Investor Spotlight: Jaxon Stuart, Spacestation Investments

In this episode of the Startup CPG Podcast, host Hannah Dittman sits down with Jaxon Stuart, Investor at Spacestation Investments, to explore a unique intersection of venture capital, influencer marketing, and creator-led brands. The conversation reveals how Spacestation evolved from a corporate angel arm founded by a top YouTuber into a full-fledged investment fund—and why their model of strategic SPVs combined with committed capital makes them stand out in the consumer investing landscape.

Jaxon shares how Spacestation approaches investing through their "three Ps" framework: people, product, and progress. He discusses the transition from deal-by-deal SPVs to their newly launched venture fund, what momentum really means when evaluating early-stage brands, and why building authentic relationships with founders matters more than checking boxes. Drawing from portfolio successes like Magic Spoon, Graza, Olipop, and Oura Ring, Jaxson reveals what separates compelling investment opportunities and how Spacestation's creator network adds differentiated value beyond capital.

Throughout the episode, listeners gain practical insights on investor-founder dynamics, when to start fundraising, and why every founder should write a comprehensive deal memo on their business. Whether you're pre-seed or scaling to Series A, this conversation offers actionable strategies for building fundable brands while leveraging modern marketing channels and maintaining operational excellence through AI and lean operations.

Listen in as they discuss:

• Spacestation's origin story: from YouTuber-founded angel arm to venture fund
• The Magic Spoon bowl and spoon origin story and early value-add investing
• SPVs vs. committed capital funds: structure, flexibility, and founder implications
• The "three Ps" framework: people, product, and progress in diligence
• Why momentum across multiple metrics matters more than single data points
• Building 10+ year relationships with founders and the "low bar" of being a good investor
• How Spacestation curates strategic SPV investors from the creator economy
• Why every founder should write a living deal memo on their business
• When to start fundraising: profitable growth vs. accelerating exit timelines
• AI's role in operational efficiency and reducing headcount needs
• The importance of being value-additive before asking for VC jobs
  
  

Episode Links:

Website: https://www.spacestationinvestments.com
Personal LinkedIn: https://www.linkedin.com/in/jaxonstuart/
Company LinkedIn: https://www.linkedin.com/company/space-station-investments/

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Show Links:

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• Questions or comments about the episode? Email Daniel at [e-mail]
• Episode music by Super Fantastics
  
  

Creators and Guests

Host

Hannah Dittman

Operations and Finance Correspondent at Startup CPG

What is The Startup CPG Podcast?

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Jaxson Stuart
Something that's really helped me in my career is writing. I'm such a believer that writing will help you produce more clear thinking. And like, number one piece of advice that I give consistently to any founder is to write a deal memo on your business that is like the ins and outs of why you're building this product, what the product does, and the future of what you're trying to create.

00:37
Hannah Dittman
Hey everybody, I'm Hannah Dittman, operations and finance host of the Startup CPG podcast. Today I'm joined by Jackson Stewart from Space Station Investments. Jackson rocketed from high school entrepreneur to CPG investor and now brings a blend of operator finance and venture experience with a healthy dose of heartfelt passion to Space Station. Space Station Investment sits at a unique intersection of venture influencer marketing and creator led brands. Born out of deep roots in YouTube, social media and community building, they're not just writing checks, they're rolling up their sleeves as strategic investors to help launch brands into orbit. In this episode we talk about how Space Station approaches investing SPVs versus deployable funds, their people, product progress framework, and what really matters in choosing an investment partner you actually like as a human.

01:27
Hannah Dittman
We get into founder takeaways from companies like Graza and Magic Spoon, why every brand needs an always ready memo version of their business, and how founders should be thinking about AI and their strategy going forward. Jackson keeps it tactical, candid and very founder friendly. Enjoy. Hey everybody, welcome back to the Startup CPG podcast. This is Hannah and today I am here with Jackson Stewart, an investor from Space Station Investments. Jackson, welcome to the show.

01:57
Jaxson Stuart
Thank you.

01:58
Hannah Dittman
Hannah, we're so excited to have you here today. I'd love to start out with you sharing a brief background of your personal experience and the path that led you to Space Station.

