Closing A $17 Million Fund with Cake Ventures Founding Partner Monique Woodard |Seed To Harvest Ep47

Welcome back to Seed to Harvest, a podcast with founders, creators, and investors about their stories, frameworks, and tactics. Today I'm joined by Monique Woodard, general partner at Cake Ventures. And Monique, I hear some congratulations are in order. Your Forbes article about closing your debut fund just came out this morning. So I really appreciate you taking the time to chat with us today. And yeah, welcome to the show.

Thank you.

Today's, today's a It is a big day. Well, I would love to talk more about your founding story of Cake Ventures and kind of what were those first few weeks or months looking like when you were kind of tossing the idea back and forth of starting your own fund? Because I talk to a lot of fund managers and it's always a very stressful and exciting and like big decision to make. So I'd love to hear more about making the decision to start your own firm.

Yeah, so I started my investing career at 500 Startups, and then I decided to leave 500 in 2018. And I didn't really leave with a plan, right? I didn't, I knew that I wanted to keep investing and I didn't really have a plan around going out and raising my own fund versus joining someone else's fund, you know, or joining a large multi-stage venture fund. And so I was sort of Noodling this over for a while and Jeremy Liu at Lightspeed asked me if I wanted to scout invest at Lightspeed while I continued to think about it. So I took him up on that offer so that I could continue doing deals. And then I just started sort of socializing this thesis around demographic change. And it had been something that I'd been thinking about and writing about and, you know, investing in for a while, but it wasn't its own thesis. It wasn't its own thing. And so over time, I think people got comfortable with the demographic change thesis in the way that I was articulating it. And then it sort of made sense for me to start putting together the fund and going out to raise capital for Cake Ventures. You know, I didn't really see an existing firm out there where I thought the thesis could, you know, have enough room to breathe on its own and be its own thing. Right.

Yeah.

I really, I really thought that was a big opportunity then. So I just went out and decided to raise a fund.

Yeah. How is that like, walk me through like what your first yes was like? I remember getting like our first $10,000 check in our first fund and I think I like cried. I was so happy. And then it like, the journey just went on from there. But I would love to hear about your, what was your first yes like?

Well, my first yes was from Mitch and Freda Kapoor at Kapoor Capital. And I had known them for a very long time, like a decade. And so, you know, they were one of the first yeses to the fund and that was thrilling, right? And probably my second yes was, um, Ed Zimmerman at First Close Partners. And those were 2 very early signals of confidence in what I was building. And then I had to go out and of course, you know, build it from there. But those were 2 people that I had known for a long time and who were confident in my ability as an investor and really wanted to be early to the party, so to speak.

And tell me more about your investment thesis. How does, I guess like, how did you come up with the name of Cake Ventures and how does Cake interact with your investment thesis?

So the fund is called Cake Ventures because I invest in layers of demographic change that are changing technology. So layers like a layer cake. And I came up with the name because I just couldn't get this like layer analogy out of my head. And I at first thought the name Cake was really silly, but I also wanted something that was very brandable and that wasn't my own name or the name of like a tree or a lake. And so I just, at some point I just decided to lean into it. And so, you know, the thesis behind CAKE is layers of demographic change. The first layer is aging and longevity. You know, we have 10,000 people turning 65 every single day in this country. Huge market opportunity around helping people age in place or manage finances into retirement, things like that. Second layer is companies that will get to billion-dollar outcomes with a significantly sized female user base. So the spending power of women now driving companies to, you know, billion-dollar-plus outcomes. You can see this all over the place in companies like Maven Health, Skims, Fenty, The RealReal, lots of companies. Um, and then third layer of the cake is rise of a new majority where people of color as a broad group, Asian, Black, and Latino become the majority in the US and are already a global majority. And so, you know, and I would put companies like StockX and Goop into that category, Whee grocery delivery, Cityblock Health. And so I had always been investing across these sort of, these sorts of layers. I did my first aging deal in 2017 when I was still at 500 Startups, and I had been actively investing as either an angel scout or VC in all of these layers for a really long time. And so it was just. kind of this moment where I said, what I am, what I'm investing in, what I've always been investing in is demographic change. I put that into a thesis and built a very ugly first deck and started talking to people about it and seeing how the story landed with them.

I feel like if it's, if it's a perfect first deck, like something's wrong. So I feel like that's like the perfect moment to share is when it's a little, a little ugly. Well, yeah, speaking of ugly ducks, I'm sure that I, I would love to hear more about kind of like your investing process and, and maybe if you could share a story of a founder that you've invested in and, and how you've seen them grow over the year and a half, I would love to hear more about that.

Yeah, so I'm an investor in this company called Pamper Nail Gallery. It's a beauty company dedicated to press-on nails and nail art. Um, so it fits into 2 layers of the cake. It fits into the companies that will get to billion-dollar outcomes based on a female, the female dollar layer of the cake. But nails and nail art have traditionally been, you know, art of minority groups. And, you know, you would always see Black girls with like fabulous nails. And so it fits into those 2 layers of the cake really, really neatly. Um, I was introduced to the founder Vivian, and then I started following her on TikTok and she has like this amazing TikTok following where she like actually shows you how she custom creates these nails. And I started, you know, I decided to chat with her. I met with her, I talked to some of her other investors and I was just became really impressed with how she was thinking about the company. And how she was thinking about moving from a really successful customs business to something that was more scalable, right? And I really wanted to sign on and help her do that. And so I became an investor in the Pampers seed round and I sit on their board.

