To Invest or Not to Invest: The VC Question about Digital Brands
I think we can all agree that digitally native vertical brands (DNVBs) have been hit as hard as any business model this year. Let’s take a walk down memory lane through the firestorm that was 2020: First, there was Casper’s pillowy IPO, then the FTC’s block of Harry’s deal, Brandless’s shutdown, and finally (ahem) COVID-19 and the election. There was no shortage of bad news casting a dark shadow over the Consumer sector and the so-called darlings of the e-commerce world, DNVBs.
I do not entirely disagree with the critical sentiment that was thrown at direct to consumer (DTC) back in February and March when the IPO market softened even further, nor do I think that digitally native brands are out of the woods after COVID sucker punched most supply chains and non-essential goods in the face.
Many VC’s, whether explicitly on Twitter or in the back breakout rooms of Zoom pitch days, have sworn off DNVBs. Many operators have warned of the flawed DTC playbook and of getting in bed with VCs. Much of the skepticism is valid. However, as someone who recently built and sold a DNVB, and who NOW as a new venture capitalist is tasked with looking at all things Consumer, I began to ask myself, “What do I make of all this?”
