The $25M fund betting on vice with Vice Ventures Founder, Catharine Dockery

Joining me on the show today is Catharine Dockery, the founder behind Vice Ventures.

A fund that invests in early stage startups from non-traditional verticals including cannabis, alcohol, CBD, e-sports, addiction recovery and sextech.

Catharine was going through a series of interviews for new jobs in the world of VC and was pitching in an alcohol brand only to be met with the same feedback on repeat; every fund has a vice clause.

And basically that meant that whether or not the opportunity was major, they couldn’t invest. And that’s how Vice Ventures was born.

Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!

Catharine: Awesome, thank you so much for having me.

Catharine: I'm very excited, Fab, before we jump into your background and how and why you started Vice Ventures, can you just explain to us what Vice Ventures is in a nutshell?

Catharine: Yeah, so Vice Ventures is an early stage fund, meaning we invest in precede seed and very selective series's and we invest in base, which we define as cannabis, alcohol, nicotine, sex tag, sexual wellness, porn, ketamine's, psilocybin. We look at the whole gamut.

Doone: Sounds really interesting. Some words you said there that I don't even know what they mean.

Filicide, what's that?

So it's the active ingredient and like what people call magic mushrooms.

Oh, OK. Got it. Great. Learning something.

One minute. I love it.

Doone: Let's go back to before you got started with the fund and what you were doing before and that kind of light bulb moment that led you to starting the business.

Catharine: Yeah, so I guess I'll start my experience in college, I went to New York University, which is actually three blocks away from where I grew up. I'm a big I'm all about branching out in college. I worked for four years every summer basically on the floor of the New York Stock Exchange. And during school, I absolutely loved one of my favorite jobs I've ever had for sure. And when I was down there, I started writing a blog called Dockery's Daily Dockett, and I was so cool. I was such a cool kid that I would wake up at four thirty in the morning to write, Oh, my God, stop, everybody love me. I had so many friends clearly. And then basically that blog ended up getting like over five thousand readers. So basically from there I got a job offer to work on a trading desk right out of college at Citigroup. And that was the worst job ever had by far of I was on a high yield desk. And just I guess just to provide some color, high yield traders and to be like the most pro of all of the traders. And they all put the cross and the football and they like and the culture is very much super aggressive and they just scream at each other all day. And I'm way too sensitive. I learned about myself to be in an environment where people are just screaming, like even when we were having lunch, they were like, What do you want for lunch?

Oh my God. Oh, I don't know. I this is all.

So I quit after my second vote is had no literally no idea what I want to do at all. My then boyfriend, my now husband, he was about to take some months to think about it. I do some soul searching and whatever. So I spent nine months interviewing, getting a ton of job offers and being done for me and playing field here. Yeah, like, I hate all of this so that I connected with another alumni of NYU and she had a PR firm and I knew absolutely nothing about PR, literally nothing. So I was like, oh, that sounds interesting. And like she was super nice and like the environment was great, but then like to love it. I was working part time was really two days a week. So my second day there, I just realized that I was incredibly bored and it wasn't like I just didn't find it interesting. Like, I mean, I find it interesting the way the media works like that was super interesting to me. But the idea of pitching clients is not something I was meant for. So anyway, fast forward, I met one of the co-founders of Bonobos who we basically like within two hours of us knowing each other, you as I want you to work for me. And I was like, that sounds great. Amazing. Like no idea. What I was doing was like, I love to work for you. So I ended up being his personal chief of staff because these two other businesses that he helped co-found besides from Bonobos and he also just as as a leader, he just has so much going on.

