This is an installment in a special series, Startup Year One, interviewing startup founders about the major lessons they learned in the immediate aftermath of their businesses’ first year of operation.
Catharine Dockery grew up in New York City with her father, who was a bartender. So to some degree, she jokes, she’s been in the vice world from a very early age.
When she was younger, Dockery thought she might become a corporate lawyer or work in finance. At New York University she studied a self-designed mix of neuroscience and finance, working on the floor of the New York Stock Exchange, serving as a summer intern at Morgan Stanley, and writing a daily newsletter about current events in the global markets.
Following graduation from NYU, she went into a traditional sales and trading program at Citibank, and despite learning a lot, she found the environment to be a challenging fit. She later worked for Bonobos cofounder Andy Dunn as his chief of staff, eventually following him to a corporate M&A team at Walmart after a $310 million merger in 2017. Not long after, as she was looking for new opportunities, Dockery started developing the thesis behind her own fund.
Vice Ventures celebrated its first anniversary on June 27. Since launch, the firm has closed over $25 million with limited partners like Marc Andreessen and Bradley Tusk. As founding partner of Vice Ventures, Dockery has invested in premier vice brands like CBD beverage Recess and sexual wellness company Maude.
Fortune recently spoke with Dockery to learn more about the firm’s first year in business, the lessons learned, the hurdles overcome, and plans for the next year.
The following interview has been condensed and lightly edited for clarity.
Fortune: What inspired you to launch your own venture capital firm? What does it even take to start one from the ground up?
Dockery: I think a lot of it for me was conviction in the thesis and the rapidly building momentum behind it. I had some really great interviews for investment roles at consumer venture funds. At the very same time, I was working with a few outstanding vice founders and their teams, giving informal advice and also working with my network to raise capital.
To start a fund from the ground up is an incredibly daunting task, but in this case, it really felt like the thesis was so differentiated that it lent a significant sense of momentum to the idea. That’s not to say it was easy [fundraising]. I sent thousands of cold emails and really pounded the pavement to find investors who connected with the idea and were enthusiastic about our plans for execution. At the same time, I really invested significant effort toward building my knowledge in the space and growing my reputation as an expert on all things vice.
Vice Ventures has a very targeted group of brands in which it invests. Can you explain more about what you’re looking for in a potential investment? What does a founder/entrepreneur need to do to impress your team?
A significant amount of my prior investment experience comes in consumer brand investing. Vice brands historically have had some of the strongest consumer connections—think Mad Men and cigarettes, for example—and brand strength is a real factor in sales, distribution, and of course exit opportunities.
Another aspect we spend quite a bit of time on is connecting with the founding team. We’re looking for founders who are intellectually honest with themselves, who can build and iterate their brands in a responsible way, and in doing so build toward a strong product-market fit. Vice companies especially need strong founding teams, given that they are heavily regulated and operating in socially delicate fields.
Even a few months ago, no one could have predicted the current financial climate that we’re in. With unemployment breaking records and an economic slump, what has the funding landscape looked like over the past several weeks? And how are your portfolio brands handling the downturn?
The broader funding landscape has definitely been somewhat challenging. That being said, the money that investors allocate to VC tends to be slightly less cyclical than other investments.
Another factor that plays into Vice Ventures specifically has been the success we’ve seen in our existing portfolio as the world navigates COVID-19. We see vice as a field that, if anything, has some countercyclical tendencies. The challenging overall financing environment has, for Vice Ventures, really been outweighed by investors who are excited by the portfolio’s early performance and the strength of the fund thesis.
It’s no secret that there are few women in the VC field. What is your firm doing differently to encourage and support not only female founders but also BIPOC founders within your portfolio now and in the future?
The first thing I’d like to say here is that I think it’s absolutely tragic that these groups have had so many social obstacles to success. We all have a responsibility to be mindful of these injustices—both in the past and the future.
One thing I’m incredibly proud of is the composition of our existing portfolio and the continued diversity of our deal pipeline. Our founders come from an incredible variety of backgrounds, with many of them being women, BIPOC, or both. While we don’t believe in creating hard-and-fast portfolio composition guidelines—either for sector mix (alcohol equals 20% of portfolio, for example) or for founders—we absolutely are looking to build.
In terms of other work we are doing, we are incredibly proud of the effort made by our portfolio companies to support diversity and inclusion, and we actively support their action there. I’ve also been quite active personally supporting charities in the space such as the ACLU, the Drug Policy Alliance, and the Last Prisoner Project.
Another source of content I’ve written here is the Medium post I put out recently on social equity aspects of cannabis legalization.
Looking ahead to five years from now (hopefully post-pandemic times), where do you see Vice Ventures? How do you want to grow your firm, and what do you want to achieve by then?
Five years from now, I see Vice Ventures expanding beyond seed stage investments into later rounds. I’d like to see some significant outperformance from our Fund 1 investments by that point, and really expect to see our portfolio meaningfully outperform.
