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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 well, and they were dictated to combustible cigarettes. And then they moved to a vape and like it like he's a genius and he's like going towards harm reduction, which is his whole point of the company. And like, that's a major thesis of ours. And yeah. So we met with them. I was like, excuse my friend, but I like, holy shit, he's a genius. Like, I want to be on his side for the rest of his life.

I thought, wow, what a compliment.

No, he's literally incredible. I feel that way about all my fans is like, I hope I go to their birthday parties. Right. We get drinks together. Like I'm very, very close to the people I work with, even the people that work for me. Like I start this week and like we're sending him. Yeah, I can say this is not to come out by Friday. We're sending him a cake and being like, happy first week or so. Yeah, right. Like a good culture. Yeah. Like Khancoban when you're not working together, like it's important to make people feel heard, you've got to be creative about that.

And so just going back to the pitch thing and what stands out to you, do you guys have like a quota of what you want to how many companies you want to invest in, or is it just kind of like as it comes? Like, what if you had twenty brands that you will like?

I want all twenty of these or like how does it work on that kind of front.

Yeah, so I think if we had seen 20 businesses that we love, like we would catch, like we're brand investors, we're big believers and we have a lot of connections with distribution. So it makes a lot of sense for us to invest in brands that would propel like Shubra. Well, like with a more retail footprint, as I have. Right. Because that's kind of how brands are built.

Yeah. And do they have to be at a certain stage by the time you meet with them? Like it can't just be. I know you said you were investing around seed and then from there so you wouldn't even meet with someone if they will, just like early on kind of thing.

Oh, totally. We invested business before I even tried the product. Like we pre product invest all of that and got it.

And I wanted to ask before, when you guys were launching the fund, was there any other fund that does vice businesses at that point? Are you still the only one doing that? Yeah. Wow.

I mean, I'm sure there's going to be copycats, right? Of course, because the thesis is working. But yeah, we are the first ones. And in the beginning when I was doing this, it was very difficult because, I mean, the people who invested on it immediately and they're like this totally makes sense. But other general partners of funds are generally significantly older than I am, and they all invest in very similar things. So they're really competing with deals with each other. And like, that's not my competition. Like it does it like I would much rather just be friendly with them. And at the beginning, people were like, what you're doing is terrible. I can't believe it. Like Vises Orvil. And I was like, actually, that's the whole point of this fund, is that we invest in good companies like operating and like superficially bad industry.

So I was like, that's actually the entire point about, yeah, that's so crazy that you guys are the only the only fun doing it because. Yeah, it just blows my mind. It's so cool, so visionary. I love that. Wow. Yeah. What kind of challenges do you face then. Do you have lots of legal battles like internally or not. Like internally. I mean but do you employ a assuming left and right.

What kind of unique set of challenges do you have.

So I guess one is definitely regulatory, so when we first invested in resources, it was legal, like the hand that Mitch McConnell had in past, the hand that we had no idea if it was going to work or not. It was a really throwing the dice there and it ended up working. And the founder, like now works with lobbyists and is like at the table, like the Round Table program, which is like the biggest media companies are on there. They have like Charlotte's Web and all of those. And like, he's the only beverage. Right. And he's also the only venture back to start a business that's there. So, yeah. So like betting on a horse definitely makes sense. Betting on somebody who's, like, so determined to succeed that they'll work with Republicans and Democrats like literally just to get something done is like I mean, especially in America these days, like that's like absolutely incredible.

Like, wow, amazing. I want to talk a little bit about your personal investing and how you started out.

What's your advice for people who want to do angel investing and how do people get started? Like, if I was like, yeah, I want to invest in a brand, what would I do?

So I think it's incredibly difficult to invest in a brand if you don't work in venture capital because there's just so much information that you're probably missing. And because of that, my husband and I only investment funds because it makes a lot more sense to put five hundred thousand dollars into a fund that's going to invest in 40 companies or 40 businesses. That and then you're like rolling the dice with more than 100. So you're kind of guaranteed a return, but obviously not guaranteed legally. But if you invest in a single company. I also wish that I had invested in fund instead of investing in private companies to begin with, just because I think the returns would have been a lot better for me. But that being said, if there are people listening to this that are looking to invest in brands, you just got to ask a ton of questions, right? You need to ask what they believe. Are they only going to be online? Are they going to be in stores? Like where do they source whatever they source or whatever ingredient? Right. Who's doing the branding? Like, does a branding click like have you done any, like, testing on the product or the product of 50 people and see what they say or 50 random people that you are friends of friends that have no ties to the company. So that's, I think, a really good way to vet a company.

Cool noted from the point of view from AVC, what is your main piece of advice for women who have a big idea and want to launch their own business?

Yeah, so I I have a different view on that.

