Sam Niemann

Tech VCs getting over their skis investing in DTC brands set back CPG investment for a decade Historically VC has been about investing in technology that disrupted big markets and captured lots of value That model didn’t fit consumer brands...until around 2012 it suddenly did: FB/IG ads provided hyper targeted access to your core demographic — stand up a website (Tech!) and suddenly you could “cut out the middleman” and grab a bunch of margin typically “stolen” from you by “antiquated retailers” Apply that to BIG markets (Shoes! Beds! Bags!) and all of a sudden VCs were chomping at the bit (they love TAM) In 2016, Dollar Shave Club was bought for $1 billion by Unilever; by 2018 Bleecker and Chestnut streets were full of DTC storefronts and the VCs behind those brands were celebrating Then things started to change: CACs rose, growth slowed, Casper botched its IPO and Apple changed its iOS to make ad targeting even harder The investors who were just recently high fiving on the way up were now underwater (crushed under heavy pref stacks) They were quick to throw the industry under the bus: “Consumer products are too capital intensive” “There’s no big outcomes in consumer” “We’re pivoting to e-commerce enablement - picks and shovels!” “DTC just doesn’t work” ...and their peers, their LPs, the media and the ecosystem at large took them at their word The industry dismissed consumer products as a whole, and in doing so it threw the baby out with the bathwater and led a lot of capital to write off CPG But the real story: these were overfunded businesses with good (but not great) products, structurally low repeat purchase and minimal moat Allbirds, Casper and Away raised a combined $700m to create less than that much value in their end state; Unilever sold off Dollar Shave Club at a steep discount 7 years after buying it The lasting misconceptions became core narratives that were only recently violated as the VC community scratches its head at the recent run of big CPG exits that raised modest amounts of capital (Poppi, Siete, LesserEvil, Touchland, Simple Mills) Word lately is that “CPG is back” — it’s just a shame that all these people thought it ever left

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Olipop sold $200M of soda last year In a category where Coke and Pepsi own 90% of shelf space Here's how they got distribution: They didn't pitch to soda buyers at Target They pitched to the kombucha buyer Same cooler Different buyer Different margin expectations Soda buyers expect $0.50 wholesale. Kombucha buyers expect $2.00 wholesale Olipop priced at $2.50 Target's kombucha buyer approved them immediately But here's what's genius: They designed the can to look like soda, not health food. Bright colors with nostalgic flavors (Vintage Cola, Orange Squeeze) The health people bought it because it was in the kombucha section The soda people bought it because it looked like soda They occupied both categories without committing to either Here's the distribution hack: Once they had 1,000 Target stores, they went to 7-Eleven. "We're already in Target" is the only pitch convenience stores need. 7-Eleven gave them an endcap. Sales went crazy. Why? Because 7-Eleven customers aren't health shoppers. But Olipop was next to Red Bull, not GT's Kombucha Context changed everything Same product Different shelf Different customer For your brand: Where your product sits matters more than what your product is Don't fight for shelf space in the obvious category Find the adjacent category with worse competition and better margins Then use that placement to invade the category you actually belong in

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Should DoorDash buy SevenRooms? Everyone keeps saying $DASH will become the "Shopify for restaurants." That's cute. It could be way bigger than that. If $DASH made an acquisition like this... They own the customer, the delivery, the dine-in, the loyalty, the data — the entire value chain. Look at the chessboard: Toast is scrambling to build an all-in-one OS but still missing true reservation + CRM firepower. Uber is more focused on building a super-app vs dominating restaurants. OpenTable and Resy own reservations — but bleed restaurants dry on fees and control the guest data. Olo is turning itself into middleware SaaS, but good luck when $DASH owns the guest relationship and the last mile. ($DASH could still acquire $OLO to leapfrog into enterprise) Meanwhile, $DASH already: ✅ owns delivery ✅ is expanding into QR dine-in ordering ✅ has Storefront + loyalty for 1P ✅ making aggressive moves into the POS space ✅ wants into reservations (with a pilot already powered by SevenRooms.) Buying SevenRooms would let $DASH: 1/ Embed itself into every single interaction a guest has with a restaurant 2/ Own the marketing, the CRM, the order, the reservation, and the ride to your door 3/ Have the connective tissue between its POS & Storefront (1P ordering) Shopify for restaurants? nah This would be Amazon + Shopify + OpenTable + Uber Eats — Frankensteined into a hospitality death star. (yes AI came up with that last bit) If $DASH wants to run the future of restaurants, this would be the move.

