Investor Spotlight: Brian Folmer, FirstLook Ventures

0:02Friends, did you know that a party has been going on this whole time with 35 ,000 people and you're invited? it's our startup cpg slack you hear about it all the time on here and if you haven't yet joined in this is your moment take out your phone type in startup cpg.com and then click to join our community you'll be at the party you'll hear about all our events you'll get in front of buyers investors brands whatever's most important to you we have such big plans ahead but you got to be in the community to hear about all of it see you on the slack

0:53There's so many dark times when you're building a brand where you're like, I should honestly give up right now. But if you really are passionate about what you're doing, you're going to keep going. You're going to get through those dark times. And so having that passion element to the slide, I think, really helps with getting people to buy into like, all right, this founder's in it for the long haul. Hey, everyone. I'm Hannah Dittman, operations and finance host of the Startup CPG podcast. And today I'm excited to be joined by Brian Fulmer of First Look and First Look Ventures. Brian brings a rare, full stack perspective to consumer investing.

1:27Having spent time in the founder chair, operating and scaling consumer businesses, building consumer ecosystems, and now backing early stage brands through first look ventures. His experience spans what it actually takes to build, fund, and support consumer companies beyond the pitch deck. Although he's reviewed plenty of those. With a deep appreciation for how relationships, trust, and long-term thinking shape outcomes in this industry, he brings a great perspective. In this episode, we dig into what founders should be thinking about as they head into a fundraise, from how to read today's fundraising landscape to what comprises a great pitch deck.

1:59Brian shares hard-earned lessons from both sides of the table, breaks down common fundraising mistakes, and explains why social capital and relationship management are often as critical as metrics when it comes to building durable companies and investor partnerships. If you're a founder preparing to raise, refining your story, or trying to understand how investors think, this conversation is packed with practical insight. Enjoy!

2:25Hey, everybody. Welcome back to the Startup CPG podcast. This is Hannah, and today I am here with Brian Fulmer, an investor from First Look Ventures. Brian, welcome to the show. Thanks for having me. I'm excited to be here. Yeah, we're super excited to have you today. This is going to be a really fun chat. I know you have a lot of interesting perspectives being in and around the space in a lot of different capacities over the last few years. I'd love to start with a background and get the details of your path to First Look and what led you up to this point? Yeah, certainly. So first and foremost, diehard Clevelander, born and raised here.

2:57Did live in New York for about six years, but moved back here about three years ago to be close to family and start a family of my own. I got my first, I guess the initial start was I actually went to law school after college. And between my first, second year of law school, I was interning at a startup accelerator in my hometown, Cleveland. and it was the first time I ever in my life I woke up and was excited to go to work and I was like all right this might be where I belong in the startup world and then while I was working there I submitted an idea that I had been working on on the side during the first year of law school and ended up getting into the program and so I went from dropped out of law school and then went from employee to founder basically overnight and yeah worked on that business for about a year and a half and unfortunately didn't have the legs to go the distance and so had to shut it down Didn't want to go back to law school right away, so jumped in the corporate world.

3:49I worked at Abercrombie's home office and then Victoria's Secret's home office. Transferred out to Victoria's Secret's New York office eventually. And then from there, I joined XRC Ventures. And that was an incredible experience. Originally, when I joined, they were an accelerator. Now they've expanded to be an accelerator and have a growth fund. But while I was there, we used to always get samples delivered to the office. And I mean, more than half the time, it felt like it was brands we weren't even talking to. They just blindly sent us samples. And so it kind of just hit me one day. I'm like, all right, if they're sending us samples, they're probably doing the same thing to every other investor whose address they can find on the Internet.

4:28And individually shipping samples and finding these investors is costly and time consuming. And so eventually kind of just had an idea hit me one day while I was bike riding. there should just be this box that curates the best brands each month and turns that one-to-one grind of trying to find investors and shipping them samples into like a one-to-many type scenario. And so, yeah, eventually left XRC in the fall of 2019 and then started First Look the next day. And then shortly after that, started First Look Ventures. Such an awesome background. And clearly the entrepreneurial pull came back to you and you just couldn't get away from the bug.

