Investor Spotlight: Rogers Healy, Morrison Seger Venture Capital Partners

0:09Make sure that your why as to what made you start it remains your why. The world is full of awesome people, but the world also has some people that are not so awesome. And once you start experiencing success and you get access, sometimes those people just come out of the woodwork and you can't let them get to you. Right. And I'm such a hypocrite in telling you this because it is hard not to think about the people that want to just use fail. But you're entering a competitive space. And just because X percentage of businesses fail within a certain X amount of time, screw that. Bet on yourself. Burn the ships.

0:44And no matter your background, no matter your qualifications or lack of qualifications, if you have the internal conviction to go and do something, and if you believe in yourself, then you can do it. Hey, everyone.

0:57Hannah Dittman:I'm Hannah Dittman, operations and finance host of the Startup CPG podcast. And today I'm excited to be joined by Rogers Healy, owner and CEO of Morrison Seeger Venture Capital Partners. Rogers is a serial entrepreneur, family man, and seasoned investor with over two decades of experience building and scaling businesses. He founded one of Texas's largest independently owned real estate firms, built a full portfolio of companies, and has since shifted his focus to venture capital full-time. He created Morrison Seeger, named after two of his favorite musicians, and has gone on to back some of the most iconic CPG brands of this generation.

1:36Hannah Dittman:With a strong focus on brands that truly resonate with consumers and earn a place in their everyday lives. In this episode, we dig into what Rogers looks for when evaluating companies, why brand recognition and excitement are critical to brand longevity, and the people element behind both investing and building a business. We also cover investor-founder fit, how to evaluate potential partners, and lessons learned from a long career in entrepreneurship and investing. If you're looking for a boost of motivation, a clearer lens into how investors think during diligence, or guidance on where to focus your North Star, This episode is packed with insights.

2:13Hannah Dittman:Enjoy!

2:17Hannah Dittman:Hey everybody, welcome back to the Startup CPG podcast. This is Hannah and today I'm thrilled to be here with Rogers Healy of Morrison Seeger. Rogers, welcome on the show. Hannah, thank you for having me. What a great way to start the week and join the most coveted podcast in the world of CPG. Well, we're honored to have you here. Thank you so much for the kind words. I'd love to dive straight in with a bit of context on your background, the path that led you through consumer and ultimately to where you are today at Morrison Seeker. Yeah, thank you. The short of it, I love to work. I've worked my whole life.

2:54I think that in life, the fortunate people are able to find out what their God-given abilities are. And early on, I knew I loved people. I love investing in people. I'll give the short answer. I got into real estate in college. I moved a lot growing up and moving a lot. This kind of forces you to learn how to be social and how to be a quick adapter and how to notice different trends all across different cities, all across different schools, blah, blah, blah. I got into real estate in college and by mere happenstance, I wouldn't even call it serendipity. I just randomly got into real estate and I wanted to make money.

3:26And so I was able to go and apply my ability to grind with my ability to network and started making money in college. Took the money and moved to Los Angeles to become an actor. And you don't know me from movies, which means I didn't succeed, which was kind of the theme across almost everything I tried before real estate. But anyway, I got into that. I lived out there, had a good network, learned how to network with a whole different audience and came back at real estate hard. Randomly met some people in Dallas that ended up being pretty influential. They were very encouraging. I started my own real estate company in 2005, grew it to what became the largest independent real estate company in Texas, which was great for the ego, but we'll get back to that, and just meet some really special people, which kind of led me here inadvertently.

4:12There's a company called Mizzen in Maine. It's a men's clothing company started in Dallas by a gentleman that's one of my best friends now, named Kevin Lavelle. Kevin approached me when he was an undergrad about an idea he had to create a dry fit men's dress shirt. This was before Shark Tank. This was before the show that I'm on called Elevator Pitch. And I was one of their first investors. And I just fell in love with it. I fell in love with the idea of helping. I fell in love with the idea of building. I fell in love with the idea that even if I invest and you outgrow me, you can't kick me out because I'm legally a part of your contract versus owning a real estate company.

4:44And so over the course of time, just kind of doing my thing, I got access to pretty cool deals, stuff that I still am a huge consumer of. And I wear them as in Maine every day. And I looked up and had pretty active portfolio and I didn't realize the success rates were not necessarily in the favor of the investor. And for some ungodly reason, my deals were at least still alive. And then I met my wife. I met my wife when I was 39. My wife is a very happy person. I was still running and growing my real estate companies and just never felt like fulfilled. I never felt like that sense of peace. and that just like, yeah, this is what I'm going to do today.

