9 Top VCs Share What They Look for Before Investing in a DTC Brand

• Despite headwinds in the space, investors are still looking for DTC brands to invest in. 
• VCs are looking for mission-driven founders who can speak directly to targeted audiences.
• Insider reviewed past investments and recommendations for this list of must-know VCs.

For aspiring founders thinking of starting a direct-to-consumer brand, securing venture capital is likely not as easy as it once was. 

As the original DTC disruptors have started to go public, disclosing less-than-stellar financials, many venture capitalists who got in early on household names like Glossier and Warby Parker are shifting their investment strategies to focus on e-commerce technology and the metaverse. 

There are the headwinds to operating a DTC business, such as supply-chain disruptions, rising customer-acquisition costs, and an increasingly saturated market. These trends have made 2022 a banner year for consumer brands partnering with wholesalers. 

Global venture funding reached $143.9 billion in the first quarter of 2022, down 19% from the prior quarter, according to CB Insights. In the US, the biggest deals went to companies in biotech, security analytics, and logistics.

Despite the drastically changing DTC landscape, there are still investors who are bullish on investing in consumer brands — but they won’t take a chance on just any brand or founder. 

“In 2010, when we started investing in the consumer space, we were really excited about new brands taking on old incumbents. You just needed to be smart and savvy and have a great idea in a new space,” Caitlin Strandberg, a partner at Lerer Hippeau, said. “Now, there’s a lot of competition, and we’re interested in these really unique things, like real technology or real applications of science-based innovations, that not everyone can go and build. You have to have real skills.”

Insider reviewed past DTC investments by investors and fielded recommendations from the venture-capital community to compile this list. Below are the key investors to know if you’re thinking about starting a consumer brand or raising cash and what they are looking for.