5:05I also didn't know you were an apparel guy. Hard industry to operate in, so I'm sure you've got a lot of lessons learned from that chapter as well. I'd love to get the formal, firm overview of First Look Ventures, kind of mandate the way you guys are operating, check size differentiation, and how that kind of works alongside the other areas of the First Look business that you've got going on. Yeah, so on the First Look Venture side of things, we invest primarily in series A and B. We will certainly look at kind of later seed stage brands, but otherwise we try to focus on series A and B. And we're pretty not an overly tight mandate.

5:44We really just want to invest in better for you products. And that can be across any category. And I would say our average check size is probably around$500 ,000. Super helpful. And I feel like it makes a lot of sense that your career kind of naturally progressed that way. You've obviously been helping so many other brands with first look boxes, which I'd love for you to kind of maybe explain that aspect of the business before I pepper you with questions for some additional color on where you're coming from and your kind of lens on the industry. But yeah, it makes a lot of sense that you had this network and then you're utilizing it from the investor side and leveraging your background that way.

6:24But yeah, I would love the formal overview of First Look boxes. Yeah, certainly. So First Look, I mean, it's pretty straightforward. It's an investor group full of angels, VCs, and family offices that are interested in early stage consumer brands. The twists or what makes us essentially one of one is each month, I'll diligence all these brands, figure out who I think the top six are, and I take their samples, put them all in a box, and send them out to everybody in our group. And so they get to experience everything, create data rooms so they can learn about the brands. And then afterwards, the investors let me know who they want to connect with.

7:00I loop everyone together in email and let them take it away from there. And so all investing is direct by the investors and it's totally free for the brands to jump in. I'm always the first to tell everyone, first looks not a silver bullet. I can't make the investors fall in love and write checks, but best case scenario is they do fall in love and they write you a check and you're on your way. Worst case scenario is if you have a great product, then you'll probably convert a lot of those investors into customers. And so that essentially led me to start First Look Ventures about a few years later.

7:32I sent the first boxes out in June of 2020, which funny enough, I'll never say I'm happy COVID happened. However, it was advantageous for us because all these networking events came to a screeching halt as far as founders and investors connecting. And so we ended up being that bridge to help those conversations continue to happen. And then, yeah, a few years later, started First Look Ventures, which is me using SPVs to invest in brands. But it wasn't until about two or three years ago that we really started building out the community side of First Look. And so boxes are certainly the fun part, but maybe the other half of the fun is all of the community things we do.

8:06And so a lot of lunches, dinners, happy hours, coffee meetups, just really trying to get people together, especially now in the age of AI, we need human connection more than ever. deal sourcing machine and a man wearing many hats i feel like you have a lot of learnings i'm sure from i can't even imagine how many hundreds of brands that your diligence on that side and then on the investing side as well so i'd love to kind of leverage some of this awesome perspective you have and get your kind of hot takes on the broader cpg investing market and market dynamics obviously there's been a lot of changes and flow differences from COVID times to now.

8:46It would be great if you could just share some perspective on market insights of where you think things are in the fundraising landscape, any notable takeaways that you have on where things might be going or things that you have seen that are promising, any kind of relevant founder insights that might be helpful for any of our listeners listening in. Kind of a loaded question, but I think it's a great time to invest in consumer, which obviously I'm biased, but there has been a lot of exits over the past 18 to 24 months, which is encouraging because we all liquidity or ROI at the end of the day.

9:21And so, but yeah, it feels like every week there's pretty solid exit of some sort. A few years ago, if you asked me, do you want to always stay in consumer investing? I would have told you, yeah, I love it. But I also, tech is really interesting, for example, especially deep tech, which is the most crazy stuff out there. But I would say consumer is even more enticing right now. And that's largely because it's, in my opinion, a little bit easier to underwrite where maybe a company is headed. I was listening to a podcast not too long ago, and the investor, they invest in some AI company. And they said they put like a$400 ,000 check in.