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The largest exits in CPG are in beverage. One big reason = Distribution. Beverages can be sold in c-stores — ~150,000 doors in the U.S. Compare that to: • ~25,000 conventional grocery • ~7,000+ natural / specialty Drinks are everywhere. Gas stations. Gyms. Airports. Stadiums. Offices. BUT (and this is the part people love to ignore)… Beverage is cut-throat. • Margins out of the gate are usually terrible at low volumes • Trade spend is high • Retailers expect velocity AND support • Significant Marketing dollars needed You cannot “bootstrap to profitability” easily in this category. This is a capital-intensive arena. So yes — the exits can be enormous. But so is the capital that’s needed to be raisers What’s everyone’s thoughts on this category?

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Who do I think will win the dispensary POS wars? My money’s on Sweed. I get asked for recommendations on all kinds of things. Most recently, SaaS products for retail optimization have been coming up A LOT. People are disappointed by the patchwork of systems, which fail on big sales days. Sweed has been quietly building a STACKED all-in-one system to run your store’s commerce operation. Here’s why I’m bullish: >> The Background In 2023, Sweed merged with Leaf Trade, a wholesale sales platform. Then LeafLink acquired Leaf Trade last November. The marriage of those two made sense, but what happens to Sweed? It remained an independent business and got CASHED UP in the process. So now they have the budget and bandwidth to build and service the needs of the industry. That’s NOT a story we hear a lot right now. >> Why it’s Important C@nnabis software has, traditionally, been a little lumpy. Traditional software players won’t work with us so most POS systems have been built on a shoestring or by cobbling together existing systems. New features get tacked on haphazardly and the result is a Frankenstein SaaS product. Sweed was built from the ground up to SERVE cannabis. It’s an all-in-one system that CUTS costs, KILLS complexity, and gives you ERP-level tracking right at the register. AND it provides ERP-level tracking and detail at the retail level. >> What’s Next? What’s pretty clear to me is that this is a DOOR-BY-DOOR battle for dominance. The big incumbents look tired, cash strapped and dated. Dispensaries tired of having multiple points of contact or daisy-chained integrations just to sell weed in store and online are eager for a one-stop shop. And they want to see AI recommendations, automations and advanced reporting - not easy feature add-ons. I was very impressed after a Sweed demo. I’m recommending it to the stores I speak to. My thoughts: We’re so early in this business that the true winners haven’t emerged yet. SaaS companies built in the AI era are poised to catch incumbents far quicker than before. Sweed is cashed up and going on a sales blitz. They’ve got one product set which replaces several and CLEARLY see where the puck is going. Tell em Seth sent you....

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Header Bars: A Surprising Revenue Booster A simple announcement bar could be making you €200K+/year. We tested removing it—and revenue dropped by 4.52%. Here’s why you need to optimize, not remove it.

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The Marketplace graveyard is now a greenfield Marketplaces aren't just coming back; they are being fundamentally rewritten. At TDV Partners love looking out for the next big marketplace opportunity and dont shy away from investing in them early at idea stage. For a decade, we were told certain categories were "un-investable." Talent marketplaces were too expensive to scale. Real estate was too opaque. High-skill services had unit economics that bled cash because matching required too much human intervention. AI just changed the math. If you are building a marketplace in 2026, "matching" is no longer your value prop. Matching is now a commodity. Your value is orchestration. 1. Kill the middleman with agents, not filters - If your user still has to scroll through a list of profiles and "request a quote," you’ve already lost. The new playbook replaces the human back-office with AI agents. We are looking for founders who use AI to vet supply, manage the negotiation, and handle the scheduling autonomously. If it costs you more than Rs 100 to make a high-stakes match, your model is obsolete. 2. Solve for scarcity, not search - The "Discovery" era of marketplaces is over. Google and Amazon won that. The "Agentic" era is about creating supply where it didn't exist or making "lumpy" supply liquid. Use AI to turn a part-time expert into a full-time service via automated interfaces. 3. Direct direction to founders - Stop pitching me "personalized search." Start pitching me "just-in-time fulfillment. - Don't build a gallery. Build an engine that completes the transaction. - Don't talk about CAC. Talk about how your AI interviewer/vetter reduces the cost of trust to near zero. - Don't be a platform. Be the infrastructure that makes the transaction inevitable. The window for "software-enabled" marketplaces is closing. The door for "AI-native" marketplaces, ones that could not exist without an LLM at the core of the transaction is wide open. At TDV Partners, we want the risky bets. We want the "impossible" categories. If you are using AI to solve the structural failures of the 2015s marketplaces, we need to talk. Fortune favors the bold and the automated. We have invested in kindlife.in, Eternz, Capslock Marketplaces 🚀, Zulu Club, Awign and SoulSensei already and hungry to invest in many more. If you are building one then please write to us on team@tdv.partners or directly get on a chat with Mox, our smart AI team member who can brainstorm and ask the right questions here - https://mymindbase.ai/mox Thanks to Olivia Moore for sharing this #Marketplaces #VentureCapital #GenerativeAI #Startups #TDVPartners #Founders