5:24It's just that my skill set, I thought at the time was having really thick skin and being able to kind of outwork everybody. But in my heart of hearts, I was like, man, I really like this venture capital stuff. I think that I could really help these brands, but I wasn't qualified to do it because I was the real estate guy. Next thing you know, COVID hits and I jokingly started the company after two of my favorite musicians, Van Morrison and Bob Seger. And I wanted something that sounded fancy that I could kind of hide behind because all my success prior in business was with companies named after me because I thought that's what a business owner was supposed to do, name it after themselves.

6:00Started Morrison Seger. I wanted something that sounded like a fancy New York firm, very Manhattan, very formal, but it's after literally Van Morrison and Bob Seger, who I've yet to meet. If y 'all are watching Van and Bob, it's time to get together.

6:13Hannah Dittman:They owe you that one. They owe it to you. It's going to happen. But anyway, like I started pitching deals, doing SPVs and every deal I put my own money in and I would tell the story behind whatever venture we were a part of. And my network was very supportive. And I was like, huh, all right, that's kind of weird. And they were supportive again. I was like, that's kind of weird. And then I was like, man, I think that I want to do this full time. And so went through a very interesting journey, very unique journey, a very stressful journey, a very unhappy journey of removing myself from my real estate companies.

6:48Fast forward to today, ended up exiting my real estate companies to do this full time. And it's been life changing. It's an inviting environment, which everyone that's watching or listening already knows that. But as someone that had a first career in a different industry, I will tell you how blessed everyone is to be in this industry because it is inviting. It is kind. It is collaborative. It is creative. And it is accepting of the weirdos like me, which was not real estate. So entrepreneur, grinder, consumer fan. But now I'm a venture capitalist in the world of consumer.

7:25Hannah Dittman:Such a vulnerable and honest reflection of your career thus far and what led you to all the happiness that you found today. And yes, the culture of CPG is a unique one and so special. And it's no surprise that everyone loves people because that's who we're serving at the end of the day with our products and our brands and everything we're offering to the world, at least hopefully, to make people's life just a little bit better. I'm so glad that you found your passion here. I'd love to dive a little bit more into your firm. We've definitely got some interesting color on the name, but I'd love to know a little bit more about criteria, stage focus, check size, your mandate differentiation, and what you're really lasered in on within the consumer ecosystem.

8:10Should I put my Morrison Seeger hat on?

8:12Hannah Dittman:Switch it up. Yeah, rep it. This is the entrepreneurial you always got to be repping. I went to SMU in Dallas. I'm really proud of my degree. I studied advertising and psychology. I didn't study business. I didn't study finance. I don't have a master's degree, but I think I've got a good gut instinct. And I am pretty confident that is what investing starts with no matter what anyone says, right? You take a sip of guava berry water. You're like, I like the taste of that. No sugar. Huh? That's cool. No calories, no sodium. Tell me more. Really cool label. I don't care what anyone says. That is how it starts, right?

8:44And it's just a matter of who gets it in your hand and how you taste the liquid or how you chew the gum or how you taste the chips. That's it. And so that's how it starts with us. Almost every single deal we're in, I'm a consumer or I'm a backer of, or my family is a consumer. My family is a backer of. And I think that's part of the obstacle and also part of the benefit of SPVs is that it's all one off pitches. So that's the bare minimum. The second thing is nothing controversial, nothing that my family would be ashamed of me participating in, whether it's something that has some kind of drug connotation or something that could be considered classless.

9:19Life is too short and my children and my wife are my entire world and I want them to always be proud even if the numbers are insanely incredible for something that doesn't fit our family ethos then that's okay. And then lastly something that has a path to actually make us some money right. It's got to be something that I love beverage which is probably the hardest space it's probably the most crowded but I love beverage and I drink a lot of liquid every single day. And I think it's good to have at least two or three in each vertical that you're rooting on where Waterloo is our later stage sparkling water.

9:53Sanzo is our mid-stage sparkling water. And I've got a few that are going to probably be our newer sparkling water. And so I think just being able to spin those plates kind of like a maniac is crucial, but obviously it's still got to pass diligence with legal. It's still got to pass diligence with accounting. We have pretty great systems internally. But at the end of the day, it starts with, frankly, what I would get excited about. And I've got to be able to pitch these deals day in, day out. And I've got to know almost as much as the founders or the leaders, which makes me an extension of their team, where my windfall comes after our investors get paid back in full first.