9:58And then literally 30 days later, there was like 20 copies of this company, replicas of this company that they had just invested in. And essentially their investment within months of investing essentially went to zero. And so it's kind of a scary thing on the tech side as far as, yes, certainly exits are larger on that side, but you can certainly get replaced a lot quicker because it's tech the way it is. With consumer, it's like, yeah, you may be a$10 million brand,$20 million brand, then you start seeing some other similar brands pop up. But at least you have time to compete with them and adjust maybe your marketing or your angle.

10:32And so it's something where consumer brands don't get replaced overnight. And so that's why I think consumer right now is probably more exciting to invest in. At least I'm excited about it. And so, yeah, I think it's a great time to be starting a brand and being an investor in the space. Yeah, I think that's a great point. And I think that's also a function of consumer psychology versus B2B selling and tech. Like there is so much less aspects of selling software to a functional tech user, for instance. They don't really care about a lot of the ancillary things that drive that purchase. It's a very round peg, round hole, cost efficient situation.

11:13Does it work? I mean, there's obviously a lot of complexity in making that work and a lot of intelligence that goes into a lot of these things. But I think the reason why there's so much more room for competition in consumer is because consumer psychology drives so much of the purchasing. And there's so many other different attributes and benefits and dynamics at play that can make something attractive to a consumer in addition to fitting a problem, solution, need. And that additional incremental layers, I think, provide a little bit of protection around the purchasing process, which I feel like is also the exciting fun part of consumer and where a lot of the creativity comes in as well.

11:54You mentioned there's been a lot of exits. How do you feel about the investing landscape in general on the funding side? Do you feel like there's kind of a lot of funding going on, a lot of deals getting done? If someone's kicking off a fundraise right now, would you have any advice of how they should be kind of thinking about the timeline of their process or how difficult relative to other times in the market it might be to get their deal done? Yeah, I think now is totally fine time to fundraise. Honestly, I would probably start, if you're on the fence, I would start doing it now because I find that when the markets are down, angels tend to pull back a little bit because they see their portfolio in the stock market and it's in the red when there's like a recession.

12:36But when it's up, which I think, yeah, S &P and basically Dow and everything is at an all-time high right now. And so everyone's a little bit more risk on at the moment. And so, and things have been certainly active on our side. We had 19 or 20 investments last year from our group. Yeah, it was a great year. Fundraising is so funny because it was just an email with, I have, you know, Laurels, a coffee brand. but we were talking about how sometimes you see a brand where they have unbelievable product and metrics and a fair valuation and like they're struggling to raise and then sometimes you see these companies these founders or these brands where it's like i don't know it seems a little wacky but like somehow they're just getting money in the door and so there's so much not only is there psychology and winning over consumers but there is certainly a psychology game in winning over investors.

13:24I sadly do not have a great answer on how to play that game. At the end of the day, yeah, you can't go too wrong with just having an awesome deck, telling a great story, and really just talking to as many investors as you can. Obviously, you want it to be targeted and people that you think would be interested in what you're doing, but it truly is at the end of the day, especially at the early stages, a numbers game to find the right investors who believe in you and hopefully think your product is directionally correct. That's great perspective. And investing is a human business. These are like humans making decisions.

13:55So that makes a ton of sense that there's kind of the relationship or almost the like marketing factor that plays into it as well. You've obviously seen a lot of founders go through the process both with you and around you. Do you have thoughts on some of the maybe biggest mistakes founders make during fundraise and alternatively some of the things that founders do that make fundraising go really well for them? I mean, there's easy mistakes as far as not having a grip on your numbers in the sense of where, say, you're raising$1 million and then in your revenue forecast, you're saying, all right, we're going to go from$1 million, or let's say$500 ,000 last year, and now we're going to go to$8 million, which is great.

14:37I know we always want to say everything's going up into the right and we're going to be making all this money. But to only raise$1 million, that's just not, especially if you're going to go heavy into retail, for example. There's so many costs with going into retail. So for you to go from$500 ,000 to$8 million in revenue, but you're only raising$1 million, the math doesn't math at that point. Unless you're going to take on a lot of debt, which is a different story, which maybe is not a good thing for some investors. But yeah, so there's many mistakes like that where it's just being realistic with your numbers.

