She had a $380M exit in 7 years

Welcome to another VC Wisdom Pod. We have Kelly Bottenfield with us today. She's a co-founder and managing partner at K&C Ventures. Uh, she's co-founder of Honeypot and, uh, former chief sales officer there. Uh, she had the $300— $380 million exit. That's a large number, so much so that my brain has a hard time saying it.

Uh, it's hard to believe sometimes.

It's a big one, big fat one. I love it. Uh, Kelly, welcome to the pod. Tell us a bit more about yourself and what you've been up to.

No, thank you for having me. It's a pleasure to be here today. As you said, I am today the co-founder and managing partner director at K&C Ventures, which is my own with my— along with my husband, angel investment company, where we are also in the early stages of raising a $30 to $40 million fund, which is really exciting. But we can talk more about that later. But I've been in consumer packaged goods for 27 years. I've been both on the retailer side and the brand side. I worked for Whole Foods market, both regionally and globally for 12 years. And then I came to what I call the more fun side of the business with brands. And I've worked with a lot of entrepreneurial brands like Food Should Taste Good that eventually sold to General Mills back in 2012. Spindrift, which many people probably have heard of. Rhythm Superfoods, where I met my co-founder of The Honey Pot. And then of course, the most important job I ever had was co-founder and chief sales officer at The Honey Pot Company.

Yeah, that's huge. I love it. Um, yeah, start with your time, uh, I guess like having a job. Were you always somewhat entrepreneurial? Were you sort of held back? And when it came to Honey Pot, you were right out of the gates dashing?

Yeah, interesting. So I, you know, I've always worked for entrepreneurial companies, you know. So when I started with Whole Foods Market when I was 25 years old, uh, they only had 70 stores. And they had just gone public. And so at the time it was very entrepreneurial and I'm working, it was like the Wild West and I lived in Boulder, Colorado at the time. And I'm working with a lot of brands, you know, I'm working with like Larabar. If you remember, Larabar was a brand that came out and Lara was from Denver. And so I got this opportunity to work with all these great entrepreneurs very early on, especially as natural and better-for-you foods were coming, you know, just more mainstream into the market. So that was really exciting. And then when I decided to go onto the brand side, you know, I was so fortunate enough to work with a brand like Food to Taste Good. And then like Spindrift and then Rhythm Superfoods. And so I've always, I've been offered jobs at bigger companies. When we sold to, when Fuji Taste Goods sold to General Mills back in 2012, I worked at General Mills for 6 months and nothing against General Mills. They're a great company. I know a lot of great people that work there, but it just wasn't for me. I'm more on the entrepreneurial side. I like the fast pace and working with the unknowns.

Yeah, I love it. Talking about the honeypot, right? And D2C is being incredibly hard. How did you folks scale it to a $380 million exit in 7 years, which is incredible?

Thank you so much. Yeah, I mean, it's a team effort for sure. And then also, you know, our incredible customers and our incredible community. I mean, the brand, you know, Bea's vision for the brand, she and I worked together at another company and she just had this incredible vision for this company and this brand. And then with my experience in consumer packaged goods for as many years, you know, we just were able to join forces and build what we could. But there was a lot that— there's a lot of unknowns that we did not know as well. And so we relied very, very strongly on a lot of great mentors, on a lot of people who had paved the way before us. But more importantly for us, it was really about the community and building community education. And building that trust and transparency. And that's really what helped to catapult the brand. And then, of course, in 2020, some people might know the story of the commercial that Target ran about our brand that went viral, that really brought our brand to a national forefront of discussion about race. And of course, we were being criticized and loved on both sides. And we were 7 people. We did not know how to navigate that. But we did really— I think we did an incredible And not only that, but it actually helped us to gain even more trust with our community.

And describe that crazy growth in numbers. So first year is like a 6-figure, then like second one, a million, then third one, couple of millions. And eventually last year you sold. I mean, at that figure, you must have done what, like $60 mil a year?

It was, uh, when we sold to private equity in 2024, we were at about $135 million. And I can say that because it is public knowledge because it was out there. So yeah, so, and the brand has grown since then as well. I'm still an investor and advisor, um, in the brand, but I'm just not in the day-to-day any longer.

So they didn't fully acquire the company or what?

Because— They did 85%. Um, so, um, us as co-founders and, um, senior management, we retained 15%.

