CPG Execs Announce The Family Fund, Will Invest $25M
A trio of CPG industry leaders is launching the Family Fund and Founder Community (F3C), aiming to create the support network it “wished they had” early in their careers.
The venture group, which debuts with a $25 million fund, was started by ForceBrands CEO and founder Josh Wand, Caroo founder Sean Kelly and Vital Proteins founder Kurt Seidensticker. All three executives serve as F3C’s general partners, with the firm employing two other staff members.
“This is a fund created by founders, led by and operated day-to-day by founders, current operators and entrepreneurs, in Josh, Kurt, and I,” Kelly said. “Every single one of our checks is from a founder operator and entrepreneur…. When we connect with founders, we have a level of insight and empathy of being founders alongside them at the same time.”
The firm’s over 50 limited partners also hail from CPG, including the founders of Birch Benders, Perfect Snacks, Sweet Leaf Tea, Supergoop!, Cooper Spirits, SkinnyPop and Koia, and executives of the Chicago Blackhawks hockey team.
F3C brought in its first $10 million in 2021, raising an additional $15 million in November 2022. Thus far the fund has made eight investments in brands including HOP WTR, CanDo, Ghost, Our Place, Flossy, Bare Performance Nutrition, and Lifeforce. None of the investments were carried over from previous deals the partners have made.
Investing in BIPOC, AAPI, women-owned and LGBTQ investors and founders is a priority, Kelly said, with over 50% of the current portfolio having a founder who identifies with at least one of these groups.
From the first fund, the group expects to make 30 core deals, roughly eight a year, Wand said. Those will typically be in early stage companies with check sizes of approximately $1 million. F3C plans to co-lead or co-invest alongside other firms, with existing partners on deals including ACG, VMG, M13, Strand Capital, TTV and Slow Ventures.
The firm also plans to make several “toehold” deals of roughly $100,000 to $200,000 into earlier stage brands as a means of joining a cap table at an early stage.
“The whole focus of this fund is collaboration and co-investment with other premier and lead investment groups who are writing much larger checks,” Wand said. “But the value that we hope to bring is all these incredible founders on our cap table that can help [other] founders and the private equity groups throughout their journey. It’s really a collaborative play within the ecosystem.”
The trio have a long history of personally investing in brands, often bringing other founder friends in on deals. FC3, Wand said, is a means of professionalizing this ad hoc system, and brings together founders from across CPG categories including beauty, personal care, food, pet, beverage, alcohol and connected fitness. The group meets regularly, with a retreat in Sonoma last year and one in the Hamptons on the books for May.
“What we realized was in this crazy world, founders are alone at the top and they don’t have the ability to connect with other founders as much,” Wand said. “It’s just incredible what these founders are able to come up with when they’re put in the same room.”
FC3 does not require a board seat in conjunction with investments, but Kelly said their members have been in demand by other PE firms and portfolio companies who are looking to leverage their prior experience.
Certainly the economic climate has shifted over the last few months, with investor dollars growing tighter. However, Seidensticker said, because FC3 can draw from a more nuanced set of shared experiences, the fund is able to better weigh growth versus EBITDA, and take a more long term perspective.
“If there’s a new category out there, I think growth is probably more important than EBITDA. Especially if it’s a rapidly growing category, you do want to be that pioneer. And those are the kinds of opportunities we’re looking at,” Seidensticker said. “[Still] there has to be a substantial underlying business model and that can’t be simply just purchasing customers.”
