The Brutal Truth About Raising Your First Investment Fund With VC Karl Bracken Of Ocampo Capital
In this episode, Karl Bracken, CEO and founder of Ocampo Capital, joins Omni Talk to share his journey to become a venture capitalist and reveals what it really takes to close an investment round in today's challenging market.
From his 16-year career at Target to founding his own VC fund, Karl breaks down the brutal realities of fundraising, why consumer brands are struggling to get funding, and how AI is creating a bubble while crowding out other investments. He also shares exclusive details about his portfolio companies that he believes are ones to watch in health, wellness, and sustainability.
🔑 Topics covered:
- The 15-month journey to close his first VC fund
- Why consumer venture funding is down 90% from three years ago
- How his small fund still represents an astounding 6% of all US consumer VC dollars raised by first-time investors (this statistics shows just how tough the market is right now)
- Portfolio spotlights: ZBiotics (hangover-curing probiotics), Small Wonder (powder shampoo), and Shameless Pets (upcycled pet treats)
- Karl;s Investment thesis focused on decade-long trends vs. short-term fads
- Why leadership teams matter more than business models
🎧 Don't forget to like, comment, and subscribe for more retail and VC insights on the consumer!
#ventureCapital #retailinvesting #consumerbrand #entrepreneurship #omnitalk #startupfunding #retailtech #vcpodcast #investmentstrategies #retailinnovation
Music by hooksounds.com
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Transcript
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Speaker B:Hello, everyone.
Speaker B:I am one of your co hosts for today's interview, Chris Walton.
Speaker C:And I'm Anne Mazinga.
Speaker B:And we are bringing back one of our favorite guests and and people, Carl Bracken, the CEO and founder of Ocampo Capital.
Speaker B:Carl is here to discuss what it takes to close an investment round to share his perspective on all the turmoil happening in the market and if we play our cards right, and hopefully we can even get him to talk about some of the investments on which he is particularly keen.
Speaker B:So, Carl, without further ado, thank you for joining us and welcome back to omnitalk.
Speaker A:Thanks as always for having me, guys.
Speaker A:It's always awesome to be here with you.
Speaker C:Well, Carl, we have interviewed you before and know you well, as Chris mentioned in the intro, but if you wouldn't mind just giving a quick background on you and what Ocampo Capital specializes in from a VC standpoint.
Speaker A:Yeah, for sure.
Speaker A:So my background is I actually started my career in finance at JP Morgan.
Speaker A:I worked in the Venture Capital Group in San Francisco during the dot com bubble and pretty quickly realized, like, I needed to get some operating experience if I was going to be legitimate doing that.
Speaker A:I was definitely not then.
Speaker A:So I went back and got my mba, actually at Kellogg.
Speaker A:I was in the same class with the incoming CEO for Target, Michael Fidelki.
Speaker A:We were classmates.
Speaker A:Yep.
Speaker A: ,: Speaker A:Wow.
Speaker B:You remember the date.
Speaker B:That's great.
Speaker A:I do, I do.
Speaker A:So, yeah.
Speaker A: ter my MBA and was there from: Speaker A:I started my career in merchandising, where I met you guys and was in merchandising for about eight years.
Speaker A:And then from there went and led the inventory management function and then led the supply chain transformation.
Speaker A:And then after that, I left Target.
Speaker A:I became CEO of a beauty manufacturer for a short period of time.
Speaker A:And then I was chief merchant and chief supply chain officer at Guitar center for about three and a half years.
Speaker A:Kind of in the meantime, while I was, you know, kind of going through my, my career, something just kept hitting me.
Speaker A:And particularly in my days at Target, which you guys will appreciate is there are all these, you know, young companies would come in with great product ideas and they would come into Target, they would sell that, you know, sell their ideas to Target, Target would, would like them, and Target would award the business and give them a purchase order.
Speaker A:And what would happen is these companies would leave high fiving and then they'd come back a couple months later and say, we can't fill the purchase order.
Speaker A:And the reason they couldn't, generally speaking, was either because they didn't have the funds to, to make the inventory, or they couldn't operate at scale and grow that fast.
Speaker A:And so what would generally happen is Target would pull the purchase order and the company would be left to go bankrupt or kind of go away.
Speaker A:And so it kind of struck me and I just kept thinking this over and over again at Target, which was, you know, what if this company had a.
Speaker A:Somebody investing in it and someone to help them operate, like, couldn't have ended better.
Speaker A:Like they had the product, you know.
Speaker A:And so about six or seven years ago, I started investing just angel investments in companies with this is kind of my idea, and helped them operationally.
Speaker A:And the idea was hopefully they would grow.
Speaker A:And, and so it was working pretty well.
Speaker A:So I decided about two years ago to found Ocampo Capital and announced that I was going to launch my first fund about a year and a half ago and closed my first fund about what, six months ago?
Speaker A:A little less than six months ago.
Speaker A:So that's it.
Speaker A:What do we specialize in?
Speaker A:We're early stage consumer investors.
Speaker A:So I invest in businesses and repeat purchase categories.
Speaker A:So think like beauty, personal care, health and wellness, baby pet, food and beverage, things like that.
Speaker A:And yeah, invest in them and help them try to grow faster.