Okay, interesting. But you also exited on some of your shares, right?

I did, yeah. So I was able to exit on some of my shares, but I still have a meaningful investment, um, in the company as well as it stands today. Okay.

And I'm still— I want to understand how you scaled so incredibly fast when this is so incredibly competitive. Is it the branding? Uh, I mean, in your feminine hygiene space? Um, I mean, there's like Tampax and all of that type of stuff. There's not a lot of, uh, cream or whatever for downstairs. So was it like low competition and it was ripe for disruption? Like, I'm still trying to figure out how you guys grow so fast.

It's a great question. Well, if you looked at the set 15 years ago, especially menstrual care, and then like you said, um, more the hygiene side as well, it hasn't changed in 50 years. It was the same brands. P&G owns majority of the category. They own Tampax, they own Always, which are the 2 number one brands in that set. And then you've had Summer's Eve that was in the hygiene set. So it was ripe for disruption. It was a category that hadn't been looked at. It had been overlooked. A lot of retailers were not really paying attention to it. And fortunately enough, we had a visionary buyer also at Target Her name is Monique. She actually is now at Ulta and she saw the brand. Bee had been at a hair show in Atlanta and was selling the intimate wash and she heard from her hairdresser about the brand. This is what I'm talking about, our incredible community. And she saw the brand and called Bee and said, you know, I'd really like to chat with you because what I want to do is disrupt this category because there's nothing going on here. There's nothing new going on here. And so that we were really the first To get in the door. Now, that that can be a good thing and a bad thing sometimes, or easier or harder sometimes. When you're first one in the door, your responsibility is education, and you're and you're paving a new way. You know, right? Sometimes there's something to be said for being second, you know, in line too, because you don't have the hurdle of education. You know, as well. But we were first to the door. We really helped to change that category, and that's what it was because people were looking for products that actually worked, that had better for you ingredients. organic cotton, which now is, you know, table stakes to have organic cotton on your products. But that, and then also, like I said, the support of our incredible buyers and customers that wanted this change and they were being very outspoken about it.

So that one random conversation, which is not so random, right? Something engineered. But that one conversation led to 9 figures, 9-figure deal.

It led to that one conversation, that one bottle of intimate wash that sold at a Bronner's hair show in Atlanta, and like, I think it would have been like 2014, led to this conversation with somebody in Minneapolis. This happened in Atlanta, it happened in Minneapolis, this conversation between a woman and her hairdresser, and, and that's what it led to this.

So that is crazy.

Yeah, it is. You know what, I always believe you never know what conversation is going to lead to the next one.

Yes.

And you never know who you're going to talk to, who you're going to meet, and I've been reminded of that over and over, especially in the last couple of weeks.

Yeah, yeah. It's like the, um, the image, right, of the miner that stops digging right before the diamonds. You never know, because it was truly like a struggle for you and your co-founders, right? Like just to hustle and try to get the, the brand in the market. But then you had that major deal that probably took like, what, a couple of years to manifest?

It did, yeah. So the, yeah, the conversation I think happened in like early 2016, and then, um, and then we launched into Target in early 2017. So it took a year. So we were in 1,000 doors. We started in 1,000 doors with 2 products at that time, 2 to 4 products. You know, now we have over 50 products at Target. And so that's where it started, you know, is that one conversation. And it's just amazing that that has happened and like where the brand has been able to go today.

Wow. Okay, so you had that home run, then you had the exit, which is like final confirmation. Such a long ultramarathon run you, you've ran for all these years. May seem short, right? 7, but it's probably like, uh, 7 years in real years.

So it definitely ages you. Yeah. Yeah.

Um, what happens after that? You have your exit, you have life-changing money. Like, uh, what goes on through your mind after that check hits your bank account?

