Deepak Shahdadpuri (DSG Consumer Partners) - Why India is Ripe for Premium Consumer Brands, How to Localize Brands, and Trends In India and South East Asia

28:39So Subway has a combi oven where you bake it, but it comes in a frozen shape that looks like a pencil. You proof it and then you bake a bread, but that frozen dough comes from us. And as part of my diligence, when I did that deal in 04 was to go and speak to Subway. I said, this is what we do. You guys supply bread to us. I said, what else do you buy? He said, our biggest spend is on sauces. So you go to Subway, you have the meat, you have the vegetables, you go to cheese, and then you have 20 different sauces. And I said, great. You know, if you're buying a lot of bread, you're going to be buying a lot of sauces.

29:13So I said, who supplies your sauces? He said that there are only three companies in India. These are the three. I went to meet all three of them. And in that process, I met Viraj, who was in the same space. And I said, you know, can I invest in your business? His dad was running the business at that point. And they said, no, we don't need outside money. We are sort of bootstrapped from day one. We're profitable. Don't need your cash. Three years later, the dad sold the business to Germany's Dr. Otka. And prior to closing the sale, I spoke to Viraj. I said, I think you're making a mistake. it's good money, your dad will sort of retire on this.

29:51But I think India's consumption hasn't even started. It's going to be 50x in 25 years. But anyway, the transaction happened. He had to go. He became the CEO of the business, worked with Dr. Otka for three years, and then he left. When his non-compete ended, and we kept in touch. I said, you know, your dad's happy. He's retired. He's written a book. I said, what are you up to now? He says, well, he said, Deepak, I think you were right. It was way too early to sell. I said, let's do it again. I said, they were doing something very different. They were doing something mass market, very successful brand.

30:26Why don't we do something solely focused on wellness, better for you? Same category. But as consumers become wealthy, they just want better quality, functional. It's like a lot of the guests you have on your podcast, right uh and one i i had many role models or many sort of uh companies i was sort of saying we could do a bit of this a bit of that uh and one of them was primal kitchen you know sort of primal kitchen was very functional but the whole idea was let's launch a range of products uh and we said let's not do something that's already made in india on the shelf so at that point first deal i said let's not go and compete with everyone on the shelf.

31:09You'll be the 10th sauce or ketchup company. So let's launch a portfolio of products that Indians already know, but they can't buy on the store easily. And by this point in 2012, Subway had become very successful. It's been in India for over a decade, they had hundreds of outlets. So everyone knew what Chipotle sauce was. They knew what ranch was. They knew what Southwest was. But you couldn't buy it easily. And if you could, they were imported from the US and it was very expensive. And because it wasn't brought in officially by a distributor, often the expiry date was one month away. So we said, Indians now know this category.

31:54They go to Subway a lot. But if someone wants to recreate a sandwich or a sub or a taco they can't get this anywhere so we if you look back you can google it the first launch of Viva I think was only seven SKUs and every SKU was new to the Indian market the most common product we had was mayonnaise but it was India's first ever 100 % olive oil mayonnaise and it was made without egg. It was mayonnaise, but it was much better, no gunk, only olive oil. And that's how we started. And our products were by far the most expensive. And our packaging was very normal for India. It was sort of not the tiny squeezy ones or the big because our products were chunky.

32:43It was a mixture of salad dressings and sauces. So that gives you an example of we sat down together we had a hypothesis we then spent two days trying to figure out what we call the company because I want he said Deepak let's call it this I said that's that's that's rubbish and he so we then actually so I took him to Sula so I said why don't and Sula by that point had built a beautiful winery and a resort and a hotel very Napa like so I took Viraj to to spend two nights with me at the winery I said Viraj this is what Rajiv has built from nothing he's now a very large business, very profitable.

33:20He's got a hotel, he's got a visitor center. And then we still spent, we couldn't come up with the name. And on the last day, as we were leaving the winery, and he said, Deepak, why did Rajiv call the business Sula? He said, well, Sula is his mother's name. So he just wanted to have a tribute to his mom. Then he said, Deepak, that's a damn good idea. So I'm going to call my next company after my mom, which is Viva. So we went back to Delhi. we then went to the registry of companies, registered the company, and then we spent a month driving around Rajasthan to look for a piece of land to buy to build a factory.