Speaker A:Wow.
Speaker B:So you, I mean, true entrepreneurial story.
Speaker B:And jumped feet first into VC after dabbling it as an angel investor and having years and years of experience on the operator side too.
Speaker A:It was scary.
Speaker A:Yeah.
Speaker A:I mean, I'm happy to talk about what it was like, you know, raising a fund.
Speaker A:It was, it was not for the faint of heart, that's for sure.
Speaker B:Well, that's that's actually what I was going to ask you next, Carl.
Speaker B:I'm curious, like, what?
Speaker B:So first of all, I mean, I think Ann and I have to give you huge congrats on closing a fund like that.
Speaker B:That in and of itself is not easy.
Speaker B:And I want to actually, I want you to explain why that's not easy.
Speaker B:And also, what does that process even look like from start to finish?
Speaker B:Because, you know, Ann and I have never really been through that on either side of things.
Speaker A:Yeah, well, the process began with me waking up one morning at like three in the morning and being like, well, I've always wanted to do this.
Speaker A:What does keep me from doing it and realizing what was keeping me from doing it was fear of failure and going out, you know, to say I was going to raise a fund.
Speaker A:And so literally what I did was that morning I got up, I'm like, this is stupid.
Speaker A:This is like, if I'm going to do this, now is the time for me to do this.
Speaker A:And so I literally called up a web designer and had them build my website.
Speaker A:And then I announced on LinkedIn that I was doing this as a way to keep myself from like chickening out.
Speaker A:And so that was it.
Speaker A:So I announced.
Speaker B:Good mechanism.
Speaker B:Good mechanism, yeah.
Speaker A:And so I announced it.
Speaker A:Now, you know, what I would say is the reason why it's so hard to raise a venture fund, and particularly a first one, is your investors are betting their hard earned money on, on you personally.
Speaker A:You don't have a track record, you don't have, you know, anything other than that.
Speaker A:And so, you know, the people that invested my in my fund thankfully believe that I could, you know, help get them good returns by finding good companies and investing in them.
Speaker A:And so that was kind of the start of it.
Speaker A:It's really hard going out and pitching, you know, your idea to potential investors and having them, you know, nine times out of 10 or five times out of 10 or whatever it be, maybe like giving you a thumbs down.
Speaker A:So, you know, that was sort of, that was the, you know, the fundraising part.
Speaker A:The way fundraising works in a venture invest investment is you have a series of closes.
Speaker A:So you'll raise a certain amount of money and then you'll have your first close and then raise some more money, have a second close.
Speaker A:That whole process for me was about 15 months or so, and then you have a final close.
Speaker A:And, and after you have your final close, that means your fund is locked in and everyone knows what percent of the fund they account for and what percent of the companies that you invest in, they will account for.
Speaker A:So yeah, I mean, it's just a lot of pounding the pavement and kind of hopefully getting people to agree with your vision.
Speaker A:So yeah, that was it.
Speaker B:So, Carl, I'm curious.
Speaker B:One of my favorite expressions personally is experience isn't something you have until after you need it.
Speaker B:So having gone through that 15 months, what is something that you look back on now and you're like, man, I wish I knew that the first time and I'm going to leverage that the second time around.
Speaker A:That's a good question.
Speaker A:I would say, you know, one of the things is I'm constantly learning and refining my investment thesis.
Speaker A:And so there are certain things about my investment thesis early on that I think were approximately okay, but are like much more defined now.
Speaker A:And so, so that's the first piece, I would say the second piece is knowing where your sphere of competency ends and knowing how to surround yourself with people that are, that they can, and you know, service providers that can fill the gaps.
Speaker A:So, you know, I went into this thinking like I'm going to do the whole thing myself.
Speaker A:I'm going to do the accounting myself.
Speaker A:I'm going to do, you know, and in retrospect, that was insane.
Speaker A:And so, you know, I had a neighbor when I lived in Minneapolis across the street and, and he would see me, you know, mowing my lawn and like trying to fix things in the, in the eaves of my house and stuff.
Speaker A:And he'd say, he would always shout across the street, outsource all non core functions.
Speaker A:And, and I would say that is totally true.
Speaker A:As I think about, you know, my experience here, like I have a fund administrator, they, they are managing how, you know, all the documentation and everything gets to my investors.
Speaker A:Like I should not be doing that, my accountant, I should not be doing the accounting, you know, things like that.
Speaker A:And that's, that's made it a lot more efficient so I can focus on the things where hopefully I can add the most value.
Speaker C:Well, Carl, I'm curious what the landscape looks like right now.
Speaker C:What.
Speaker C:It seems like the investor climate is a little challenged there.
Speaker C:I mean, are there a lot of companies that are closing funds?
Speaker C:You did that in 15 months.
Speaker C:That's pretty impressive.
Speaker C:But how would you kind of sum up a state of, the state of the market right now?
Speaker A:Yeah, I would say there's, there's two pieces to this.
Speaker A:There is if you're an AI business and then there's if you're everything else.
Speaker A:So if you're an AI business, it's like it's go, go.
Speaker A:You know.
Speaker A:Yeah, Y2K all over again.
Speaker A:You know, I would argue that it's in a pretty big bubble, but you know, that's getting funded right now.
