This Week in Startups - E984: Vice Ventures Founding Partner Catharine Dockery raised $25M to invest in vices: marijuana, sextech, gambling, alcohol, vaping; shares insights on hacking her way into VC through cold emails & a strong investment thesis, capitalizing on early markets hungry for investment

Episode Date: October 4, 2019

0:47 Jason intros Catharine Dockery 4:29 How Catharine came up with Vice Ventures 7:00 What was the response when Catharine began raising her first fund? 7:19 What does harm-reduction mean for Vice Ventures? 9:21 Getting Marc Andreessen to invest in her fund 13:32 Strangest emails Catharine has received since starting Vice Ventures 16:01 Investing in cannabis 20:15 Investing in psychedelics 26:33 Investing in gambling 31:16 Who are Catharine's typical LPs? 32:15 Investing in alcohol 39:33 Investing in sextech 44:06 Vice Ventures strong thesis against harming others 47:22 Is Vice Ventures hiring?

This week in startups is brought to you by Walker Corporate Law, a boutique law firm specializing in the representation of entrepreneurs. Visit them at walkercorporate law.com. LinkedIn. A business is only as strong as its people, and every hire matters. Go to LinkedIn.com slash twist and get a $50 credit toward your first job post. And 8Sleep. The first bed engineered to improve your sleep through dynamic cooling and heating, detailed sleep tracking, and more.

Try the pod for free for 100 days at 8Sleep.com slash twist. Apply for the next launch accelerator cohort. Applications are due October 14. Learn more and apply at launchaccelerator.com. Hey, everybody. Welcome to this weekend startups. I'm your host, Jason Calcanus. I'm an angel investor here in the Silicon Valley.

I invest in, I don't know, this year of 2019, 80 companies. Pretty crazy. I got an investment company of 15. It's called Launch. You can visit launch.co and see all the different things we do. We have an accelerator. We've got the syndicate.com. And once in a while, I'll have other investors on to explain their thesis on how they invest.

Some folks invest by stage. I happen to be one of them. I invest in companies when they have three or four people. That's called kind of the seed stage. And then maybe I'll participate in the Series A when they're growing and they're at three or four million in revenue. Other people do midstage, Series B and Series C financing. We count those up like letters, A, B, C, D, E, all the way to maybe an IPO.

And there is no specific signs to that. It's just sequential lettering. And then there's some people who pick a vertical to work in. You may have seen a bunch of crypto, dipshitschits.com, starting crypto funds. You may see people do Google Glass. There was a Google Glass, if you remember, that failed Google product or product that went away. Sometimes people will invest in a country, a region. So you'll have people who invest in a region.

But for the first time, I was surfing around the Twitter, and I saw that my next guest had decided to go after a vertical that VCs specifically have in their documents that they're not allowed to go after. Let that sink in for a second. VCs have clauses in their agreements with their LPs. So VC is a venture capitalist. They invest money in startups. They have investors in their VC fund, venture capital fund.

Those are called LPs, limited partners, fancy term for somebody with a lot of money who wants to triple it. That's it. Rich person, rich endowment, retirement fund. They want to triple their money, cash on cash, instead of doubling it like the stock market does. And one of the things that those LPs do in order to protect themselves is they have a vice clause in their documents. They don't want to give a venture capitalist a bunch of money and then have blowback on them when they do. Gambling, porn, drugs, anything that would be considered near the line of embarrassing. And it's not really a morality clause as such.

It's more we just don't want to deal with nonsense. We don't want to deal with blowback. We don't want to deal with drama. Stick to your knitting, do software. What that means is there's a big white space. Gambling, which has a very dark kind of interpretation by the venture community, also known as wagering, is very permissible in other countries. When you go to Sydney, now it's just there, every bar has a VIP lounge. And the VIP lounge has a bunch of slot machines.

You can gamble. Anybody who wants to gamble anytime can do that. Here we kind of leave gambling to, like, casinos. Then we look at drug culture, obviously some places. allow cannabis, psilocybin other things. VCs don't want to deal with this. It just creates too much drama. But Catherine Dockery, did I get it right? Yes, you got it right. Welcome to the pod. Thank you. You are the founding partner of wait for it, Vice Ventures. Okay, you heard my little preamble. How did you come up with the idea to start a fund based on Vice and why? Yeah, so I came up with the idea

when I was interviewing for a new role, actually. I was working at Walmart on the M&A team there. And basically all these venture capital firms asked me to pitch a business. So I pitched this business that I personally invested in Bev. And all these fund managers were like, you know, Catherine, we love Bev,

we love the company, we love the branding, we love what they're doing. Unfortunately, we're not allowed to invest. What did Bev sell? Bev sells a canned rosé business. So literally VCs were not allowed to sell rosé all day. They could drink Rosé. all day, but they couldn't invest.

Yes, exactly. This to me seems a bit hypocritical because literally two-thirds of the venture community is high A-F at Burning Man for seven days straight. We'll put that aside. The venture firms would not touch Rose A. Yep. They would not touch Jose. But again, I'm saying they love the founder.

They love everything about the business. But because of their clauses. They weren't allowed to invest. Is there a specific name for that clause? A vice clause. It is a vice clause. Yep. All right. So you realize they can't invest in something as legal and acceptable as alcohol.

Yep. And you decide you want to start a fund based on that. And then I tried to understand what the vice clause actually meant and what it precluded. And what does it preclude? We go alcohol, cannabis, nicotine, sex tech, online gambling, e-sports. Some even procured pork, like the meat pork from Sriola. Okay. So playing video games. While drinking rosé on an edible or smoking a doobie is completely legal, perhaps even advisable on a Friday night. I'm just, you make your own decisions here.

