovering new brands.
• 31:27
  SPEAKER_01: You know what I mean?
• 31:28
  SPEAKER_01: Like there were like four people on the floor, and this kind of, I know this kind of like off topic a little bit, but I want to just to give reference to everyone listening.
• 31:35
  SPEAKER_01: You know, people were like asking the Sephora agents, you know what I mean?
• 31:39
  SPEAKER_01: Like, what brand can I buy for this?
• 31:41
  SPEAKER_01: And all this, there was so much discovery.
• 31:43
  SPEAKER_00: Yeah, just discovery and play.
• 31:47
  SPEAKER_00: Um it's it's part of the beauty of the industry.
• 31:51
  SPEAKER_00: So we've always believed in the power of Omnichannel and in particular specialty retail to be able to really foster that experience for the consumer.
• 32:01
  SPEAKER_00: And we, you know, we we love it.
• 32:03
  SPEAKER_00: And to your, by the way, to your point around, you know, uh brands that have launched big and then been exited, um, yeah, I'm sure you experienced when you walked into the Sephora, there's a lot of brands there and every, you know, it's packed in there, and there's, you know, there's not a lot of space available at all.
• 32:23
  SPEAKER_00: So you have to be able to perform once you're there.
• 32:27
  SPEAKER_00: And, you know, just because you have a celebrity face or, you know, an influencer um with you know, associated with your brand, and maybe it might get you a lot of publicity at launch, but what's ultimately going to get you to longevity and success is having that compelling brand story, that you know, efficacious product that truly, you know, does what it's supposed to do in a way that is an amazing experience for the consumer.
• 32:57
  SPEAKER_00: Um, and that, you know, everything from the formulas to the packaging has to be a great experience for the consumer and be, you know, mission-aligned with them too, by the way.
• 33:05
  SPEAKER_00: Um, and and and provide that, you know, delightful experience that gets them to not only come back and buy, but buy deeper into the line, ideally.
• 33:17
  SPEAKER_00: Um, and so, you know, there's so many aspects that go into what happens post-launch.
• 33:24
  SPEAKER_00: Um, and and a lot of that also comes down to execution on the brand side.
• 33:29
  SPEAKER_00: You have to have the right team in place to be able to successfully, you know, maneuver all of the challenges of being in retail.
• 33:38
  SPEAKER_00: So, you know, we also try to spend time bringing in people who know, who've done this before, who have a lot of experience and could provide that um guidance.
• 33:48
  SPEAKER_01: I mean, that makes yeah, it makes total sense.
• 33:51
  SPEAKER_01: And I I love what you said.
• 33:52
  SPEAKER_01: I think it's more, it's so much more than just the face on the brand, you know, and I think that's something I see a lot of, and I always wonder from this, you know, like the investing standpoint about that, because you know, at the end of the day, I've never been the consumer.
• 34:07
  SPEAKER_01: You know, I'm just speaking about myself.
• 34:08
  SPEAKER_01: So I don't know what everybody else is like, but I've never been really the consumer that's like, oh, so-and-so's face is on this, let me go buy it.
• 34:16
  SPEAKER_01: You know what I mean?
• 34:16
  SPEAKER_01: It's always for me about efficacy, which is I know you a point you had mentioned, Christina, was this idea of does your product actually work?
• 34:23
  SPEAKER_01: You know, is it doing what it's promising?
• 34:26
  SPEAKER_01: And I feel like, you know, um, we're seeing more of that now.
• 34:29
  SPEAKER_01: So I, you know, I think a lot of times, like the brands I talk to, especially if they're a smaller brand, they will be so hungry for this like exposure, right?
• 34:39
  SPEAKER_01: In terms of like celebrity exposure or like, you know, somebody endorsing them.
• 34:43
  SPEAKER_01: But I always wonder to myself, I'm like, if you if you're making a great product and if you're no your product is extraordinary, like it does what it's supposed to do, you can get it into anyone's hands.
• 34:55
  SPEAKER_01: And if it's performing, it's gonna, you know what I mean, show for itself.
• 34:58
  SPEAKER_01: It's gonna show up, you know, for that person, for their audience.
• 35:02
  SPEAKER_01: And I've I'm I'm curious, you know, from the strategy of um an investor, like do you tell brands like, hey, this might be a good way for you to get more exposure for your brand, or is that something you leave into in their own hands?