02:08
Jaxson Stuart
Yeah, yeah, for sure. So I kind of have a unique path into venture. So as a kid, like I'm a first generation college student, grew up in a small farm town and yeah, saw a lot of my friends going to work at Sonic or McDonald's making 7:25 an hour and yeah, that just wasn't interesting to me. So I figured out entrepreneurship was a thing is like you can go make money yourself and started a car detailing business actually just in my small hometown. Started with your mommy, minivans, cleaning up baby vomit, french fries, all of that good stuff. But then quickly evolved into doing larger projects, working on ferraris, working on RVs and boats, and even started hiring some of my friends and paid them 2x what they were making, all under the table.

02:48
Jaxson Stuart
So yes, I Started hiring a bunch of my friends, paying them more than they were making at their jobs. And yeah, really just got this knack for entrepreneurship and at the same time started getting fascinated with investing. Kind of later in high school, just the concept of the stock market and watching Wolf of Wall Street, I was just like, man, this is like a really interesting world. So again, first generation college student, I go to the University of Utah. I'm based in Salt Lake City, so that was just the closest university to me. And it was really all I knew from going to the football games and everything else.

03:17
Jaxson Stuart
And yeah, like, started studying finance and became more and more entrenched and fascinated with that world, but still had this love and passion for entrepreneurship and this business I had started in high school that helped pay my way through college. So I really thought the perfect combination of entrepreneurship and finance was working in venture business because you get to work with a ton of great entrepreneurs. And in my case with Space Station Investments, like, I've honestly felt like a founder building out this really early stage investment arm of the proper space station, which I can talk about in a moment. But that's really been my path into venture. So just recently was promoted to partner, which is exciting, on the Space Station Investments team. And now I've been with the company, with the fund for almost five years.

03:57
Jaxson Stuart
So that's been my journey to Space Station. But maybe I can give you a little bit of the Space Station story because we're a pretty unique investor, if that's cool.

04:05
Hannah Dittman
Yeah, I'd love to go there. Next. Those are some really interesting canon events that you've had and clearly shows that you've had a lot of hustle and passion and excitement for different things that I feel like it makes perfect sense that you ended up investing. I'd love to dive into a bit more of the background of Space Station Investments. Could you share kind of the context of the fund, your criteria, stage check size, aum, all the nitty gritty details and that high level overview of what you guys are doing?

04:31
Jaxson Stuart
Yeah, for sure. So I'll give you a little bit of the background story. So were actually founded by a YouTuber of all things. So his name's Sean Duras on YouTube and between his channel and his daughter's channel, they're doing half a billion views per Month on YouTube, spinning off a ton of cash flow. And really Sean McBride, the YouTuber and then his business partner, Sean Holiday, took a lot of that cash flow and started building businesses underneath the Space Station umbrella. So Space Station Investments is really just the investment arm of the broader space station. And we have obviously the two YouTube channels. We have an influencer marketing agency, we have animation studio, an esports team, a CPG brokerage and a bunch of other businesses.

05:11
Jaxson Stuart
But really on the investment side, which is what I get to work on every day, is we started initially as like a corporate angel arm. We had some excess cash on the balance sheet and our very first investment was in Magic Spoon. So the high protein, better for you cereal based out of Brooklyn. We had one of our partners who invested and introduced us to Gabby and Greg, the two co founders there. And we're like, hey, you guys should for sure invest in Magic Spoon and then help them with influencer marketing. And the two co founders, I had enjoyed the team at the time, but the two co founders were like, yeah, let's do it. So they cut a small angel track into Magic Spoon's seed round and they really went to work with trying to add value.

05:48
Jaxson Stuart
They didn't know what the term value add investor was at the time, but cut their check and then immediately were like, what can we do to help? And our claim to fame. And I have a little show and tell here is many of you have probably seen the Magic Spoon bowl. So this idea was actually incubated at the Space station. So our managing partner, Tim Holiday, when were seeding out product to a bunch of our network, which happens to be these YouTubers and influencers and other people like that. Yeah, we're like, man, we need to send something a little bit with some pizzazz with this box of cereal.

06:16
Jaxson Stuart
So we're like, oh, we can get dog bowls off of Alibaba and these neochrome spoons off of Alibaba and then laser etched them with the Magic Spoon logo and our logo and ship them out to all of these creators on YouTube, TikTok, Instagram, and it's going to be kind of like this cool viral moment maybe. And lo and behold, it was. And Gabby and Greg loved the idea so much and it just elevated the brand that they're like, can we take this and run with it? And they did way better with the silicone bowl and spoon versus our dog bowl that were using. Anyways, that was the first investment that Space Station had ever made. Space Station investments didn't even exist and it's really just since evolved into what it is today.

