Katherine Power Looking for Fresh Brands to Grow With Greycroft
Katherine Power has a new perch to find, mentor and invest in the next big thing in the consumer sector.
The serial entrepreneur joined seed-to-growth venture capital firm Greycroft as partner and is leading its early-stage consumer product investments.
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It’s a post that connects Power with her long-time investing partner Dana Settle, who is cofounder and managing partner at Greycroft. It’s also a gig that plays to her strengths and background.
Power has been operating for years at the intersection of consumer products and what’s next.
She cofounded Who What Wear in 2006 and used that experience to launch Versed Skincare and minimalist beauty brand Merit and also has teamed with Cameron Diaz to create the organic wine brand Avaline.
Settle — in one way or another — has been involved each step of the way.
Now the two are working shoulder to shoulder and looking to put the playbook Power developed to work at new brands that are just starting out, but have big expectations.
Power, in a joint interview with Settle, told WWD that she’s looking to not just invest in fresh new companies, but to help founders “put strategy around that first $1 million to $3 million of capital that they’re taking in and helping them to understand how to spend it in the right way.
“It’s first understanding your staffing needs, your management needs, and then it’s really looking at the margin profile of the business and, ‘Do we have the opportunity to expand that margin? And how do we get there?’ Then recognizing, is this a business that has an opportunity to build a meaningful direct-to-consumer business, one that makes sense to invest in, or is it more of a wholesale-driven business? And when you’re able to answer that question, that’s a fork in the road.”
From a customer acquisition perspective, she said businesses should generally look to break even with their first sale and, if they can’t, they probably don’t have the unit economics to support major d-to-c investments.
“We like our businesses to always have some sort of a direct-to- consumer component,” Power said. “We think it’s important from a data perspective to be able to speak directly to your customer, tell a story, but we also think there’s huge opportunity in Amazon, which is another channel that’s somewhere between wholesale and direct-to-consumer and works better for products in certain categories.”
Power is looking in the beauty and personal care market, but said it will take a “very unique point of view” to pique her interest given how saturated the market has become. Food, beverage, baby and pet care are other sectors on the radar as well.
“We look for brands that we think are enduring that can become household names,” she said. “We look for businesses with high repeat rates, so subscription-like characteristics, even if it’s not a subscription.”
Apparel could be a tougher sell, but not impossible.
“If there was something with a real unfair advantage, let’s say in the supply chain or the way that a company’s able to market the apparel, we would definitely take a look at that,” she said.
Settle added that, “What we look for in apparel would be similar to what we’d look for in any category. So there has to be a very high gross margin kind of a brand that has the ability to really endure and typically would have something really special about it.”
Clearly Settle sees something special in her long association with Power.
“I think really we’re just kind of doubling down on what we’ve done, but doing it even better,” said Settle, noting that Power would be able to “go to that next logical stage of her career — mentoring young founders and really helping them get off the ground in the right way.
“What we have identified is that that’s just an area where there’s not a lot of institutional capital really there to support founders in the consumer product space at that earliest stage,” she said.
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