• 35:15
  SPEAKER_01: You know what I mean, in terms of who they partner with or if they get brand, you know, like celebrity partnerships and stuff like that.
• 35:22
  SPEAKER_00: Yeah, I mean, we've we've talked to some of our brands about this stuff.
• 35:27
  SPEAKER_00: I mean, some of our brands have had really amazing viral moments from influencers who organically picked up their product and talked about it, and all of a sudden, you know, boom, that product is sold out, and all of a sudden, you know, you know, uh the brand becomes a household name.
• 35:44
  SPEAKER_00: Um, so there they're definitely, we love when that happens organically, but you can't you can't manufacture viral moments as much as people want to try.
• 35:53
  SPEAKER_00: That does not happen.
• 35:55
  SPEAKER_00: So then, you know, going the partnership route, I mean, I think it's got to be a very compelling reason why you've picked a certain partner, and there's got to be credibility in that relationship and in that partner.
• 36:09
  SPEAKER_00: You know, why why this partner?
• 36:11
  SPEAKER_00: Um, can they really articulate a reason for partnering with said brand?
• 36:18
  SPEAKER_00: Uh and that can't I f I struggle with kind of forcing that to happen unless there's already some sort of existing relationship.
• 36:29
  SPEAKER_00: Um, but listen, to your point, if the product is phenomenal and you have a great team behind them that knows how to execute excellently, and then you just need to widen the funnel at the top and acquire more customers with the visibility of the right celebrity or the right influencer partnership, it definitely can work.
• 36:55
  SPEAKER_00: You just can't you can't force it and you can't expect it to be a silver bullet because it never is.
• 37:01
  SPEAKER_00: All the other pieces have to be in place.
• 37:04
  SPEAKER_01: That makes so much sense.
• 37:06
  SPEAKER_01: Yeah, because I've I've got my yeah, go ahead, sorry.
• 37:08
  SPEAKER_00: No, the only thing I was gonna say is one of the things that we've also um started to gravitate towards is uh founders who know how to create their own demand.
• 37:21
  SPEAKER_00: So they don't have to be a celebrity, they don't have to be an influencer, but uh they know how to create their own demand within their community.
• 37:30
  SPEAKER_00: They know how to create community um and they know how to engage, they know how to create advocates for the brand.
• 37:37
  SPEAKER_00: And quite honestly, they know how to sell the brand themselves with their own story or experience.
• 37:42
  SPEAKER_00: Um I think that is really, really powerful.
• 37:46
  SPEAKER_00: And it becomes a very authentic, and that's used, I know that word gets used around a lot, but it becomes a very authentic way to um to create organic demand.
• 37:59
  SPEAKER_00: Uh, and so founders that have that superpower are amazing.
• 38:03
  SPEAKER_00: So, you know, Fiona Chan from Euthoria has that power.
• 38:06
  SPEAKER_00: So does um Charlotte from Dewskin.
• 38:09
  SPEAKER_00: Um, they're incredible at creating demand from and creating community.
• 38:14
  SPEAKER_00: Um, and we love that because in addition to being able to run their brands as you know, founders and and CEO, they're also able to be the brand's number one ambassador.
• 38:27
  SPEAKER_01: Yeah, yeah, absolutely.
• 38:29
  SPEAKER_01: I I remember like when I had spoken to Fiona, I hosted Youth Foria and I was it was before she was on Shark Tank and everything, you know.
• 38:37
  SPEAKER_01: And I remember talking to her and feeling like she really knows her product, you know what I mean?
• 38:41
  SPEAKER_01: She knows why she's making what she's making, she knows where it's gonna go and who who is gonna benefit from it, you know.
• 38:48
  SPEAKER_01: And I feel like that's you're right.
• 38:49
  SPEAKER_01: Like it's like you can tell immediately when you talk to a founder, even from my perspective, like, you know, um, I can tell like you really know why you made what you made, you know, you know who your community is, you know what they need, and you know how to deliver it to them.
• 39:02
  SPEAKER_01: And I think that's oftentimes, you know, what I get, I get questions, right?
• 39:07
  SPEAKER_01: And I'm always like, I don't know, but I'll invite somebody on that can answer your questions for you.
