Investor Spotlight: Family Fund with Josh Wand and Sean Kelly

In this episode of the Startup CPG Podcast, host Hannah Dittman sits down with Josh Wand and Sean Kelly, General Partners at the Family Fund, to explore what founders actually need to understand when navigating fundraising. The Family Fund is a deeply community-driven investment firm built by former founders who believe the best companies are built through trust, transparency, and long-term partnership.

Josh and Sean bring decades of firsthand entrepreneurial experience and an incredibly deep operator and founder network, which gives them a uniquely practical, grounded perspective on investing at the earliest stages. Throughout the conversation, they unpack why asking the right questions matters just as much as having the right answers, how to truly understand deal terms and power dynamics, and why knowing an investor's focus, incentives, and target stage is critical before bringing them onto your cap table.

The conversation covers the traits that consistently show up in great founders, the difference between early-stage problems (product-market fit, customer love) versus later-stage challenges (team scaling, professionalism, organizational structure), and how to think about alignment as your company grows. Josh and Sean also emphasize the importance of researching investors the same way you would research retail buyers—understanding their allocation strategy, stage focus, and whether they actually invest in your specific vertical and company size before pitching.

Throughout the episode, listeners gain tactical insights on essential questions to ask investors (like "walk me through a time one of your investments struggled and how you showed up"), why raising at too high a valuation can backfire and limit future funding options, critical deal terms to watch out for (liquidation preferences, redemption rights, founder vesting resets), and why founders should optimize for the next five years—not just winning the current round. Whether you're preparing for your first institutional fundraise or evaluating investor partners for a growth round, this conversation offers honest, hard-won insights from two investors who have been in the founder seat themselves.

Listen in as they discuss:

• Josh and Sean's backgrounds: 20+ years as entrepreneurs before co-founding Family Fund in 2022
• What Family Fund is: Early stage investor ($1-5M checks) with 60%+ founder and CEO LPs
• How fund cycles work and what Fund 1 vs. Fund 2 means for founders
• Why researching investors matters: treating it like researching retail buyers at Target
• Essential questions founders should ask investors before accepting capital
• Understanding critical deal terms: liquidation preferences, redemption rights, and founder vesting resets
• Why raising at too high a valuation backfires and limits future funding options
• Traits of great founders and early-stage vs. growth-stage problem differences
• Why the best founders optimize for the next 5 years—not just winning the current round
• Founderland 2026: Family Fund's annual gathering of 7,800+ founders, retailers, and strategics
  
  

Episode Links:

Website: https://www.humblegrowth.com/

Personal LinkedIn: https://www.linkedin.com/in/nick-giannuzzi-6a550b14b/

Company LinkedIn: https://www.linkedin.com/company/humblegrowth.com/ 

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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?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Sean Kelly
Foreign. I really believe researching the investors that you're speaking to, whether it's a high net worth individual, whether it's a family office, whether it's a venture fund, whether it's private equity group, being very direct upfront to understand what their allocation strategy is, what stage do they invest in consumer? In this specific vertical of consumer with this size company and are they interested in learning more based on that? That in itself will save you 90% of your time.

00:39
Hannah Dittman
Hey everyone, I'm Hannah Dittman, operations and finance host of the Startup CPG podcast. And today I'm joined by Josh Wand and Sean Kelly, general partners of the Family Fund. The Family Fund is exactly what it sounds like. A deeply community driven investment firm built by former founders and operators who believe the best companies are built through trust, transparency and long term partnership. Josh and Sean bring decades of firsthand entrepreneurial experience and an incredibly deep operator and founder network, which gives them a uniquely practical, grounded perspective on investing at the earliest stages. In this episode we dig into what founders actually need to understand when navigating fundraising. Why asking the right questions matters just as much as having the right answers. How to truly understand deal terms and the power dynamics and why knowing an investor's focus, incentives and target stage is critical.

01:30
Hannah Dittman
Before bringing them onto your cap table, we also unpack the traits that consistently show up in great founders. The difference between early stage problems versus later stage challenges founders face, and how to think about alignment as your company grows. This conversation is thoughtful, honest and packed with hard won insights from two investors who have been in the founder seat themselves. If you care about choosing the right partner, not just the fastest capital, this one is a must. Listen, enjoy. Hey everybody. Welcome back to the Startup CPG podcast. This is Hannah and today I'm here with Josh Wand and Sean Kelly, investors from the Family Fund. Josh and Sean, welcome to the show.

02:09
Josh Wand
Thank you for having us.

02:10
Sean Kelly
Thanks for having us, Hannah. Appreciate it.

02:12
Hannah Dittman
Yeah, we're so excited. It's a double feature today. We've got two amazing investors to dig in with. I'd love to start us off with getting a brief background from each of you and the path that led each of you to the Family Fund.

02:24
Sean Kelly
Okay, great. Well, first of all, Josh and I have been good friends, or at least I would say that for over 10 years. We originally met through good friends that knew that we both operated and were building companies in the consumer and consumer adjacent industries. My background. We launched Family Fund, our first fund in 2022, so just a few years ago, but the previous 20 years I was an entrepreneur, so I studied biomedical engineering at Johns Hopkins in Columbia University. I've always been ultra passionate about elevating health outcomes for myself and for others. And I thought that the consumer ecosystem was the best way for me to help people become healthier.