33:57So again, so in that example, it literally was business building with the founder. So there we look for a, it's all about the founder and the team and a coming together of minds on a category we think could be very big. So I would say that is 25 % of what we do at DSGCP. Long way of answering your initial question of what do I look for in a deal. So we look for people who are excited to build a category with us. So that's 25%. There, the diligence is on the founder, either what he's done in the past. In Viraj's case, he had been in a very similar industry before. And what the category is like today and our view of what the category could be like 20 years from now.

34:45The next 25 % of our deals are the companies incorporated. He knows he wants to be in the pet business or he knows he wants to be in the baby skincare business, he or she, but they haven't launched yet. There's no packaging. There may or may not be a branding. There are four companies we've invested in in the last four years, three years, where companies incorporated, the founding team is there. They had a brand name, which we thought was awful. But they hadn't launched and no one knew the brand name existed.

35:23We're like, dude, have you done any focus groups? Have you spoken to anyone? It's like, no, no, no, we really like it. So we said, guys, this is why we don't think it's going work. Let's help you do focus groups and let's play around with it. And then we actually came up with the name. So the most recent example is a company called a pet, a pet sort of a broad pet platform that does pet services, pet food, and sort of pet related products. It's called Super Tales. That's the name of it today. So I won't tell you what the name was before we renamed it. Okay, so that's why we like to get in early, right?

36:06Get in as early as we can, making sure that the founder is totally aligned about the category. The mistakes we've made in the past is founders who find a big category, but are not passionate about it, and we've done quite a few of those, end up not doing so well for us. So they found the category, they know it's going to be big. They know they can make a lot of money, but they really don't love the category. So that's the biggest learning over the last 11 years. So we really need to believe that this is what you really want to do, as opposed to you doing it just to make money. So real affinity with the category.

36:44And then we spend a lot of time on the category. The third bucket is where there's a product, there's a team, the product's been launched, but revenues are sub a million dollars so you have a few SKUs maybe D2C only or only in one city or in a small part of a one city so you launched you bootstrapped yourself and you have some traction you could be doing you know$50 ,000 a month$100 ,000 a month but still very early and there we said we look at the product we look at the team first we love you you we know you're passionate we look at the product? Do we like the product? And product is defined as, do we like what's inside the product, the liquid or what's being consumed?

37:29Do we like the packaging? Do we like the brand? Do we like the brand story? Do we like the pricing? If we don't like it, what would we change? We then discuss it with the founders. And this is, like I said, you go to$100 ,000 a month, but we think for you to really scale, you've got to change a few things or a lot of things. And this is why, and this is your company, let's debate this. If he is not open to any feedback, we're like, guys, we're the wrong partner for you. If he's open to feedback, we engage and we don't expect him to listen to everything at all, but we want him to engage. Because most founders in any category they're passionate about is going to know 10x of what my team are going to know anyway.

38:17So we have a macro viewpoint, having done this for a long time, but we don't have a micro viewpoint on cold brew coffee specific. OK, so we want him to push us back as well and tell us this is why we think, Deepak, you're wrong or your team's wrong or we disagree. So and because he's got some revenue, we start looking at KPIs. And the most important KPI to us for a company that already has revenue is capital efficiency. So capital efficiency to us is defined as total capital raised to date. It could be just the founder putting his money in or some family and friends, or he may have done a seed round before us, raised, I don't know, half a million dollars.

39:00It really depends. So we look at capital efficiency, and that's defined as total revenue raised to date and your current ARR. So if you raised half a million today to bootstrap you to where you are and you're doing$100 ,000 a month, means your ARR is 1.2 million, means your capital efficiency is 1.2 million over half a million, which is 2.2. Got it. Got it. How well you've used capital you've gotten today to get your business to where you are today? Again, it's a very powerful matrix, a very powerful KPI, but it is very different for each business, each category, and sort of how capital intensive your business is.

39:47If you're capital light, you're more likely to have a higher or you should have a higher capital efficiency. if you're like a manufacturing business like Sula or Aviva where you build your own factory from day one that capital efficiency doesn't look very different right so you've got to peel the onion but we we spend an insane amount of time looking at capital efficiency it's easier as the company gets bigger but at that early stage early revenue is hard and this is where we look at capital efficiency to date. And more importantly, if we are putting in the next million dollars, which means the total raise would have been the half a million before us and our million, so one and a half million after you take our money, we need to be comfortable that before the next round of funding, you must be at an ARR of at least three million.