• 39:12
  SPEAKER_01: You know, a lot of times the questions are like that, you know, from brand founders, which is how do I get people more engaged?
• 39:19
  SPEAKER_01: You know, how do I get people to really like what I'm doing?
• 39:22
  SPEAKER_01: And it's it's like there's no easy answer, right?
• 39:24
  SPEAKER_01: I mean, there's no answer to that.
• 39:26
  SPEAKER_01: It's like you just have to figure it out, kind of thing.
• 39:29
  SPEAKER_00: For sure.
• 39:30
  SPEAKER_00: And and you got to do what's natural to you, don't force something by trying.
• 39:35
  SPEAKER_00: If you're not, you know, if you're not a TikTok person, you're probably not going to become one.
• 39:40
  SPEAKER_00: As much coaching as you have, it's not gonna be organic to you or to the brand.
• 39:44
  SPEAKER_00: So you got to do it in a way that works for you.
• 39:46
  SPEAKER_00: Um, and yeah, I mean, Fiona's a great example, and she's kind of the trifecta because she is incredibly innovative on the product side and has created some really disruptive products.
• 39:58
  SPEAKER_00: Um, she's also a very savvy business person, and she knows how to create demand organically for her brand.
• 40:06
  SPEAKER_00: So for us, that's such a such a winning combination.
• 40:09
  SPEAKER_01: I love that.
• 40:10
  SPEAKER_01: I love that.
• 40:11
  SPEAKER_01: And I I want to actually switch gears a little bit because I do want your perspective and you know your insight into this because I'm I I always see these articles pop up and I've it's from various different sources, but it's always stuff like you know, this type of beauty is dead, or this is not working anymore, and we're not gonna see, you know, for example, like luxury, right?
• 40:32
  SPEAKER_01: Like a lot of people um sometimes they love posting these these you know commentaries about well, luxury is never is not there anymore.
• 40:40
  SPEAKER_01: You know what I mean?
• 40:41
  SPEAKER_01: Like, is that true?
• 40:42
  SPEAKER_01: Like from your perspective, like we're are we really transitioning out of like luxury products?
• 40:47
  SPEAKER_01: I mean, um, the way you see it, and what's your opinion?
• 40:51
  SPEAKER_00: Yeah, I I love those those clickbait headlines like oh, retail is dead in 2020 and look at retail now, right?
• 40:58
  SPEAKER_00: So um, you know, I think beauty is so much these categories, it's not about ending, it's about evolving.
• 41:05
  SPEAKER_00: They evolve.
• 41:06
  SPEAKER_00: Um, and as it relates specifically to luxury, you know, I don't think luxury is at all coming to an end, but you have to break it down into the various categories within luxury.
• 41:18
  SPEAKER_00: Um, if anything, just as a general statement, I do think beauty is a pretty underpenetrated um category within luxury when you compare it to, let's say, fashion as an example.
• 41:30
  SPEAKER_00: Um, but I do think that there are certain categories where where luxury thrives.
• 41:35
  SPEAKER_00: I mean, if you look at prestige beauty, I think you know, fragrance is definitely the most luxurious category.
• 41:42
  SPEAKER_00: And it's definitely um, you know, more expensive in general on average than a category like skincare or makeup.
• 41:51
  SPEAKER_00: And if you look at luxury fragrance, it's grown meteorically, uh, especially during COVID.
• 41:57
  SPEAKER_00: Who would have thought?
• 41:58
  SPEAKER_00: We our team, you know, we sit back and we scratch our heads saying, this is unbelievable to see.
• 42:04
  SPEAKER_00: Um, you know, that being said, those that category is really dominated by legacy and designer fragrances.
• 42:11
  SPEAKER_00: Um, so you know, you definitely, I think, have to have a lot of history and credibility um to be successful in luxury.
• 42:19
  SPEAKER_00: But if you take a step back and look at uh even, you know, transactions within luxury have been, there's been several huge ones like Creed or Tom Ford.
• 42:29
  SPEAKER_00: So I, you know, I don't think luxury is dead.
• 42:32
  SPEAKER_00: What I do think, what I a big challenge that I see with luxury is the dependence on department stores.
• 42:39
  SPEAKER_00: Um, and from a beauty perspective, too.
• 42:41
  SPEAKER_00: I mean, that's really tough.