03:06
Sean Kelly
So I've started my own e commerce company, food service business, CPG companies quite a bit over the last couple decades and teamed up with Josh, like I said in 2122 to create a different type of consumer venture investor, one we think that deserves to exist in the world. And that's a little bit about me.

03:27
Hannah Dittman
Great background and I'm sure a very colorful lens that you can relate to other founders with. Josh, what about you?

03:33
Josh Wand
Sean's very humble, but he's done a lot of cool things. I'm lucky to get to work with him as my partner. And first were friends, became really close and decided to start this together. I was brought up in consumer. When I was in my early 20s, I had pleasure of starting a rum company with a couple guys and ran that for six or seven years and then realized I love people and I love building companies and people are the most important piece of that. And back in the day there was really no recruiting platform specifically focused in the beverage arena. So I started a company to do that and built leadership teams. And then we got into food and then we got into beauty and then we got into pet and kind of everything, consumer health and wellness. It's called Force Brands.

04:11
Josh Wand
And built that company for about 15 years and then finally got to a point as a founder. I was like, I better get out of the way and bring in real professional leadership to run this and elevate the team. So now I sit as chair and through that venture I had a lot of opportunity to have a front row seat invisibility into what brands were doing right, more importantly what they were doing wrong and who were the right people that were leading the charge there. We started investing, just writing small checks and realized that a lot of these high growth companies wanted founders and operators on their cap table is deeply important to them and we had access to that. And so we helped them kind of coordinate and bring people into their businesses.

04:44
Josh Wand
And during COVID Sean and I decided, wait a minute, there's something here. A lot of businesses want operators, founders, CEOs on their cap table. So we kind of took those learnings and said, what if we dedicate the next chapter of our lives to creating a fund where all of our LPs and our partners in the fund are exactly that. That have built some of the most successful businesses the consumer and built and sold and dealt with integrations and had the bumps and bruises and are willing to mentor and coach this next chapter.

05:10
Sean Kelly
So.

05:10
Josh Wand
So we did that and we do it together and we have a couple other great partners and really just, you know, it's. We're lucky to do what we do. And you don't go to school to study this. You kind of end up there through the evolution of life. And it's a really good spot to be in.

05:22
Hannah Dittman
I love that. And yeah, I mean, kindred spirit startup CPG knows how important community and people are. So I'm all about that. And I feel like, especially in cpg, the people are so friendly and so much of the learnings and wisdom just comes from having people that have done it or faced a similar challenge before in operations and like that. So I can definitely see the strong point of differentiation there. Also a great segue. I'd love to kind of get the formal firm overview from you guys. Things like criteria, stage check size, your mandate, AUM and your other points of differentiation. Obviously your deep network seems to be a big one, but would love to hear the pitch.

06:02
Sean Kelly
Sure, yeah. So it's best to think of us as a series A investor that's typically writing checks between 1 to 5 million dollars. We will lead and co lead about half of our deals out of Fund 2, which we just launched in Q2 of this year, 2025. But we'll also participate and don't mind following a lead into the right assets and behind the right teams. We will also invest in pre seed and seeds. About 20% of our investments will be earlier and about 40% of our capital goes towards reserves and opportunistic growth. So we'll also invest early in the growth cycle. We love doing that and our LPs do as well because it generates faster liquidity earlier DPI for them.

06:44
Sean Kelly
In fact, for Fund 1, which we launched, as I indicated earlier in 22, we already have four exits which we're excited about backing founders from the very beginning, all the way to when their journey transitions. And hopefully we'll get the chance to do that with many other wonderful founders and teams Besides that. Our AUM, our first fund, we deployed about $36 million through Fund 1. Fund 2, we are wrapping up our fundraise process in Fund 2, but we'll end up right around 90 to 100 million. We could dive into that. Josh, we don't need me bloviating too long. Do you want to talk a little bit about how we differentiate beyond what we already discussed.

07:23
Josh Wand
I think great investors can do one thing really well, and it's provide access to deals and access for your leadership teams that need to grow the business. And we find that's very often go to market strategy, rebuilding your supply chain, fundraising, thinking about executive leadership, thinking about retail partnerships, strategic partnerships. So the way that we built our community mirrors that. Having the best and brightest in each vertical of consumer multiple layers. Retail, wholesale distribution, investment banking, founders that have built the businesses. And so the reason I say that is because if our founders or CEOs or COOs or CMOs or CFOs need access to. If we do not have the answer, we will find it for them. And we don't look at ourselves just as investors. We look at ourselves as partners. We are in this with you.

08:09
Josh Wand
We're here to grow with you, and we're going to build the business with you through thick and thin. And so talk is cheap. But, you know, if you talk to the portfolio of companies we work with, we're totally there to support them. And I think the key differentiator is the human component of it. We are working with humans, helping humans build businesses that are operated by humans and humans.

08:28
Sean Kelly
And humans. Anything that elevates the human experience. And Hannah, I'll leave it with a couple just little things that we like to say. We're not just capital, we're a consumer ecosystem. And we don't just invest in consumer, we convene consumer. So a couple things. But I appreciate you bringing that home for us, Josh.

08:42
Hannah Dittman
Yeah, I love that. And yeah, no robots.

