Quality product, or a vision to get there — Bad products sometimes succeed, but rarely do so in crowded markets, and often need exceptionally good branding and marketing to succeed. We probably spoke to 200 canned cocktail businesses over the past year, so in a space like that you’re seriously starting from behind if you don’t have a good formulation.
As part of our series about “5 Things I Need To See Before Making A VC Investment” I had the pleasure of interviewing Catharine Dockery, Founding Partner of Vice Ventures, a venture fund investing in early-stage vice companies. While interviewing with traditional consumer venture firms, she continually brushed against vice clauses in investment pitches, with this friction culminating in the idea for Vice Ventures.
Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you a bit. Can you please share with us the “backstory” behind what brought you to this specific career path?
I grew up in a working-class household — my father was a bartender and my mother was a flight attendant. As someone who lived in NYC from an early age, I always saw the finance industry as the peak of self-made success. Those were my examples of people who often came from similar families to mine, and built names and livelihoods for themselves on the quality of their ideas and the work they put into their trades and opinions. Working at a bank, however, was definitely not for me. I couldn’t handle the rigid hierarchy, the clumsy attempts to support women’s careers, or the lack of opportunities for creativity. Working at a bank still gave me a fantastic early training that I’m grateful for to this day and connected me with some incredibly talented individuals (i.e. my husband).
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
There is one book that without question changed my life. I found the Elegance of the Hedgehog a few years ago when I was still working on a trading desk, desperately unhappy and trying to find comfort anywhere I could. The book is filled with little wisdoms and thoughts (i.e. a Haiku: “to build, you live, you, die, there are, consequences”), but the the piece that’s always stuck in my mind is the very end, the perfect coda to such a deeply authentic story, “Thinking back on it, this evening, with my heart and my stomach all like jelly, I have finally concluded, maybe that’s what life is about: there’s a lot of despair, but also the odd moment of beauty, where life is no longer the same. It’s as if those strains of music created a sort of interlude in time, something suspended, an elsewhere that had come to us, an always within never. Yes, that’s it, an always within never…. For now on, for you, I’ll be searching for those moments of always within never. Beauty, in this world.”
That idea, searching for an always within never, has changed me to my core.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
I don’t really have a life lesson cliche quote, but “always within never” has always kept me going. It’s helped me truly appreciate little wins, intimate moments, the concept of true loyalty, and moments of security and love. Understanding that time is precious, but fleeting, has encouraged me to take risks. Thankfully, Vice Ventures was one of them.
Another somewhat relevant thought here might be watching Michael Jordan speak in The Last Dance. It’s become meme-ified to a rather comical degree, but the way he’s able to constantly focus his competitiveness is so inspirational. It’s almost silly how often you hear a long story followed by “so I took it personally” followed by the story of a legendary win. Raising a fund came with a lot of rejection, and I’ve tried to draw inspiration from the idea of turning conflict or doubts into motivational tools.
How do you define “Leadership”? Can you explain what you mean or give an example?
The leadership role I aspire to can probably best be described as a blend of planning and motivation. I’m fortunate to have built an incredibly intelligent and self-directed team, where I feel confident letting them operate with broad authority and see my role as an almost Socratic figure constantly asking questions and trying to focus their thoughts and efforts. I’ve been a part of workplace cultures that revolved around output — specifically quantity of output — and am actively trying to avoid that.
Another central aspect of leadership for me is to act almost as a social lubricant. In order for the team to produce the best possible work, we need everyone feeling confident, actively responding to feedback, and collaborating smoothly. Due to hiring during COVID, I’ve built a team completely remote, but we have all become good friends because I’ve made sure that a) we share the same monthly and weekly priorities; and b) we hang out together as a team, and not talk about Vice Ventures. One of the luxuries of having such a small team is that we can build this trusting relationship on a very personal level. For example, just before New Years’ Eve this year, we had a Zoom champagne happy hour where we set goals for the new year (2 professional and 2 personal). Because we so frequently receive product samples, I’ve been able to design significant amounts of team building around Zoom taste tests where we discuss trends and products in a more informal and open-ended way.
How have you used your success to bring goodness to the world?
There are a few aspects of community engagement that I’m incredibly proud of.
- We launched the Young VC Mentorship Program, which paired early-career mentees interested in VC with actual venture capitalists. We’ll be doing another iteration of that program soon, and have had some incredibly positive feedback from both mentors and mentees. One of the fundamental goals of this program is the development of a better culture among young VCs — we’re actively trying to improve VC culture to make it more welcoming, open, diverse, and collaborative.