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You can expect a ~$45,000 comp increase at each promotion as a pre-partner VC. You're probably leaving money on the table. You need 2 things before you ask for a comp increase: → Understand how VCs make money to pay employees → Market benchmarks by position and region #1 VCs make management fees of 2% of their fund size or AUM. A $100M fund makes $2M a year to keep the lights on & pay employees. Consider the number of employees and the ops costs of the firm. Knowing this, make sure you don't ask for something that is out of scope. #2 Various comp reports get released yearly. Below is one. My rec is to look at ALL of them and average the comp for your position across reports. Use that number as your north star (market rate) in your negotiations. More detail in my VC Compensation 101 guide here: https://lnkd.in/gsWkapXP --- Thanks to John Gannon and Venture5 Media for aggregating this 2024 data. Head to his page to see the full report! ♻️ Repost to help someone in your network. #venturecapital

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7 moves that turn around lower middle market companies: CASH BLEEDS: Most $20M revenue businesses leak $2-3M annually through basic inefficiencies. Duplicate software subscriptions, three people doing one person's job, inventory sitting for 18 months. FINANCIAL CONTROLS: Most companies run on QuickBooks and prayer. Add monthly reporting, cash flow forecasting, budget variance analysis. Instant 10% EBITDA improvement. SALES PROCESS: The founder's golf buddy isn't a sales process. Document the pipeline, track conversion rates, pay commissions properly. Revenue grows 20% just from follow-up. VENDOR RENEGOTIATION: That 10-year office lease? Cut it by 30%. Handshake vendor deals? Get contracts and volume discounts. Insurance hasn't been bid in five years? There's $500K right there. MANAGEMENT TEAM: Stop having the founder approve every $500 purchase. Hire a real CFO, not the owner's cousin. Create actual job descriptions. Suddenly the business runs without daily crisis. PRODUCT FOCUS: These companies make 100 products. Five make money. Twenty lose money. Cut the losers, double down on winners. Margins improve overnight. TECHNOLOGY UPGRADE: Still using paper timesheets? Excel for inventory? No CRM? Basic digital infrastructure pays back in six months. PE firms don't do this work. Too messy, too slow, too much effort. They'd rather buy five companies and call it synergy. But for operators who actually improve businesses? This is where fortunes are made. #PrivateEquity #OperationalExcellence #LowerMiddleMarket #ValueCreation

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Early and growth stage CPG. Is it now a more attractive asset class for LPs? I do wonder. Over the past few years, CPG got lumped into the DTC boom. And its inevitable bust. Brands were getting valued like software businesses. The thesis? Cut out the "middleman" (aka the retailer) and sell direct. But the new middlemen – Facebook, Google, Amazon – became more expensive and more competitive. CACs ballooned. Many companies folded under unsustainable economics. The narrative shifted: "DTC is the business" → "DTC is one channel." Then came the public market flops. The acquisitions that didn't go well. There was a debate: Should brands even be venture-backed? Meanwhile, in tech… • The IPO market’s been closed. • M&A is under scrutiny for anti-trust And for LPs, it’s getting harder to get liquidity. There are reports that some LPs are trying to sell their stakes in their funds. But CPG? In the last 12 months, we’ve seen large, meaningful exits from strategic acquirers. A real path to liquidity. LPs getting distributions. Not a guarantee—but a signal. So I do wonder… Will more LPs take another look at CPG?

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The 2 most important metrics for any early-stage CPG brand: VELOCITY and RETENTION. If you're an early stage company building in the alcohol space (or any CPG space), all of your focus and effort should be spent on activities that drive those two- and ONLY those two- metrics. It's VERY easy to get caught up spending cycles (and money) on things that feel important to your brand and success. But the harsh truth is, this is a competitive game and the brands that succeed are the ones that are RELENTLESS about driving improvements in the metrics that really matter. If your brand has strong velocity and retention, most other problems are solvable. But if your product doesn't pull off shelves and stores/customers don't re-order, it's nearly impossible to succeed in the long run. There is beauty in implicitly... keep it simple, focus on driving velocity, and most other things can fall into place! If anyone disagrees with me here, or has stories about how you've approached this in your own businesses, I'd love to hear any and all of it! 👇