Sounds like a lit Friday to me, a little rosé in a little age of empires. I might be down for that. You're saying VCs can't touch it. Nope. Because of the vice clause. Because of the vice clause. E-sports? E-sports.

E-sports. Some e-sports. That's bonkers. It's bananas. It's totally out of this world crazy. And has that changed as cannabis has become legal? So a lot of VCs have started putting up vehicles together that basically ignore their rice clause. Got it. So they're doing little sidecars that say, hey, we might want to touch cannabis. If you're down with that, if you're okay with it, you can invest in this side fund or you can do the main fund if you're not.

Yep. So when you went out to raise this fund, what was the, what was your experience? I had a lot of very positive experience, actually. Yeah. Yeah, people that we totally understand this, this is needed in the market. We'd love to have a fund that invest in things that other people can't invest in. We think that you can do this in a harm reduction way. Harm reduction way, okay.

Unpack that. What does that mean, harm reduction way? So harm reduction. So basically the thesis is that the future of vices, I think, kind of boils down to harm reduction. So like for example, like Jewel was a harm reduction for combustible cigarettes. Right. Yeah. And do you buy that?

Is it harm reduction or did they get that right or wrong? I think they got that right. There's over 6,000 chemicals and combustible cigarette of that 60%, 60 of them are carcinogenic. Got it. And then in an actual, there's 11 chemicals and then jewel. 11. Mm-hmm. But they did make it pineapple flavor and did some average.

That was semi-targeted towards kids, it seems. So perhaps they would do some things differently. Yeah. And I guess your thesis would be, as an investor, you might be able to help them to understand harm reduction versus getting kids addicted to it. Exactly. What could they have done better with the kid thing? Should that have been a prescription? Jewel, I always thought it should have been a prescription.

Like, you go to your doctor, like you get the nicotine patches. Should it have been a prescription in your mind? I don't think it should have been a prescription. No. No. I think that... How did you keep kids off it? Like, something like one in three kids is using these things.

I think that they could have had better advertising, better marketing. Okay. How? Not necessarily have, like, lemon-flavored, like, guppy drops or something. So skip the cotton candy. Yes. Rainbow Sherper flavor. The fairy flavored.

Yeah, I saw that original marketing, and it was, like, looked like a Benaton ad. Yeah. With, like, kind of, like, aspirationaly teenager. like barely in their teens, like 18 or 19 years old. Yeah. Which is what a high school kid wants to be. They want to be 18 or 19.

Like, that's kind of the aspiration. It's like, you don't want to be old, but you want to be able to buy alcohol to go to college. Yeah. And what was it? You got Mark Andreessen involved in this? How did you loot Mark and Driesen? He's one of the most famous investors in Silicon Valley today.

I sent him a cold email. I got it. Okay. So people are having a hard time. time raising funds. You sent Mark and Driesen a cold email and he put in 50 or 100 grand. He put in a nice amount of money. Nice amount of money. And he has his own fund. So he was like, I want, did you meet with him? Yes. Okay. So you went to meet him. And what was his take on what you were doing? I'm curious. He was like, I think this is really clever and I think this is needed.

And he basically said that the vice clause ran much deeper than I even knew. Really? Yeah. What else is in the vice clause that we don't, vice clause that we don't know? Like, is there some other And why do you think it's there? I thought it was for embarrassing kind of things and blowback. What do you think it's there for? Did you do any research on that of like where it came from? So I think it comes down to like who gets to decide what vices. So a lot of vice clauses actually they start basically from church, from church organizations or religious organizations.

And they kind of get to decide who like what vice is and what vice is in. Got it. All right. When we get back for this quick break, I want to talk about how much did you raise for this? and then how are you picking companies? Because once you put out a tweet, hey, I'm in vice tech or I've got a vice fund, I would think you would get a lot of interesting emails. When we get back, I want to hear some of those crazy emails on this week's service.

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415-979-99-98. How cool is that that he puts his phone number and his email right out there for you to email him at Scott at Walker Corporate Law.com. Thanks again, Scott, for supporting this weekend startup. You're the longest-running sponsor, I think, along with Squarespace, so I really appreciate that. Okay, let's get back to this amazing episode. Can I interest you in some nicotine, cannabis, alcohol, gambling, psychedelics, or sex toys?

If so, you've come to the right place. Today, my guest is Catherine Dockery. And she is with Vice Ventures, Vice underscore Ventures. And she's raised a fund. Is it disclosed how much it is? Around $25 million. So you've got $25 million to put to work. That's a big number.

In Vice-related startups, when you say you're an investor, and you weren't an investor before this, you were at Walmart, is that correct? I was an investor before this. Oh, okay. Where were you? I worked for Andy Dunn, who's the founder of Novos. Ah, got it. And you were doing investments for him?

Yes. Ah, so he had some sort of deal flow, and he made money from Bonobos. Yes. And he wanted to put it to work. So that's where you got your start. He was on episode 1-2-2, for those of you playing along at home. And we should rip some clips from that because what was that? What year was that?

2011? Oh, my God. Eight years ago, he was on the pod. Wow. So you're working with him learning how to do VC. Then you decided to do this fund. I guess he was your anchor LP, I would guess. No, he wasn't.

No. No. You just went out and were like, hey. I was just going to do this. You're just going to do it. Yeah. Okay. When you put, I am now the Vice Ventures general partner on your LinkedIn, you must get flooded with emails.