08:46
Josh Wand
And we teach humans how to leverage AI.

08:48
Sean Kelly
Yeah, that is a little bit more robotic.

08:51
Josh Wand
Very into that. But humans have to use it.

08:53
Hannah Dittman
Yeah, humanoid component. That's really great. And yeah, I totally think that the more people around the table and the more smart people around the table and the better the outcomes typically are and the truer the partnership really is. So true. So many founders, especially as they're building quickly and rapidly, need people they can trust and people that can tap in quick. So I can imagine you guys bring quite a lot of power to the table. We're talking so far about fund one, Fund two. I just kind of wanted to take a little segue. I think we've covered in other episodes a little bit of how funds get and deploy capital.

09:30
Hannah Dittman
But given that you're in the middle of a fundraise or the tail end of a fundraise, I'd love to capitalize on the moment and kind of run through a little bit of learnings here. So how do you guys get the money that you are deploying? And you know, when you say something like Fund one, Fund two, what is that really referring to? And how does that all work for the investor side?

09:52
Sean Kelly
Yeah, absolutely. For Fund 1 and Fund 2, you typically have a set amount of capital to use to deploy into investments per fund. And once you deploy all of that capital, you're either done investing and you're just managing your companies and your assets and working with the teams that you've supported, or you need to launch and fundraise for a second fund so you can continue investing along the way. And so that's what we did. We launched Fund one, invested out of it for three to four years, and then launched Fund two, which is a little bit bigger, but with a similar strategy, but also taking quite a few of the learnings that we had from Fund one into Fund two to hopefully consistently get better and better.

10:35
Sean Kelly
Josh and I, you know, when we came in and decided to launch the Family Fund and made this jump, one of the things that was, I guess, a little bit, I don't want to say anxiety producing, but one thing that we had to be really sure about is the question of is this something that we want to do for the next 20, 30, 40 years of our lives and are we ready to actually make the transition from founder operator into investor? And that required some. We knew were excited about it and we knew were interested, but it required some inner searching to ensure that the answer was a hell yes. And the answer came back hell yes. Even though for fund one, Josh and I were still operating and still CEOs of companies. But for fund two, we are 100% committed.

11:17
Sean Kelly
So this is full time, this is everything that we're doing.

11:20
Hannah Dittman
If I'm a founder, is there a difference for me whether I'm in your Fund one or your Fund two?

11:26
Josh Wand
Yes, there is just your involvement. You know, Fund one is fully deployed, so you're always a member of the community. But as a participant In Family Fund 1, you have exposure to a little over 25 point portfolio companies that we invested in and the financial outcomes that result in those investments. Fund two, the majority of our LPs came back and we've got some additional founders that came in because they really deeply believe in what we're doing. And maybe we didn't have a relationship with them early on or they wanted to see the traction, the proof points, but we've also brought in some pretty Significant family offices, global family offices. The come from consumer backgrounds that have the ability to add significant value to the companies that we invest in, whether through distribution or manufacturing synergies or through retail.

12:17
Josh Wand
So I would say that were grateful for everyone that comes along for the journey. But our ultimate job and our primary responsibility is to provide top decile returns as investors. And people don't come back unless you're great investors and you provide them with great moink and great irr. And we've proven that we can do that. But we also don't pass the hat with family fund and founder community. I mean it's an invite only situation where we have to curate it very carefully who are the most impressive founders and CEOs that have been through these journeys, but also great human beings and that we really want to be around and that we want to invite to our family reunions, which is our agm and we want to get to know their family members.

13:00
Josh Wand
And there's some that are great people that we haven't invited that might not be connected to, but those that are part of it. There is a lot of power in that community which is why we call it the family fund and founder community which is a mouthful, but that's really what it is.

13:14
Sean Kelly
Yeah. And you asked Hannah if there's a difference if you're a founder in Fund one or Fund two, I think in terms of your integration into the community there's not right Family fund as a brand regardless of where in fund one, Fund two, Fund three, our port cos have the same access and similar support but obviously you're continuing to evolve as a fund and you would certainly hope that you get better and better. So for one of the as an example for fund two, we're definitely taking a more active approach with our brands and part of that is that Fund 1 were only participating, were only co investing, weren't leading deals For Fund two, we're leading quite a bit. And so we're taking more active participant with higher influence, higher check sizes, more company ownership.

13:56
Sean Kelly
And so we're absolutely even more involved in the companies that we support in Fund two than just compared to Fund one. And yeah, fund dynamics, I mean the average check size, how long you've been investing out of the fund, what your fund's length is, what the fund's expectations are around, liquidity and exits, all of those things matter significantly to founders and it's actually something that many founders never ask questions about. They're just looking to raise money and they don't ask all of these questions that actually end up being highly influential for them.

14:28
Hannah Dittman
Yeah, great call outs and going back, I also love that you call AGM your family reunion. Very cute. And for those listening, annual general meeting where your LPs all gather and you kind of present what's going on in the investment fund. I agree to your point Sean, about founders not always knowing the questions to ask about these things. And I think you can hear kind of wildly different experiences sometimes that a founder might have with an investment firm or just founders on their investing journey in general. And I think a lot of that also boils down to the dynamics of what's going on as you're mentioning, you know, leading an investment versus co leading, that's a big difference. Majority stake, a minority stake, that's a big difference.