Speaker A:If you're an AI business is not that hard.
Speaker A:No wonder.
Speaker A:So many companies that are, you know, like serving burgers or putting AI on the end of their company so they can get a hire AI.
Speaker B:That's a great one.
Speaker C:Yeah, we interviewed somebody and he was like, you could be bread AI right now and somebody would give you money at this point in time.
Speaker B:That's right.
Speaker B:That's right.
Speaker B:They said that.
Speaker A:Yeah, it is true.
Speaker A:Yeah.
Speaker A:I mean, maybe you guys should think about Omnitalk AI or something.
Speaker A:I don't know.
Speaker B:Believe me, it's been discussed, Carl, it's been discussed.
Speaker A:So that's one, that's one side of it.
Speaker A:And that's actually about 40, 40 plus percent of venture dollars are going to AI companies right now.
Speaker A:And it's, I would say, pretty bubblicious.
Speaker A:On the other hand is everything else.
Speaker A:And when you look at everything else, it is, it is challenging funding environment.
Speaker A:And in consumer, it's about as challenging as it is in any, in any possible area.
Speaker A:Now why is this?
Speaker A:There's a couple reasons for this.
Speaker A:So first is any legacy venture fund that has raised funds is trying to raise another fund now.
Speaker A:And they're having a very hard time doing it because of the IPO market.
Speaker A:There have been so few companies going public that they aren't having any liquidity events.
Speaker A:And because of that they can't return money to their investors.
Speaker A:And so that has made it really, really hard for any venture fund to fundraise.
Speaker A:The second thing I would say is there were a bunch of kind of generalist venture capital firms that had invested in consumer a number of years ago.
Speaker A:So think of like Amazon aggregators, there was a big push to invest in that or influencer LED brands, those kinds of things.
Speaker A:And a lot of those guys got burned pretty badly on their investments.
Speaker A:And so that's caused some of the venture investors to just kind of walk away from consumer entirely.
Speaker A:And then like I said, you know, there's so much money going to AI that it's like crowding out investment in other categories.
Speaker A:So you know, with all that said, it's like it's a very challenging time to fundraise as a, as a venture fund because so few venture funds are, are able to raise and it's.
Speaker A:And because of that it's also very hard to fundraise if You're a company looking to fundraise if you're, you know, there were 30,000 consumer brands founded last year.
Speaker A:Many, if not most of them are looking for some sort of venture capital or some sort of investment and they can't get it because there's so few companies investing.
Speaker A:So the consumer venture dollars are down as a, in total down almost 90% from where they were three years ago.
Speaker A:So it's, it's down.
Speaker A:Yeah, it's down pretty dramatically.
Speaker C:Carl, just a quick question, like what does that mean then for these consumer brands or is it looking at like shutting down like it was when it went the whole reason behind why you started your fund?
Speaker C:Like what does that mean for the landscape then, then?
Speaker A:Yeah, it means for a lot of them, they have to really refine their, their business model and make sure that it is on point and efficient as a business model.
Speaker A:And that's, that's a big.
Speaker A:Yeah, run lean, you know, go slow to go fast, that kind of thing.
Speaker A:I mean and, and I pray I preach that to every company in my portfolio too is.
Speaker A:Oh, you know, it's, it's.
Speaker A:Go slow to go fast is a good way to be operating in any environment, particularly now.
Speaker A:But you know, on the, on the positive side, if you look back on some of the biggest consumer brands there are in the, in the world, there's a huge percentage of them that were founded during major economic downturns and very tight funding environments.
Speaker A:And I think one of the major reasons why is because they had to have a really awesome business model.
Speaker A:And so if you can, and if you can make it through the lean years, you're going to be just propelled forward faster in the, in the big year.
Speaker A:So you know, think about like Coca Cola, Procter and Gamble, Microsoft, like there's so many companies you could call out as companies that were founded during pretty tough economic environments.
Speaker A:So, so that's that.
Speaker A:I mean, just, you know, one last point I'll make here is just to give you a sense for how tough it was.
Speaker A:My small fund actually accounts for 6% of all US consumer venture capital dollars raised by first time investors in the United States this year.
Speaker C:What?
Speaker A:Yeah.
Speaker B:Jesus.
Speaker A:Yeah, that's how tight it is.
Speaker B:And congrats again, my friend.
Speaker B:Yes, that's a pretty awesome statistic drop too.
Speaker A:It's a good stat, but I think it says more about how tough the environment is unless huge my fund is.
Speaker A:So anyway, Right.
Speaker B:Well then it also tells you potentially, which we'll talk about more, gives some insight into your investment thesis and why people are interested in you too.
Speaker B:All right, so let's shift gears a little bit.
Speaker B:We want to have a little fun here with you.
Speaker B:I'm going to do something and, and I've tried it a couple of times with different folks.
Speaker B:Going to try with you.
Speaker B:So one of the things I always think about when running an investment fund, and honestly, it is probably the number one reason I personally would never do it, is that you, you have to handle other people's money.
Speaker B:And so I can imagine, I can imagine you are fielding all types of calls from people about all sorts of topics.
Speaker B:So Ann and I are going to pretend that we are each one of your investors and ask you what is on our minds.
