Ethan Song and Nick D’Urbano discuss the downside of venture capital for CPG and DTC businesses. There’s a shift taking place within CPG and e-commerce. Brands are optimizing for profitability and shunning expensive venture dollars—and for good reason! DTC businesses as a category have not performed well since Warby Parker pioneered the concept over a decade ago. Hear from Ethan’s experience raising over $40m in capital with Frank & Oak and better understand the risks and challenges of taking capital for early CPG and DTC businesses. This episode also explores how to grow profitably, different types of financing options and important traps to be aware of as you find product market fit and start to scale.
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Links Discussed
Don’t Take the Money (Even When You Can) by Ethan Song
DTC Analysis by Ben Cogan
1,000 True Fans by Kevin Kelly
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Show Notes:
3:45 Profitability and growth
7:35 Amazon v. DTC brands
13:25 Venture capital in CPG
21:30 The risks of VC dollars
29:30 Brand growth checklist
32:30 Product market fit
34:30 Marketing and growth
38:00 Non-dilutive capital
42:27 Funding inventory
44:00 - Crowdfunding
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Past guests on the Pop Up Report include Stephen Kuhl (Burrow), Jake Karls (Mid-Day Squares), Alan Wood (Rally Beer Company).
Stay tuned for new episodes from upcoming guests including Lanny Smith (Actively Black), Karen Danudjaja (Blume), J.P. Robert (Quartz Co., Want les Essentiels) and many more.
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Additional Episodes You Might Enjoy:
Rally Beer Company: Tapping into Passion
Mid-Day Squares: Building the Next Great CPG Brand through Authentic Content
Burrow: Customer Obsession as a Competitive Advantage
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The Pop Up Report interviews DTC and CPG founders to uncover how they fostered and scaled their communities to create profitable businesses. Gain a deeper understanding of the tools, tactics and retention strategies that build true customer loyalty.
Subscribe to the Pop Up Report on Substack or YouTube for more.
E5 Pop Up Deep Dive: Why You Shouldn’t Take VC Money, Even When You Can