15:09
Hannah Dittman
There's a lot of nuance other than just money getting into the bank account that impacts how that experience of both getting the money and post getting the money, working with an investment firm might be. And there's a lot of other things at play going on there on both sides of the table. So I think not to put words in your guys mouth, but if you had any advice for founders on some questions to ask or ways to diligence or better understand the investors that they're speaking with or evaluating, what would you share with them or guidance would you give them?

15:43
Josh Wand
I feel like so many founders are so busy running their business that fundraising is this opaque, challenging process and so time consuming. And I really believe researching the investors that you're speaking to, whether it's a high net worth individual, whether it's a family office, whether it's a venture fund, whether it's private equity group, being very direct upfront to understand what their allocation strategy is, what stage do they invest? Do they invest in consumer, in this specific vertical of consumer with this size company, are they interested in learning more based on that? That in itself will save you 90% of your time. Because so many founders go through and they pitch and they pitch and they're just talking to the wrong people. So I think like really being targeted just like you are with your customers.

16:27
Josh Wand
If you're going to target, you know who the buyer is and you know what set they buy for and you.

16:31
Sean Kelly
Know when they rotate, I think that's the bar minimum. Unfortunately many founders don't even get to that point. I mean it's actually incredible how many founders come in and ask very few questions. They ask you to invest, but they ask very little. And when a founder Comes in, is actually thoughtful and is asking questions that show that they've done their homework, they've done their research. It makes you want to invest more because you actually. So as the investor, you're sitting there saying, oh, wow, they probably apply this thoughtfulness and this curiosity and diligence. And also, oh, by the way, they're not just desperate and begging. They actually are asking these questions because they want to go and find the best investor, not just any money.

17:10
Josh Wand
Right.

17:11
Sean Kelly
That exists out there. And so for founders, if you can do this, I recommend it highly. A lot of different questions. Some of my favorites are, can you walk me through a time one of your investments struggled and how you showed up? Boom. Like, what happens there? What's your default reaction when you disagree with a founder? What typical changes about your involvement when a company misses plan? And then some of the stuff is like, can be a little bit more direct and specific. Like, what's your philosophy on board seats at early stages? How do you prepare for board meetings? What's the hardest feedback you've given a founder? How many boards are you currently on? What about that one? Like, again, think about the investor.

17:42
Sean Kelly
Because at the board, if this investor is on like 12 boards, what are they actually going to do for you? And then to wrap some of these up, asking somebody, these are my milestones, and this is what I'm looking to achieve. How are you and your firm specifically going to help me achieve these milestones? Like. Like, let's discuss, like, what are you really going to do? Not some BS about value add. And I'm going to connect you here, but this is what I need to do. And how are you going to help me get there?

18:08
Josh Wand
I think that's a great one, is, what can I expect from you as an investor? Where can I lean in? Where you strategically want to be involved in my business? Because a lot of investors are minority investors. They just don't care the way you check. And they want to sit in a board meeting. And a lot of them really have deep experience. And it either is that person who's a sponsor or an operating partner or someone else in the organization that's kind of been on a similar journey that can really help you out. And I find a lot of the value is between the board meetings. The board meetings are table stakes and very often a dog and pony show if you don't know how to actually orchestrate.

18:41
Josh Wand
But if you're able to understand where groups can support you deeply and that aligns with what you're looking for, great. But It's Matchmake. If you're a real business, you're not just looking for investors, you're looking for the right partner. Disentanglement strategy there is really hard. Yeah. So make sure that these people are aligned in the type of journey they want to be on with you.

19:03
Hannah Dittman
Such great advice. And I love the practical, tangible questions that you can ask. I think sometimes it's just a little bit of a knowledge gap for founders. Like if you don't know what the relationship is typically like post investment, it's kind of hard to visualize what questions to evaluate to know where things might go wrong. I think your analogy comparing it to a retail buyer at Target is, was a very good one and definitely the way to think about diligencing the process. And I would just add, if you're not familiar with it and it's a little too intimidating or hard to get in touch with investors to start asking some of these questions, find a fellow founder who has raised before and ask them what the dynamic is like, what is the relationship like?

19:45
Hannah Dittman
There's so many founders that I'm sure will be more than happy to vent or and talk about some of these things. And I think as many questions as possible. The same way that you would diligence a co man, the same way you would get Rex for packaging or anything else. Get an understanding of the landscape of what the relationship is like and then start to get formulating your questions.

20:03
Josh Wand
We offer that up a good amount of time. If it's a company that we just deeply believe has real opportunity potential, maybe it's a little early or the timing is not right, but we just happen to like them. Maybe we might never invest in them, but say like, hey, there's a founder or two in our community that we think you benefit from speaking to and we'd be happy to make a connection because they built Perfect Bar or Hugh Chocolate or these people want to have the conversations. And those tend to be very powerful in really impactful conversations. So to your point, it's like that's where you hit a wall where you don't have access to other people that have fundraised. If you do, like, learn what not to do, like avoid the landmines. It's more important what not to do than what to do.

20:45
Josh Wand
Because the challenge with fundraising is you're selling a piece of your company and very often you're not putting any money in your pocket, but you're selling more of your company and you're losing more control of your company. And as you do this. It's like, oh, I'm great. You get a really high valuation. Let's celebrate. It's like, actually think very carefully about whether or not you want to be in the driver's seat and do it really well and make sure that this is your dream. You always have the ability to make those sound decisions on behalf of your dream.

