Investing in Community with Sonia Nagar, of The Community Fund. #3
Sonia Nagar @ssahney, of The Community Fund @theCommunityVC, talks about why community-driven companies can be bigger, faster, and more cost efficient to grow.
Links:
Pritzker Group Venture Capital @PritzkerVC
Dame @dameproducts / Alexandra Fine @afinehuman / Dame Labs
Flybridge @flybridge / Jesse Middleton @srcasm
Ganas Ventures / Lolita Taub @lolitataub
Brian Smiga: Hi, this is Brian Smiga here, and it's the Speedy VC Podcast. Welcome, Sonia Nagar.
Sonia Nagar: Thanks, Brian, for having me.
Brian Smiga: Absolutely. So, today we're going to talk about a new company you've invested in, both as an angel, and at your venture fund. Tell us, first, about you and your venture fund real quickly.
Sonia Nagar: Sure. I invest out of a couple of different pockets. I invest personally as an angel investor. I'm part of a group called The Community Fund, which is one of the things I'm going to talk about, one of our investments from there, today. And The Community Fund is a little bit unique, it's affiliated with Flybridge, it's a $5 million fund writing $50,000 checks into communities-driven companies. And the way we define community at the fund is companies where the customers identify as members, where every additional customer adds value to previous members, and where there's a many-to-many relationship, versus a one-to-many relationship. So, members are helping each other and helping the company either through the marketing process or the product development process. And then, in addition to Community Fund, I also invest as a partner at Pritzker Group Venture Capital. And I'm based out of Chicago.
Brian Smiga: That's great. And we've had a long friendship, and it's really great to be with you here on this Racket and learn more about this great company. This is Brian Smiga, Speedy VC, and we're focused this year on the inclusive economy. And Sonia's here to tell a story of a growth company she's invested in that is playing in the inclusive economy. Sonia, you tell us about it.
Sonia Nagar: Yeah. So, I'm going to talk about a company in the women's sexual wellness space called Dame. And I was introduced to the company through Listen Ventures, which is consumer-focused fund here in Chicago that I'd co-invested with previously. And women's sexual wellness is one of those categories that is still taboo today. And the founder correctly identified that there was an opportunity to build products and community to make women more comfortable talking about their needs, and building products to better serve women. And also, uniquely identified the fact that the current companies in the market were largely not community-driven, and not looking to customers for feedback. So, Alexandra, the CEO and founder, started the company three or four years ago, and has done a really great job doing all the things that we look for at The Community Fund. And so, again, it's a company that I invested in personally as an angel, as well as through The Community Fund.
Sonia Nagar: And what attracted us there was, it was clearly a market where we saw a big opportunity in a white space. The approach that Alexandra had taken was inclusive of her community and customers from the start. So, within Dame, there's this concept, or a community that's basically called Dame Labs where customers participate in the product development process and give feedback. And then, in the marketing, because the advertising rules on Facebook are somewhat restrictive, and a little bit biased against female sexual wellness products-
Brian Smiga: Interesting.
Sonia Nagar: ... she's had to be really creative in leveraging her community to market and get customer acquisition done. So, it's been one of those companies that really, I think, embodies what you want to see in a consumer community-driven company, and it's been very successful.
Brian Smiga: Right, so you came in recognizing the white space as a angel, and then you brought it to Community, and you and your partners invested. Tell us about the Community model, how you partners work together in this scout-slash-seed fund called Community Ventures.
Sonia Nagar: Yeah, so we are a distributed team selected by, there are two general partners, Jesse Middleton, who's a GP at Flybridge, and Lolita Taub, who is an independent investor. And I think we try to embody the community as well, we're a fairly diverse team, geographically, gender-wise, ethnically, racially. And we have a fairly progressive process, in that it's really all about finding two partners that are excited about a deal, and then our process moves pretty quickly. And we're investing at the seed in the pre-seed stage typically. Dame was later stage, but it was such a fit squarely with our thesis at Community Fund that it made sense to invest.
Brian Smiga: That's great. So then, you invested in Dame, you invested as a VC out of Community. There had to be an early setback that Alexandra came over. What was that setback, and how did you triumph over that?
Sonia Nagar: Yeah. For Alexandra, the marketing restrictions I referenced earlier, one of the things that gave me confidence that Alexandra had a lot of grit and resilience as a founder was a story she told about how, in her first couple years of operating the company, she had wanted to advertise on the MTA, which is the subway in New York. And you often will see Hims, and Roman, and erectile dysfunction companies that have been able to advertise there. But when she went to try to advertise there, she was basically told that it wasn't allowed for whatever reason. Because I think sexual wellness for women is still taboo, and for whatever reason, erectile dysfunction wasn't viewed as similarly taboo. And so, she actually sued the MTA in order to get more equality and awareness around the inequality for consumer brands to advertise. So, I loved that story of her having the grit and resilience, and seeing something that was unfair, and fighting to make it more fair.
Brian Smiga: I do too. And equal time on the MTA for women's health as well as men's health issues, absolutely. So, tell me more about your thesis around community. I know you gave us the headlines, but is this going to be important in the next five years? Is this an investible theme? Or is it just a good way to scout our early stage companies?
Sonia Nagar: Yeah, I think community, especially for consumer companies, but even for B2B companies, you'll see pretty robust. Like at Shopify, the community around answering questions for developers as you're building out websites, or even non-developers who are building out websites, is a critical part of how they get customer service done efficiently and cost effectively. But I think community, it makes so much sense. The best companies will be community-driven, and historically the best companies have been community-driven. If you think of some of the mega-outcomes in consumer, like a Pinterest or a Facebook, or even an Amazon has a really robust seller community, again, where people are answering questions for each other, create stickiness. There's many reasons why, as an investing thesis, we believe at Community Fund, and quite honestly, even prior to joining Community Fund, I was already investing against this idea that community-driven companies are going to be bigger, faster, and more cost efficiently grow.
Brian Smiga: I so agree. And so, this is really interesting. Do you see that there's going to be more partner-only funds, like yours?
Sonia Nagar: I don't know. I think that there are definitely benefits for larger funds to have bigger teams with associates and junior people supporting them. But there is something that I think appeals to founders about getting directly to a partner-only team, and getting decisions faster.
Brian Smiga: That's great. So, Sonia Nagar, based in Chicago, Community Ventures based around the country. Thank you so much, Sonia. Happy Spring.
Sonia Nagar: Happy Spring. Thanks, Brian.
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