Anybody who's writing checks for a living gets pretty popular. What kind of companies are emailing you? I saw a sex doll company, which is very funny. Sex doll. Sex doll. Self lubricating, has human hair, his program to talk. Okay. This is super disturbing.

I don't mean to be judgmental, but this whole in-cell movement has got me rocked. Yeah. There's like literally a group of men and they believe that they are being persecuted by women and not being allowed to have sex. Interesting. You know about the in-cell movement? These are the people who like drive through crowds and cars and shoot places up. It's like part of this whole Reddit thing. and yeah they

they don't know how to talk to women apparently and ask them on a date so they assume all women want them to suffer and they are involuntarily celibate but anyway you got a sex toy or sex doll which is I guess a sex toy was that something you would invest in is that a technology no

I mean they're growing it in Japan got it which is kind of where the market for this is in Japan yeah but I just don't think it's necessarily a venture backable business Like, where's the exit or something like this? Yeah, they would have to be incredibly, they'd have to be incredibly profitable and be able to IPO or, I guess, yeah.

Are any of the pornography businesses, none of them have ever been venture-backed, but have they ever been private equity or backed by other individuals? How is porn backed and how do you think about adult entertainment as such? So some virtuality porn is backed by investors. Really? Yeah.

Venture for? firms or? Not firms, but individual people. You think that has potential, virtual reality, sex? Has an investment? I mean, I wouldn't write it off completely. Just because, like, someone would come up with an idea that's so brilliant that it would just work out. Right.

But as it is right now, I don't think it's necessarily the most venture backable business. Yeah. Again, you have the exit problem. Yep. So in cannabis, there's an obvious exit, which is. The Canadian stock market is getting filled with cannabis companies apparently. Yep. So that's easy.

Have you invested in any cannabis companies yet? And how do you figure out if a cannabis company is legit or run by stoners who will never do any work or legit and run by stoners who want to make a lot of money? Yeah. So we invested in one cannabis company called Indos. Indos. Indos. which is a vaporizer that actually measures vapor in terms of milligrams. Ah.

So it'll last for a precise dosing. You can see exactly how much you're inhaling. Wow. That's brilliant. Yeah, the founders out of this world incredible. See, that's what I thought Jules should have had. Jules should have had something that said, this is how much nicotine you're getting. Yep.

And you should, when you buy it, it should be allowed in a 24-hour period to give you a certain amount of nicotine and then stop if you've opted into that, right? Yeah. And it should track it in an hour. or track it on the device. And then just you could sort of like the screen time. You could ignore it if you wanted to, but at least you could set a limit. But people are just dragging on those jewels really hard and they have no idea.

And then the same with cannabis. Like if you hit one of those vapids, who knows what's going to happen to you, right? Just by if one person has big lungs and takes a huge drag versus somebody has small lungs and takes a short drag, is that a massive difference? I would think so, right? I would assume so. Yeah, I assume so. Well, that's interesting.

Is that product in market yet? I've spoken to two companies actually that are doing something similar to that. Oh, with the recording. Your one, indose. So indos, but for nicotine specifically. Oh, for nicotine. But in cannabis, is that in market yet, the endos? Yeah, so it's available in California for sale.

Really? Yeah, mostly in Los Angeles. Oh, at the Medmen location? Med-Men? I don't think that they're in Med-Men. No, but you're kind of rolling your eyes at Med-Men. Is that, do people in the cannabis industry, like, hold them in disdain or something? Why, uh, why, uh, other reaction?

Men, men, I don't know. It's a very, um, peculiar place. Really? Yeah, I would say so. Peculiar. It's because they're not known to treat their suppliers in the best way possible. Interesting. Yeah.

Ah, so they don't pay them on time or they? We don't pay them on time. They negotiate terms constantly. Oh, so they're kind of like Walmart in that way where they're just. No, totally. They're totally brutal to their supplier. Yeah, I would say that's completely fair. Yeah.

I mean, Apple was known for that too. I mean, if you get anointed by Apple to be in their store, it's incredible for your brand. But my understanding, I don't know if this is true or not, but I've heard this multiple times. But it might be old information that they kind of tell you what percentage you're going to get at the sale. Which makes total sense. You have all the leverage. You have all the leverage. But it's also kind of a little bit heavy-handed.

Yeah. Would you like to be the one anointed battery pack? iPad case, that's not our iPad case, we're taking 77% you're getting this percent. Walmart does that too, I think. They tell you what your margin is. Walmart is brutal to suppliers. Really? No, wait, you work there?

I did work there. I don't know that if I'm working there, though. No, no. You signed a non-disclosure, but from what you've read in the press, that is the chaos. So, wait, you grew up in the West Village? I grew up in the West Village. You're from Brooklyn? No, I live in Brooklyn now.

You live in Brooklyn now. Yeah. But you grew up in the West Village. Until I was about 14. You left Manhattan for Brooklyn. Yep. No, I left Manhattan for Westchester, which is even worse. So weird to me.

Like, I grew up in Brooklyn and our goal was to get to Manhattan. And now all these people get to, are born in Manhattan, and they're just like, I can get the hell out of here. Manhattan's fabulously boring, isn't it? Brooklyn is the best. It is. I was trying to tell people that they told me it's wrong. So I was like, all right, I'll go to Manhattan. Now, apparently, Brooklyn is the best.

Now you're right all along. I was right all along. It actually got kind of cool. Like all the cool restaurants came and artists and everything came to Brooklyn now. So you've invested in that one company that does the dosage. That's brilliant. And there's definitely exits there to be had. Totally.