10:28Hannah Dittman:I love the way that you're kind of thinking about stacking sectors by stage. I think that's really interesting and any unique approach. I also love Sonzo. I drink the Kalamansi one like almost every day. Huge fan. And yeah, Food & Bev, we've got a lot of founders listening that I'm sure are eager to hear your opinions today. That is their sweet spot. And so as far as check size and when you're leaning in and getting involved, what stage of focus are you really aiming for or are you pretty agnostic and it's more about what you find interesting and compelling? All stages. Check sizes, half a million to$10 million.

11:02I still actively write checks. I'll write, I would write what many would consider to be very, very small checks just to get in and to learn. Like last year was the year of pistachios and I did three pistachio deals, all small checks. I think they're about to have a moment just simply because my gut's telling me so. And so the founders and the deals were nice enough to let me in for small checks so I can learn. So yeah, it just depends, right? But with that said, if you're raising money for the later stage deals, you kind of have to raise a lot of money to make it make sense for the economics on the back end.

11:34So we did a few secondary deals in Waterloo and I had to raise a few million dollars to make it make sense. But I think it's a safe deal, right? So there's different audiences for different deals. And that's the benefit of having a pretty diverse network. And just like you, that's what I'm spending every day doing. It's just adding people to my personal database and finding ways to stay top of mind.

11:56Hannah Dittman:I love the strategic focus and lens that you're approaching things with. I think that's interesting and unique. And also, I think a cool part about being a nimble institutional investor where you're kind of able to run it a little bit more as you see fit versus some big archaic firm where you have like a very rigid mandate and you can't be as opportunistic or strategic in your approach and how things change. And yeah, pistachio wave. I agree. I mean, I think also there's always these kind of weird little things that come up in consumer like the Dubai chocolate kind of ancillary little waves that draw some attention to some other tangential categories sometimes and things end up sticking and clicking.

12:39So interesting.

12:40Hannah Dittman:I'd love to dive in to your thoughts a little bit more on diligence process and what gets you excited about brands and built conviction in a company. You're obviously talking a lot about consumer psychology, something I call the consumer double take, which is you kind of glance at everything quickly on the shelf. But what's the thing that makes you look again or turn that package over to read a little bit more? What else are you really looking for? Like what are the pillars, brand performance or analysis that you're focused on that really makes you feel like a deal is a winner and you want to be involved?

13:14Sure. I do think that the branding has to pop from the start. Like again, I'll never forget where I was. It was 2018 or 17. And this guy, Paul Levitino, walked into my conference room in my real estate company drinking a Waterloo. I was like, what's that? That looks really cool. Is Waterloo, why is it called Waterloo? And I just, as like, I'm a fan immediately. And almost at that point, even if it tasted like whatever mud, I would still like it. Cause in my head I'd already fall in love with it. And I think that is kind of part of it with some of these brands, but yeah, it's gotta

13:44Hannah Dittman:be simple. I don't like brands that go in, like change the spelling a lot, remove vowels. And they're trying too hard to be a nightclub. That's just not for me. And I don't think that could appeal to everybody. Not that the brands are for everybody, but yeah, it's gotta be simple and it's gotta be something that's already for the most part established vertical. it's just how can you go and stand out right and at this point there's nothing new that can be created right like powders and gummies and gummies of powders it's like that's always been around it's just a matter of how you're taking one from this and putting into that one but yeah i like stories i like stuff that is simple and stuff that you would want on a t-shirt or a hat and as crazy as it sounds like all of these brands have very very loyal fan bases and it shouldn't be extreme to have somebody that wants to wear a Sanzo logo on a hoodie.

14:36And I think that's just how you got to kind of look at it. And if someone has to zoom in and be like, what's that? It's like you've lost them. And I think we live in such a instant gratification community and also like a short attention span community that if you don't get them immediately, then you've lost them. And then you saw someone a Sanzo, you got to make sure they come back and buy another Sanzo, which means you got to have community engagement from Michael Influ. It's a combination of stuff, But the short answer is it's got to pop, but they can't be trying too hard. There's a lot of brands that have pitched us that I'm just like, really?

15:04It's like, you're trying so, so hard. And I think that's going to cost them too much money versus just trying to brand to their audience better than anyone else can brand. And that's real estate, right? I own a real estate company with a lot of people that work there. At the time, 80 ,000 realtors in Dallas. How do you stand out, right? It's like, you got to find your people. You got to keep them engaged and you got to keep them excited. and that's consumer branding.