40:43If we feel our million dollars doesn't get you there, and therefore whoever looks at your business 18 or 24 months from now says, oh, you raised$1.5 million to date and you're only doing a million in revenue, you failed. Okay, so that's how we think about it. And the last bucket is businesses which are slightly larger. They're doing$5 million a year. Either we did not see them early on or we passed them or we like them now. We look at everything, but their capital efficiency becomes even more important because you've been at it for five years. You raised two or three rounds of funding, let's see what that happens and across the board we spend too much time on on margins so again we invest only in consumer so we have a strong view of what a beverage company what a frozen company what a chilled company should have at gross margins and depending on whether you're direct to consumer or you're going to distributors or retailers, we know what each slice is taken by the distributor and the retailer and everything else.

41:50So we need to make sure your gross margins are good. And all of this is before marketing spend, right? So if you don't have enough margin because you don't understand it, or you're just trying to push revenue, and if your style of business is, I'm going to go top line and figure out how I make money later is sort of scares us. And that's what happened in, I think, in 2019, 2020, 2021, we saw a lot of that because I've been doing this for 20 years. And it was always very sensible, right? Most founders understood the margin. I think what happened for a short window was that non-traditional CPG investors started investing in CPG.

42:35Many of them came from venture tech. And they are really good at venture tech, right? And in venture tech, if you win the category, it is a winner take all or winner takes most. Google is Google, Dropbox is Dropbox. There are other competitors. But if you win the category, you are going to get a disproportionate share. So you can go out and market grab and sort of reap in the benefits later. In CPG, it's very different. You will never see one brand in any category take a disproportionate share, whether it's ice cream or soft drinks or water or yogurt. It's the opposite. So this whole idea, I'm going to spend to get market share, doesn't work.

43:21So we saw a lot of investors come into consumer goods with the right long-term view of building brands, but in our opinion, the wrong playbook, not because they were being difficult, because that's worked for them in what they used to do. Many of them have retreated now, aren't doing it as much, but that that sort of put the market in a very confusing state for founders because they would meet us they would meet other funds or and i would say you know i think you're worth three to four million the other guys he will say not five or six he said oh i think you're worth 20 and and then we would have a debate i'm like guys you know it's a good fund great brand name they've never done consumer before we do consumer, they're really good they can help you with the website and optimization and they know everything on UI but they can't get you into Whole Foods or the Whole Foods equivalent or they can't get you into retail and take your choice if you're more traditional like us, come with us if your product or service is very D2C where you don't ever have such physical distribution maybe they can help you.

44:41I don't know. Right, right, right. Well, and it's also so few, I mean, I've, I've, I've a few thoughts on that. I'm going to sound like a broken record because I say this a lot about tech firms coming into consumer. I think that what's been lost a little bit in the 2010s is for the case of, you know, DTC brands, Dizinator brands is I, sometimes I feel like tech investors thought of them as technology businesses, whereas rather using the technology as a distribution for distribution, as opposed to the business ultimately is a consumer product, right? It's not actually a technology business. And so, and evaluate by how these brands are being valued are like a technology business, which is very, very quite different when it comes to the multiples and evaluations that you can achieve of tech.

45:31So kind of just reiterating what you said and totally agree that it's been a difficult time because what that could lead to is many bridge rounds, down rounds, which ultimately are recaps, ultimately just are not very good for the business. So that can be pretty painful to go through if you make that wrong decision. Absolutely. Again, I think, and again, no one knew, right? I think it's good they tried because it may have worked, but it isn't working. It isn't working. I think some have done a better job than others because, you know, there are some consumer brands which is tech centric and technology can make a huge difference.

46:14They're better off where gross margins are much higher and D2C maybe could work for longer. Like skincare has gross margins of 80 to 85 percent. Food and beverage does not. There's enough margin in 85 percent to sort of do more D2C. But again, going back to first principles, irrespective of how your initial go-to market is, our view is to be very successful. And our definition of very successful is, is your brand strong enough that Nestle or Unilever or L 'Oreal or Mondelez or Mars would like to buy you? and they are. So I spend a lot of my time meeting global and regional CEOs of all the companies I mentioned at least once a year, if not more.

47:01And most of them know me, at least in the region personally. And they want to see the fundamental belief is you need to be where your consumer is. When you're small and you are bootstrapped, you find the most capital efficient way of getting discovered. So think of any consumer brand. You create a product, it's great, or you think is great. No one knows you exist. You're brand new, right? So you start, how do you get discovered? Okay, after you get discovered, how do you get someone to try you? After someone tries you is, if they try you and they don't like you or the experience, then there's something wrong with the product market, product market fit, whatever it is.