06:55
Jaxson Stuart
So we started spinning up SPVs because we had enough people within our network wanting to invest in the companies that were investing in. So that's about the time that I joined the team again have a more kind of traditional venture finance background with a few other funds that I worked for. And yeah, it was brought on to help build out this syndicate model. So spinning up SPVs investing deal by dealing with across the consumer landscape. So that was Oura Ring, Olipop, Slate, Milk Oats, Overnight Graza, a ton of CPG products and then other consumer product, health and wellness and then some SaaS sprinkled in there. So we're consumer generalists. I mean really from the SPB side we have so much flexibility. So we don't have minimums that we have to meet. Maximums we have to meet.

07:36
Jaxson Stuart
We can really just flex that SPV based on what the company needs. Which has been really nice for us to build our track record that way. But the exciting thing is on October 31st of this year we just had a first close on our formal venture fund. So now we're going to have two ways to support companies. One is going to be the SPVs. Those are going to live on. We still want to like bring deals, great consumer deals to our network of investors. But now we have this committed capital vehicle and any founder that's worked with us I think would have positive things to say. But I think the hard part has definitely been we'll commit to invest. But we don't know what our check size is with an SPV.

08:12
Jaxson Stuart
So it could be 200k or it could be six and a half million. So if you could give us that range, that'd be awesome.

08:18
Hannah Dittman
A little small range.

08:20
Jaxson Stuart
Yeah, yeah, exactly. So now with the committed capital fund we have a more strict thesis Investing precede to series A cutting 250k to $2 million tracks into companies depending on conviction stage needs and then really focused in that consumer world. So anything cpg, consumer product, consumer tech or like your call it E Commerce Enablement or other B2B2C companies where we can make a ton of intros to the brands that we've invested in, especially if I help them with marketing or selling on E commerce or whatever else that's all within our wheelhouse. So there's the space station story for you.

08:55
Hannah Dittman
That's so interesting. You shared so many interesting nuggets. My brain is buzzing. I could go in a million different ways right now, but I just wanted to pause and take a second to explain SPV and double click on the concept for those maybe less familiar with it and contextualize what that means for relevance and deal structuring and how the deal process might Actually get done.

09:17
Jaxson Stuart
Yeah, for sure. So an SPV stands for Special Purpose Vehicle. It's just a fancy name for an llc. And really this is how we invest deal by dealing with. So if we go out and find Oura Ring and we want to invest in Oura Ring, then we'll spin up an spv. We'll go to our group and say, hey, we're investing in Oura Ring. We're really excited about it. Like, do you want to join us, basically? And then people opt in or opt out, they choose their check size and then we're off to the races. We have a close and that vehicle has only one company in it. There's not a grouping of companies, it's just Oura Ring. So we spin up a unique SPB for every single deal that we do. Compared to the fund. The fund is where we're taking commitments upfront.

09:56
Jaxson Stuart
But the investors or the limited partners don't know what they're investing in. They're just trusting that the space Station knows how to pick companies to add value and to generate great returns for investors. So it's a very different model. It's a lot more based on trust and track record of the GP or the actual person making the investments. So anyways, there's hopefully a helpful breakdown of the two.

10:18
Hannah Dittman
Yeah, that's so helpful and I think a great summary of it. Couldn't have done it better myself. And who's in your SPV network? What kind of profile are those investors and would you classify them as angel investor network? Or how do you like to think about your SPV investment partners?

10:34
Jaxson Stuart
Yeah, for sure. So we're pretty unique in how we approach the SPVs. I mean, initially it's a lot of just people who have, call it the two and a half to five million net worth. You've kind of maxed out what you can do in the public stock market, maxed out your 401k, have some real estate and it's like, what else do I do with this net worth? And it's like, well, you should invest in startups, especially ones that you are passionate about and want to see become successful. So anyways, that's kind of like an initial grouping.

11:00
Jaxson Stuart
But I think what makes Space Station unique, going back to our roots in the creator economy, having one a founder who's a YouTuber and a top YouTuber at that, and just our network within the creator economy from the Influencer Marketing agency and just all these different activations we run. We own and operate the largest conference focused on creators on YouTube, TikTok, Instagram, all of that called VidSummit. We're co owners with Derral Eves, Mr. Beast, Jimmy and then Space Station. We're each a third partner. So we're just really plugged in on our thought leaders in the creator economy. So that's oftentimes what we're adding value to our portfolio companies. On day one, we're bringing in. If you're a prenatal supplement company, one of our strongest categories on the agency side is mommy bloggers. And that I think really resonates with that type of product.