15:08And then also tossing out just, again, it actually kind of always comes back to just being realistic, which is like we had a Decker founder say that they're building a$5 billion beverage brand. which I'm not to say that they can't do it. I mean, I'll never be like Mr. Wonderful on Shark Tank where he tells the founder, you need to take this out back and shoot it. He's so mean. I know, I'll never be that mean, but it's just like, and trust me, we all want to invest in ambitious founders, but like, all right,$5 billion exit, like that's so rare. But hey, you know what? There have been large exits in the past, and so I'm not going to say you can't do it, but the product was, in my opinion, wasn't extremely unique.

15:45And so now it's like, all right, What's the real story of how you're going to get to this number? Which again, I keep saying this, just being realistic with your numbers and your plan and what's in the market and how fast can you actually move. And also just having a great deck. Because that's kind of the first touch point that you have typically with an investor is like, here's my deck. And so they're really judging you quite hard as far as like how you present, how you think, what you think the future looks like. So I say just having a great deck is an awesome starting point. What makes a deck great to you?

16:17You know, if you were a founder and you were putting together what you perceive to be an A +, what would it consist of and what would it be like? Yeah, I mean, it doesn't have to be like super engineered or like, you know, handed to a design agency and made looks ultra pretty. But you can do a lot with all the tools nowadays to make a pretty decent looking deck. But the biggest thing I would focus on is the why now question, which another way of maybe thinking about is like, what's your big bet? where if things go right, the brand's going to do awesome. And then hopefully investors are going to make a lot of money by being a part of that journey.

16:52And so that's because typically when you bump into an investor, they have an idea of what the future is going to look like. You have an idea of what the future is going to look like. But obviously investors are always open to learning and changing their minds and everything. And so it's really important to have that crisp story of here's where the world's headed. Here's how we fit into that world. And this is why it makes sense for you to invest in what we're doing right now. Of course, or every investor on the planet always says investing in the team is super important, which it certainly is.

17:20And so, and there's really not a great answer for how to show yourself off in a deck. But I personally always say, give your background and your experience and like the ways you, maybe the previous jobs you had, like the change that you created, moved our company from 2 million in revenue to 50 million in revenue and built out these teams. But they also have like a passion story in there as well, because there are a lot of founders I find that they just see an opportunity to make money. And so they start building something. But there's so many dark times when you're building a brand where you're like, I should honestly give up right now.

17:57But if you really are passionate about what you're doing, you're going to keep going. You're going to get through those dark times. And so having that passion element to the slide, I think, really helps with getting people to buy into like, all right, this founder is in it for the long haul. Yeah, I think it's kind of like the two different founder archetypes of someone who is so pulled by an idea that it moves them into being a founder versus someone who so desperately wants to be a founder that they craft an idea to be able to do so. and it's a lot harder. I know what the nights and the mornings can be like when things aren't going well or external things are happening.

18:33Obviously, I don't think it's a surprise to literally anyone in the planet that being a founder comes with a lot of ups and a lot of lows. So yeah, I think getting through those times when you didn't have like when the conviction was more about your role versus the conviction being about what it is that you're building and why you're building it, that can be a huge differentiation shift. We'll be right back. Are you going to crush it on Amazon this year? It's such an important channel, but it's so hard to do alone. And most agencies are a total ripoff. We can't afford$5 ,000 a month and a commission on our sales.

19:08They just don't get it. That's why I love our partners at Daybreak. They are full service, meaning they do the creative work, the listings, the logistics, and of course, all the ads, all with the most reasonable retainer out there. I work with them personally. I'm so grateful we have such a good partner to recommend out to you, our community. They do evaluate your product first to see if it might be a fit. So if you want them to have a look, email them startupcpg at daybreak.agency and they'll do a free audit for you. Good luck, everyone.