Speaker B:Are you ready to play this game?
Speaker A:All right, bring it on.
Speaker A:Hopefully I've heard these before.
Speaker B:I imagine you have.
Speaker B:I imagine you have.
Speaker B:Because when people, when it's about people's money, they get really serious really quickly.
Speaker B:So.
Speaker B:All right, first one, first one, the topic du jour.
Speaker B:Tariffs.
Speaker B:What's my exposure on tariffs, Carl, if I'm investing in your fund.
Speaker A:Yeah.
Speaker A:So we went through a really detailed analysis of where we might have tariff exposure earlier this spring.
Speaker A:And thankfully, since all of our, almost all of our businesses are produced in the United States, our tariff exposure is actually pretty limited.
Speaker A:So we have some packaging exposure.
Speaker A:You know, packaging being made in China that for our products, like, there's a little bit of exposure there.
Speaker A:We have a couple products that are manufactured overseas, and those products we have tried to move the manufacturing location, and in most cases that's been like, pretty effective.
Speaker A:But at this point, I would say our exposure is relatively limited.
Speaker A:Now, if we had been investing in businesses like long lead time apparel that's produced overseas, or, you know, other consumer categories that, you know, I don't know, sporting goods or things like that that are largely made overseas, that would be a much scarier proposition.
Speaker A:Thankfully, we don't have much of that in our portfolio.
Speaker C:Okay, what about AI?
Speaker C:Everybody's talking about it.
Speaker C:How carried away with it should we get?
Speaker A:Yeah, okay.
Speaker A:So I'd say I think it depends on what you mean by that.
Speaker A:So if, if you're talking about direct investments in AI companies, You know, I, like I kind of alluded to before, I'm, I'm haunted by my experience working in venture capital in San Francisco during the dot com bubble.
Speaker A:Yeah, it was, you know, back then, every company was changing their name to look like an e commerce company, even if they weren't.
Speaker A:And the reason why they're doing that was because the Valuations were higher and you know, it was, it was kind of a popularity contest.
Speaker A: But you know, I would say in: Speaker A:What they didn't know was who the winners and the losers were going to be.
Speaker A:You know, was, it was, you know, think about it like Amazon.com was a book seller.
Speaker A:Did they have any right to win more than pets.com did at that time?
Speaker A:On the surface, maybe not, you know, and so that, that was, you know, so, so because of that really no one knew who the winners and the losers were going to be.
Speaker A:I would say the same thing with AI now, like, I am not an expert on AI and that's actually the main reason why I don't invest in it, because I don't have a right to win.
Speaker A:But just as an outsider looking in at it, to me, I think that the biggest challenge with AI is you don't know who the winners or losers are going to be.
Speaker A:Like everyone knows AI is going to be a big thing, there's no question about it.
Speaker A:But I don't know if XAI or anthropic or whatever, OpenAI or whatever is going to be the winner or something that hasn't even happened yet.
Speaker A:If you think about how fast it's iterating and you're thinking about a long term investment cycle like a venture investment, how do you know which LLM model is going to be the best at version 15 versus version 3?
Speaker A:I have no idea, you know, so I have no right to win in this space.
Speaker A:I know very little about it.
Speaker A:So from the standpoint of investing, I stay away from it.
Speaker A:Now on the other hand, when you think about, you know, the impact that AI companies can have on your portfolio, like that's pretty important to know because you are holding these companies for a long period of time.
Speaker A:And you know, I don't know what, how AI is going to continue to evolve, but I do have a feeling that 10 years from now consumer products are still going to be purchased by people.
Speaker A:And so where AI can help you, that's really good to know.
Speaker A:Where AI could potentially disrupt you, that's also good to know.
Speaker A:And so I try to stay away from categories where I think AI can quickly disrupt the businesses, but stay very close and where AI can help either my fund or the businesses propel faster.
Speaker A:So yeah, AI is a huge topic.
Speaker A:Hopefully that answers your question, Carl, what's.
Speaker B:An example of a consumer business that could be disrupted by AI in the Space that you're generally treading within.
Speaker A:Yeah, let's see here.
Speaker A:I'll mention a couple of areas.
Speaker A:Like one, one would be like consumer businesses that are based on some sort of a technology infrastructure or tie into some sort of a technology that could be disrupted.
Speaker A:You know, I think about like, like electronics products or something that could, that are like IoT products that like, that could be a challenge.
Speaker A:Or you think about like, like products that are based on a, like biotech underlying, you know, sort of research that could be disrupted by new research.
Speaker A:That's better.
Speaker A:Those are the types of things that I think are potentially disrupting.
Speaker A:Yeah, things like that.
Speaker B:Got it, Got it.
Speaker B:All right, so next one.
Speaker B:So, so.
Speaker B:Man, Carl, I'm just, I'm just really threatened about this consumer.
Speaker B:You know, the consumer confidence continues to seem like it's on the decline.
Speaker B:It seems like it's declining every single week.
Speaker B:What, what's the outlook on that?
Speaker B:Like how concerned should I be about the state of the consumer right now in my investments?
Speaker A:Yeah, so there's, there's two answers that I would give you to this.
Speaker A:So the first one is, you know, the short term answer and then the second one is a long term answer.