11:48
Jaxson Stuart
So we don't focus on forcing our companies to work with our agency or forcing our companies to do anything within the other businesses that the Space Station has. It's completely opt in and you get special rates and lower minimums and stuff like that. They operate their own businesses. But what we found is founders are stoked when you can have a mommy blogger or other strategic investor that really resonates with your brand, investing in your company, joining your cap table. Because now they're incentivized to talk about your brand and product because they've seen it, lived it, loved it. And I think that differentiates us a little bit from other maybe celebrity or influencer backed funds. We're not focused on bringing really strategic people into our fund.

12:31
Jaxson Stuart
We want like your family office, the people that you just don't know, to have a lot of money in the fund. The SPV side, we're hyper curating who that grouping of people are to invest in these particular companies. So like to go back to the prenatal supplement example, if you have a fund that LeBron James is invested in and that fund invests in that prenatal supplement company, what is LeBron James going to do for them? Probably not much. But if you bring on Space Station, we'll invest out of our fund and then we'll spin up an SPV and we bring in women athletes and mommy bloggers and other people that would really resonate with your product and brand and be able to help push it. Like we think that's our unique model.

13:12
Hannah Dittman
Yeah, hugely unique value proposition and really interesting way to approach the investing side. A very modern approach that I think is very relevant for the consumer behavior landscape of today and how people are learning about things in shopping and operating. And I think that's really cool and really unique. So I can see why you guys have so many great logos already racked up in your portfolio. I love to look into the diligence process a little bit next Obviously I think as founders listen to this, I'm sure they're hearing all the starry eyed amazing things and seeing all the potential they could have for their own brands. But what are you guys really looking for as you're evaluating companies and what is standing out to you in the diligence process and how does that process work specifically for you all?

13:58
Jaxson Stuart
Yeah, so we focus on three things and we call it the three Ps and trying to get creative there I guess. So it's progress, product and people and that's in reverse order of what's most important. So number one is people. I think most early stage VCs will say that who is the founder behind the product and that's really who you're betting on. And then yeah, we like to look at both product and is it differentiated in the market? Do we like the product? Like that's oftentimes how we make investments is we're pretty early and innovative on a lot of the products that we're using and consuming of a funny tangent is that's how I found Space Station Investments is I was an early Oura Ring user. You can see it on my finger here.

14:38
Jaxson Stuart
And I was just looking like, yeah, I wonder who's invested in Oura Ring. And I found this company up in Layton, Utah of all places that invested in what I thought at the time was the and still is one of the coolest like consumer health companies out there. And I'm just like no way. There's someone right in my backyard that knows Aura. And I reached out cold to on LinkedIn to basically just say like hey, you invested in an Aura Ring Olipop, Magic Spoon. Like these are so cool. Like I'm customers of all of these. Can we talk? And so that's getting away from the point but really we just like to invest in companies that we would be a customer of or we can clearly validate that there is a clear use case for this.

15:14
Jaxson Stuart
It's not just a better brand, a better marketing approach but like there's actual innovation and emote around the product. So yeah, as far as maybe like some takeaways for a founder as VC is doing diligence, I think one of the key things like if you were to draw a thread across our portfolio of what makes us decide to invest in a company because most VCs say no 99% of the time and say yes that 1%. So how do you become that 1%? It's really just around momentum and that could be a myriad of things. It's momentum behind the brand, momentum behind growth, momentum in retail, momentum behind traction, actually building the product. I'll give you one example. You can see probably over my shoulder, Graza. So we're early investors in Graza and I think they've done a phenomenal job at building that business.

16:03
Jaxson Stuart
But when we initially invested, you know, they were six months post launch, so there wasn't a ton of data to look at. But what were finding is there was so much PR around the brand, for some reason they had just really taken the PR world by storm. They were getting articles in the New Yorker, New York Times. It's like this is like a six month old startup that just launched. They had just started going into retail and started seeing great velocities there. But again, not enough to say like, oh, this is an obvious win, but we saw enough of those boxes checked that it's like there's a lot of momentum coming behind this brand and that's what really pushed us to invest. So it wasn't anything individual, it wasn't revenue traction, it wasn't pr, it wasn't the social listening that were doing.

16:47
Jaxson Stuart
It was all of the things and it's like, man, this is interesting. Let's go.