21:14
Sean Kelly
And remember, as evidenced by this podcast, investors love to talk. Good investors are good question askers, and it's really is about you, the founder, but let them talk. So maybe at the end of your pitch or the end of your call, ask them, on a scale of 1 to 10, how likely do you think you are to invest in my company? What did you like about my pitch? What did you not like about my business? Like, get feedback along the way. Don't just keep on doing the same thing, like, let people help you. Hannah, one of the things that you talked about early on is one of the best things about consumer brands and the overall consumer ecosystem is the collaborative nature. People want to help, people want to empower. Even assholes, I don't think actually want to be assholes.

21:55
Sean Kelly
You know, people like to be helpful. And so that's really what we built the foundation of the family fund on, is that we will do everything we can to be the best collaborators and to put that community around each of the companies and founders and teams that we support.

22:09
Hannah Dittman
I can tell you guys have so much passion for this and really believe in your mission and vision for your fund and the people around it, which I think is great to have that genuine, authentic care and drive behind what you're doing other than just making money.

22:24
Sean Kelly
Hannah, we have just so, you know, like, and this is real and this is authentic, and it's genuine. Like, we have unbelievable empathy for the founder journey. Josh and I have been founders for decades. We have been through hell. We have been through in the. Into those moments where we did not know how were going to survive an extra day. We've been elated at the pinnacle of success when it felt like nothing could go wrong. We've had all of it. And so I think that's just part of it is like, I think being a founder is glorified now. Used to be you could only be glorified if you were a celebrity. Now it's like entrepreneurs are some of the top celebrities in the world and everybody talks about how amazing it is, but the actual journey is agonizing and it's challenging.

23:01
Sean Kelly
And so I think that empathy is real for us and we're Happy that we get to focus all day long on other people's problems today rather than just our own problems.

23:11
Hannah Dittman
I totally feel that it is totally different. I've been on both sides, and both sides are hard and both sides care a lot. But, man, are you up at night wanting to sweat and cry sometimes. On the founder's side, that is. It's a much more emotional road, for sure.

23:29
Sean Kelly
Learning how to temper that and stay as close to the middle is one of the skills you gotta develop big time.

23:35
Hannah Dittman
Yeah. I always think if a bunch of founders got together and everyone just kind of wrote one page of the war stories, the battle stories that they went through, it would be an epic book.

23:45
Josh Wand
If you come to our AGM meeting and you hear the stories, there is a lot of laughter and there's a whole lot of tears. And these are people's real journeys of being in a fetal position all the way to the top of the mountain and then achieving significant wealth, in many cases realizing, wait a minute, that actually doesn't define me as a human being. I have a whole lot of money, and now I have to separate my identity from it. Now what do I do? Because all those people working for me, with me aren't calling me on Monday morning because we just sold to Kraft Heinz. And so these are real conversations about how humans show up and going to do it again, to mentor, starting a new thing. So these conversations matter because every college help a founder or CEO or an operator.

24:25
Josh Wand
It's your business. It doesn't define you. It's something you dedicate your life to. But you are a human being, and you gotta make sure that you're able to show up. And just because you have a bad quarter or a bad year, you don't feel like a bad human being. It's a business and their ups and downs. And so, like Sean pointed to, empathy really matters. It really is important to have someone to talk to and to work through things, because nothing worth doing. Talk to a championship team. They have horrible seasons, too. They have a lot of injuries. No one gets the top or becomes a dynasty. It's easy. So we really try to coach and mentor and make sure there's support around that.

25:02
Hannah Dittman
Yeah, that's so important and important to humanize the founder and their experience too. You know, they're going through it real time. You guys have a lot of wisdom both within yourselves and around the table, and I think that's a really important aspect in a partner. We just had our founders and funders conference, and one of the Panels. Someone was mentioning how when they are speaking with their founders, they're hard on them on a good day and easy on them on a hard day. And I think you want people that are going to be your cheerleaders in your support system in it for the long haul with you as much as they are your thought partners and pushing your thinking and pushing your strategy forward too. Like you mentioned earlier, this is a partnership.

25:44
Hannah Dittman
I mean, to some extent these are a quasi coworker dynamic where you want to feel really good about going to business with these people and working alongside them essentially.

25:54
Sean Kelly
Now people forget that investors are actually owners in your company. It's like you're in it together.

25:59
Hannah Dittman
Yeah. It's your adopted baby now.

26:03
Sean Kelly
Yep. By the way, Christine was at your founder and funders in New York. She said it was great.

26:08
Hannah Dittman
Oh, awesome. Yeah, were so glad to have her there. It was a lot of fun and hopefully everyone learned a lot too. Flipping the script, you know, we're talking a lot about kind of investor evaluation and how important having the right investor is. Flipping back to the founder side a little bit, I'd love to kind of get some tangible examples of the kind of founders that you find have the most success or that you enjoy working with. For instance, when have you seen a founder handle something that went wrong and what did you like about how they handled it? Or is there an example of a standout founder from your portfolio and what they did during fundraising to make that crystal clear for you?