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Most startups sell into verticals. We’re taking over one. Ohanafy is rebuilding the operating system for a $7.6B industry, starting with beverage alcohol, a $1.2b wedge. Legacy players are drowning in disconnected systems: Sales. Ops. Finance. All running on tech that doesn’t talk to itself. The Frankenstein software approach means everything breaks and lags. •⁠ ⁠Fragile integrations •⁠ ⁠Delayed reporting •⁠ ⁠Missed decisions Ohanafy didn’t ask: “What’s the next feature?” But: “What would it take to replace the whole stack?” So they built it: → Native on Salesforce → Multiple tools consolidated into 1 → Customers save 20+ hours/week → Field teams onboard in days, not months → Sales, ops, and finance run from the same screen This isn’t just a product. It’s a platform play. We’re now raising a $3M bridge round to scale faster into enterprise, double down on AI, and shorten our time-to-profitability. If you want to back a vertical category winner, this is the full-scale land grab to look at. DM me to look at the full deck!

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Announcing: Plaid Layer Extended Autofill, a major update available today that enables instant, compliant onboarding for the vast majority of U.S. consumers, whether or not they’ve used Plaid before. Today, nearly 50% of users sent to Layer are already in the Plaid network - that’s almost double what we saw when we launched the product about one year ago. But what if your user is not in Plaid's network already? Here's where Extended Autofill kicks in: 🌐 You check via API whether a customer is in Plaid's network 🟢 If they are, they go through the high-converting Layer experience using our network of remembered users and bank accounts 🟡 If not, you send us their date of birth, and we autofill the user's PII and present it in the same Layer experience 👍 The user can then confirm their info before completing onboarding This gives you the power of Layer, combined with the power of form pre-fill, all in one unified experience. Since launching, Layer has achieved:  ⚡ Instant onboarding for millions of users 💯 Amassed 45M remembered users with full identity and linked financial accounts 🌎 The largest network of remembered users in the world with both bank + full identity information Link in the comments to get started today.

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There's been great analyses on Hinge Health's S-1 already, but one thought that I've been noodling on:   Even with impressive metrics— $390+ million in revenue, 33% year-over-year growth, 77% gross margins, and strong trends towards profitability—Hinge will need top-tier revenue multiples (12-15x) to simply match its private valuation of $6.2 billion from 2021.   A quick look at digital health comps today shows that median LTM revenue multiples are currently around 2-3x, a far cry from what Hinge needs.   Traditional telehealth companies are struggling. Teladoc trades at about ~0.7x TTM revenue despite generating $2.6 billion in revenue, due to stagnant growth and nearly zero EBITDA margins. Companies like LifeMD and Talkspace have similar financial profiles and comparable valuation multiples. In contrast, Doximity leads the pack with ~20x TTM revenue multiples, driven by $475 million in revenue, 15% year-over-year growth, 90% gross margins, and 40%+ EBITDA margins. Perhaps this is an unfair comparison since Doximity is not a tech-enabled services company; alternatively, maybe this is the key takeaway itself.   It'll be interesting to see where the market places Hinge in this landscape and how growth stage investors react to the real disparities between public and private market benchmarks.

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The deal was nearly closed. A top-tier VC was ready to sign and wire. Then an early investor killed it... overnight. A founder recently emailed me and my colleague, Andrew Berg (shared with permission), which left me frustrated, sad, and angry. They raised pre-seed capital from a non-traditional investor (think hedge fund manager type) who ironically brands themselves to “partner with founders to build great companies.” The company’s multi-year journey ended, not because of market fit or founder execution, but because of misaligned capital. It’s a painful reminder- who you let on your cap table matters a lot. Get references before you take someone's check! Not all money is long-term aligned. And not all investors play the long game with your best interests in mind. #startups #venturecapital #founderlessons #evilinvestors

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BREAKING: Capital One is acquiring Brex for $5.15B. Yes, that’s less than half of Brex’s $12.3B peak valuation. Cue the hot takes. But zoom out 👇 For early investors, this is a monster win: - Ribbit Capital led Brex’s $7M Series A in 2017 - That bet turned into a ~700x return, even after dilution - YC, Kleiner Perkins, DST, Peter Thiel, Max Levchin? All did very well This is venture capital in its purest form: - You don’t need every round to be “up and to the right” - You need one asymmetric outcome early For late-stage investors, it’s a different story: - Liquidity, yes - But nowhere near the outcome implied by 2021–2022 prices The contrast is brutal when you look at Ramp: - $1B+ ARR - 50,000+ customers - $32B valuation (on paper) Same market. Very different trajectories. Brex’s pivot to enterprise, its EU banking license, and ~$13B in deposits made it strategically attractive to Capital One — especially as banks race to modernize their fintech stacks. Congrats to the Brex founders and team! Such a fantastic run!

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