47:39But assuming you do that well, then you need repeats. So again, you want to optimize the cost on the discovery and the trials. So maybe social media, maybe technology can help you. I started the first 10 years doing mainly food and beverage. And our idea was the best way to be discovered is be close to where the consumer buys that product. So we'd show up on the aisle and do sampling. So you do two things, you get discovered, and you get trialed at the same time. Because if you're selling a new yogurt, and you stand by the yogurt aisle saying, please try this yogurt. It's a Greek yogurt. And he'll say, what is Greek yogurt, man?

48:19We've been having yogurt in India for 100 centuries. It's an Indian thing. We're like, just try it. It's different. This is why it's different. That has four grams of protein. Ours has nine grams of protein. It's a different occasion. So for Epigamia, not only did we have a new brand, we said we can't, because Indians eat yogurt three times a day with a meal. We're like, how do we sort of avoid the confusion? So we actually created a new occasion for the Indian consumer, which is if you're eating yogurt as breakfast, lunch, or dinner, which is when it's mainly consumed, unlike the West, then please buy traditional yogurt or curd.

48:55We are Greek yogurt. It's a snack. So this is what you do post-run, pre-run, after the gym, pre-yoga. So we said different occasion and it's high protein and we saw the function and occasion so that the consumer wasn't confused. And it worked really well for us. And most of our success stories were samplings because it's the most cost-effective way of discovery and trial. And COVID happened. And you can't sample. You can't go to a supermarket. And that's when we said, you know what? You don't have a choice, right? Social media, send pamphlets. Let's figure it out. And in food and beverage, when someone tries it, there's an instant reaction of whether I like it or not, taste-wise.

49:43And if they pick up a couple to buy, you know there's some traction. For some products, you can't get instant feedback, right? For example, in skincare, if we make a claim that if you wash your face every day with this, the wrinkles are going to go away and you look better, you need to wash it for a month. So we said, even if you are at the aisle and sample it, there's no way anyone's going to know if it's effective or not. Okay. So in that category, we said, you may not need to sample on premise because that person washes his face at home, not in public. So then different challenge, maybe you get discovered offline and you give them a small sampler, they go home or you do it on social media.

50:25We don't know. So we go brand by brand. we don't have a set playbook for anything. It's sometimes frustrating for the DHGCP team, especially the new guys who join us saying, where's your playbook? We don't have a playbook. It doesn't exist. Our playbook is back to the right team. We convince about the category and work with the founder who is very comfortable breaking the problem down into first principles and saying for my product and my brand and my price point, how do I test it? Do I go offline first do i go online first we encourage them never to go both some do but our viewers do not do both this does not include being on social media and having a website or having instagram page that that you should do but we don't think you should be doing shopify and doing offline at the same time because it's really hard doing one thing we're not saying both can't work we're like pick one because if all we're trying to do is to get to 50 or a hundred thousand dollars a month, you should be able to do it on either.

51:28So pick the one you think will get you there on the lowest cost base to test the hypothesis that people want to buy your brand. Right. That makes a lot of sense. Yeah. That's a very long-winded answer to your question of what we look at because it depends on the stage of the business. Well, I know you don't have one playbook, so you might not like this question, but going, taking it back to when, when, um, when you invested in what became Viva and when one of your, um, hypothesis or inspirations was Primal Kitchen, right? in the West. What are some of the nuances when you're looking for inspiration?

52:12And obviously, you don't always look for inspiration when it comes to collaborating very early stage with founders from what's happening in the West. But what are some nuances that you have to take in consideration when it comes to the Indian market that is quite different to the West? when you're thinking about bringing like a type of brand over to India? Yeah. So we don't think of bringing a type of brand. We are asking ourselves, how does a brand, whether it's in the US or anywhere else, it could be any market, how does a brand enter a... And unlike India, where many categories are still blank, you can launch in...

52:55I mean, 20 years from now, I don't think many funds are going to say, oh, we launched India's first Greek yogurt or first cold brew coffee, because it's just never going to happen, right? Because every category is going to be filled. So that bit's easy. I think what we do is look around and say, how did Primal Kitchen come up in a very competitive environment with really big brands, Heinz, Unilever, everyone's got brands in that space and charge a premium and grow really large. And if you go back, it was, well, I've heard too many podcasts, read too much, But to me, I distilled it down to two things.

