The 4-Part Diligence Framework Every Founder Should Know

0:00Hannah Dittman:What if your next investor meeting is already waiting for you? Applications are now open for Startup CPG's Founders and Funders 2026, our flagship event built to connect the most promising emerging CPG brands with investors ready to write them checks. Sick of cold emails, cancelled meetings, and pounding LinkedIn pavement? Well, consider Startup CPG your ultimate warm intro. Join us December 10th, 2026 in New York City for the fundraising event of the year. This year, we're back and bringing together 200 of the top emerging CPG founders and more than 100 investors for nearly 1 ,000 one-on-one pitch meetings.

0:42Hannah Dittman:Plus, a full day of networking, educational panels, and countless conversations that turn into real fundraising relationships. Brand applications are open now and you can find the event at events.startupcpg.com. If you're planning to raise capital in the next 12 to 18 months, this is where you want to be. If you're an investor or partner who wants to be included in this epic event, please email funders at startupcpg.com. Again, brand applications are open now at events.startupcpg.com. Don't wait. Acceptances will be on a rolling basis. Apply today, and we can't wait to see you in New York. Good luck.

1:43One of the lessons I've learned is probably how growth can conceal fragility for a long period of time. A company can add a lot of doors, customers, or revenue, but really that papers over a lot of things that are not as strong under the hood once you start digging. So I am very skeptical when I hear about broad distribution right out of the gate. What I really want to see is what is the velocity, the repeat, the margin, the cash conversion that's going to make you capital efficient and durable over the long period of time. The last that we want as a founder to just be deploying capital for the sake of deploying capital, because you're going to end up failing as a company and you're going to go under.

2:28And then that's not a great outcome for anybody.

2:32Hannah Dittman:Hey, everyone. I'm Hannah Dittman, operations and finance host of the Startup CPG podcast. And today I'm really excited to be joined by Ashley Hartman, managing partner at Bluestine Ventures. Ashley brings experience from both sides of the table as an investor and operator, giving her a deep understanding of not only what makes a business compelling on paper, but what the execution behind closed doors actually looks like. BlueSign Ventures is an early stage firm born out of a heritage family office focused on the future of food and high growth consumer brands. There, Ashley partners with founders across their verticals with a highly hands-on approach to company building.

3:09Hannah Dittman:In this episode, we break down the four areas Ashley focuses on during diligence, what makes a founder stand out, and why those traits matter so much after the investment is made. We also discuss what the first 90 days post-investment looks like, the difference between family offices and other institutional investors, and how founders should think about when to fundraise and why they need the capital in the first place. Ashley also shares examples of Bluestein's work alongside its portfolio companies and what true investor-founder partnership looks like in practice. Ashley highlights multiple fundraising frameworks that are founder notebook gold.

3:46Hannah Dittman:So go grab a pen or your AI agent and enjoy.

3:54Hannah Dittman:Hey, everybody. Welcome back to the Startup CPG podcast. This is Hannah, and today I'm excited to be here for an investor spotlight with Ashley Hartman of Bluestine Ventures. Ashley, welcome to the show. Thank you so much for having me. I'm so excited to be here. I'm excited to chat with you today, too. I'd love to kick us straight into a brief background of yourself and your path that led you to Bluestine. Happy to. So I certainly didn't grow up thinking I would become a venture capitalist, but I came here through a combination of analytics and operating experience. I started my career in finance at Nira Economic Consulting, which really was a great training to break down complicated markets and separate stories from evidence.

4:40And then I led strategy and operations at my family's manufacturing business, which was in windows and doors, helping drive growth and expansion. which gave me really good hands-on appreciation for what it means to actually build and scale and operate a business. And then it was really fun to see where Blustein could bring those two sides together, where I can use my analytical toolkit and financial analysis, but bring an operator's mind and bias toward action. So today I'm managing partner, co-managing partner with my partner, Andrew Blustein, and I help lead both our investment strategy and the firm, and have made over 40 investments over my career and just love working with founders and helping them move from this big idea to really durable business.

5:25Hannah Dittman:Awesome. You have a super awesome background and the experience that you've had on the operating side, I'm sure informs so much of what you're doing on the investing side and giving you that empathetic lens that you're bringing to the founders that you're meeting with. I'd love to understand a little bit more of Blue Stein's positioning in the market, your criteria, stage, average check size, and mandate differentiation, and all the things that make you interesting and that founders want to know about your firm. Bluestine Ventures is an early-stage venture capital firm, and we invest in modern well-being at the intersection of culture, science, and technology.