Speaker A:The short term answer I would say is not as relevant for what I'm doing because if there's, if we're in a technical recession today or technical recession, you know, the next three months or whatever, that's not really going to impact what I think the outlook is seven to ten years from now for my, for my companies I've invested in.
Speaker A:But on the other hand, you know, when you think about, you know, short term trends, like do I think the consumer potentially is under some stress?
Speaker A:Yes, I think consumer is kind of bifurcated between the, you know, high upper end, the higher income and lower income consumer.
Speaker A:You know, you see credit card balances increasing and revolving credit card debt increasing.
Speaker A: That didn't end well in: Speaker A:That's a little scary.
Speaker A:So, you know, there are some indicators that the consumer is not as strong as they were, but they do tend to, you know, they seem like they're still spending.
Speaker A:I think it's just who's winning and who's losing.
Speaker A:I mean, look at, you know, Walmart.
Speaker A:Walmart is reported good earnings, you know, so there's, you know, it's, there's consumers are still spending.
Speaker A:I think it's just, it's shifting around.
Speaker A:But for me, longer term it's about, you know, what is the state of the, the broader macro environment seven to ten years from now.
Speaker A:And I, I can't really get too caught up in the short term consumer interaction because that may or may not be, you know, correlated with, with what I think is going to happen at my companies.
Speaker C:Well, Carl, what should we be betting on then?
Speaker C:I think especially, that's especially interesting to me as you're talking about, you know, health and beauty and wellness and pets and you know, consumer products like that that we're using day in and day out.
Speaker C:What's going to change about that?
Speaker C:Or what would you be placing your bets on?
Speaker A:Yeah, that's an awesome question.
Speaker A:And what I would tell you is it was back to your earlier question about, you know, things that I learned over the course of doing this.
Speaker A:You know, one of the biggest AHAs I had was like the way to translate a merchant mindset as a former merchant and the timelines that you think about there to the timelines you think about as a venture investor.
Speaker A:And so, you know, you know, with, as a merchant, as you guys know, you're thinking like one to two years out.
Speaker A:You know, you're thinking like, what can I bring into my assortment that'll do well over the next 12 month cycle or you know, two years as a venture investor, if you think that way, you're thinking too short term.
Speaker A:You need to be thinking like much longer and you need to be thinking about what are trends that are going to last for the next decade or two decades or three decades.
Speaker A:And so when I think about that, you know, you think about what's changing more macro in the world.
Speaker A:You think about what are the, you know, what are new generations caring about, what are they interested in?
Speaker A:And so when I think about some of the, how the consequences of that and some of the areas that I'm investing in, it's things like, you know, consumers are taking health into their own hands a lot more than they were before.
Speaker A:Now why are they doing this?
Speaker A:I think there's, there's several reasons.
Speaker A:One is it's hard to get a doctor appointment.
Speaker A:Secondly is they may or may not trust their trust doctors or trust the established medical community as much as they used to.
Speaker A:Third is it's gotten super expensive, you know, to, to, to participate in them in the medical field in any way, shape or form.
Speaker A:And then fourth is they have a, you know, a device in their hands that make them feel smart about, you know, what they, how they should be taking their, you know, health into their own hands.
Speaker A:Right, wrong or different that's happening.
Speaker A:And so, you know, underneath, so that is a trend and That's a trend that will continue.
Speaker A:I mean, I, I'm confident that's going to be a trend for the next decade or two decades.
Speaker A:I don't see, you know, all of a sudden, you know, there being big, you know, decreases in health care costs or things like that.
Speaker A:And so because of that, you know, I'm looking at things underneath there, such as, like gut health, women's health.
Speaker A:You know, I think the gut microbiome is something that is, that is here to say and will be for a long time.
Speaker A:You know, women's health, other areas that are, you know, health related, you know, products that they could benefit people outside of their doctor appointments.
Speaker A:So that's one area.
Speaker A:Other areas I'm looking at things like antiquated models.
Speaker A:Like, think of consumer products that have been around for a long, long time, have not been improved upon or revised upon in like decades or even a century.
Speaker A:Those are areas that are ripe for invention.
Speaker A:And so that's one area to look.
Speaker A:And if you see something that has, that's been iterated on a million times over the past, you know, three years, there may be less to squeeze out there, but in some of these other categories, there could be more.
Speaker A:The third area is the environment.
Speaker A:You know, I think that the environment is for, you know, for younger generations particularly, but for everyone is becoming a bigger and bigger determinant of what they're buying.
Speaker A:And so that's, that's something I think about.
Speaker A:And then fourth one is pet as humans.
Speaker A:So, you know, treating your, your kids like the same way you treat your pets or treat your pets even better than your kids, like that is a trend.
Speaker A:And I think that's going to continue to.
Speaker A:You look at how long that trend has been been or that that pendulum has been swinging.
Speaker A:It's like the past 50 years, you know.
Speaker A:So will that continue?
Speaker A:I think it probably will for the next 10 to 20.
Speaker A:So anyway, those are just a few examples, but those are the kinds of areas I look at.
Speaker B:My wife would definitely agree with that last one in terms of the pendulum continue to swing in that direction.