15:28Hannah Dittman:It's such a succinct and great way to sum up such a core pillar of importance in consumer. There's like the marketing piece, branding, all of that stuff in that bucket and then there's the product piece and it's like what's outside the bottle, what's inside the bottle. Like both of those things are almost equally important in the consumer experience and one of them is a lot easier to wrap your head around because it's science-based and one of them is really hard to wrap your head around because it is so nebulous and ambiguous us sometimes and it is expensive yeah and like you're saying the harder you have to try the way i'm translating that in my mind is that means you're spending a lot of money to get the top of funnel going and getting through that conversion experience which is not typically what investors want to see because that means their dollars aren't being used productively and the growth that they're looking for isn't going to come as easily as it could with another brand maybe where they could put their money elsewhere.

16:23Hannah Dittman:I think a lot of times people are so myopically focused on their own brand, they forget to go into the point of view or the perspective of an investor. Investors have like almost unlimited options the way you would have if you were going to invest your money in the stock market. And so you have to like really think not just like why your company is so great and what's working for it, but why is it the most productive use of dollars for that investor. Yeah. And it also, there's a lot of very intelligent people in this industry, but nobody has the perfect playbook. Nobody, nobody, nobody. A lot of people, myself included, have gotten very lucky, but some people get lucky multiple times.

17:03You want to follow that kind of person, but you still have to go and find a way to create your own vertical for success. Because at the end of the day, a lot of us, myself included, are kind of building the plane mid flight. So find a pilot or a leader that you love and that you trust and help them. Right. And the ones that are closed off with it are full of shit. Excuse my language. Like, cause they don't know everything. Nobody knows everything. And to the point that you were making about the other thing, the only thing that's harder than creating an established brand is maintaining it. And that's also expensive, right?

17:36And every day, whether it's in real estate or beverage or zippers or rubber bands, every day, someone is literally building their company with the sole purpose of taking your company down, right? So how do you stay tunnel vision? How do you stay psychotic enough, but also how do you be able to breathe and appreciate the people that have danced with you? Because I think that's a really, really hard thing for a lot of business owners myself to do is appreciate the climb and appreciate the ones that really have shown loyalty versus worry about who you're going to lose or worry about who you're not going to get.

18:07And I think that's human nature as well. And I've experienced this to scale, which makes it sometimes really difficult to enjoy the successes.

18:15Hannah Dittman:Great points. And you're such a straight shooter. And I like what you said about every investor is different. Everyone has kind of a different sticking point, outlook, strategy, things that they are going off of. It's a human business. They have their own experiences, wins and losses that they're kind of anchoring on in their own mind, patterns that they're noticing that they're leaning into. It's definitely a lot of art in addition to science, it can seem a lot of science because there's so much numbers and data that is also going into it. But there is a big art component to investing as well.

18:48Hannah Dittman:When you're meeting with a founder, what is the vibe you're looking for? What are the characteristics you're looking for? What really makes the pitch stand out or works well with you as an investor from a founder persona perspective? The stuff that can be taught, like be on time, say somebody's name, be respectful, be present, learn how to follow up. If you have a consumer product and someone asks you where to get it. Don't let them buy it. Just simple little stuff, right? That's just part of the cost of being a business owner, but not everybody meshes with me and I don't mesh with everyone. And that took me a long time to be comfortable saying that because it's like human nature is you want everyone to like you and to love you, right?

19:24There wouldn't be songs if there wasn't love and there wasn't heartbreak, but I love Bob Seger and Van Morrison. You might love Jimi Hendrix and Taylor Swift, and that's okay, which means you're probably going to have more comfortable conversation with Jimi Hendrix and Taylor Swift fans, just like I would with Van Morrison and Bob Seger. So volume helps. The more meetings you take, the more people you're going to meet. But again, it's got to feel good. And I don't do well with like cocky people that pretend like they don't need you. It's like, no, you, everyone needs each other. Like you need me, not you literally, but I'm saying like a founder might need me.

20:01Hannah Dittman:I need you. You're here. You're helping me share my story. And it's therapy to talk about it. But people that act like they're doing you a favor, especially on the founder side, that's just sour taste. And surprisingly happens a lot. And I'm like, wait a second. What? Like, no, no, no, no, no, no. Like, it's got to be a team. And people that don't know how to communicate, that's the biggest red flag, period. Respond to emails, respond to messages. Like, if you have life that came up, I totally understand, just explain it and apologize and let's move on. But it sets a precedent, right? And when I met my wife, I was like, oh my gosh, this is going to be my wife, right?

20:38And I knew that because I was single for a long time prior and I had dated women that didn't give me the same assurance or that same feeling, but that took me some time.