• 42:42
  SPEAKER_00: That's that's a uh a channel that's been declining.
• 42:46
  SPEAKER_00: And and, you know, many luxury brands have actually been turning more to DTC to be successful and to acquire, you know, customers.
• 42:55
  SPEAKER_00: Uh, and then some of them are taking a little bit more of a uh localized approach or bespoke approach and working with luxury boutiques and luxury hotels and resorts and all of that to try to find other avenues for um for growth and trying to find where those luxury consumers are.
• 43:14
  SPEAKER_00: But, you know, but I again I don't think it's dead, and and and fragrances is a great example of that.
• 43:18
  SPEAKER_00: I do think it's, you know, if you look at other categories, though, it's a little bit more challenging, um, like, you know, uh skincare.
• 43:26
  SPEAKER_00: I think while there's some amazingly successful luxury skincare brands, I think the challenge has been that there's been really great skincare brands within Prestige and within Mass that have come in at lower prices and offered a stronger value proposition to the consumer.
• 43:45
  SPEAKER_00: So they can provide very strong efficacy and high quality ingredients and clinically proven results at a fraction of the price.
• 43:56
  SPEAKER_00: And in some cases, you know, they they use this.
• 44:00
  SPEAKER_00: Same ingredients and can still demonstrate better results at a lower price.
• 44:04
  SPEAKER_00: So I think that's been a challenge in a category like skincare, not to mention dupe culture is a real thing.
• 44:12
  SPEAKER_00: You know, I think people get real excitement by advertising when they found something that really works for a, you know, a lot lower of a price.
• 44:22
  SPEAKER_00: And that's just kind of natural for people to want to do that.
• 44:25
  SPEAKER_00: But, you know, I still think luxury brands have an opportunity to win over consumers.
• 44:30
  SPEAKER_00: I think they just have to focus on what sets them apart, you know, focusing on those top quality ingredients and results, telling a very compelling and credible brand story and that and giving consumers that, you know, very elite experience with very, you know, high touch customer care and exceptional, exceptional service, and really kind of anchoring on, you know, why to buy luxury.
• 44:56
  SPEAKER_01: Yeah, no, I mean, that makes so much sense what you said, because I feel like, you know, with luxury, it's like there's a lot of dupes, like a lot.
• 45:05
  SPEAKER_01: Like, I mean, I see it every day and I feel like I feel bad, you know what I mean, for these brands because they were the first ones to come out with them.
• 45:12
  SPEAKER_01: So, you know, it's in in a sense, like I as a consumer can definitely relate because I've I've seen it myself, you know what I mean?
• 45:19
  SPEAKER_01: And I'm I'm kind of guilty a little bit of buying the dupe.
• 45:21
  SPEAKER_00: Yeah, I mean, the the good thing is that the beauty consumer is, you know, yes, they they could be motivated, you know, to try a dupe to get, you know, for a lower price, but the beauty consumer is also looking for more.
• 45:37
  SPEAKER_00: That's they're looking for the results, but they're also looking for the brand experience.
• 45:40
  SPEAKER_00: Or maybe they maybe they shop based on brands that are mission-aligned with them from a perspective of you know, inclusivity, sustainability, um, and other, you know, other other brand values.
• 45:52
  SPEAKER_00: So, you know, there could there are definitely other ways to be able to keep, acquire, and keep a consumer outside of just price.
• 46:03
  SPEAKER_00: Um, and clearly, prestige, as I mentioned when we first started the podcast, prestige is growing 15% year over year based on the latest Circana data.
• 46:14
  SPEAKER_00: I mean, that's massive.
• 46:15
  SPEAKER_00: Prestige is outperforming mass.
• 46:18
  SPEAKER_00: So clearly, people are looking for more than just price.
• 46:22
  SPEAKER_00: So I I do I feel very bullish on prestige.
• 46:26
  SPEAKER_00: And I think that luxury in certain categories could also do very, very well.
• 46:31
  SPEAKER_01: I love that.
• 46:32
  SPEAKER_01: And I love that you gave that insight because I I can definitely see that, you know, just even as a consumer, I can definitely see the you know it the truth in that.
• 46:41
  SPEAKER_01: Because at the end of the day, like, you know, even like when I'm buying products, you know, it is a lot of my the brands I buy are prestige brands.