That's awesome. And we were talking about this a bit before the show, but now you're 12 companies into investing your first fund. I would love to, if you don't mind sharing a bit more about how you think about balancing a portfolio between consumer and B2B and like ConsenSys and non-consensus. I would love to hear more about your strategy for building a balanced portfolio.

So Pamper, for instance, is obviously a consumer company. It was super non-consensus, still is very super non-consensus because when I talk about it, people are like, how is that a venture-backable company? And then I talk to them about how much revenue she's doing and they're like, oh, well damn. And, um, yeah, yeah, definitely. And then, you know, I invested in a company called Bright, www.learnwithbright.com, and it's using AI to, to power immersive training and reskilling for the emerging workforce, especially in service level jobs, which is a big part of the Cake Ventures thesis around non-white collar work, non-office jobs. And, you know, that's an enterprise company, big contracts, you know, they've They have contracts with Macy's and other large corporations. And that's something that a lot of people can understand.

Yeah. Yeah, I think that's, that's super interesting. I feel like that balance between consumer and B2B is interesting when you have a thesis that's centered around, like, for example, like demographic change. It might not be around a specific sector, but it's carrying out that theme across like all sorts of different applications. I'm curious, like, as you look across the portfolio, are there any certain, like, trends that are coming up that are things where you might, like, share insights across, like, consumer and business-to-business, for example? Actually, I would love to hear, like, your thoughts on, like, TikTok, on whether, like, B2B companies should be using TikTok to grow their user base. 'Cause I feel like on the consumer side of our portfolio, I've seen, like, massive success, but, and, like, more coming on B2B, but I'd love to hear your thoughts on that. TikTok is B2B company as well.

Yeah, well, I spend entirely too much time on TikTok, so it's literally a problem at this point. But I do think it's still most helpful for consumer-facing businesses, right? I think that the place where we'll, where we'll see B be really successful on a platform like TikTok is when it's a company that is more B2B2C. Right? Or it's building out, you know, what I call the backbone of consumer industries, right? Where there is some consumer touchpoint in, in the line, um, you know, from, from a business-to-business company to the consumer. So I wouldn't say that I would spend a ton of time on TikTok if I was a B2B company, but you know, if you do have that through line to like some consumer story, then sure. You know, it's, it's a really good place for you to be. Yeah.

Have you thought about, or like as a, as a solo GP, how do you think about marketing from your perspective? Are there any like specific frameworks that you follow or like any, like a brand voice that you have or kind of like how are the frameworks of how you think about representing yourself on the internet or?

Yeah, I mean, the brand voice is really my own voice, right? I mean, I wrote this Medium piece called, you know, Cake Ventures Fund 1, AKA Reasonable Doubt, and put a playlist of like classic hip-hop albums in, in the, in the Medium piece. I mean, you know, you're only able to do that if you're—

Wait, to, to dig on that.

Yeah.

I was gonna say, what hip-hop album has been like most formative for you?

Oh, Reasonable Doubt. Because it's Jay-Z's first album. Oh yeah.

Yeah.

That's certified as a classic. Like everyone knows that. And you know, like every fund one has reasonable doubt, things that LPs ask you, things that are these untenable things that you can't get around as a fund one, especially as a solo GP. And to me, you know, mm-hmm, that's the make— those are the makings of A classic album or a classic fund. You think about the performance of 500 Startups Fund 1, you know, Union Square Ventures Fund 1. All of these fund 1s were hard won, but they are classics. And so just like a hip hop album, there's reasonable doubt.

I love that. And then continuing on that media train of thought, what are the books you would say that you've read and have really influenced I don't know that there are particular books I've read that really influence the way that I invest, at least not traditionally.

I would say Steve Stout, The Tanning of America is a fundamental book in talking about demographic change and how demographic change, you know, is causing the tanning of America and how America's getting browner. And he wrote that many, many years, over a decade ago. And so that is certainly the—

Yeah, in 2011. Oh, this is cool. Oh my gosh, I wanna read this. This is like how hip hop created a culture.

And that book is the fundamentals of how I think about that layer of the cake.

Yeah, this, and he wrote this before like Cash App started doing all of those like really interesting collabs. Yep. And. Talking more about financial literacy. I, and I feel like it takes like a certain type of company to be able to effectively translate, you know, what, what they're doing to different demographics. And I feel like they're an example that's, that's just like done really well with, with being like, all right, we're not gonna try and like do it ourselves. We're gonna partner with people who are in the community. So that's, that's super cool.

Yeah. Cash App is a great example.