Anything in, I saw psychedelics here. Yep. I almost invested in a psilocybin synthetic psilocybin company that Peter Thiel invested in. out of Europe where it's legal, I guess, in certain countries. And their idea was to give you a synthetic psilocybin which is magic mushrooms,

the active ingredient in magic mushrooms, and give it in a heroic dose in an IV under a doctor's supervision or a counselor's supervision for PTSD. Yep. What is your thinking on psychedelics

and have you started your research there and have you made an investment there? Yeah. So we're, we're very bullish on psychedelics on the market. Okay. Despite right now, kind of if you look at psychedelics, nothing that makes a company attractive is making psychedelics attractive. So they can't scale.

Can't scale, no. They can't scale. They can't necessarily have a product that exists because you have to pass all of these clinical trials. Right. Which also makes me really scary because I'm not a doctor, so I can't necessarily say like, what's medicine, what is in medicine. Right.

Yeah. So that being said, besides those things, we're very bullish on psychedelics. Didn't Oakland just pass something to decriminalize? Yes. Grown, which I don't understand. Like, if you've, ayahuasca and psilocybin are okay because they're grown, their plants. Yep. But then, the surgic, whatever, LSD or cocaine wouldn't be because they're chemically produced.

It's bananas. But that is the law. That is the law. I got it right. Yeah. I've only read like one or two articles on this. But so what you're thinking about the impact of that? And what's our horizon?

Because it looks like cannabis. We had a national referendum in Canada. We're at whatever 30 states here or something. So we'll have a national referendum in Trump's second term or Kamala Harris is first for sure. Yeah. Because she's definitely down. Based on what I've seen. I think we get that other one.

What's her name? Elizabeth Warren. She's not down. No. She's like a soccer mom. She will give you. a lecture if you smoke a doby, even if it's legal. I was thinking about the other one, the Crystal Lady.

Who's the Crazy Crystal Lady? Marion Williams? Crazy Crystal Lady. Running for president. You don't know? I don't know. She's not, I don't know, I think she didn't make it to the top five. So can you make an investment in that space?

And have you started meeting with folks yet? Yeah. So we've met with a few folks. Okay. What is their thesis of how it becomes a venture-backed business? The other thesis is that it gets bought by Johnson & Johnson. Hmm. Or it gets bought by a company like that, yeah, which I think could definitely happen.

But they're not trademarkable or protectable, right? Like mushrooms grow in the wild. Yep. Ayahuasca grows in the wild. But then again, I guess beer isn't protectable either or soda is not, and those became big businesses. So what do you think happen? Johnson Johnson winds up having like psilocybin pills for people dealing with anti-depression or PTSD eventually?

Is that what those founders think? That's what I think will happen. Huh. Which I can't say that they're wrong. Like, I don't know enough to kind of make a statement on that way. Mary Ann Williamson, I'm sorry, I forgot her name. The Good Vives Crystal lady. She's pretty awesome, actually.

I like her. And do some research off her now. She believes in crystals and love will beat Trump, I think. Got it. And she also... Good heart. Believe that you could pray away AIDS. which is super weird.

That may not be true for folks listening. I don't know that you can't pray away the AIDS, but I definitely don't think there's any proof of that. Yes. Okay. So you've been meeting with the psychedelic folks. You've made an investment in cannabis. When we get back from this quick break,

we're going to talk about my favorite area. Gambling, wagering, betting, having some skin in the game, rolling the dice, right? Let's talk about gambling. Let's play some bets when we get back on this week in startups. Hiring is not as easy as just putting an ad on some message boards somewhere and hoping for the best. No, that's not how you do it. That's not how you do it right in 2019.

No, you want to use LinkedIn. If you're growing your business, you need to reach the right candidates at the right time. And 600 million members visit LinkedIn to make those connections and learn and grow as professionals. You know that. They also go there. Sometimes they want to discover new job opportunities. In fact, a new hire is made every eight seconds on LinkedIn. One, two, three, four, five, six, seven, eight.

Somebody just got hired on LinkedIn. That's right. And here is my CMO, Prech, who we just upgraded to an associate. He's in the game. And here he is, posting a job for us, a customer success person manager in Toronto. Here's the job function, a little business development, a little customer service. He takes our nice little job description, pops it in there. Look at that whizzywig editor.

It looks great. Does a preview of the job and he's ready to go. But that's not all he's going to do here. He's going to pick that he wants them to have customer service experience for two years. And he's going to post that job. And it's going to show that job to the right people at the right time. He did that in seconds. And here's the good news.

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Let's get back to this amazing episode. All right, trigger warning. Hashtag trigger warning. If you are offended by sex toys, psilocybin, psychedelics, nicotine, cannabis, alcohol gambling. It's not the episode for you. But if you're a human being, on planet Earth, who is not in denial. These things are part of life.

People have sex. They smoke weed. They drink. Sometimes they even gamble. Have you started looking at gambling companies? And what do you think the opportunity in gambling is? Yes. So actually made an investment in a skill-based betting company.

Okay. Explain what skill-based is betting, wagering, versus gambling. Yeah. So gambling is like you don't really know the odds. Or you do know the odds, but you have no way to control the odds and you know skill that's going into playing. Skill-based betting is you basically can practice, you know exactly how good you are, you know exactly how good your opponent is, and you're making an educated bet to make a wager against them. So if you and I play chess, that is a game of chance or skill? Skill.