16:51
Hannah Dittman
Yeah, it's like popcorn. You're like looking for the anticipation of when the colonel is about to pop and be along for that journey. I think that's a really interesting example with Graza as well. And kudos to them. I love the Graza team. I think they're, yeah, doing a phenomenal job. You mentioned people as the primary evaluation bucket, a higher priority evaluation bucket. What are some of the traits of exceptional founders, specifically in your portfolio that you work with and that you like to see in companies you're diligencing.

17:25
Jaxson Stuart
Yeah, I don't think that we have necessarily like a specific thing that we're looking for in founders. Like there's a lot of the obvious stuff like grittiness, hardworking, do you have background in the space? All of those like I think are just table stakes at this point.

17:40
Jaxson Stuart
But we really just like to get to know the founder and when you look at like a stat that I recently heard that kind of blew my mind is the average marriage in the US lasts like nine and a half years and oftentimes like you're investing in a company sometimes for 10, 12, 15, 17, 20 years and it's like you are signing on to a very long term relationship with the person you know that you're taking money from as the founder, but also as an investor, it's like you're gonna be spending time with this team and supporting them through a lot of ups and downs. So it's like, do we just enjoy spending time with that person? Is one of our biggest diligence criteria. And yeah, like it's just time spent.

18:21
Jaxson Stuart
It's not anything special test that you have to complete, us flying out to meet with you. It's us getting on a ton of zoom calls and talking about things that aren't related to the business. Yeah, like that's all interesting to us so that we can actually get to know who the human is behind the company that we're hopefully investing in.

18:39
Hannah Dittman
I love the human approach and I think it's really important. And given how many hours everyone spends at work with your stat, I feel like it might even be that you end up spending more time with a company like hours wise too than even in a marriage. So, so important. And I think there's a lot of hard judgment calls that need to be made in businesses and I think who someone is as a human dictates a lot of the decision making and leadership that they have. So I understand why that's so important. Reversing the question now. Why do you think you're a strong fit for founders and what do you think a founder should be looking for in an investment partner as they're thinking about their side of the equation?

19:15
Jaxson Stuart
The partners on our team like were founders first and then built and bombed a couple companies, built and sold a company. I'm more of like the born and bred investor. But even from building space station investments, like there's been really scrappy times and hard decisions building this investment group from the ground up. I mentioned like we just had a first close on our venture fund which is actually allowing us to like have a consistent paycheck. But all the SPVs, like we never know when we're going to be making money and it's like we have to go out and kind of eat what we kill, which was scary, like startup like experience for us and we're finally getting into that. I just told someone today that it feels like we just raised a monster Series A from like El Catterton with this pond.

19:58
Hannah Dittman
I get what you're saying. And for everyone who's maybe needs a little bit more context here, when a fund raises from LPs they get management fees which is a percentage of the amount of money of capital that they've been given to deploy. And so that's where the salaries come from and the office Expenses and all these other things. But an spv, I assume you're not getting those management fees or maybe only when the deal gets done or if, depending on the volume of what, the SPV ended up being a percentage of that. So a lot less predictable and maybe a lot less recurring. Maybe not on annual basis. So, yeah, definitely. I am sure a lot of founders resonate with that feeling.

20:37
Jaxson Stuart
Yeah, for sure. So, like, that's, I guess my way of saying it's like, we've been there, we get it. Like, we. All we want to do is focus on our most important side of the business, which is meeting with founders and investing in great companies. And when you have to go spend time on fundraising or figure out how healthcare works or whatever else, it's like those are just kind of like the necessary evils of the business. So, yeah, it's like, I think that we just resonate a lot with founders in that journey. So, like, we try not to be jerks and don't request, like, just busy work of a founder to, like, waste their time on. And I've really just found, like, being a good investor is a pretty low bar. It's sad for me to say that, but it's a really low bar.

21:13
Jaxson Stuart
It's like if you can make some intros not annoy people, be helpful where you can, and, like, you're probably like a top 25% on a founder's cap table. All the stuff I talked about previously, like the influencer work and working with the CPG brokerage space station CPG on our side, and access to these two YouTubers that do half a billion views per month, especially if you're in the kids and family ecosystem, it's like those are. That's all of their content is on YouTube kids. So all of those pieces that I think are the obvious ways that we add value. So, yeah, I've already touched on those. So we don't need to go too in depth.