- We place a significant focus on investing in harm reduction products marketed towards adults. A great example of this would be Lucy, who sell various nicotine products like gums and lozenges to 21+ adults. Lucy offers alternative ways to consume nicotine, helping cigarette and vape users who may want to change away from harmful products without stopping nicotine entirely.
- Quite a lot of our activism and policy work on drug legalization has focused on criminal justice and social justice aspects. For example, I’ve personally matched donations to the Drug Policy Alliance on several different days on Instagram. We care deeply about
- While we don’t institute quotas or any guidelines on our founders, we’ve been quite glad to invest in multiple founders of color who are often especially underrepresented in Vice spaces. Our primary goal is to make money for our investors in a responsible way, but it’s been incredibly encouraging to see that many of the founders we believe in and end up backing come from these communities.
Ok, thank you for that. Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?
One aspect of VC (and even investing in general) is that I think the pipelines into the field have become a bit too deeply set. While business school isn’t quite the prerequisite it used to be, it’s still pretty common that people in VC have this sort of similar background. That can often be exclusionary, and also can reinforce the social challenges faced by women, minorities, and people of color.
As a woman, I often find a lot of the conversations around gender in VC are a bit simplistic. People often assume that because I’m female, I only invest in women. My response is nearly always the same — my goal is to invest in top-quality founders, without any additional biases on top.
Unlike most funds these days, we don’t have a diversity quota. We look at good businesses and search for informed and driven founders. Because of our approach to investment, we actually have around 60% of management teams that have a founder who identifies as a BIPOC. Again, we didn’t invest in these people because they were diverse, we invested in them because they’re brilliant and founded revenue focused businesses.
Can you share a story with us about your most successful Angel or VC investment? What was its lesson?
I can’t really single out an individual investment — probably best if you pick one from our website.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
We had a deal fall apart because a co-investor and I had a minor disagreement on the current state of medicinal cannabis (we don’t invest in medical products), and they then went behind our backs and created a scene with the company’s founders. The main lesson that we took from this was the importance of co-investing with people and funds that we want to work closely with.
Can you share a story with us about a problem that one of your portfolio companies encountered and how you helped to correct the problem? We’d love to hear the details and what its lesson was.
Can’t share this.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
We’ve been investing for ~18 months, so there aren’t quite so many ones that got away. We were a bit unhappy to miss some of the early successes in psilocybin, but that space is an incredibly difficult one to interact with currently, and most of the early developments have been medical (which again, we don’t invest in).
Super. Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why. Please share a story or example for each.
1- Quality product, or a vision to get there — Bad products sometimes succeed, but rarely do so in crowded markets, and often need exceptionally good branding and marketing to succeed. We probably spoke to 200 canned cocktail businesses over the past year, so in a space like that you’re seriously starting from behind if you don’t have a good formulation.
2- Responsibility — We want founders and management teams who are well-educated on the regulations in their space, and who are actively looking to execute in a way that’s positive for consumers. If I ask a founder about a regulatory complication in their product, I need to see that they’re reasonably well informed and continually thinking about these things.
3- Feedback/Collaboration — We want founders and management teams who can take feedback in a productive way. We’re working together in an attempt to build something incredible, and egos can really get in the way there. We deal with founders who are willing to engage intellectually with us, and hopefully in doing so increase their chances of success. Part of this comes from our investment style as well — we like working with founders to help them grow their businesses, and like building communities of founders who can learn from each other and grow alongside each other.
4- Planning — Nothing goes 100% to plan, ever. That doesn’t mean that founders don’t need to have a well-explained strategy. At a minimum, I’m looking for plans around launch, hiring, marketing, distribution, future raises. It doesn’t all need to be in an excel model, but the more that you can show you’ve thought of these things, the better.
5- Exit potential — VC requires exits for returns. Whether that’s M&A or other liquidity events, the business has to have the long-term growth potential to eventually fit our target return profile. I see plenty of great businesses that for whatever reason (capital needs, growth pace, founder preference) just don’t fit our needs here.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
As many of us have been forced to work from home, one of the most clear changes I’ve seen has been the repositioning of schedules. Without such a clear delineation of work and home, you can take time off at 2pm to go for a run, and be back for a 3:30 Zoom. One thing that I think has unfortunately carried over from the old scheduling culture has been lateness. Punctuality is one of the ways I try to show respect for the people I’m meeting with, and I think a renewed focus on timeliness would provide understated benefits for everyone.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. 🙂
At the moment, I’d love to get the chance to speak more closely with Governor Cuomo. I’m really quite excited about recreational cannabis legalization in NY, and see some incredible potential for new cannabis brands to emerge soon after legalization.
This was really meaningful! Thank you so much for your time.