Because they have a rating. And if you've been playing for a year, you're going to beat people who've been playing for a month and have been playing for 10 years, you're going to beat the people who have been playing for a year in all likelihood. You can improve your skill. Exactly. Now, if we're playing roulette, game of scale or game of chance? Chance. Because no matter how much I practice roulette, no matter how much training I have, no matter how much effort I put into my 10,000 hours of roulette,

there's no way for me to get an edge on you. What about blackjack? Because some people count cards, some people know the math, better than other people. Skill or chance or both? I would say both, but more chance. More chance than skill. So 70% chance, 30% skill or something.

Where do you think poker falls? Because we had our Black Friday in America. I think it was Black Friday they called it. When they banned poker, which I would consider a game of skill with some chance. Yeah. What do you think about poker? Should it be legal? I think poker should be legal.

You think it's going to, it should be? Yeah. And they're slowly making online poker illegal, but they had that Black Friday when they banned it. Yep. Is it a game of skill? Chance? I think it's more of a game of skill than it is a chance, but I think there's elements of chance involved. Right.

Because even if you and I get it in 80, 20, 20, 20, 20s, and beat you. Yep. Still a 20% chance that could happen or something. Yeah. Interesting. You play poker? No. Okay.

That would be a good one for you to. I need to pick it up. You should pick it up. Players Lounge is a company you invested in? Yes. What do they do? So it's a skill-based betting platform for e-sports. Ah.

So you can go on and play FIFA and win money. Versus another person. Versus another person with a similar skill set. Does FIFA the... Do the game manufacturers need to approve that use of their game or no? No. You're just matching people together. And then you watch the game and figure out who won somehow.

Yep, and then it's all self-reported. They self-report. Yeah. What if there's a dispute? Then a player's lawn chancels it. Got it. Does that happen a lot or just people? Very, very rarely.

Very rarely. And then what does players get? 5% of all the wagering? They get a Vig or something? Yeah. What is it? 10%. 10%.

10%. So you and I could bet, 10 bucks on a game. I win, I get $9. You win, you get $9. The house gets $1 or something. Or 10% of the 20. 10% of the 20.

Oh, okay. So I get $8. netted back to me. That's a big big. How is that company doing? They're doing super well. Yeah? Yeah. Where are they based? How many people?

They're based in Brooklyn, New York. Oh. The team is about 10 people right now. Oh. They're doing very well. And then how do you see the fantasy sports sites got kind of rocked? Is that a game of scale? It feels like skill picking the players that will perform well, or is it not?

That's a hard one. I feel like that's more chance. More chance. But aren't there people who perform much better than other people in it? Yeah, but then you're chancing at how well they'll play that night. Okay. So I might pick better than you, but I could still lose because of chance. Yeah.

How do we ever reconcile what percentage is chance versus skill in these kind of like poker, blackjack, and fantasy sports situations where it's not obvious like chess and e-sports, where 100% of the outcome is, my work. I think that's a great question. Yeah. Unknown. Unknown. Interesting. But it's all going to change, right?

Isn't the NBA, the NHL, and the NFL are all putting teams in Vegas and they all want to have in game, in stadium, in arena, betting? That's all coming. Yep. And none of the VCs are investing in it because they have these vice clauses. And you just get to come in and slurp it all up. Yeah, it's fun. Yeah. Who are your LPs and how do they look at you?

Are these traditional LPs who are like, oh, thank God somebody is doing this? Or are they just CEOs and individuals who want to be in it? You've got family offices. You're not getting the Harvard's and the yells and the Dukes to do this kind of thing, I assume. No. So you're not getting the big endowments. No. You're not getting the retirement fronts.

Caliper's not in yet. Nope. But family offices. Family offices are in, as are a lot of founders. Founders like it. And people who manage money love it. Ah, money managers are like it. Yeah.

Interesting. They get it immediately and they're the ones that write the track the quickest. Are there things that you won't fund? And how would you look at, I don't know, funding? Because you had harm reducing was your... Harm reduction. Harm reduction as a highlight. So if somebody were to make something in cigarettes or alcohol,

How do you, would you invest in a cigarette or alcohol company? I don't think we invest in a cigarette company just because that doesn't really seem to be the trend going forward. Yeah. Ms. Combustible cigarettes. Yeah. Alcohol, we would definitely invest in an alcohol company just because there's exits every few years in spirits. So a tequila company, no problem. Yeah.

Who typically invests in tequila companies? It seems like everybody's got a tequila company. VCs. Everybody's investing in tequila right now. VCs are investing venture capital money in tequila? Yep. just because George Clooney made a fortune. It's crazy the amount of money that's going into tequila.

I get sent decks for tequila at least once a week. Tequila's horrible. I mean, I don't think there's going to be another huge exit after the George Clooney exit. So I don't really understand why everybody is flocking towards tequila. Makes no sense. I agree. What does a tequila deck look like? Just a bunch of people on a beach, having fun, popping bottles.

It's literally just people doing shots. Yeah. That's, and they just put an arrow. That's our liquid. That's our tequila in the shot glass. Look, these people are really drunk. These people are drunk, and they're paying $6 a shot for our tequila when they could literally just drink rubbing alcohol and would taste as good.

Yep. What's the churn like on tequila, I wonder? Fantastic question. It's a fantastic question. Yeah. Every time I've had tequila, I've churned. Churned. So, thank you.

Thank you. Thanks for the boys in the... At least one landed today. So I'm fascinated by the alcohol opportunity, but you haven't done one yet? We've done Bev. Oh, you did Bev? We did it.

What is Bev again? What do they do? It's a canned wine. Canned wine. And so it's a direct-to-consumer can wine business. I think I may have had it, yeah. I'm sure it's everywhere now. People want to drink wine out of a can.