Oh, you know, I, you know, I wasn't sure. I, you know, I turned 50 that year as well at the same time. So which is also a big life change. And, you know, you start thinking about what you want the last third of your life to look like. And, you know, when you spend 7 years, you know, just grinding, working, you know, having your head down, you pop your head up and go, okay, what do I want this to look like? And so I stayed on in my role as Chief Sales Officer for, for 8 more months. Which I still love my team. I love the brand. I love my team. And I do miss sometimes being in the day-to-day. But now I really looked at what I love doing. And what I love doing is strategy, helping founders find their path, building the governance and the organizational rigor that they need to have their dream, to have their $380 million exit. And so my husband and I decided, okay, we're going to take you know, some of the funds that we have, and we're going to start an angel investment group. And that's where K&C Ventures came from. And so we're invested in brands like Banacqua, which is a banana water company, which if you haven't heard of it, you soon will. And Coconut Cult, which has been just been blowing up here in the US. And, and Lunan Water, which is a new water that just launched this year, which is a third-party certified plastic-free water. And skincare brands like My Neighbors and Allies of Skin. And so, and I work very closely with these founders on not just raising money. It's not just writing a check and walking away. It's about being there. I know what, I know what it's like to be in their shoes. I've sat where they are sitting and to be able to sit with them and talk through, you know, how to structure your team, what retailers are right for you, what pricing structure, trade spend. You know, there's just so many topics that, you know, you don't know what you don't know. And as you and I both know, I mean, AI and technology and information has become more available than ever, especially in the last 2 years. I mean, some people don't realize that AI has actually been around since the '90s. You know, my husband worked with AI for, you know, a long time in video games. But, you know, now that it's become more mainstream, there's so much information out there. But I think, I feel like people like me who have been a successful operator, and I know others like me, we're out here to help those founders decipher that information. and, um, and find out what's right for them to move forward. And then— oh, sorry, go ahead.

Yeah, I've heard of, uh, Coconut Cold for sure, right? Um, they're, they're pretty much everywhere. They're, they're pretty fascinating. They're definitely gonna be big. Um, but, right, like, you were super successful, and indeed to see, uh, maybe investing in companies reminded you of that, but it's super duper hard to have a breakthrough, right?

So it is, it is.

How has been playing that game so far, right? Because you built Behemoth, but like investing in others to build them, even if you advise them, right, can be also like a very hard and different game. How's it been so far?

You know, it's wonderful. Actually, I spent today— I was, um, on the phone with 3 of my, uh, founders today, actually. Um, and, um, I really enjoy— I personally enjoy it. I love talking about business. I love helping people to solve problems, even if I'm not solving it for them, but help them, give them the tools to solve it on their own. You know, I mean, I think, you know, it's tough because I love products. I mean, I love branding. I love products. I am a big foodie. I love skincare. And but I probably see about 4 to 5 pitches a week. You know, I see a lot. And what you, you know, you end up saying no to 99%, you know, of I mean, because you also only have so much money to do, right? And right now I'm doing my own personal money, and that's why we're raising a fund. But, and it's hard, that's hard to decipher. But I think a lot of the times I'm with founders, I'm looking for, because I'm investing at usually pre-seed, seed, some, a little bit of Series A. But I'm really looking for founders who have that grit and have that emotional self-awareness to know what they don't know. And letting, being able to let go of their ego and then also having the wherewithal to know that they can't do it all themselves and they have to hire the right people around them to move forward. 'Cause some people don't do that and they think they can do it themselves and it's very difficult. Again, like if it was so easy, everybody would do it. It just isn't an easy job to choose.

Yeah, yeah. No, I mean, it's tough and DTC need to be the number one user of your product and I mean, I mean, that law is true, like, also in B2B. And when I launched my nootropic companies 15 years ago, I created that product for myself, right? So, would take, like, various pills for— one for memory, another for alertness, caffeine, ginkgo, um, L-theanine everywhere. But there wasn't, like, one pill with, like, all these ingredients, right? So, I created my own. I took the pill every day. It gave me magic powers as a student, as an entrepreneur. But— I mean, even that was so hard. Like, um, we're running ads and some days we're in the green, some days we're in the red, right? Um, how do you handle top of funnel, right? Like, how do you acquire clients? How do you keep them? Uh, we both know with Coconut Co., it's all about subscription, right? So, uh, tell me about some hacks here and how to make it as a DTC nowadays.