Like he had a very expansive portfolio of private investments. He also was setting up a family office. And it was just awesome to learn VXI. Right, by actually doing and like Googling like what does a series see. So I guess that's how I got my start in venture. And then when Walmart acquired Bonobo's, I followed the founders to Walmart and then basically within the first two weeks realized it was definitely not for me either. Like nothing to do. Like Walmart is great and people love working there. But like when you grow up in New York City and you've never been to a Walmart and to work there, it's like a culture shock. I mean, to be a culture shock for me, like anywhere else in the country. Right. But so I wanted to leave and was like, if you can just search ones, that would be great. And I was like, sure, I can do that. No problem. And then I use a six week period to interview at a lot of consumer venture firms. And I personally had invested in alcohol business that was doing well. And so I just kept pitching them out all the interviews and then I just kept hearing endlessly. Katharyn like, we don't disagree with you, but we're not allowed to invest in actually the vice clause. And then finally an injury. I was like, can you define what vice causes? And they're like, yeah, it basically means like we can't invest in alcohol, nicotine, cannabis, CBD, anything, sexual wellness, online betting or skill-based betting or whatever.

But why? Why what's that called?

Because so if you think about the whole financial system, the small pool of capital basically are like assets under management is venture capital. It's tiny, like it's the highest risk you can do. So people aren't as selective about who there are a lot of the time just because they're just happy to get money. So because of that, pension funds and endowments and a lot of these places, if you go university endowment, you probably don't want to invest in nicotine right now. Right. So, yeah. So that's why the vice causes it. Got it. Got it. OK, and then fast forward. I was super fed up with this and I. Listen to so many theses of funds and being consumer agnostic is not a thesis that's just being really opportunistic and that's like throwing darts, in my opinion. So then I decided I was going to do this. I had no idea I'd get funding at all. I don't come from money like my dad was a bartender and I had a student loan. So at that point I was like, if this fails, I'll get another job right? Like, I literally have nothing to lose. So then I just started emailing people, begging my friends who worked at media outlets for emails like Important People, and they would give it to me, which was fantastic. But yeah. So the first person that basically I emailed, I was like, who's the richest and most powerful and brilliant person I can think of? And I was like, Mark enjoys it. So I sent them a cold email and he responded in my time. Yeah, you responded within five hours, which is I think, incredible, because he probably gets more emails than anybody on the planet. And he was like, I would love to talk to you about this super interesting. Like, what are you available? And I remember so well. So I just woke up in the middle of the night and I was like, oh, let me check my phone. It was it was literally one forty two in the morning. And then I just started screaming.

I was like, oh my God, oh my God. I can't believe I woke my husband up and he has to wake up for work at like five thirty just like this. Better be important. What did you say in the email, like what do you think made him right back to you and read it?

Yes, I was just like, this is what I was like, you don't know me, but I know you. And basically I was like, I like this is this is what I did in my past. One paragraph. The next paragraph, I was like, this is what I'm doing now. And then the third paragraph, I was like, I think you would be really value add for these reasons, but also totally understand if it's not interesting to you. And I see over five hundred people to get funding, but yeah.

Wow. And so you go and you meet him I assume, and like tell him your idea. And in that meeting do you be like, hey, do you want to invest in my fund. Was it that black and white. Well yeah.

So I he has this incredible executive assistant like she's phenomenal and she's like one of those people that writes you emails and you're like, oh, I can feel your heart through this email. So when I walk up and then I walk into the office or like the waiting room, obviously I looked her up. I was like, did she look like I need to recognize her? And it was she came and as I gave her a hug and I was like, thank you so much for being with me when I emailed you every week to see if the meeting was still, you know, where you are.

So she walked me into his office and I was so starstruck that he put his hand out and was like, I'm Mark.

And and I was like, I know like five minutes ago this happening.

Exactly. And I was like, I need to calm down. I need to come down. And then another partner walked in and I was like, oh, my God.

Anyway, anyway, fast forward. They ended up committing. It was one of the best moments of my life, like without question. And then after they committed it, it was a lot easier to raise money, right? Yeah, which is awesome. So we raise money basically in five months or five and a half months. And I was actually on a panel yesterday with another fund and they're like, oh, just three years to raise capital. And I was like, I'm very lucky.

And I read that you raised around twenty five million in in that five months. Right. So still a huge amount. It's really cool, very exciting. And then what happens next? Do you basically start looking for brands? Are you like putting the feelers out, talking to everyone you know, or do people start coming to you immediately? How does it work?