21:47
Hannah Dittman
It is sad but true that I think so much empathy can be lacking in the investment dynamic, because in some ways the power dynamics are just so lopsided at times that it sets the stage for that to be the way the relationship can be set up. I think the industry is changing a little bit as people are getting a little bit more broadly focused on cpg. Once again, there's a little bit more, not a ton, but a little bit more competition on the investor side, which always is, like, good to drive companies forward. And yeah, I think it definitely makes you stand out. The empathy that you have the understanding and the general human approach to business is so important and definitely something that I feel sets you and your firm apart. I'd love to take a second.

22:32
Hannah Dittman
Given that you've had such a broad swath of experiences and you guys move quickly and have seen so many things reflecting on your career and investments you've made, I'd love to know some lessons learned or compelling anecdotes that you think other people listening could be learning from.

22:47
Jaxson Stuart
Something that's really helped me in my career is writing. I'm such a believer that writing will help you produce more clear thinking. And number one piece of advice that I give consistently to any founder is to write a deal memo on your business that is like the ins and outs of why you're building this product, what the product does, and the future of what you're trying to create. Not only is that helpful for investment discussions, because most investors I know are writing a deal memo and doing market research and validating all of the things that the founder's telling them. So, one, you're going to be more successful on fundraising. You're going to be more successful onboarding great people into your team and getting them immediately up to speed on the vision, the product, how you operate, everything.

23:34
Jaxson Stuart
It just takes time to take what's up here and actually put it on a page in a way that someone can understand and pick up and run with. It's hard, it's not easy to do that. It's not just something that you can digest with ChatGPT or something like it definitely takes effort. ChatGPT can be a great resource, but I think at the end of the day, it's your clarity of thought going pen to paper that will really help. So that's really the number one piece of advice I give to founders and is something that I've learned in my own career.

24:02
Hannah Dittman
Yeah, I think that's a great piece of advice and a really unique way to think about things. And it is true on the investing side, you have your diligence decks. I mean, you could be having like a hundred, 200 slides, so much data, all this stuff and you still will be writing an investment, a written essay like investment memo version of it for your LPs and for your IC. So I do think that it's a completely different way of thinking because it's distilling down just a universe of information that you have into a different format and really makes you think through how you want to articulate strategy.

24:36
Hannah Dittman
And double click on a couple of things too, for people Less familiar with a deal memo, could you give a brief overview of what it kind of contains, how long it is, what it is, like what the things they should be thinking about writing about are?

24:49
Jaxson Stuart
Yeah, I mean from the investor standpoint, like in my early days as like a hardcore analyst at Growth Fund, like they were 60 to 120 page deal memos and they were so chock full of information. I now prefer to write a little bit more kind of narrative style. Still very data driven and bullet point driven, but prefer the narrative style because it's easier for someone to kind of pick up and kind of follow along the story. So yeah, like as far as what to write about, a VC is going to write about every single aspect of your business. Like literally everything that you think of on a day to day basis a VC is going to be writing about. So it's what market you're playing in, the traction, the contracts that you have and what's coming down the pipeline. It's why.

25:32
Jaxson Stuart
What makes your product differentiated? It's the supply chain for your product, it's how is it being impacted by tariffs? That's a new conversation. So that's a new line item in our deal memos. Now it's how is AI playing into your business even if you're not a native technology company? I think it's obvious like we all need to start leveraging AI in order to keep up with everything going on. So yeah, like it's everything that you're making a decision about as a founder can go into a deal memo and it can again be that living, breathing document where not even just for investment conversations, but when you're onboarding someone new into the team, it's like they can immediately go to the AI section and understand, oh, this is our AI strategy and this is what we're trying to accomplish.

26:10
Jaxson Stuart
And now I'm aligned on that mission and goal and in my role in supply chain or marketing can be on the lookout for interesting tools for us to leverage anyways, so I could go on. But it's every aspect of your business you could write at least a paragraph about and sometimes it's going to be 10 plus pages about your product and the intricacies of it and how it differs from the competitors. And again it's this living document where if a competitor releases a new feature or a new sku, like you should write about that, you should update it and it's like, what are they doing differently than us and does that put us at risk? Are we still differentiated? What do we need to do with our own product development cycle. Do we need to do nothing?

26:47
Jaxson Stuart
Because we're not trying to chase trends or anything. Like all of those are decisions that founders are constantly making. But I think again, just putting pen to paper or finger to keyboard is yeah. The right way to go in terms of actually distilling that information and developing more clear thinking.