Yeah, you know, it's so funny. I just got off the phone, um, with Jason Goode, who is the founder of Flate. Um, which is a men's scalp care company, which is a fantastic company. He's built an amazing D2C machine. He's not even really in retail. He'll be launching into a national retailer next year. And, um, to be honest with you, he— I've learned a lot from him, actually. I call him a D2C ninja, um, and because he's built an incredible business on that. And, uh, so really, I, I see somebody like him really leveraging, um, AI to create ads really quickly. You know, for a long time it took a, it took, you know, incredible amounts of time, incredible amounts of money and resources to do something like that. I see him moving really quickly to making ads and then also using authenticity as well of him as a person because again, going back to your point of like you have to be using the product and he created the product based on what his needs were and he's also bringing in his friends and people and real customers who are using the brand and using the product. And, and really having those testimonials, I think right now within, with AI, I think people are becoming very distrustful. So I think having, using AI to create your ads, but having that authenticity of real people is going to be really important going forward in your, and bringing that top of funnel because bringing those people in that they can feel like they can trust you and trust the brand, especially with Gen Z, they really want to trust and feel good about the brands that they're trying and that they're eating or putting on their bodies.

What about, um, the LP side? Like, uh, sure, investing your own money, but you must know a bunch of people, and/or it's way easier to get their trust once, uh, they know that you've exited for $380 million plus that you're putting your own money, right? So how do you get LPs to invest?

So that's what I'm working on right now. So, um, that's something that I, you know, I'm always about, you know, constant learning. Um, of course, you know, I've raised money, you know, with our company at The Honeypot. This is a little bit different Now where we're in the really early stages of raising a fund, our goal is $40 million. And so one, our thesis is I've been a successful operator and not only just at one company, but at several companies. And then not only that, I've spent the last 2 years really rigorously working with— I've talked to hundreds of founders, hundreds of brands over the last 2 years. I've advised hundreds of people over the years as well. And I think I found some really great investments and We have brands. I have larger VCs that I've worked with. I have friends who are bankers in the M&A space that come to me with ideas. They come to me with leads. And so I think it's just based on the track record and pattern recognition. That's where we are today. And that's what I'm focused on right now.

I love it. How much do you want to raise? And would that be fund 1 or fund 2?

It'd be fund 1. It'd be fund 1. This is first time fund manager here.

Yeah, yeah, yeah.

I love it.

big would that one be? $50 mil or—

$40 mil. $40 mil is what we're looking for right now. Yeah, so we want it— we want to have something that is meaningful, um, but also, um, you know, my husband and I also like having a life, you know, too. It's not something where— and I know you're a new father, so I know you've kind of created a life as well where, you know, you have space in your life too to spend time with your family and your friends. And we still want to have that, but then also be able to continue to support the, the amazing ecosystem that, that we've been, been able to be lucky to be a part of.

Right. Um, yeah, you have your head over water now. You have like way more space. Have you been enjoying that since you— since your exit?

This has honestly been the best summer I've probably ever had since I was a kid. Yeah, we've been doing— we've been doing— we joined a pool here in Boston and we've been doing pool days on Fridays. So tomorrow will be a pool day. Um, you know, we have our work, you know, we work on Tuesdays, Wednesdays, and Thursdays. Um, and, um, you know, and just been enjoying my friends. We've had, uh, you know, FIFA, the— we had a lot of World Cup here in Boston, which was really fun. And, uh, just been enjoying the summer.

Oh, I love it.

Yeah.

Um, for, uh, the, the fund, right, and the, the founder, you're looking for, um, product-market fit, like any specific spaces? You mentioned like the coconut, uh, craziness right now, like Fancy Waters. I also saw peptides. So do you have like specific thesis on product-market fit? And also the founders, do you look— what other skills do you look at than grit, right? Do you look at, um, great at marketing, great at branding, visionary, knows how to raise money? Can you tell me about your criteria for both businesses and founders?

I think for me, I think for me personally, I do like founders who have a good understanding of finances, um, an understanding of data, and really digging into facts. I mean, obviously, I love people who are passionate and have great ideas, but also people who are really grounded in data. I know that I am. That's something that I'm really strong on and was strong on in the business. And being able to back up the passion and be able to back up the ideas with facts is really important to me. And that's important to LPs. That's important to investors as well. I mean, obviously, early on in a business, you're investing in the founder, you're investing in the idea. Um, but somebody who has a good sense of how they're spending their money, what their ROI is, what they're getting for it, is really important.

Yeah, I love it. Well, thanks for being on the pod, Kelly. Where can people find out more about you?

They can find out more about me at kncventures.com, um, and I'm also on LinkedIn under Kelly Bottenfield. And, um, you'll see some— I've had some recent speaking engagements. And, um, yeah, so, you know, I share a lot about, um, leadership and business on there.

So Love it. That was Kelly and Charles for another VC 101.