26:46
Sean Kelly
Yeah, I can start off. We are fortunate to have so many different examples. And also, Hannah, my commentary on a great founder and what that founder did would probably depend on stage and where they were at. Because one of the most challenging things about being a founder is what you need to do at the pre seed and what you need to do at the growth stages are very different. And the problems are often very different too. And that's why one of the traits that we look for in founders is basically how quickly can somebody improve and self iterate. Because in order to be a founder that exists through all these different phases of growth, you have to constantly change. Right.

27:25
Sean Kelly
And so one of the founders that I think about who is just at our AGM family of the union and founderland is Jacob Peters of a business called Superpower now, it's a longevity platform that basically tracks all of your biomarkers and your diagnostics and then gives you recommendations for what you can do to improve your health and connects you to a marketplace and the AI doctor to help you along with Your health journey. But we invested at Jacob at the Pre Seed at about a 14 million valuation.

27:55
Sean Kelly
And when we think about Pre seed as like the most important traits that we look for, founder problem fit, phenomenal market size, and then a founder that has an amazing differentiated vision that's incredibly thoughtful and that vision is aligned with where the greatest opportunities are in the market that will actually create a better user experience. And when you talk to Jacob, first and foremost, he lost about half of his organs during COVID and during this process, he got a million dollar hospital bill and just as a result of being in the hospital for months, basically said this process in this healthcare system is completely, absolutely effed. I need to do something different. I want to reinvent consumer healthcare and I'm going to go and build my forever company.

28:41
Sean Kelly
And so when you talk about unbelievable founder problem fit and then when you talk to Jacob about what he's building, he is so thoughtful and he has applied this unbelievable rigor to thinking about how his product fits in this massive marketplace and exactly what he's going to do to win. No matter how bold and courageous and crazy of an idea that it is, that it's just impossible to not sit with him and say, oh my gosh, this guy's going to do it. And so that's just like one founder. Those aren't specific problems.

29:09
Sean Kelly
I guess if I was going to talk to Jake, a problem that Jacob had, as I remember as he was building the company and even scaling from like Pre seed to seed, growing pretty quickly, having a lot of people throw money at him, he realized that his team had to change. Right. So the people who were with him at the beginning were kind of. Some of those people were. The company was already outgrowing them. Right. A lot of people think that long term retention is a sign of positive, a good company. But a lot of times the most innovative companies have the highest turnover because they're changing. Right. All the time. And I remember talking to Jacob after he had this big, you know, this exodus of talent and he was just so incredibly calm.

29:44
Sean Kelly
He was in calm, he understood what was going on, he was confident about how to fix it. He wasn't being overly emotional. And I just remember reflecting on my own founder journey of how emotional I sometimes got, not necessarily externally, but how horrible I would feel when employees would leave my team. Early on, I actually felt like it was an insult to me as a person. Like I felt they were criticizing me. And to see Jacob go through that, I was like, man, that's fantastic.

30:07
Hannah Dittman
Great examples and really paints a picture, I think, in a lot of different ways. A lot of the things you said, I think are super relevant. One of the things you also mentioned was the skillset and the problems that you're solving. Early days precede seed are very different than down the road. And it's a little bit of a different skill set that you might be evaluating or looking at. Could you give maybe like two or three examples of some of the top problems or focus areas that you think a founder might be facing?

30:36
Josh Wand
That's kind of like the area that I love occupying my previous company, Force Brands. Builds executive leadership teams, Build your board, build your C suite team. And then look at the functional area of sales, marketing, finance, operations, human resources. And the founders and the CEOs that I always end up respecting the most are those that are opened up about their blind spots and knowing that they can't be the smartest person in each function of the business. And the reality is, to your point, these inflection points, building a zero to $20 million arrow business is much different than 20 to 100 as far as skill sets. And 100 to 250 is a much different skill set. And expectations change when you venture backed and private equity backed. So all of that matters.

31:15
Josh Wand
And it's really about who are the people at those specific layers that have been through that stage of the journey. Because very often the team, the ones who like getting to 20, love getting to 20, but are they appropriate to get to a hundred? And is that exact where they want to sit? And are they comfortable with new leaders coming in, coaching them when maybe they were running commercial, now someone else is, Are they moldable? Can they be moldable? Do they want to develop? Very often they have more equity than that person coming in because they were in early stage. So you got to be really thoughtful about assessing all of the skill sets and core competencies and the social behavior of every single person in your organization and just be honest.

31:57
Josh Wand
And so I think that the founders that get that are obsessed with growing and making sure their team can stay ahead of that, are the ones that end up building incredible businesses. The ones that are afraid of that is tough.

32:11
Sean Kelly
There's a few different ways, but I think just most simply when you're at the pre seed and seed, all you should care about is product market fit. That's all you care about, is customer love, how to build, repeat, how to make sure that I'm creating a product in a market that customers love. Nothing else matters. Like, yes, other things matter, right? You still need to have team members, you still need to run payroll, you still need to have some semblance of hr, but like, everything's focused on that. And also when you're early, you have a smaller team. And so almost everybody's a generalist. You don't have all these specialized functions. Right. And then when you later. Right. I mean, companies usually change. It's the rule of three. So when you.