How's a taste? He's delicious. It's just... It tastes like rosé. Just taste like rosé. Yeah. So we did that. I did an SPV for a business that's called 10 to 1 rum.

10 to 1 rum. Yep. What's their angle? So it was founded by one of the youngest executives at Starbucks. Okay. Who oversaw innovation in M&A. Interesting. So he really understood how to grow a beverage business.

Got it. What is the secret to growing a beverage business? It's about marketing and celebrities. It's about distribution. Is it about the bottle? Distribution, 100%. Distribution. Yeah, I would say.

And in this context, how does that work? Is that like getting a bunch of people to go to bars and convince bar owners one by one to stock it? So that's definitely part of it is having like an off-premise or on-premise sales team. Got it. Who goes around and makes sure that your product is in bars. But then also part of it is making sure that you're getting the best distribution when it comes to traditional distribution. Interesting. So people have to see it.

Yeah. Do people make decisions on these drinks based upon the taste of them or on the image of them? Like whether to carry them? Well, I'm thinking more of the consumers, but also to carry them. Yeah, I think combination. Yeah. I think if something looks beautiful but it absolutely terrible, then you're not carrying it. Yeah.

But if something tastes good, but it looks horrible, then you're probably not going to carry it either. Yeah. So I think it has to hit a happy medium. Yeah. It's interesting. There's just one to kill that comes in a big porcelain. bottle. It's giant.

All right. And I see everybody orders a bottle of that now. I don't know the name of it. Is it white? It's white and blue. Yeah, I know you're talking about. It's like turquoise and white. It looks like it's like almost like the colors of the Greek flag.

But I see people drinking directly from that on Instagram. Yep. What about sex? Have you invested in so far? Sex tech. Have you met with a lot of companies? I'm curious. I met what the ton of stocks at companies.

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If you don't like it, you can kick it out. But you won't. Thanks again, H.Slee. Really, not just for supporting the podcast, but for making a product that is truly great. I'm so impressed. Okay, let's get back to this amazing episode. All right, listen, everybody wants me to talk and hit the insal thing one more time. If you play video games all the time and you don't know how to talk to,

and this is specifically a specific gender dynamic, young men who don't leave their apartments and play video games all the time and don't bathe and don't know how to have a conversation with a woman. Here's a tip. Be normal. Ask somebody, hey, I think you're attractive and a really cool person. I was wondering if it's not too forward.

If I could get a cup of coffee with you or maybe we could go see a movie, I'm not sure what you're into. But I think you're kind of special and I'd like to get to know you. Just effing clip that. That's called being new. normal.

Yeah. Did that seem normal? Very normal. And if somebody were to say that script to you, if you were into boys or girls or whatever, like in a normal way who you met, even if you met them in a cafe, would you be super offended or not offended? Not offended. So, trigger warning for anybody who is offended by the birds and the bees, but let's

get into it. Here we are coming around third base, so to speak, in the third chapter. of our podcast here. What is the problem, as you perceive it, with sex and tech? Because we had, I think, all the sex toys got banned and they rescinded an award from somebody who made a vibrator or something at CES. I don't know if you saw that story. It's ridiculous.

Then they wound up reinstating it. what is it about sex tech that's so triggering for folks and what's the most interesting companies you've seen and have you invested in me? I think it's just really stigmatizing for people. Yeah. And people are uncomfortable about it and don't know how to talk about it. And if you can't even talk about it and an invention that came out, then you're not able to talk about it with your investment team to make an investment.

Right. Because you have to actually have a conversation. Yeah. Which is uncomfortable for people. Totally. And therefore, in a business. on a Monday morning meeting, you have to say, listen, we're having a Monday morning meeting. A company's coming in with a vibrator, a smart vibrator, let's say.

This might be uncomfortable for some people. But if you come work at Vice Ventures, you have to sign some sort of a waiver or some sort of agreement. Like, I will not sue you if I read a deck about a sex toy. Yeah. I guess. Do you have employees yet or team? No, it's just me.

Just you for now. Okay. So what's the most interesting thing you've seen, have you invested in anything yet? I love this company called mod. M-O-D. M-A-U-D-E. M-A-U-D-E. M-A-U-D-E. M-A-U-D-E-M-A-U-D-E-M-A-U-D-E-M-A-U-D-E-M-A-Mod.

Yeah, but probably will be investing in it. It's... Mod-Mod. So it's gender-neutral, kind of basics. Gender-neutral basics. For having sex. For having sex. So it's vibrators, condoms, lubricants, candle.

They are super smart because they get around advertising, because a lot of sex companies are prohibited from advertising, which is why it's difficult from them to grow. Ah. By Facebook and Google? By Facebook and Google specifically. Google doesn't allow it. Google has porn. Google is an index of porn links.

They literally are having so many issues advertising. But you can't advertise. Google can index all the world's porn. But you can't advertise porn on Google. No, Google also has their own alphabet. Part of alphabet, they have their own campus for porn. They have a campus for indexing porn properly. So they can make sure that when you type in your specific porn search, you get the right results.

Yep. But people have to opt into being in that building so they don't get offended. Yeah. So Maude has, and I know that Instagram doesn't even allow nipples because there's this whole movement free the nipple on Instagram. I don't know if you know about that. Of course. So men can show their nipples, women can't. And then a bunch of transgender people are like, here are my nipples.