27:05
Hannah Dittman
Yeah. And it helps keep things out of a brain trust because like you're saying, I think founders are definitely. I mean I'm sure every founder is going to bed at night with all of this streaming through their mind, but it helps disseminate and I think the quicker you're growing and the more quickly the world changes around you too, the more other hand and knowledge sharing needs to happen a little bit more real time. So great advice and I'm sure your portfolio companies probably have some like best in class operational excellence going on with that North Star standard. I'd love to take a second touch on some thought leadership. You guys are looking at so many different things and seeing a lot of interesting concepts. You seem to be very creative, forward thinking investors as well.

27:46
Hannah Dittman
Are there any current consumer trends or categories of interest for you? All that you've been spending a lot of time thinking about lately?

27:53
Jaxson Stuart
Yeah, I feel like health and wellness is like eating the legacy incumbent CPG's lunch right now. There's like the better for you version of everything and that's been a pretty consistent thread portfolio. So like I wouldn't say like we're oftentimes chasing different trends intentionally. It's oftentimes based on like where we see a lot of consumption happening and where we see like actual lasting change happening. Not just a trendy product or whatever else, something that we're starting to integrate a little bit more. And seeing trends within our portfolio companies is more on the ops side. So let's assume you check the box. Great founder, great product, great progress. We're almost going to add like a fourth bucket there. That's just operations and that's really AI driven of how are you leveraging AI in your organization to help with efficiency, efficacy of anything?

28:46
Jaxson Stuart
Supply chain marketing, hiring. There's so many different tools that people are creating AI for. And we have one example in our portfolio and I'll leave their name out. This is like a large business now, 300 plus million in revenue. And were on their update call at the beginning of 2025 and for 2025 they'd approved 70 headcount to be hired into the business. They were growing 50% year over year expected for 2025. So by no means were they slowing down on growth or anything else, but they reduced that 70 approved headcount down to four. Because they have an incredible CTO who has started building internal AI tools that reducing the need to hire and also reducing like other software spend. Like Amazon's a great example of this, where they don't pay for Zoom, they develop Chime internally.

29:40
Jaxson Stuart
They're developing their own tools because it's like, why would you pay Zoom a million bucks a year, probably $10 million a year plus to do something that we can just whip up overnight kind of thing. So now that the development cycle has just rapidly increased in terms of speed and quality, I feel like even if you're not a technology or AI native company, like, you can leverage best in class tools that are being built specifically for your business in E commerce or in retail to really become a very efficient and lean business. Which is going to make an investor stoked. Where you're not bloating your operating model.

30:15
Jaxson Stuart
With a ton of hiring, you can really focus on like, who am I going to hire that's going to move the needle and how can I leverage best in class AI tools to, yeah, help on the operating model? So that's kind of quick thoughts there.

30:27
Hannah Dittman
Yeah, I totally agree and I think it's very top of mind and of the moment for a lot of people. Even myself as a solo founder we had like issue with our website and I was like, I'm sure AI can help me fix this. Like I've never coded before in my life, but I was able to just solve our website issue and have ChatGPT figure out the code for me and fix it in a matter of hours instead of needing to go find a developer, pay them thousands of dollars, not understand fully what was going on. Anyway, yeah, it's a different world we're living in and I feel like it's a great resource, especially for early stage startups that just don't have the capital, don't have the time, have a million things going on. So definitely echo that.

31:08
Hannah Dittman
I'd love to hop into a case study question now. As you know, startup CPG has the largest Slack community in the industry with now over 30,000 members. I'd love to pull a question directly from our channel and have you answer it as a case study for any founders with a similar question. The recent question was how do I know when to start fundraising?

31:28
Jaxson Stuart
Yeah, so I think that there's a hundred different reasons of why you would start fundraising, but I'll give you one really recent example within our portfolio. So this is a business again we'll leave the name kind of quiet but this is a business that doing 30 million in revenue, nice size business and are profitable so they don't need to raise more money and they've been profitable for over a year now. So we're stoked. As an investor it's like hey, I feel like that's every founder's goal is like reach profitability and they're growing, you know, 20 to 30% year over year which is great growth. So like we're not upset by any means about the company. But I think like with founders and with investors like you need to make that decision.