Speaker B:All right, well, Carl, I'm going to put your feet to the fire here then, you know, you know, as we start to close things up.
Speaker B:But where have.
Speaker B:Let's put your money where your mouth is.
Speaker B:Let's put your feet to the fire.
Speaker B:What are, what are this, what are some of the companies you've actually bet on?
Speaker A:Okay, well, maybe I should just break it down by the same sort of like categories that you shared shared with you.
Speaker A:So if yeah, so if you start with like taking health into your own hands, you know, I have several companies in the portfolio that were founded by PhD chemists and PhD biologists and have patents on, on research they've been doing that, that are now bringing products to market.
Speaker A:So for instance, there's a company called ZBiotics that we've invested in.
Speaker A:ZBiotics was founded by a PhD in microbiology and immunology.
Speaker A:And they have created the first genetically engineered probiotics to solve certain like states that you're in.
Speaker A:So it's deep tech being applied to new categories.
Speaker A:So for instance, their first product cures hangovers.
Speaker A:It breaks down the byproduct of alcohol that causes hangovers.
Speaker A:Their second product is it actually takes sucrose in your stomach and converts it to leavened fiber.
Speaker A:So imagine what that does.
Speaker A:You know, you no longer have spikes in glucose.
Speaker A:If you are, if you're wearing a CGM continuous glucose monitor, it basically flatlines your glucose.
Speaker A:So, you know, that's one company that is really interesting.
Speaker A:Second company is Persephone Biosciences.
Speaker A:They're coming out with their first product actually on September 9th.
Speaker A:And what they are is they were founded by two chemists, one from Caltech, one from Berkeley, and they have been studying the gut microbiome like I mentioned, for the past eight years.
Speaker A:And originally we're going to be launching a, like an oncology drug and they're still going down that path, but they've realized that that same platform can be used for consumer.
Speaker A:So their first consumer product is actually a powder you can add to baby formula and it'll actually revert a baby's gut microbiome to what it should have been at childbirth.
Speaker A:So if you think about it, 90% of babies are born with compromised gut microbiomes.
Speaker A:And the reasons why are there's several.
Speaker A:One is being born via C section, another one is mom taking antibiotics before childbirth.
Speaker A:So things like that.
Speaker A:And so their research, they actually, the research has been published in peer reviewed journals, but their research actually shows that that is the case.
Speaker A:And, and their product actually solves it.
Speaker A:And so think about that'll reduce the likelihood of babies getting like food allergies or eczema or some other things.
Speaker A:So anyway, so that's a, that's really compelling.
Speaker A:That's coming out on September 9th.
Speaker A:A third company is Volley Wellness.
Speaker A:So that's a functional beverage brand which tastes better, is derived from clean superfood ingredients, helps athletes, you know, with hydration, energy, that kind of stuff.
Speaker A:Really, it's a Very competitive space.
Speaker A:But their products are amazing and they have differentiated ingredients in their products.
Speaker A:So that's on that first sort of like, you know, science level set of products.
Speaker A:The second one is kind of improving upon this antiquated model.
Speaker A:Thing is we have a company called Zea, which actually is launched in Target.
Speaker A:And what that does is it's a air diffuser that is aromatherapeutic and actually good for the environment.
Speaker A:It doesn't use heat and it doesn't emit toxins.
Speaker A:It actually is better for you and it's a, it's a diffuser system that you buy and it'll, It'll, you know, help make you feel better.
Speaker A:So that's the second one.
Speaker A:Yeah.
Speaker A:Third, the environment.
Speaker A:A couple of companies under there.
Speaker A:I'm just rattling things off.
Speaker A:Is this okay?
Speaker B:Keep going.
Speaker C:It's amazing.
Speaker A:I love this.
Speaker B:It's cool to hear about new companies.
Speaker B:Yeah, this is great.
Speaker B:Keep going, man.
Speaker B:You're on a roll.
Speaker A:We'll keep rocking then.
Speaker A:Just tell me to shut up whenever you want.
Speaker B:Oh, no.
Speaker A:Like the environment.
Speaker A:So companies that are.
Speaker A:That are kind of tied into the environment.
Speaker A:So one is a shampoo and conditioner company.
Speaker A:The shampoo and conditioner is actually powder.
Speaker C:You told us about this one.
Speaker C:I love this company.
Speaker C:Yeah, I've been obsessed since you told us last time, Carl.
Speaker A:Yeah, they're starting to scale now.
Speaker A:They're in salons and they're getting into retail.
Speaker A:Yeah.
Speaker A:So rub it under powder.
Speaker A:That's salon grade.
Speaker A:You rub it under water, it reconstitutes in a shampoo and conditioner.
Speaker A:And so they're.
Speaker A:Yeah, they just won their second Marie Claire award.
Speaker A:So they're, they're doing really well.
Speaker B:What's it called again, Carl?
Speaker B:I don't know if you said it before.
Speaker A:Yeah, small wonder.
Speaker B:Small wonder.
Speaker B:Okay.
Speaker A:Yeah, yeah.
Speaker A:Another company is Shameless Pets.
Speaker A:I think I may have mentioned this one to you guys before too.
Speaker A:But that's basically.
Speaker A:It's a pet treat company that's made with upcycled ingredients.