19:39Kind of going back to what you were saying about Dex and what you think they need to comprise of. Do you have a tangible example for maybe someone in your portfolio or a company that you thought did a stellar job of how they positioned some of those aspects that you were saying and what the kind of pitch and deck was like from them? Yeah, I guess I would probably say our most recent investment, which was in Half Day Iced Tea. And yeah, the deck was look great, short and sweet, but hit the right points that investors care about. and I think they did a great job of kind of explaining the why now which is I think fiber is going to be a huge story going forward I mean it already is I think it's going to be a bigger story over the next 10 years and beyond because yeah gut health is so important to the rest of your body and so and then the other thing I also and this I always ask every founder is of course they're going to pitch and make it sound like whatever I'm building is like perfect or is you know is amazing but I always like to ask like what other people think so specifically like retail buyers.

20:37Like what are they saying, for example? Because then in the day, they're the ones that dictate if you're going to be on shelf or not. And so, and their whole business is as many products as possible. So I'm always curious what the retailers are thinking and why they may or may not be giving a brand of green light to jump in. But otherwise, yeah, Hefty had an awesome deck. It wasn't too short. It wasn't too long. And they had a great argument for why Fiber is going to continue to be a big story. Yeah, I think that's a really helpful color on the why now because it puts it in really practical terms that investors aren't just betting on a specific company.

21:10They definitely are. But they're also betting on these kind of like broader market aspects and trends and external forces that are happening almost equally sometimes as, you know, it's like betting on the wave and betting on the surfer riding the wave. So kind of believing in that wave coming, I think, helps people get a lot of conviction with what you're doing as well. And I think that's a great way to showcase that. Reflecting kind of on your career and investments more broadly outside of just fundraising, what are some lessons learned or compelling anecdotes that you think other operators or even other investors might be able to learn from?

21:50So one thing I certainly wish I knew now that I didn't know back then was, you always hear advice from investors, especially for advice kind of up and coming people or people want to break into spaces like, oh, just start by sharing deals. Every investor wants to turn over every rock. There's no question about that. However, and maybe this is the most important thing in VC, it's not money, it's your social capital. And so, for example, if someone shares with you 300 deals a year, and then another person shares with you two deals a year, the person who shares 300 deals a year with you, you're more likely to skip over their email, not take any, you know, those deals as serious versus that person who shares two or three unbelievable deals that you're, you're not going to miss that email because you know, every single time they send you something, this is unbelievable.

22:36And that's essentially, I mean, the heart of social capital is at least part of the, on the deal flow side of things are building a reputation is like, yes, you want to be helpful and share deals with other folks, but you don't want to overshare because then you kind of wear that out. You burn up your social capital, for example. And in that same vein, if Mark Andreessen says, this is a great company. I mean, A16 is doing pretty well. Versus someone who just started out fresh out of college, they're an associate at a firm, and they say this company's great. You're going to take Mark's word a lot more than maybe the new associate that just fresh out of college.

23:11And yeah, that comes with just, again, it's like the social capital is when you put your word on something, which maybe you don't put your word on a bunch of things, it becomes that much more impactful. And so yeah, social capital is probably one of the most interesting parts of VC is just being very careful with what you share because it really does follow, it molds how people or how other investors think of you. And that's so important because if I'm sending over a bunch of deals and I think, oh, these are all great. It's like, all right, they can't all be great. But if I don't send that many deals, when I do say like, this is a good company, you need to look at it.

23:42That's going to carry more weight because I don't say that as often. Sorry, that was like a long answer, but it's really interesting. I'm actually going to write a newsletter on this because it's one of the interesting things that I didn't know and I just had to learn as I go. I wish I knew back then. I think that's a great point. And I feel like that extends almost everywhere to like as a founder, a lot of times founders are asked to give warm intros to other people. And I'm sure they're thinking about it in a similar way to like if I just blast every founder that asked me for a warm intro to another investor, what is that going to reflect on me as a founder and kind of like my headspace and my personal network?

24:19I think everyone wants to do a lot of favors in the CPG industry. Everyone is so friendly and they get it takes a village and how hard it can be to get some of these businesses to a place where they're off and running. But at the same time, I think everyone is also, you know, protective of their own networks in a way and wanting to, like you're saying, manage their social capital. So I think it's a great point and a great label for it as well. Makes a ton of sense. If I was a friend, a founder friend coming to you, looking for a mentor chat, looking for a coffee chat and asking you, hey, I'm about to embark on a fundraise and go through a diligence process.