Yeah. Yeah. I, I feel like seeing those clubs was just like really Inspiring. And it was also just like, oh, Cash App like gets it, you know? So I think that was really cool. And, and then we were, we were talking about this a bit before the show, but how do you kind of work to translate those insights that you are learning about from a demographic change perspective and help support your portfolio founders on applying those within their companies?

So it's everything from like, where should companies be showing up? You know, if Pamper Nail Gallery is going to do sort of a, an in-person popup, you know, isn't Essence Music Festival one of the places that they should be? Right. And really having a pulse on where the culture is and how to authentically take part in the culture and use that to your advantage in order to grow.

Whoa, that's cool. Yeah. Can you talk more about like what you're noodling about or writing recently as well?

Yeah, well, one of the things I'm noodling about and writing on is, you know, the second layer of the cake, the increased spending power of women and how women drive companies to these big billion-dollar-plus outcomes. You know, I think, mm-hmm, I think people discount It a little bit when they see a company like Skims, which is, you know, a unicorn company led by Kim Kardashian, or they discount a company like Fenty, also another unicorn company led by Rihanna, or they discount Shein, right? Huge, massive company that is multi-billion dollar company that is based on the consumption of women, right? And we can talk about sustainable fashion and, and whether that's a good or bad thing. But, you know, you can't deny that that company has grown significantly based on the female dollar, right? And so that's a really interesting thing to, to talk about and to unpack. And so that's one of the things that I'm writing about right now. Mm-hmm.

Oh, I'm excited to read that piece. Ooh, I have, I have an interesting one. So I was like recently thinking about this, kind of like 2023 becoming like a new year, turning a new chapter for you, publicly launching your first fund, which is super exciting. I'm curious, like what's on your in/out list for 2023? What are you doing less of or wanting to spend less time on? And what do you wanna spend more time on?

Fundraising is out.

Fundraising is out. I love that. No, massive congrats on that. That's so exciting.

You know, I think, what is, what is out? What am I not doing any, any more of aside from fundraising? You know, I think. I think being overly concerned with how people will view the fund and the way that it lands for people. I think, you know, the, the LPs that, the LPs that got it, got it. And the ones that didn't, didn't.

They get it, get it.

You get it. And so, and I think, you know, even as I start moving into fund 2, There are always going to be people who do not understand or, or, you know, don't want to understand how big this could be. And I am spending less and less time convincing those people and spending more and more time leaning into and pouring into the people who are getting it and the people who, you know, are primed to understand what I'm building and, and how big and massive it can be.

Hmm. I love that. I love that quote, like the ones that get it, get it. I feel like it's really easy to lose sight of that, especially like in the thick of fundraising. If you're like communicating with a super broad group of people and especially like fundraising, whether you're a founder or an investor, you'll get like a lot of nos. And I think it can be quite discouraging, but like you said, like the ones that get it really get it, which is really exciting to come to a point where you're saying. Fundraising on the out list and, and just getting to spend like quality time with the people that really get it and believe in your vision is just such a nice thing. And then what's on your in list?

What's on my in list? More, a little more travel, a little more fun and travel. Ooh. You know, I have barely left the country since the pandemic.

Mm-hmm.

And so I am really eager to, you know, Get back to meeting founders in, in other places outside of the US. I was just in Vancouver, which I love. It's a beautiful city. One of my portfolio companies is there, and so I'm just excited to get to do more of that.

Oh, that'll be awesome. Do you have anywhere on your like bucket list that you wanna travel this year?

I will be in London this year for Kauffman Fellows, and I'll probably go to Portugal for a little bit after London. So it's exciting to go back to see friends. A lot of friends have now moved to, moved to Portugal, so it'll be nice to see them.

Oh, that's super cool. Nice. Yeah, I was there in September. It was one of my favorite places I've ever gone, I think.

Yeah.

Um, gorgeous. And then I, as we're like wrapping up, if, if founders wanna get in touch with you or people want to follow you, where's like the best place to pitch? At you, and then where should they follow you on the internet?

They can follow me on the internet at Monique Woodard on Twitter, and they can go to Cake, www.cake.vc, in order to get in contact with the firm. And there's a, you know, apply link there that they can use.

Perfect. Well, Monique, thank you so much for spending this time with us today. I so appreciate it. Any last thoughts for our audience or advice for aspiring founders?

You know, just get out there and do it. You don't have to ask permission from anyone.

Awesome. Well, I love that. Thanks so much for tuning in, everyone.

I'm—

special thank you to producer Riley Jennings and podcast editor Tate Doherty for your help on this episode. If you're listening and you'd like to connect with me, follow me on Twitter or LinkedIn, Paige Finn with 3 N's. Thanks again for listening. I really appreciate it. You can look out for new episodes every Monday at 5 PM PST. And if you'd like to learn more about those strategies and tactics of seasoned institutional investors and rising venture stars, check out our YouTube channel at Seed to Harvest. Also, my TikTok channel is Seed to Harvest, where I post a lot of behind the scenes. Um, and if you like this episode, Please rate and review this podcast wherever you get your podcasts, if that's on Apple or Spotify. Anyways, thank you so much for listening. I hope you have an awesome rest of your day. Bye.