Speaker A:So ingredients that would otherwise be food waste getting reconstituted as, as food.
Speaker A:So it's better for the environment and they've saved millions of pounds of food that would otherwise be waste and they're off to the races.
Speaker A:That company is doing really, really well.
Speaker A:Another one is that I would say is sort of the last company I'd mentioned is Coherent Commerce.
Speaker A:And what they are is they are a platform that can actually, that interfaces with early adopter grocery stores.
Speaker A:And they can take the companies that they're putting on their shelves in these early adopter grocery stores and they can with pretty high certainty tell which of the brands are likely to scale fastest in retail.
Speaker A:So imagine if you're a merchant, like how much would you have liked to know that when you're thinking about your next plantogram revision or transition.
Speaker A:And for me I've actually invested in another company in my portfolio, Kokata, which is a better for you snacking brand because of the information that I got from the Cohere commerce platform.
Speaker A:So it's, it's been that, that's pretty awesome too as far as like, you know, sort of the intel inside of what's happening in, in early stage grocery.
Speaker A:So yeah, so that's it.
Speaker B:Well that, that, that last one's a little, that last one's a little bit of a different flavor than the other ones that you mentioned.
Speaker B:So what gave you the confidence to go in, that's more of a tech play.
Speaker B:What gave you the confidence to go in that direction on that relative to the where, where it seems like you're spending more of the, of your investment time?
Speaker A:Yeah.
Speaker A:So having been a merchant myself in food and beverage at Target, I, I had a pretty good sense for basically which questions to ask there and how to help them.
Speaker A:Like this is one where I'm able to help them a lot with sort of their ability to scale because of my background and think particularly like what's on their roadmap also, you know, that's one where the information is so valuable and so obvious for you know, for merchandising teams or for, you know, investors.
Speaker A:My thought was like I could, I could help them propel forward because I know the categories well that they're getting into.
Speaker A:Even though the underlying technology, I have to trust them on that.
Speaker A:So yeah, there are two data scientists that founded that company.
Speaker A:One was a, he actually was a Michelin two star chef and then taught himself data science and ended up being the founder of Wynn Casino and Resorts data science team.
Speaker A:So he ran all the data science for Wynn Casino.
Speaker A:Casinos.
Speaker A:Yeah.
Speaker A:And I mean obviously you know, incredibly smart.
Speaker C:So what a rat after becoming a.
Speaker B:Two star chef too.
Speaker A:Exactly, exactly.
Speaker A:Yeah.
Speaker A:Pretty amazing.
Speaker C:Well Carl, I don't want to end this conversation because I feel like every time we ask you a question I get deeper and deeper into this.
Speaker C:But, but in the interest of time, let's get you out of here on this question.
Speaker C:The VC game, it's a long game.
Speaker C:You have to be a long term, you have to have a long term investment horizon to be Successful.
Speaker C:So what would you say is next?
Speaker C:What aren't we talking about that maybe we should be.
Speaker A:Yeah, I would say what's next?
Speaker A:What's next for me is helping these companies grow fast.
Speaker A:Like the companies I've invested in.
Speaker A:How do I help them as best as I can be successful?
Speaker A:And that's something that hopefully is a differentiator for how I operate my fund.
Speaker A:So that's the first thing that's next for me.
Speaker A:Continuing to look at emerging companies and continuing to look at emerging sort of trends as things for me to consider investing in.
Speaker A:And we're about 50% invested in the fund, so I still have quite a ways to go and so definitely open to reassessing and constantly learning about what's new out there.
Speaker A:I will say this, like I mentioned early on, I don't really care that much about short term fads.
Speaker A:I care a lot more about, you know, things that will continue forward as trends for a long period of time.
Speaker A:And so that's, that is something I think about.
Speaker A:But you know, just like you guys, I'm.
Speaker A:I want to be kind of a constant learner and so definitely open to seeing different businesses and seeing, you know, ways that I could maybe help them.
Speaker A:So that's, that's what's.
Speaker C:Yeah.
Speaker C:Carl, how much do the people and their personalities or pedigree come into play there?
Speaker C:Because I have to imagine like when you're thinking long term, it's not necessarily about what the product is today, but where it could go and maybe the team's ability to iterate or be more agile as times are changing.
Speaker C:How do you kind of set up a rubric for that and how much does that weigh into some of your decisions when you're thinking about investment?
Speaker A:I would tell you that the most important thing I look at is the founding team, the leadership team, the.
Speaker A:And that has gotten since our last time speaking.
Speaker A:That's actually become a bigger focus for me and sort of the epiphany for me on that is if you have a, like an A plus business plan with a, like a B minus leadership team, every young business is going to have to pivot.
Speaker A:It's like it is a requirement.
Speaker A:Like there's no such thing as a young business that doesn't have to pivot.
Speaker A:And so you may have what seems like an A plus business model, but it's going to have to pivot and it will not be an A plus business model.
Speaker A:So if you have like a mediocre leadership team, they're not going to know how to Pivot to make the business as successful as they can.
Speaker A:Now, on the other hand, if you have a B plus business model, but like an off the charts awesome A plus team, that A plus team will find ways to iterate and iterate and iterate to make that business as good as they possibly can.