32:47
Sean Kelly
A company is initially three people, and then when it's three times three is nine or ten people, it changes. Then when it's 30 people, it completely changes. And then when that 30 becomes 100, it completely changes. Then it changes again at 300 and it changes at a thousand. That's when entire organizations need to shift and change. And that requires professional management. And those problems are. I mean, they're omnipresent, but they're a lot different than when you just have a team of generalists running around experimenting, experimenting, and just constantly being obsessed about the customer. And how do we make something better that the customer loves more and more?

33:19
Hannah Dittman
Yeah. Great summary and great points from you both. I think, again, something to chew on that founders might not be thinking that far out when they're going into a fundraise initially or for the first time. Because in founderland most often the first time you're doing something is kind of the first and only time you're doing something in a lot of ways, you know, you're encountering. The first time you're getting into retail might be the first time you're learning it. The first time you're fundraising might be the first time you're learning it. The first time you're managing a large team might be the first time you're learning it. So sometimes it's hard to have the foresight when you're getting up the learning curve so quick all the time.

33:54
Hannah Dittman
But definitely important to think about building your skillset for now and surrounding yourself with people that can help you build your skill set for down the road.

34:01
Sean Kelly
Yeah, don't bite off too much. I mean, it's okay. Just like, just iterate and run with it.

34:05
Josh Wand
Well, here's where I think so many founders, they don't think about it, and there's a great illustration on every single deck of how company goes from 3 to 10 million in 10 to 25 in 25, 50 in 50 to 80. That's well illustrated. But what's not is the team that needs to be constructed to support that, and that's where the majority of the use of proceeds go. So it's very easy to put projections together based on retail growth or D2C E com growth. But how are you getting there and how are you constructing the operation and the organization to do that? And so those who are willing to ask for that and lean in, the most obsessed founders, like Sean said, the reason you become Bloom or ghost or lesser evil or supergoop or a poppy is because you build incredible teams.

34:54
Josh Wand
You gotta think way ahead of it because it's moving so fast. And if you're gonna build that business in 10 years, you always gotta think a few years out. And it's very important, a conversation to have with people around you that are your investors.

35:07
Sean Kelly
Yeah. That's why I also love it in fundraising. The best founders never try to win a round. They try to set themselves up to win the next five years. There's this belief that, oh, I need to get the maximum valuation, I need to win this round, I need to brag about it on LinkedIn. No, like this fundraise is a part of. How is this fundraise helping you over the next three to five years? And let's win there. That's what the best founders do.

35:30
Hannah Dittman
That's a great call out, a great comment. And yeah, I think sometimes people don't realize, like, once you're in the fundraising merry go round, you're in it. It's not one and done. It's a. Like you guys are saying, like, it's a long term relationship, more rounds need to get done. You're in a different business at that point and you've committed to it. And I think it's so easy to get caught up in the short term capital needs that you have and the fears and the anxiety. Like you're saying, how are we going to fund tomorrow? How do we keep the lights on? All these things that are kind of pushing, but there needs to be a lot of pull there too, to get you where you need to go. It can't just all be anxiety push.

36:06
Sean Kelly
It's a great call out in terms of that. When you're fundraising, it's not just about this round. There's a reason it's called A, B, C, D, E. Different series is because you're actually jumping on a path that you can't get off of. And by the way, once you get off of it's either going to be glorious and there's going to be high fives because there's going to be an IPO or an exit or more often than not, you're going to get off of it because you did something incorrectly or the business didn't perform. And one of the biggest mistakes that we see from founders is raising money from the wrong people to maximize valuation at a stage.

36:37
Sean Kelly
And then when they get to the next round where they need more capital, they meet with a lot of smart money and a lot of the best investors who can actually be strategic in helping them get to where they want to go. But because their valuation was so high and out of whack at the last round, those investors just say, oh, it was great meeting you, but no thank you. It doesn't mean that they didn't love the business, but they don't want to insult you because your business raised at a 50 million when it should have been a 25.

37:03
Sean Kelly
And even though you think that you took less volution, you know what ends up happening is you take a massive, not only do you not get the support that you need over those first, whatever, 18 months or 36 months, but later on you actually have to take a massive down round from one of those good investors and it screws up your entire cap table, pisses people off, ruins the momentum of your business.

37:23
Sean Kelly
So Hannah, I think, you know, some of this sounds self serving as an investor, but I've seen it time and time again, Josh, and I see it with a company happening right now that's actually on a tear, but literally has to raise at 50% of a previous valuation not because the business is not performing well, but it's just because they didn't raise capital in the right manner and frankly didn't have the right mentors and advisors around them.

37:43
Josh Wand
And to Sean's point, and I'll make this brief, sometimes you raise this high valuation, there's a bullseye on your back. And if that smart money comes in, they'll say, all right, fine, maybe I will give you the valuation, but I want a 3x liquidation preference. And by the way, that adds total misalignment. And what that means is they get three times their money out of the business before you ever see a dollar. And that's because you have set such a high valuation on the business because this precedent was there, but the reality it wasn't market. And so just really being thoughtful about how I want this journey to work, who are the right partners and talk to other founders that have worked with those investors and figure out what fair looks like and what market looks like.

38:23
Josh Wand
Just be right down the fairway, like there is no getting the highest valuation. Doesn't matter. What matters is the best Outcome for everyone.

