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Catharine Dockery on building a VC fund for vices

Vice Ventures has raised $25m since January and invested in several companies traditional funds bypass

4 Minute Read

Her last job was technically for Walmart. Catharine Dockery, the founder of VC fund that specializes in vice, was chief of staff for Bonobos founder Andy Dunn. After Bonobos was bought by Walmart, she worked several months for the company that cared so much about maintaing a squeaky clean image it didn’t sell music with explicit lyrics in the 1990s.   

“It’s definitely a cultural shift,” she says. 

Dockery, who is 26 and lives in Brooklyn, started Vice Ventures in January. In just over six months, Vice Ventures has raised $25m and invested in several companies related to traditional “vice” industries that are spurned by many investment funds. 

We talked about the steps she took in building her fund, the importance of cold emailing, and what she sees for the future of vice. But before we get to our conversation, here are some quick takeaways from Dockery.

  • Organize your idea and your deck before sharing it with potential investors. 
  • Rely on friends who might know potential investors and then send as many cold emails as you can. You never know who’s going to respond (in her case it was billionaire Marc Andreessen). 
  • Have “the courage” to start something. Dockery believes plenty of people have had her same idea over the years. She was just the first to do it. 
  • For future trends in vice, Dockery says to watch harm reduction nicotine––products that help wean people off tobacco that are alternatives to nicotine gum and patches.

How did you start thinking about a VC fund geared toward vice?

It started with basically after I was interviewing for a new role and I was looking to leave Walmart. I had personally invested in a company called Bev, which was a direct-to-consumer rosé business. All these venture funds had expressed interest in Bev, only to find out that all these fund managers, despite loving the business and loving Bev, weren’t allowed to invest in Bev. They had a vice clause which precluded them from investing in alcohol.

I was hearing vice clause over and over and over again. I went to look up what it was and look up what else was precluded in the vice clause. That’s when I realized there was this whole white space out there that nobody was touching. 

And I thought the best way to do it would be to create a fund.

What exactly is a vice clause?

It’s a super-specific agreement in an LPA, which is a limited partner agreement. And it basically says what you can and can’t invest in. Basically a lot of institutions, whether they’re religious or academic, don’t want their investors to invest in alcohol or cannabis or sex tech or gambling. Some even preclude esports and pork, which is really interesting. 

As you move toward where more and more money is––venture capital is the smallest part of the financial ecosystem––you see less and less of these vice clauses. They’re mostly in venture capital.

Some of the smaller funds have steered away from them. But all the big funds have them, for sure.  

Once you had the idea, what did you do to get started? 

The first step was definitely developing the thesis around all the different categories and being very thoughtful about what we would invest in and what we would stay away from. Because vices in general, some of them include guns. We obviously would never include guns. 

Anything violence-related, we don’t want to be part of. We don’t see that as a vice. We see that as violence. 

We also don’t want to be part of anything pharmaceutical. Basically, if the product can harm someone else––not the person who’s using it––we would never do it. 

The second step was getting a deck together. 

The third step was cold-emailing over 500 people to get funding. 

How did you pick the 500 people?

I had a network of amazing friends who had a lot of important people’s email addresses. 

Including Marc Andreessen and Bradley Tusk, right?

Bradley Tusk, I had brief contact with when I was working with Andy. And Marc Andreessen, I got his email from one of my friends. I cold emailed him.

And they loved it. They were like, “When can we meet?” I met with them in person and both meetings went extremely well. 

I started fundraising in January. I originally went out to raise $3m, which at the time I thought was a world’s worth of money. Then all of a sudden the more commitments you get, I realized the idea was greater than I thought it was. I’m actually looking to raise $50m now.

Why had no one thought of this before?

A lot of people must have thought about it, but I think it takes a lot of courage to start a fund. It takes even more courage to invest in something that nobody can invest in. I think there’s a lot of really smart people out there who thought of this idea. I think I was the first one to act on it. 

Why is this a good time to be involved in vice industries?

I kind of see the world changing. You see a lot of purpose-driven funds being created more and more. Like health-care focused, esports focused. I just thought there was no reason to not have a vice fund as well. 

I saw the markets changing as well. The world is kind of moving toward legalization. That alone is reasoning for a vice fund. It proves there’s value there and potential and proves there should be a fund like that. 

What was the first company you invested in?

A company called Recess, a CBD sparkling water. We invested in Recess before there was a product. We just really believed in the founder who had the most knowledge about his field and believed in the brand itself.

We’re brand investors. And it’s a really strong brand. Everybody knows what recess is. It was that idea: “Just take a recess.” I thought it was genius.

You’ve also invested in InDose, the vaping product that controls doses?

We love InDose. We’ve invested in Players’ Lounge, which is a platform where you can play video games and win money. We invested in a company called Plant People, a CBD business. We invested in Bev, of course. Then we also invested in Hath, which is transdermal patches for CBD. 

How do you get ideas for what you want to invest in?

Basically, we’re super-opportunistic. We don’t have ideas of the companies we want to invest in but we wait until we see what people are starting and then evaluate each idea individually. 

What’s next in vice?

We’re super-bullish on harm reduction nicotine. You think about Juul and ecigarettes and how it’s created a new generation of smokers. You’re going to have all these people who are going to want to stop smoking at some point. How do you do it? Nicorette tastes terrible. The patch doesn’t work as well. And like 90% of people who try to stop smoking can’t. So I think the best investments out there are ones that are going to help people wean themselves off e-cigarettes.