6:02We started the firm in 2014 as the investment arm of Family Office, the Bluestine Family Office, and then it evolved into an independent family-backed firm. So we're currently investing out of our third fund, which is actually our first fund with outside capital, though it's still anchored by the Bluestone family. And our stages, so we invest primarily seed through series A, and our initial check sizes are 500k to 2 million. We look across the supply chain in modern well-being and nutrition. So we invest in high-gross consumer brands, which is most relevant to you guys, digital innovation, and also frontier technology.

6:39And what connects the portfolio is just this consumer who's becoming more proactive, informed and demanding about their health, which is really exciting. And it's happening across the value chain in the industry. And then you asked about differentiation. And a core part of our differentiation is our specialization. We've spent 12 years focused on this market exclusively, investing in over 50 companies in this space. So every company ends up sharpening the lens for the next one. where we learn what retail trends and velocity looks like, where we can push on health and innovation. We understand deeply how long enterprise sales take and what a strong supply chain looks like.

7:23So that accumulated judgment really enables us to recognize opportunities earlier. And it also enables us to be the most useful to our portfolio companies once they come into the Blustein family.

7:34Hannah Dittman:Very well said and great perspective that you're thinking about the market with and bringing to. I love the focus areas. I'd love to double click on the idea of a family office that you mentioned. Could you explain a little bit more about what's a family office? What does that entail in terms of the way you operate in the investing world or working alongside founders? Are you different in any way from a traditional venture capital firm? What would the implications be if I was a founder who was getting an investment from you all? Yeah, no, that's a great question. A lot of these words and terminologies can be opaque.

8:08I'd say one nuance with family offices is when you've seen one family office, you've seen one family office and all of them operate in very, very different ways. So when we were operating exclusively as a family office, we were naturally, which you would expect, is a bit more patient with our capital on return profiles, company building, et cetera. And so I think that does differ a bit from a venture capital fund, which obviously operates on a certain timeline. However, we have since spun out of a family office. So we are a dedicated venture capital fund and we do operate on that timeline and operate like a traditional VC fund, which is designed for a lot of uncertainty at the earliest stages and also power law outcomes.

8:53And so we like to think we are still patient in that we invest at the seed stage and we understand growth is not linear. But at the end of the day, we do have to return capital and then have a significant return to our own investors, and we have to keep that in mind. And I'd say, secondly, when you take money from a family office, it's a fantastic opportunity because family offices are, as I mentioned, very relationship and partnership driven and long-term minded. But if you take a family office capital alongside venture capital, you are ultimately on the venture capital timeline, not necessarily on the family the office timeline.

9:32So if that makes sense, you kind of have to think about the investor syndicate, not just the one single investor that you have on my cap cable.

9:39Hannah Dittman:I love that you pointed that out. The constricting or the constraining factor is going to be whoever has the most accelerated timeline or whatever the outlying need will be. You need to accommodate and think through that. Very well said. Yes. Very well explained. And I think a really helpful breakdown between all the different classes of investment firms that are out there. And I think also probably informs a lot of the ways that you guys think about deals in the process of diligence and evaluation coming from the heritage of a family office, even though you've gone down a little bit more of a traditional VC path now.

10:12Hannah Dittman:Speaking of, I'd love to understand what you typically look for in a diligence process. What's an overview of what the steps in that process is like for you all and what type of deals fit those profiles the best? Great question, because there's a lot behind the hood of what we do. So our diligence is structured really around one question, and that's what are the few things that we have to believe for this company to have an outsized outcome? And that process usually takes roughly six to eight weeks when a founder comes in the door and then runs through the entire process. And we think about things around a few key areas.

10:53The first thing we do is we take a step back and we say, okay, let's think about the founder, the vision, why now, and the initial traction that this company has. So those are the kind of first things that we just high level think about and talk about as a team. And then if we want to go deeper, we think very deeply around building a scorecard across four areas. First is the vision. So what is the problem you are solving? And is there a credible path to create long-term value? And why is that path open now? The second piece is, okay, what is the playbook you're bringing to this market that's going to make you successful?

