Dec 10, 2018 · 28m · 20vc
20VC: Top 3 Considerations When Evaluating Consumer Businesses Today | 700 Meetings, 70 LPs, 2 Years, What It Takes To Raise a First Time Fund| The Power of The Female Network In Action Today with Anu Duggal, Founding Partner @ Female Founders Fund
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Anu Duggal, Founding Partner at Female Founders Fund, to discuss her journey building a premier early-stage venture capital fund for female entrepreneurs. Anu shares insights on evaluating consumer startup metrics, positioning fund brands, leveraging female investor networks, and scaling fund sizes from Fund I to Fund II.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 41.8% of the talking time here. How this is scored →
Harry as informed peer 2.5 Guest teaching 3.4 Guest disagreement 0.8 Harry pushing back 1.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 10:26 Rejection of General Consumer Exit Discount
Anu explicitly rejects the host's premise that consumer businesses face depressed exit multiples, distinguishing traditional fashion retail from high-margin consumable categories.
Hardest push from Harry ▶ 21:13 LP Ownership ChallengeHarry takes on an LP persona to directly challenge how stepping up fund size from $5.7M to $27M alters check sizing, co-investor collaboration, and ownership demands.
Biggest teaching moment ▶ 10:26 Consumer Category & Acquirer NuanceAnu educates the host on acquirer economics, explaining that strategics like P&G and Unilever pay strong multiples for high-margin, repeat-purchase consumable brands compared to fashion retail.
Harry holds his own ▶ 10:00 Citing Low EBIT Exit MultiplesHarry demonstrates strong industry knowledge by bringing up a specific counter-argument from a previous guest regarding weak 1.6x EBIT exits for consumer startups.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Anu Duggal's Journey to Venture Capital and Fund I | 1 | 2 | 0 | 0 | Harry introduces Anu and asks standard background questions about her transition into venture capital and founding Female Founders Fund. Anu outlines her experience as an e-commerce founder facing investor bias, leading her to launch Fund I. | |
| Investing in Alternative Communities and Consumer Megatrends | 3 | 4 | 1 | 3 | Harry references Sarah Tavel's framework regarding initial market wedges versus expanded addressable markets when asking about niche apps like astrology. Anu explains how institutional VC returns apply to non-obvious categories by citing beauty brand margins and unit economics. | |
| Evaluating Consumer Business Economics and Metrics | 4 | 5 | 2 | 4 | Harry pushes back on consumer investments by citing an anonymous guest's claim that consumer businesses face capped exits at low EBIT multiples. Anu reframes the premise by distinguishing pure fashion retail from high-margin consumable beauty businesses that command strong strategic acquirer interest. | |
| Evolving Perceptions of Female-Focused Consumer Markets | 2 | 4 | 2 | 2 | Harry asks whether male VCs can be blamed for missing female consumer pain points. Anu re-educates on VC incentives, explaining that fear of missing out on returns drives change, alongside structural shifts as firms add female partners. | |
| The Strategic Power of the Female Investor Network | 2 | 3 | 0 | 0 | Harry inquires about leveraging investor networks and fund brand building. Anu highlights specific syndicate deals like Winky Lux and Maven Clinic alongside her fund's content and event strategy. | |
| Fundraising Insights: Comparing Fund I to Fund II | 2 | 4 | 0 | 0 | Harry asks about fundraising mechanics for first-time fund managers. Anu shares stark operational metrics from Fund I (700 meetings, 70 LPs) and contrasts that with raising Fund II in a crowded micro-VC market. | |
| Deployment Strategy, Check Sizes, and Reserve Allocation | 5 | 4 | 1 | 5 | Harry explicitly adopts an LP perspective to press Anu on transitioning from a $5.7M super-angel fund to a $27M fund requiring larger check sizes and ownership targets. Anu explains NYC seed size expansion, co-syndication, and pro-rata reserve strategy. | |
| Quickfire Round with Anu Duggal | 1 | 1 | 0 | 0 | Harry conducts a standard quickfire round covering book recommendations, personal challenges, LP relationships, and recent investments. |
Statements from this episode (13)
Female Founders Fund I raised $5.85M from prominent LPs
“So I started the fund in 2014 after a very long fundraising process, raised about 5.85 million of capital and had a fantastic group of LPs in that first fund, including some great female entrepreneurs, the founders of guilt, birch box, stitch fix, Care.com, as…”
Female Founders Fund invested in Co-Star, Peanut, and Hip Sobriety
“So a few examples of companies in our portfolio that we've invested in that follow the thesis include costar, which is an astrology app peanut, which is a social network for modern motherhood and hip sobriety, a holistic alternative for alcoholics anonymous.”
Duggal: Beauty startups offer SaaS-like margins, retention, and strong exit multiples
“We think it's an exciting category for a few reasons. So healthy SAS like margins, Repeat purchase behavior and really strong exit multiples.”
Duggal: Venture capital is fundamentally driven by FOMO on returns
“So, I mean, you know, from what I've seen, ultimately what drives venture capital is FOMO, particularly when it comes to missing out on, on returns.”
Duggal: All-male partner teams signal exclusive culture and limit deal flow
“I think that we've seen with our female founders is that if you are looking to pitch a fund with a website that's full of all men partners, that tends to really signify a certain culture within that firm, and so I think that as VC funds add more diversity to t…”
Maven Clinic raised $27M Series B led by Sequoia and Oak
“Similarly, this fall, one of our companies, Maven Clinic, was raising a Series B and made an intro to Jess Lee at Sequoia, which resulted in a twenty-seven million dollar Series B that was led by both Sequoia and Oak.”
Female Founders Fund pioneered tracking female founder Series A funding data
“We published an annual review on the amount of series A funding that went to female founders in 2014. And, you know, since then we've seen Crunchbase, TechCrunch, and a host of other journalists in the tech industry really follow suit in terms of recognizing t…”
Duggal took 700 meetings and two years to raise $5.85M Fund I
“Fundraising for fund one was incredibly difficult, and I think that's a very similar story to other first-time fund managers. So over 700 meetings, over 70 LPs for a 5.85 million dollar fund over a two-year process.”
Duggal: Over 400 sub-$100M VC funds were in market in 2017
“So I would say that from a macro point of view, and I'm sure you're aware of this as well, I believe there were over 400 funds in the market last year that were sub a hundred million.”
Lightspeed Ventures invested as an LP in Female Founders Fund II
“The other thing that helped for our second fund was that Lightspeed Ventures was an LP of ours, which has been tremendously helpful and validating for traditional institutional LPs.”
Duggal: New York seed round sizes grew to $2-2.5M by 2018
“We invest primarily in New York and the size of seed round in New York has grown from a million in 2014 to two to two and a half million in 2018.”