Trends Watch: Venture Capital and Consumer Products
- Feb 27, 2020
EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.
This week, Elana talks with Sumeet Shah, VC, Swiftarc Ventures.
What is your outlook for venture capital?
Looking at the aftermath across WeWork, Casper, and other messy IPOs, the venture capital world will continue to push its strategy less towards hyper-focused growth and more towards strong, sustainable actions across its portfolio companies. Profitability should hopefully be achieved sooner in the process, but there’s a lot of opportunity to hit doubles and triples along the market instead of continuously swinging for home-run investments. Our experience -- launching, scaling, investing in, running and selling some of the most successful consumer startups, companies and Fortune 500 institutions -- gives us the belief that consumer products present attractive opportunities. We collectively know of and continue to learn from the early-stage and later-stage growth strategies that consumer brands need to be aware of.
What areas do you see the greatest opportunities?
As we focus on consumer products, we look deeper into the “engine builders,” companies that really own their process of production, distribution, and customer growth strategy. It’s not in terms of owning their plants, but it’s more about being in strong control of the brand ethos and each step of the business. These brands also step towards the idea of contextual commerce, a term we believe is the next wave of retail surrounded by the customer’s journey into and alongside a brand, regardless if s/he enters offline or online. That customer (potential or current) is creating their profile (purchases, likes, reads, etc.) that is authentic, genuine and entirely built and managed by them.
What about the biggest challenges?
There’s still pressure to grow and scale fast due to the indirect pressure that the venture world has still instilled. I’m hoping that the strongest firms do not succumb to that pressure.
What keeps you up at night?
Life is precious. Being a founder can be one of the loneliest jobs out there, because not everyone will get or support what you’re building, and many venture capitalists consistently provide “empty promises” to founders (offering to help, offering money, etc.). I want to spend as much time as I can doing whatever I can to help founders in need and make this ecosystem a better and happier place.
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Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.
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