You figure it out. Go ahead, Spotify. Go ahead, Instagram. You tell me. So literally, think about this. A biologically born male, where I guess I can't even say that now, somebody who's born with an X and Y,

how do you say it without offending people? I want to make sure I get this right. Anyway, somebody who transitioned from a male to a female, I guess is the easiest way to say it. Somebody transitioned from a male to a female who shows their nipples on Instagram is going to be censored or not. But a woman is 100% censor for showing a nipple

and men are 100% not censored. The world is bizarre. The world is weird. Yeah. Super weird. So how does Maud get around all this? Maud has a candle, a massage candle. Ah.

That they advertise. So genius. It's so genius. So the massage candle basically attracts tons of people. Like moths to the light, so to speak. Yeah, exactly, literally. Yeah, like quite literally. Yeah.

And then they can see other offerings. Yep. And as long as you're two clicks away, Google or Facebook would be good. Yep. So massage oil or a massage candle, a massage CD or something like that is okay. But everything else, Ixnay on that. Yes. Hmm.

Interesting. Oh, are guns considered vice or weapons considered vice? No. So basically, of vice ventures, we have a thesis that says, that we will not invest in anything whose point of the object is to harm somebody else. Okay, yeah, that makes total sense. Yeah. Right.

If I'm smoking weed or doing nicotine or gambling, that's not harming anybody else. It might harm me theoretically if I do too much of it. And I'm not managing or alcohol for that matter. I got it. So no guns. We don't seek violence as part of being vice. Violence would not be a vice. and in a way I guess everybody

depending on who you are you could debate even if any of these things are vice or just things that could be vice if you take them too far like there's a certain amount of moderation how did you hack your way into VC to begin with I'm curious

you said you hacked your way in yeah how'd you do that I just decided that I was going to do it so I started sending emails out. I was raising a fund. All right. You in Ireland, it's like literally everybody complains about like, you know, how difficult it is to do all this. And I'm not saying it's easy. Yeah.

But you literally just decided unilaterally you were going to be a VC and started emailing people. And the idea was so good people couldn't deny you. And your track record having worked at Walmart or for the Bonobos guy, Andy Dunn, those two things. guess made you credible in some way. So a little bit of credibility from your resume or LinkedIn combined with a great idea equals funding. Equals new fund. Equals new fund. That's it. Yep. Were you shocked that you were able to pull us off? No, because I really bleached in the thesis. Yeah. And I thought it was really strong. So I kind of thought that the thesis itself was so strong. Yeah. And I think in Arlen Hamilton

She's been on the pot a bunch of times Like I think her thesis was also very strong And she was able to pull off A fund It's like black women are not getting invested in There's a whole group of people who are Not even getting into the room where it happens They're not getting meetings

Yeah That would make that would be a great Under service demographic Like entrepreneurs who are being ignored You could just sweep been there and not have any competition for them because they're being ignored. Yeah. Both cases.

Hmm. So where do you think this goes from here? Are you going to hire people? And what's the qualification to work at advice ventures? Because I feel like, based on my gambling, I might need to apply. I'm a degenerate gambler. I think that's why I'm an investor. It's just like it's like the greatest manifestation of gambling ever.

Unlimited upside and known downside. Yeah. In our business, you make 100K investment, you know what you're going to lose. Yep. 100K. What are you going to win? I don't know. 10x, 50, 100, 100, 1,000, 5,000.

I mean, it's all possible. It's bizarre how asymmetrical it is. Yeah. It's very weird. It is very weird. So you're going to hire and build a team now? You got the 25 mil? Yep.

I'm looking to hire a partner. Oh, really? Yeah. Like a general partner? Like somebody would be your partner. Yeah, like a general partner? But that type of hiring position is very sensitive one to go about. And it's a very...

It's a really hard to hire. Yeah, that might be a mistake for you. Why? Because it's so hard, and if you get somebody, they're going to be super entitled, and then they may want your job. That'd be horrible. Well, the problem is, like, if you... The alternative is for you to develop your own team and your own bench

and develop talent. So in a small fund, a solo GP with a couple of managing directors or a couple of associates, and you build up your own talent pool, and then they become eventually partners. That's the other possibility. So you can still be the person in charge and not have to worry about every one of your ideas being slowed down by having to have buy it from your partner. That's kind of the advantage of a small fund. Like mine, I have the same thing, small fund. I can just unilaterally make the decisions without a partner meeting.

Nice. I think it's a possibility for you. Yeah. But you moved to Westchester for Brooklyn? No. You were in Brooklyn now. I'm in Brooklyn. There's a lot of people in Brooklyn who want this job.

Yeah, for sure. I get hit up constantly about if I'm hiring. Yeah, I'm about to launch a website, getthaseat.com. Mm-hmm. That is, my thesis is, being an investor is the greatest job in the world or amongst them. Power, money, joy from seeing founder. succeed and excitement and purpose. It's like everything.

Yeah. It's the greatest thing in the world. Like, as far as I'm concerned, like, the only better job is being the founder, but that comes with massive stress and anxiety. So I'm going to just set up the website, get the seat.com for an associate and for a managing director for our firm. And it might be up. If you're listening to this, you can apply.

But I need people who want to work like 50, 60 hours a week, like match my effort. What do you work? Are you a millennial? you? 27? You're 27. You have a $25 million fund. I just want to say to all you

30-some things or people complaining. She's 27. She's got a $25 million fund. That's incredible. See, I was worried about your generation. And then I hire people and they're like, well, you know, I have people who want to come work for me?

I'm like, what have you done? And I'm like, wow, I haven't done much, have you? And I'm like, by your age, I had two magazines. By your age, I had two magazines. But I didn't have a 20-5. $5 million fund. Wow. Where'd you go to school?