11:33Does the product work? Is it exceptional? How is it sold? What does traction really mean? And how do the unit economics look today? And how do they improve with scale? And then the third piece is obviously the team. We call it the engine. Is this the team that's going to be able to build? and can they recruit? And do they have the right partners around the table, whether that's in-source or outsource partners? And then the last piece we look at are the terms. Does this price and structure create alignment and an attractive outcome for everybody? And that's a key part of what we need to evaluate.

12:05It's not just about how good is this business. It's what does our return profile look like? And there are a lot of implications to putting a check into a company than just, okay, we think the product is phenomenal, which might be great, but it's necessary but not sufficient. So that's how we kind of like work through our process. And those are the key areas that we dig into.

12:25Hannah Dittman:Ashley, I love the way you laid that out. And I think it is so clear and easy to understand for the founders that maybe don't even know where to start thinking about presenting their business or some of the things that an investor might need to see. I think just thinking through it in those big picture buckets and then narrowing down, drilling down to ultimately the deepest layer, which is the detailed metrics and KPIs that drive a lot of those insights and vision and strategic thought. It's super helpful. When you're thinking through fundamentals and KPIs as you're alluding to traction and thinking through what makes a business strong from a metric standpoint, what are the target benchmarks or the areas of focus that you're really double-clicking on the most or that you really want or need founders to get right in the diligence process for you to feel high enough conviction to get involved?

13:17Yeah, there isn't really one KPI that reveals everything because we invest across the supply chain. It really can vary depending on category and where a company sits and what their route to market is, whether it's retail or direct to consumer or some other path that they've chosen. So it can just vary enormously. But if we're talking about CPG, what I really want to dig into and there's no right number for us to look at that that's going to be a yes or no. But the key areas that I think every founder should be targeting in their mind on having this dashboard in their head of where they should have their numbers cold is net revenue by channel and by skew, gross margin and contribution margin, retail velocity and same store sales or kind of your net LTV to CAC if you're a direct-to-consumer brand, and really around what are those key numbers that show that your product is working and it's turning into not just first purchase, but repeat and really customer love.

14:23Hannah Dittman:I love how crisp you break down these questions. You're such direct, awesome answers, and I think it's so easy to understand. And I love the way you walked through the piano a little bit there to highlight. When you're thinking about founder evaluation and you're mentioning the engine and thinking through some of that stuff, what are the traits or the characteristics of that engine that help answer that question for you? Is this the team that's going to be able to build this or is this the right team for this company? I love this question because it really does come down to the founder. This is who we're partnering with and getting into bed with for many, many, many years.

15:02So we have to think very deeply about are we the right fit together? And so I tend to look for founders with this unicorn combination of vision and operations. And it's really hard to find. You'll find founders that are very high level, very visionary. And then you'll find other founders that are super in the weeds and super tactical. But finding that marriage is so important. And so that is what high level look for when we're talking about what is the founder that I think is going to be successful. To give you one example, one of our portfolio companies was a company called Vive Organic, which is a two ounce immunity boosting wellness shot.

15:42Wyatt Tabman is an incredible entrepreneur. During the diligence process, he could share the high level vision of how he was going to create the shot category. why now and what was the problem he was solving and how the product was just designed to like create this category that he was going to build in retail around shots, which really didn't have many products in that set when he started the brand. And then he would get tactical and he would know every number and he would know the retail velocity or the dollar productivity per square inch of the product on shelf. And so that kind of like rare combination is really what gets me excited.

16:22And then there's some traits that kind of I would layer on top of that. It's really this product and consumer obsession. They really understand what problem they're solving in the consumer's life. And they are so obsessed with improving and optimizing the product they're offering. Then it's, do they have clarity? Can they explain this insight, the wedge in the market, and what are the priorities? The third trait I definitely look for is intellectual honesty. Are they self-aware? They know what they don't know. They know where they want to solve, what they want to solve and what they have today.

16:57And then I certainly look for someone who has, I would say, maybe a low ego, but high standards. They want to build strong people around them, don't need to be the smartest person in the room, are coachable, but really have that high bar for anybody that they bring on the team.

17:15Hannah Dittman:It's such a hard thing for founders to be all of those things. But I think as you're outlaying all of the different characteristics, you can think through why each one of them is so important when you think about the future of a company journey throughout the time that you're going to be an investment partner with them. And this idea of marrying the operations view and the vision view is really important. And I think one of the hardest things to be able to bounce back and forth in every decision that you're making in every execution plan of what does this mean from a very granular tactical perspective?