Speaker A:And so the leadership team matters a ton.
Speaker A:And so I, you know, honestly, while I mentioned a couple companies that had really strong pedigrees, the actual, like, you know, educational pedigree and stuff like that, I don't, I don't focus on that as much.
Speaker A:I focus more on, you know, experiences they've had and skill sets that they have that would make them likely to be successful.
Speaker A:You know, if they, if they have a great, you know, academic background too, all the better.
Speaker A:But, but it's, it's less like, do you check the boxes on, you know, my list of things as a leader and more about, like, you know, what is, how.
Speaker A:What is their intuition?
Speaker A:How do they think about problem solving and that.
Speaker A:You can only get that through lots of interaction with them and lots of, you know, conversations to, you know, as part of the due diligence process.
Speaker A:But, yeah, it's a big part of it for sure.
Speaker C:Awesome.
Speaker B:Carl, how important is assessing frugality in.
Speaker B:As you're evaluating these.
Speaker A:That is it.
Speaker B:Yeah, I'm curious, like, what's your take on that?
Speaker A:That's one of the hardest things to assess.
Speaker A:But that's also, yeah, it's also one of the things that can make or break a company, and it's one of the things that I can hopefully help them with.
Speaker A:But yes, I would always side on a business that is, that is making frugal, smart investments.
Speaker A:You're never gonna be able to save your way to success with a, you know, a young business at all, but you are, you know, that said, you can absolutely succeed, you know, if you're making, like, smart, small bets and not spending money as fast as you're bringing in from investors.
Speaker A:So that, that is just super crucial.
Speaker A:So, yeah, I mean, that is one where it's like, you partly know, as you're investing in these companies, they don't have much of a track record, so it's a little hard to tell.
Speaker A:But it's, it's, you know, taking the track record that you can see and ask them the right questions and then doing everything you can to, to help them kind of get to that point.
Speaker A:Because frugality can be learned too.
Speaker A:You know, it isn't like you're born either frugal or not frugal, so.
Speaker A:Right, yeah.
Speaker A:So it's a lot of that.
Speaker A:Yeah.
Speaker B:You need to know what steps to take.
Speaker A:Right?
Speaker A:Yeah, exactly.
Speaker B:Said something similar.
Speaker B:She said she looks very hard at the income.
Speaker B:When she was on the program last.
Speaker B:She looks very hard at the income to see, like, what are the signs of frugality being shown by the way the business is actually moving to?
Speaker B:I imagine you're looking at that as well.
Speaker A:Yeah, I mean, I look at cash burn a lot, and, you know, cash burn is a sign of, you know, frugality or not.
Speaker A:Yeah.
Speaker A:And so.
Speaker A:And where are they?
Speaker A:You know, where is the cash being spent?
Speaker A:You know, if it's being spent, what's driving the burn?
Speaker A:Yeah, yeah, exactly.
Speaker A:That's really, really important, you know, so you look at that, and you can get a reasonable sense of.
Speaker A:Of are they investing in the right places?
Speaker A:Are they trying to conserve cash in areas where you, like, you know, and one CFO once told me, like, save money where it doesn't matter, you know, and, like, that's right.
Speaker A:Like, if they're, if they're spending money on stuff that doesn't matter, like, you know, big Christmas party, big holiday parties, whatever, like, not.
Speaker A:Not smart.
Speaker A:That's.
Speaker A:There's no positive, you know, ROI on that.
Speaker A:Right, right, right.
Speaker A:Yeah.
Speaker B:No fun.
Speaker B:No fun.
Speaker B:No, I'm just kidding.
Speaker A:Not that.
Speaker A:Not that.
Speaker B:All right, man.
Speaker B:Well, well, Carl, thanks for being with us.
Speaker B:This is awesome.
Speaker B:I, I, We.
Speaker B:We just absolutely love talking to you.
Speaker B:It's so great to get your perspective on everything.
Speaker B:And again, congrats on closing the fun.
Speaker B:For everyone out there listening.
Speaker B:For everyone out there listening, what's the best way for them to get in touch with you if they want to?
Speaker B:You know, for all kinds of reasons, I guess.
Speaker B:Based on the conversation we had in this podcast, what's the best way for them to do that?
Speaker A:Yeah, I'm on LinkedIn.
Speaker A:Feel free to reach me there.
Speaker A:And then also, info campocapital.com they can reach me through.
Speaker A:Through that email handle.
Speaker A:And, yeah, I'm not a huge social media guy, but those, you know, those are two good ways to get a hold of me, for sure.
Speaker B:You do it just enough to be dangerous, though.
Speaker B:You do it just enough to be dangerous.
Speaker B:All right, well, that wraps us up.
Speaker B:Thanks again to Carl Bracken, founder and CEO of the new venture capital firm Ocampo Capital.
Speaker B:Although it's not so new anymore, really.
Speaker B:Thanks to him for sitting down with us today.
Speaker B:And thanks, everyone out there for listening to this next episode of our ongoing series on VC perspectives across retail and the consumer goods industry.
Speaker B:Please let us know what you thought of our interview with Carl on social media.
Speaker B:And as always, on behalf of all of us here at omnitalk, be careful out there.