53:34He said there was a segment of the consumer who wants functional because for whatever reason, they follow a lifestyle. It could be I'm vegan, I'm keto, I'm whatever. Right. And that demands you to change how and when you eat. So they want the functionality element. Second big movement was consumers as they become more wealthy in any geography, after they binge and become unhealthy and fat, they realize they need to become healthy and better for you. So in addition to functionality, they want products that are as natural or as clean. So no fillers, no gunk. if you make a really good product based on better for you and clean unfortunately it's going to cost a lot more money than a product which is made in a big factory with with a lot of sugar uh and therefore your consumer base is initially going to be small uh but that market who's willing to pay uh will lean on influencers this is this i'm using the word influencer prior to there being social media these are guys who are thought leaders who would in the space and we said that's what happened so primal kitchen was one i said you know very competitive similar broad space as viva uh but did really well and what did he do he did functional and he did clean uh and we took at many other brands across categories and we said you know what india does not have a better for you.

55:09I'm not saying we are the perfect no filler product. All we said is we want to be at a time of launch. And I wish I had some of my old packaging around because our packaging, that company is 10 years old now and the packaging has changed. But our initial initial skew, which you would take it for normal, we did not have a made in India fat-free anything. Didn't exist. Or we didn't have anything with only 3 % fat. So our original products and it was purely based on low fat, low sugar, no added sugar, as a hook to tell the consumer that we are better for you. And then it came to sampling. It had to be on the taste.

55:49So we looked at sort of look at the trends, but you have to localize it, right? Because the flavors that work in the West, since we're talking about food, may not work here. example would be epigamia which is a lot inspired by chobani but the flavors that work really well in india is yogurt is mango as opposed to strawberry so strawberry sells okay but yogurt outsells i mean mango outsells strawberry 10 is to 1 because it's the fruit that indians prefer so you have to localize it uh you have to sort of create an occasion when that occasion wasn't there and you need to be willing to experiment and be ready for it to be rejected.

56:35That's helpful. That's helpful. You know, those are some of like, as you say, like you need to localize it for the actual market that you're actually doing it. Like it reminds me, I was talking with an investor who invested in an alcohol tea company, alcoholic tea company. And they said that when they were doing the iterations, they kept making it sweeter and sweeter and sweeter because they're like, Americans love their sweet. So that was kind of localized for the US market in that particular example. Wrapping up here, what's one book that's inspired you personally and one book that's inspired you professionally, Deepak?

57:11Too many books, right? I think the one that I read most often, and I just recommended it to my son last week, is Thinking Fast and Slow. So it is very insightful. It tells you a lot about human behavior. Again, what is a consumer brand, right? If we understand psychology, we would be the best marketeers, right? Building a brand is all about a story. Let's take for granted that the product in any category or service is the best it can be. So why does someone buy brand A over brand B over brand C? assuming all of them are identical because that story resonates with Mike or resonates with Deepak on one or more pillars.

58:04And thinking fast and slow tells you how the brain works. It's only one element of how you make a decision, but how important psychology is in terms of any brand you build. So, you know, I always tell my team, anyone I read, read that book, depending on your state of mind when you read it. The first time I read it in a neutral state of mind, it was more about economics, right? With the brand lens, I realized, you know, you got to do a lot of work because a consumer gives you two seconds to make a decision. So how do you understand his psyche and how do you build a story to engage with his psyche?

58:45So that is a book I would recommend strongly from a professional point of view. So personally, I'm just looking for the book here because this is a book, sort of the books that inspire me personally change over time. But this is a book, again, it's very India specific. It's written by a friend of mine called Ryu Sangvi. It's called The Game Changes. And it's about transforming India. right and the importance of having entrepreneurs who think against the grain who are in many ways outliers in their social group and who see a vision for the country and again it's a very emerging markets problem and this is a book I often recommend founders I've invested in, I'm like, guys, you do not have to follow any predetermined playbook.

59:45You have 1.4 billion people. Look at any data set. GDP has grown, but it's going to grow much more exponentially. We still haven't hit that$4 ,000 real GDP per capita when discretionary spending will sort of take off. And it's both a professional and a personal book because it tells you the hard stories, each one of the people. So what we did is that he actually interviewed one, two, three, four, five, six, seven, eight, nine, ten. He interviewed 10 different people from a film director to the best-known Indian chef to a private equity professional with a view of why are you successful in what you do, okay?

1:00:34So it's got a personal element of, you know, You really need to think against the grain. You really need to push back when everyone says it's not going to work. And it resonates with me in my most successful founders. If I think of Rajiv Salman at Sula, if I think of Rohan at Epigamia, if I think of Viraj at Viva, I know for a fact I've been in the room when people said, you can't make wine in India. Even if you did, no one's going to buy it. Even if they did, you will never compete with anyone else. Right. Same with the Greek yogurt. So you really need to be sort of strong-willed and sell that dream and build that story.