• 46:48
  SPEAKER_01: You know what I mean?
• 46:49
  SPEAKER_01: It's just something that I gravitate towards, you know, naturally.
• 46:52
  SPEAKER_01: And I think a lot of it, you know, I don't know the inner workings of you know what they do in terms of their strategy, but it works, you know, it's working, whatever they're doing is attracting customers.
• 47:02
  SPEAKER_01: But you know, I think for the new brands, one of my question always comes down to this idea of what can we tell them, right?
• 47:10
  SPEAKER_01: And and this is where I really want your advice because, you know, what can we tell brand founders that is going to kind of, I mean, they might be doing what they're doing, but like to optimize their likelihood of getting not only funded, but then being successful.
• 47:26
  SPEAKER_01: I mean, is there some sort of like one size fits all, you know, uh strategy or just advice you could offer, you know, for these brand new founders out here that just need some guidance?
• 47:37
  SPEAKER_01: You know, I would love to just get your your words of wisdom there for that.
• 47:42
  SPEAKER_00: You know, I wish I wish there was a one size fits all um piece of advice, but it it will vary.
• 47:50
  SPEAKER_00: It will really vary by by your brand and and your category and what you're you know ultimately trying to accomplish.
• 47:58
  SPEAKER_00: But if you're looking, and you know, we have a mentorship program that we launched aimed entirely at this topic, which is gosh, how do I become funding ready?
• 48:11
  SPEAKER_00: Um how do I prepare my business for investors to diligence?
• 48:18
  SPEAKER_00: And as one of our prior mentees said, you know, get in the underwear drawer of my business.
• 48:23
  SPEAKER_00: And so I would say, you know, first and foremost, before being even funding ready and what it takes to be funding ready, just make sure that from the very early stages, you're you have a plan and you're building a viable business that would be attractive for an investor.
• 48:44
  SPEAKER_00: Maybe not sitting here today when you're first launching your brand, but you know, in a couple of years, you know where you want to be.
• 48:52
  SPEAKER_00: You have very clear milestones that you want to achieve to have the best outcome because investors, especially those that maybe aren't as sector focused like we are, they may want to see certain proof points before investing.
• 49:09
  SPEAKER_00: So, you know, have your three, five-year plan.
• 49:13
  SPEAKER_00: We always start our mentorship program with asking, do you have a financial model?
• 49:18
  SPEAKER_00: And if they don't, we spend a lot of time with them helping, helping build that out because that's that's your that's your plan, that's your roadmap, those are your guardrails.
• 49:27
  SPEAKER_00: Um, and start as you wish to continue.
• 49:30
  SPEAKER_00: And if you don't have that idea of what you want to become, uh, and when, you know, for example, if you know you really want to be a Sephora brand, that is your ultimate goals to get into Sephora, then, you know, do you have the right, are you in the right price point?
• 49:47
  SPEAKER_00: You know, are you the in the right, you know, channel?
• 49:50
  SPEAKER_00: Are you prestige, but are if you're if you're really, really mass or really, really luxury, you know, it may not fit necessarily with Sephora and their sweet spot.
• 49:59
  SPEAKER_00: Or, you know, if you uh are thinking about expanding, um, you know, you really want to be DTC and you want to create a subscription business.
• 50:09
  SPEAKER_00: And okay, well, you have to make sure that you have, you know, what your unit economics are going to be like and you know, what are your AOVs relative to your CAC, which is your cost of acquiring customers.
• 50:22
  SPEAKER_00: Uh, if you're spending more than what you're getting, if your CAC is higher than your AOV, it's almost impossible.
• 50:28
  SPEAKER_00: It is impossible for you to be able to be profitable.
• 50:31
  SPEAKER_00: So you just have to have that um that baseline understanding of what it's going to take to get from point A to point B and be able to articulate that to an investor.
• 50:41
  SPEAKER_00: They're gonna want to know that you have a plan.
• 50:43
  SPEAKER_00: Now, a good investor is gonna know that that plan is probably never gonna happen exactly the way you plan it.
• 50:50
  SPEAKER_00: That's why it's a it's a forecast, it's a model, it's going to be wrong, but at least they can understand the way you're thinking about planning out the business and what the growth drivers are, you know, and that you have a clear vision around that.