32:09
Jaxson Stuart
One, when you're going to bring on capital, if you're going to bring on a venture investor, it's like you need to be ready one day for the exit. Like there's no lifestyle business here unless you plan on buying out the cap table. So it can be a lifestyle business where it's just you as the owner. Then yeah, it's misaligned incentives because venture makes money by selling companies. So with this particular company they're opportunistically raising a pretty large growth round. Again, profitable business, still growing. Have built out a great team and keep doing that for another 10 years. But we engaged with bankers and those bankers like basically walked us through the M and A landscape and said you're really not going to start being in the eyes of an acquirer until you hit X, Y, Z figure of revenue, EBITDA and then net income.

32:54
Jaxson Stuart
So we're like, okay, how do we get to that goal? And we're going to get there in five years but maybe we could raise a growth round and get there in two years and then exit in two years. Like that's exciting for us. So we worked with the founder to basically put together a really interesting deal both for the company and for the investor. That is all the money that they're raising is being poured into growth to accelerate that exit timeframe. And I've already engaged in bankers so I give you that example because there was a very clear reason why we're raising capital with a clear outcome of what that capital is going to do.

33:27
Jaxson Stuart
And I think if you're just blindly raising of like I think I need 2 million bucks to make my dream come true of creating this product that's not good enough for an investor. It's like they really want to see like what is the outcome of this raise and where does it get you? It doesn't always have to come true. It's like startup land is wild and oftentimes when we look at pro formas that founders are putting together, it's like we won't even look at it because it's probably not going to become true. It's either going to be way better or way worse. But very rarely is a pre seed C stage company right on their pro forma model.

33:59
Jaxson Stuart
We have a few examples where the founder is just maniacal on data and like is, I swear, like a Wall street analyst with how they report to investors and it's like, wow, you missed revenue by $2. Like good for you.

34:12
Hannah Dittman
That's insane. Good for them. They need to go hit Vegas.

34:16
Jaxson Stuart
I think it's okay that I talk about this. So the founder I'm referencing is Brian Tate with Oats Overnight. And what's funny is his background before he started Oats overnight was a professional poker player. So your Vegas comment was spot on.

34:29
Hannah Dittman
Yeah, it gave me that vibes because even investors can't forecast that well typically to that level of accuracy. That's awesome. Well, before we wrap up, I want to take a second to make sure our audience can have an actionable next step to apply all of this amazing knowledge to thank you so much for sharing so many interesting anecdotes and having such a candid, fun conversation. Jackson for founders that want to get in touch with you, where can they find you or what is the best way for them to get in contact? And for anyone looking to transition into investing or working with you all, what advice would you have for them on the investing side?

35:03
Jaxson Stuart
So founders can reach out on our website? You can also find me on LinkedIn reach out there. I'm pretty active on responding to DMs and then yeah, as far as investors who want to get into it, I think the best thing that you can start doing if you want to become a venture capitalist is to start talking to founders, start networking and start being value additive to the firms. Like I've had multiple people who want to work for Space Station investments go out and source really interesting consumer deals and then when they reach out to me, they're like, hey, I have this really interesting deal, would love to talk you through it. And then on the back end they're like, by the way, I'm also looking for analyst role at a firm like yours.

35:40
Jaxson Stuart
And yeah, I think if you just start adding value to GPS early, like you get noticed versus just kind of random cold outreach. So that's for investors and then for anyone who is currently an investor and looking to deploy into consumer startups. We have the SPVs, we have the fund. So if that's interesting. Again, same channel as LinkedIn or on the website always down to talk with. Yeah, any folks who want to invest in great companies like Alipop, Graza, Oura, Ring, so on and so forth.

36:04
Hannah Dittman
Well, thank you so much for all of your time today. I really enjoyed our chat and I'm sure our listeners will have a lot of interesting nuggets that they've taken away from it. So I appreciate your time and thanks again. It was lovely chatting and learning from you.

36:17
Jaxson Stuart
Right back at you Hannah. Thank you.

36:18
Hannah Dittman
Awesome. Thanks so much for tuning in everyone. If you like this episode, show us some love with a five star review at ratethispodcast.com startupcpg I'm Hannah Ditman, Podcast host and Correspondent here at Startup cpg. I hope you'll join me again as we dig into more gifts, juicy topics like ops, finance and all the real talk founders actually need. Come say hi on LinkedIn or ping me on Slack. I'm always eager to hear your questions or brainstorm future episode ideas. If you're a potential sponsor and want to get in on the fun and appear on the podcast, shoot us an [e-mail] and last but not least, if you haven't already, don't miss out on our free Slack community. For emerging brands and CPG lovers alike, join us the [e-mail] we'd love to have you. See you next time.