1:01:16So anyone who wants to do something really difficult, great book to read. Okay, cool. No, really appreciate that because you're the only person that's mentioned the Game Changers. So you're very original, Deepak. I think we've had a few past guests mentioned Thinking Fast and Slow. So really excited to add that to our book list, the Game Changers. Deepak, this was so much fun. Thank you so much for your time. I'm glad it sort of happened. And I am going to make sure I ping you before I come to LA so that I see you in New York. That'd be great. Oh, that'd be great. That'd be great. Thanks again, Deepak, so much for taking the time.

1:01:56Thank you. And there you have it. It was such a pleasure chatting with Deepak. Deepak, thanks again for coming on the show. Gabriel, thank you for joining me today. How are you? Yeah, really great. Thanks for having me, Mike. No, it's a really, really appreciate it. So when someone wants to invest, whether they've started their own fund, their emerging manager, or they and they have LPs, or whether they're an angel investor, how do they typically get started? What should what should they be thinking about? Yeah, that's a great question. So yeah, our platform makes it easy for people to pull funds together and invest in early stage startups.

1:02:29There's a number of reasons someone would use, you know, SPVs or want to create a venture capital fund. So, you know, for angels, I would say, you know, the most important part is, you know, diversifying your portfolio. So instead of, you know, putting 10 checks into, you know, a single company, you can diversify by putting your eggs in various different baskets using an SPV. So that's, it's a predominantly popular use case to kind of diversify your angel investing. As you know, it's a highly risky asset class. So instead of being concentrated in one single asset, it allows you to invest in multiple.

1:03:08So that's a use case there. Cool. So how does Vobin kind of make it easy? And what do you need to think about on the admin side in order to actually set up whether you're angel investing, whether they're setting up like an SVV or a fund? Yeah. So fundraising is a pretty difficult task, whether you're a founder, angel, or a venture capitalist. So with our product, we have all the ancillary services incorporated into the platform using a digital platform. So we handle the legal documents to create a separate legal entity. We have a banking partner that is incorporated into the dashboard. We'll onboard the investors.

1:03:51You'll have real-time information of how your fundraising process is going. And then we'll handle any administrative aspects such as reporting, any taxes, and ultimately the distribution at an exit scenario. So, you know, if a company goes IPO, if a company gets acquired, you know, how does that capital flow back to the investors? So, you know, we handle all of that. So our clients can focus on, you know, finding great opportunities, networking, building relationships, and building those investor relationships, which takes a lot of time and effort, as anyone who's been fundraising will know. Yeah, what, what do you feel like, you know, maybe on the SPV side things, and also on the emerging managers side, what do you think that they maybe struggle or have, or have like a hard time with?

1:04:42Yeah, so I think with the angel side, you know, a lot of a lot of angels will be investing directly. And, you know, some are unfamiliar with the concept of an SPV. You know, syndicating is a concept that's used in the financial markets, whether, you know, you're a bank syndicating loans or a bank syndicating investments. It's a really good way to, you know, share your network, deal flow with your network, you know, get into those really competitive deals by having those higher minimum tickets, pulling those funds together. So I think, you know, for angels, the concept of SPVs and syndicating is relatively still new.

1:05:24And, you know, there's a large market where I think they would significantly benefit. You're able to also monetize off that deal flow as well. So you can charge carry, which is, you know, a portion of the profits upon an exit scenario, or you can charge fees. So, you know, finding an opportunity, trying to fundraise for the deal is a lot of hard work and sometimes being compensated for that does definitely help incentivize the deal. For emerging fund managers, it's a really great way to start building your track record. So, you know, when you're talking to LPs or, you know, investors, one of their strategies is, you know, how do I get some co-investment opportunities or direct investments?

1:06:09And so building that relationship, showing your deal flow allows you to build those relationships with those LPs to ultimately invest into your funds. Additionally, it's a really good way to kind of show your track record of the companies that you've invested, where the ability to fundraise, getting access to those top deals, and then going out to the market and showing a track record of your resume. so it definitely paints a better picture than you know saying you know one day I want to be a VC fund manager and not having anything to back it up with I hope you all enjoyed that episode again if you're really loving the podcast highly recommend subscribing to the newsletter at theconsumervc.com where you'll receive all new episodes straight to your inbox and a weekly recap of all the consumer deals that are happening thanks for listening bye

1:07:03Oh, oh, oh.