• 51:02
  SPEAKER_00: Um, because oftentimes the founder is founder and CEO.
• 51:07
  SPEAKER_00: So yes, you might be the creative vision.
• 51:09
  SPEAKER_00: You might have um, you know, you're the brand, you lay out the brand DNA, you you know, develop all the products and you have, you know, a real point of view on what your brand, what you want your brand to be.
• 51:22
  SPEAKER_00: That's great.
• 51:23
  SPEAKER_00: But now can you run the business?
• 51:25
  SPEAKER_00: And it's okay.
• 51:26
  SPEAKER_00: If you can't run the business, that's not your skill set, that's not your superpower, then augment it with a partner, augment it with somebody who can around you so that together you're actually from the beginning building something that has the best chance of commercial success.
• 51:44
  SPEAKER_00: Um so long-winded explanation of saying just know your business, kind of lay that groundwork and that foundation.
• 51:54
  unknown: Yeah.
• 51:54
  SPEAKER_00: And then when you it's time for you to find the right partners, it's going to be easier for you to articulate the story and the plan.
• 52:01
  SPEAKER_00: And if you don't have that, it's so much harder.
• 52:04
  SPEAKER_01: I love that.
• 52:05
  SPEAKER_01: That is such solid advice.
• 52:06
  SPEAKER_01: Thank you so much.
• 52:07
  SPEAKER_01: Because I know that that sometimes, I mean, it's things like this that you don't know, you know, as a new founder.
• 52:13
  SPEAKER_01: Like, I I mean, there's so many um amazing people out here that have created brands, but you know, there's just they have like, you know, this problem of like never knowing like where the first steps are, right?
• 52:25
  SPEAKER_01: In terms of guidance.
• 52:26
  SPEAKER_01: So I I can't thank you enough for for giving you know your advice and really offering that because it's important to know where you're headed.
• 52:33
  SPEAKER_01: And you're right, you know, you have to have a plan and you have to take the time to sit down and make a plan.
• 52:38
  SPEAKER_01: But uh, Christina, this has been so amazing.
• 52:40
  SPEAKER_01: You are truly a wealth of knowledge, and I'm so so grateful to you for coming onto the show.
• 52:46
  SPEAKER_01: And I absolutely love everything that TBV, you know, supports, all your brands.
• 52:51
  SPEAKER_01: You guys are just killing it out here.
• 52:53
  SPEAKER_01: So thank you for you know funding the right brands and bringing them to us, like, you know, uh blooming them for us.
• 52:59
  SPEAKER_01: I it means the world to us as consumers because yeah, we're all always looking for right options, you know, and good options and you know, beauty, wellness, everything right across the board.
• 53:09
  SPEAKER_01: So I can't thank you enough.
• 53:10
  SPEAKER_01: Thank you so much.
• 53:11
  SPEAKER_00: Thank you.
• 53:11
  SPEAKER_00: Thank you so much for your questions and for being such an amazing um, you know, resource for indie beauty brands.
• 53:18
  SPEAKER_00: I think having access to knowledge is truly power.
• 53:22
  SPEAKER_00: And the more places they can go to to find this knowledge, the better.
• 53:25
  SPEAKER_00: And so thank you for all of your contributions and for having me today.
• 53:29
  SPEAKER_00: Oh no, it's my pleasure, it's my honor.
• 53:31
  SPEAKER_01: Um, for everyone listening, if you are a small brand and you are a founder and you have questions, please do not hesitate.
• 53:38
  SPEAKER_01: Reach out to us, you know, send us your questions.
• 53:40
  SPEAKER_01: We'll definitely pass them on to Christina and Rich's team and see if we can get some answers for you, maybe even do a part two if they have the time in their schedule.
• 53:48
  SPEAKER_01: But um, yeah, I would love to hear from you guys, you know.
• 53:51
  SPEAKER_01: And it's, you know, we always consider our listeners our family.
• 53:55
  SPEAKER_01: So, you know, if you have any questions, if you have any concerns, any any advice you need, please reach out and we will find the find the answers for you and and get them to you.
• 54:04
  SPEAKER_01: So thank you so much for tuning in and I will be back next time.
• 54:10
  SPEAKER_01: Hey guys, so I hope you love that episode.
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• 55:17
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