I think that as a woman founder, I never felt really that the one time the like any negative effects of being a woman in business. So I think if you are a woman founder and you're looking for women investors, like there's zillions of funds out there that only invest in women. Now, that's a pretty established thesis at this point. So they should know who to reach out to if they're looking for funding, not just from unemployment employment numbers. I mean, just start doing research. Is this a beauty company? If it is, who are the best investors? Right. Who is interested in this? Can I hold email the founder of a beauty company and get advice from them for venture capital is all about networking, right? And figuring out where you fit in and where you can succeed best. So I think it's definitely like we like, for example, like when we get cold pitches and they tell us exactly why they think we're a good fit for them, we always, always like even if we're not, we're into the products and we'll take the meeting to see if we can help them with other people to raise money. Right. We even take meetings of non super thoughtful pitches like we took cookie dough company pitch and connected them with like 10 investors. Right. Even though it's like so out of our mandate. But I love that we try to do the right thing by everybody that we cross.

It sounds like a really like I don't know if this is the right way to say it, but like a really empathetic approach to just not goes to people and be like, no, I like I like what you're putting down here. Like, I'll I'll give you some time of my day. I love that. Yeah.

Yeah. So we're big on like a lot of these don't answer companies, they'll just like delete the email and they just go out on them and we, we answer every email we are we try to answer as we get so many of them. I probably missed two or three a day, but like I do everything in my power to answer every email and give founders' feedback. I'm like water passing.

Wow. Amazing. I love that. We are up to the six quick questions. Part of the episode. My favorite part. Well, one of my favorite parts. Question number one, what is your why?

Yeah, so I guess it all starts with my childhood, right? Like, my dad was a bartender in New York City. I would hang out with him at the bar and like I was around alcohol all the time and like to me, like, alcohol was fun and not a big deal because it paid, like, literally paid our rent and put food on the table, like the service industry. Like that's where I grew up. Right. So in my mind, like alcohol or cannabis and all the stuff is not actually bad. So like for me, I started taking it personally. It was like I shouldn't have. But I did like when a lot of these funds were like, we don't invest in alcohol like we like. That's a huge vice. Right. Like we would never touch alcohol. And I'm like, that is such a closed minded view. Like, yeah, to me there's a ton of money to be made at it, first of all. And second of all, like maybe if we talked about it more often as a society, maybe we wouldn't have so many drunk driving. Right. Like the more that you bring up, like some of these stigmatized. Companies or industries like I think the better society, the better society actually could be, right for sure.

Question number two is what's been the number one marketing moment for you that made your business pop?

I think so, it's a really good question. We've had so many presidents and now I'm thinking about it, I think interviewing on CNBC was a big deal. We got, I think, like two hundred and fifty emails after that of some people who are looking to invest. Some people who they wanted to fix. Our company is like some people who are like, I don't have the money to invest. But like I think, like, this person would be super just said, look, are you open to the indro? And like, that was probably a moment where I was like, wow, this is like potentially could succeed.

Oh, I love that. That's so cool. It must have been so exciting to receive, like, just such a bombarding moment of interested people, interested parties. Question number three is where do you hang out to get smarter.

My husband, I hang out with him all day. He literally is the smartest person I've ever met in my life, like literally I have gotten so much smarter dating and marrying him.

What does he do?

He trades equity derivatives and studied financial engineering operations research at Princeton. So we have very different schools.

I don't know any of that means yet either. He explains to me. And I was like, Oh, got it. OK, I've got it written down notes. Yeah, exactly. Like sometimes you say things and I'm going to write this down. This is brilliant.

Oh, that's so nice. I love that question.

Number four is how do you win the day? And that's around your A.M. ampm rituals that keep you feeling productive, happy, successful, motivated, etc..

Yes, I try and run I like run a marathon before, so I like a pretty big runner, but like.

Starting the final leg left me with no free time because I had it was literally just me running it completely. So I kind of fell out of shape for like two years. It was like with a pandemic, like it's been such a good release for me, right. To get out of the house, to go running to find a running bath or like a ton of people aren't on or so like that. I found really entertaining and relaxing and like especially because I was learning more and more about the city that I've lived in almost my entire life. Like so like that is like super like that's definitely relaxes me finding the new spots in the city.

I like that.

Question number five, if you only had this one might not be super relevant to you because it's usually targeted to e-commerce brands. But if you only had a thousand dollars left in your business bank account, where would you spend it?

I think I would put a thousand dollars. Actually, I would probably give it to my employees, I literally I think I would split it between both of them. And congratulations like a small bonus.

I think that's how I would probably spend it. Please stick with me.

Don't leave me, please. All crumbling.

Nice. Very nice. And question number six is how do you deal with failure? And that can be around like a personal experience or it can be just your general mindset and approach.

Yeah, so I guess one read I do failure is like I'm not really a competitive person, like I'm like super collaborative and I'm like I see people succeed. Like, it makes me so happy. Like, another example is like my husband watches football, primarily football and soccer. I guess you just go to me. But the only reason why I watch it is because I love watching people score. Right. And just like seeing celebrations, I'm like, this is the whole point of sports. I is to feel like you're doing something that's like impossible.

Yeah. Nice.

Very nice. Thank you so much for taking the time to be on the podcast today. I have absolutely loved getting to know about your business and where it's at and all the cool things that you have going on.

Thank you so much for having me. This is a blast.



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