NYU. You went to NYU? That's nice. I went to Fordham at Lincoln Center. What'd you major in? Neuroscience and finance. Neuroscience and finance. So you really understand the brain chemistry of gambling.

I mean, I understand as much as I can. I am no expert. There's a group of people, this is the most fascinating thing to me about gambling. There's a group of people who like to lose money gambling. Think about that. Wow. Think about the chemical, emotional framework of people who get a rush from losing their net worth or having the risk of ruin in play gambling.

You know what the risk of ruin is? So in gambling, the risk of ruin is, let's say you had a million dollar net worth. If you go to the poker table and you buy in for $5,000, there's no. risk of ruin. And if you did it 10 times, you still don't have the risk of ruin. You still have 95% of your net worth is not on the table. There are people I know who had to have their entire net worth or some significant portion of it on the poker table in order to feel alive. Wow. Wow. So if they blow out, they have to stare at the ceiling and know that they've been. You know that they've lost everything, there's no more money and they have to go build up their stack again.

These are the true gamblers, the ones who just cannot feel alive unless everything is at risk, the risk of ruin. And I did the opposite in my gambling career. I always just played with less than 1% of well less than 1% of my net worth, never having to even think about it, rounding era. still this is this is a really well-known phenomenon yeah they made movies about it you think there's going to be a national referendum for gambling in this country and how do you think that's going to play out i mean i hope there is yeah yeah are you following this stuff yet or

um i follow some of it and i follow mostly for sports betting yeah just i've just seen so many sports spending companies how is that working now you can place a bet on sports legally from any from what states and how does it work now so it's state legislated by the state got it so in New Jersey Nevada

New Jersey's the epicenter of it I heard that why is that they just needed the money or they're just progressive they probably needed cash yeah it was a cash grab I'm sure so if you live in New Jersey you can take out your phone and gamble

and bet on a sports game or Nevada you can do that but in California you cannot. No. But if you had a phone with a VPN on it that said you were in New Jersey or Nevada, I wonder if you could. I have no idea how strict the geolocators are.

Yeah, that's interesting. There's a sports book walking distance from Giant Stadium I was just told in New Jersey. That's crazy. I think like, this is why I think we have to really think through angel investing in the friend, of sports betting.

We are very careful with our syndicate to make sure we have accredited investors and we explain to people the risks, even for high net worth individuals for investing in startups, try to explain to them. You have to have 30, 40 investments and we're going to have enough diversity to have an outlier, yada, yada. And then people can walk up to the sports book and put their entire life savings on a game. No questions asked. Wow.

Isn't that bizarre? That's crazy. Yeah. How many companies have you invested in so far? from this fund? Four. Four. And what's your pace

is going to be like? And what your typical check size? Check size is anywhere from 100K to 500K. And if people want to pitch you,

what's the best way to do that? Catherine at Vice Ventures.com. Catherine, which is spelled C-A-T-H-A-R-I-N-E, which is not the correct spelling of Catherine. Or is it?

I don't think it is. No, it definitely is not. What's the story? Do you change? your name. My mother's felt my name wrong on my birth certificate. In fairness, she had just had you. She might have, I mean, having been through this, yeah. Mom could have been, we could maybe forgive mom for the misspelling. You never thought to change it, though, because it's kind of charming. I kind of like it. Yeah, it's charming that you have the misspelling. Yeah, it also helps me see

people's attention to detail and they send me emails. Oh, everything's a test, isn't it? Everything is a test. I'm fascinated by you, Catherine. What did your parents do? My dad was a bartender and my mom... My dad was a bartender. No way. Yeah. No way.

And Nick's grandpa. And my mom was a flight attendant. My mom was a nurse. So you grew up blue collar. Yep. Mom was away all the time. Mm-hmm. Dad was at the bar to 4 a.m.

Yep. In Manhattan. Yep. You were a latch kid kid? Would you go to Stuyverson? I went to school in Westchester. Oh, in Westchester. to write, where the Knicks are.

Do you have any Nicks in your class? Did not. Okay, because the Nicks are all up there, right? It's for the practice facility. All the NICs were living up there, at least in the 90s. So your dad was a bartender, mom is a flight attendant, you're a venture capitalist. There it is, folks, the American Dream is still alive.

My mom was a nurse, my dad was a bartender, and eventually owned a bar, and here we are, two venture capitalists. I love it. I love it. Catherine Dockery, I wish you a great success with Vice Ventures. Everybody can follow Vice Ventures right now,

Vice-Undres, and catherine at viceventures.com. Nicely done. Thank you. And share your deal flow, okay? Let me know when you're going in on something. Let's stay friends. Let's be friends. Let's be friends.

Let's be friends. Perfect. I love it. Yeah. Well, that's kind of the podcast is a great front for making friends. You just have people on your podcast and now you have friends. You should do a podcast. I should do a podcast.

You should do a podcast. Yeah. Well, you know, you'd be a great podcaster because you're a woman a few words. You're like pretty tight in your answer. So that's good actually when you're doing the questions. Yeah. And just ask very succinct questions. But this would be great. If you actually did a podcast, you could interview people in the vice business. People want to hear from the people doing that stuff. It's like a huge white. Like it's a huge. It's a huge. It's a white space. Like blue ocean. Nobody's covering those companies. I would love to hear these gambling companies. companies or sex companies or psilocybin cannabis nicotine companies explain themselves this week advice you have my permission you can use this week advice all right we'll see you all next time on this week's arms bye bye