17:51Hannah Dittman:How do we get this done? All the little minutia and the details and then the big picture thinking of driving the boat wherever you're going and making sure that it's all aligned with what you're thinking. And I think in that bucket, people often focus a lot on company vision and mission and product vision and all those things. But I would also add to that layer understanding the big picture vision and concept of scaling a brand with an investment partner and the big picture of what that actually means for a company journey. Because I think that is sometimes something that founders are surprised by when they get involved with an investment partner.

18:29Hannah Dittman:Could you maybe shed a little bit of light on what you think that journey post-investment is typically like. Obviously, this varies by each individual investment, but what growth or scale or milestones need to be hit post-investment for the investment to be successful for you all? Yeah. I mean, you said that really well. I touch on maybe a couple of areas. I mean, one is a founder to be successful in their capital raise should have very clear milestones for what they want to achieve when they take capital in the door and have that North Star and think backward. It's like, okay, this is where I want to be in 24 months.

19:08Now here's the amount of capital that I want to take in so that I can go achieve that. And so I think that sets the journey there. And so for us, once we have that roadmap, when we invest, we want to sit down and say, okay, how do we go get there? How do we go help you do that? So like, let's sit down and actually strategy plan and think about what's required to get to the next stage and the next milestone. But we need to take those milestones together. That certain milestone is going to depend on what stage the company's at, where they started, where they're going. And so I'd say that's one piece of things.

19:44And then the second piece is we are really early stage investors. So we invest between seed and series A, and we know a lot can go wrong. And so growth is not linear, And we don't expect it to be. And we understand that sometimes companies need to actually take a step back to go forward. We have two companies this year, for example, I'll keep them anonymous. One needed to rebuild their marketing function from the ground up. And so they were very conscious around, OK, how do we minimize capital deployment this year so that we can actually rebuild this function so that we can set the right infrastructure and foundation to then accelerate going forward?

20:23And the second company needed to do a lot more work around their product skew development and also their brand. And so they also took a step back to go forward. And like, is this year, 2026, where we think the revenue was going to be when we invested? Absolutely not. But because both founders were intentional about what they were doing and really conservative with capital and disciplined about how they were going to build a company, we are very comfortable with that. So even though the milestones aren't hit, we understand the journey and how it's going to where we want the journey to go once they've set the right foundation.

21:04The last that we want is a founder to just be deploying capital for the sake of deploying capital because you're going to end up failing as a company and you're going to go under. And then that's not a great outcome for anybody.

21:14Hannah Dittman:Ashley, I love that you highlighted that. I think it just shows what a great investment partner you all are for the portfolio companies you're working with. I think a lot of times founders have this big fear of working alongside an investor and answering to someone and someone cracking the whip or being harsh with them or being in a board meeting and be angry with them if things aren't going to plan. And I think showcasing that, hey, it's not always up and to the right. There's a big picture of vision here that needs to get achieved. And you understand the nuance and the difficulties and the complexities of operations, which a lot of investors don't.

21:52Hannah Dittman:I think just showcased what an important thing it is for a founder to pick the right investment partner and really understand what their own business strengths and weaknesses are and the kind of investor they want alongside them as they navigate through some of those things. 100%. But we do need a founder who wants to be transparent and really own up to things when they aren't going right. And we're okay with that. But I think sometimes founders, as you mentioned, are a bit wary of doing that and being almost like they want to paint this like really positive picture, which isn't stuff hits the fan in early stage.

22:30And we understand that. And I wish that founders also understood that they can confide in their investors and really use them as resources and partners along this journey. because one of our core values at Bluestine is challenge and support. And we are going to support you, but there's some element of challenge too. We want to push you. We want to think about how do we push things forward and dig in and really uncover what's not going right, which isn't totally comfortable for everybody.

23:00Hannah Dittman:Yeah, and I think it's the same thing as when you're working internal to a company and the C-suite team, for instance, You kind of all need to like push on each other's thinking to get the best decisions and outcomes at the end of the day. And I think as long as you have a really firm belief that you and your investor are playing on the same team and really aligned with the same goal, some of that push comes through a different lens than maybe feeling that it's a little bit more adversarial. Truthfully, I have a lot of empathy for founders. Of course, I advocate for integrity and intellectual honesty.