Yes, so we very early on before the fund even closed. Shout out to my lawyers of Bagley who dealt with this because he's got to look back Leupp family and basically the fund leaves before it closed. So like The Wall Street Journal ended up writing about it, and that's illegal to market your fund before it closes. So we ended up being like a whole new legal category, which is crazy. Again, he's incredible. So he definitely would not be here without his guidance, clearly. Yeah. So basically, like, fast forward five months, whatever, dude. And we ended up closing on June twenty seven to twenty nineteen and that day was so crazy they more attention than I've ever received in the entirety of my life. I wasn't great with attention. Like at our wedding. I fired my parents on going down the aisle and I was like, you guys stay here.

I like being in control, you know, like your parents low.

So mom and dad, there's actually a photo from our wedding of them like high five each other as I like to fire them and walk down the aisle. I'm charming. I told you I'm super charming.

Yes, the fun closed. We got a ton of attention. And then Founders' just started reaching out left and right. And they're like, this is a great idea. Like we have this idea. We've had so much trouble getting meetings with these CEOs because, like, they just refuse to invest in these categories, like whatever. And then from there, like we got endless in mountains, like we've seen over two thousand companies in the first year. And we don't really work with other funds pretty much because like a lot of funds can't invest in what we invest in. So that's just all inbound is so insane.

Holy moly. That's like multiple per day. How big is your team now?

Oh, my God. So it was just me for the first year.

That's like three ratings a day.

That's more it was wild. My day was literally like eight a.m. to like happy hour to dinner.

It was like literally nuts out of two thousand people. What's the like how many companies out of twenty like. Oh, I'm interested in these.

Probably twenty five percent ish, and of the two, I think it's like two thousand and four to be exact, that we've seen we've invested in eight.

Wow, that's crazy. Yeah.

Holy moly. And so when these people reach out to you and found us reach out, what is it to you that sparks your interest to even get a meeting?

And for people listening who want to go down that route of v.c or being on someone's radar, what should they be thinking about? And there's obviously so much research online about what goes into a pitch and like what needs to be there. But what, in your opinion, creates that sparkle?

Yes, I guess pitches that stick out to us is one when people stole my name, correct. I know it sounds stupid, but I can mentioned it so people would be like instead of a room that says a lot about a person, like if they can't get the name right of the person, they're trying to get funding from them, like, what are their financials look like? Where are the other typos? Like, that's the first thing that my team and I look at immediately pass and you'd be surprised like it happens more often than not. That is so bizarre, so bizarre. But like some we do look for are like super strong brands. So like a great example of that is a company called Resource and it's a sparkling water. And we were like, I think one of the first checks, if the first check in and I literally committed in three hours, just like talking to him and I Benwood use a total genius. And just the brand is like almost every American has taken a recess right throughout their childhood for the first 13 years of their lives. Right. And like most people, are nostalgic for their childhood. So to me, I was like, this is to sell super well.

Yeah. Wow. I didn't think of that, like psychology behind that particular name. That's so cool.

Yes, so, yeah, I was like immediately and it was like there's two companies and three companies that have done that with the second one is a business called Parade.

I love them. They're on my legs, you know, randomly. I want them on the podcast.

I yeah, they're amazing. I'm very, very good friends of the founders. I mean, we're kind of like good friends with all of our founders. And like when our analyst, Aaron Rutter's started, we had like a few LPs reach out to him and they're like, congratulations, like starting like welcome to the Vice Ventures family. And they because that's kind of how we operate. So like, for example, like parade founders, like I've gotten calls from them like 1:00 in the morning sometimes. And we would talk at 4:00 a.m. sometimes about trying to figure out how to build this business. I'm like, yeah. And then Lucy is another one that we're big investors in. And it's a nicotine company. It's like nicotine gum and lozenges. And the whole thesis there is at the founders, there were also the founders of Soyland or some of the founders as