38:30
Sean Kelly
We're constantly amazed. I mean, by the way, most of us, almost every investor, we have our portfolio companies on our websites. Very easy for you to go and call those companies. And we're surprised how really good founders who have great companies, how they don't do more of that. It's like, don't, you know, go and call those companies and say, hey, what did you think about this investor? Did they do what they promised to do?

38:50
Hannah Dittman
Yeah. I think getting your reference checks done is the best way to vet something if, especially if you are anxious or nervous or hearing it from the horse's mouth is one thing. But you would never hire someone without calling their references. So it makes perfect sense. And a lot of what we're touching on in this conversation right now is a perfect dovetail into a Slack case study question that I had for you all. 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 that might have a similar question. The question for today is what deal term should you be proactive about asking for? We're talking about liquidation preferences, valuations.

39:31
Hannah Dittman
If we could break these down into layman's terms and if you could give some advice to founders on the top two or three that they should really focus on the first time going through a deal and why, I think that would be super helpful. Additional color to a lot of the things that you both just mentioned.

39:48
Sean Kelly
Yeah. So I think I'm going to turn this around a little bit. I think fundraising today, like there are some standard nomenclature and standard terms and those that are unstandard. And so I think the first thing, whenever you're speaking to an investor, especially if that investor has gone through hundreds or thousands of rounds and this is your first, second or third, is to ask them, are there any terms in this convertible note or in these fundraising documents that are not standard? Just ask are there anything out there? And just ask them. Because I really think that when you're going through a fundraising process, it's primarily about avoiding red flags and the best investors are not going to try to sneak in things without letting you know that those are a little bit unique.

40:27
Sean Kelly
Josh already mentioned one of the things to avoid, which is a high liquidation preference. Just as a little bit of an example, if you have a greater than a 1x liquor, why does that create misalignment with the investor and the founder or the investor in the team because let's just say that you raised at a hundred million dollars valuation and while a lot of other investors were giving you a $75 million valuation. And so this one investor said, okay, I'll give you 100, but I need a 3x lick pref. Well, what that means is that investor does not care if your business sells anything less than 300 million because they're getting their 3x anyway if you exit. And so you created all this misalignment just to get a higher valuation.

41:05
Sean Kelly
Now if everything goes perfectly, that'll work out in your favor because you got less dilution. But guess what? That usually doesn't. That often doesn't always happen. So Liquorf is a big one. I'd say be careful with redemption rights. So depending on how you are now, if you're a growth stage company, you're a little bit later, I'd say redemption rights. That's where the investor basically wants some guaranteed path to exit if a company doesn't have, if an exit is not experienced. So just be careful with that, especially early on, right? Just understand what you're getting into with redemption. Right? Some of them don't have too many thorns, but some of them do. I think a big one early and especially for unsophisticated investors is operational micromanagement. That's disguised as governance. Right? We need all this veto power and all these protective provisions.

41:48
Sean Kelly
And if you want to spend more than $25,000 or you want to indebt the company by 10 grand, we need approval and board mandate. That's ridiculous. Any investor who's coming in at the early stage, you are literally backing product idea or product, the team and the market. So if anybody's trying to come and micromanage you, like what the hell are they doing? As an early stage investor, they should not even, they shouldn't even be in the vicinity because you're literally betting on the team, like those are the things we definitely don't want to do. And then the last thing I'll say is I see a lot of times that these founders who have toiled and been in this business for a long time, they get subject to founder vesting resets. And I think those are quite dangerous.

42:27
Sean Kelly
I think there better be a damn good reason for founders to re vest and lose their ownership and equity. There better be a really good reason or else it's like something's wrong there. There's obviously some misalignment or the investor doesn't believe you as a founder to stick it out. So Those are at least some of my call outs. I know I turn things around, Hannah, but hopefully that's helpful.

42:45
Hannah Dittman
I think that's so helpful and I feel like that's the meat of what people want to know. Also is more important of where can I protect myself and what do I need to watch out for and how can I make sure that I can vet whether the person I'm across the table from is a trustworthy, high integrity person. Also sometimes you someone's smiling and being nice to you might not realize like you're mentioning where their incentive alignment actually is and they're maybe assuming that you either understand or you don't and not putting the burden on themselves to explain it to you in a way to make sure that you are. So I think educating yourself is so important and knowing your watch outs and.

43:20
Sean Kelly
Also, yeah, making sure. I mean again, you like, you gotta get good counsel and good advisor and good founders around you. Make sure you understand what to fight for and whatnot. Because there's some stuff you definitely want to fight for. There's other things that are just not that big of a deal. Whether your simple interest and your convertible note is 7% or 9%, maybe that's not the one to fight over, but everybody's a little bit different.

43:41
Hannah Dittman
Great advice. I could talk to you guys all day long. You have so much wisdom to share, so much passion. Before we wrap up, I want to make sure there's an actionable next step for everyone listening to the episode. First, 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 second, for operators or anyone looking to transition or other people that might be interested investing or working directly with you all in your fund. What advice would you have for them?

44:07
Sean Kelly
If you are a value add badass that's ultra passionate about supporting founders, building the next great companies that really impact humans experience, then yeah, reach out to us. It's joshamilyfund vc. It's Sean. That's S E A namilyfund vc. You can also submit a form at familyfund vc. Believe it or not. We'll get back to you. And then also Josh. Josh just revealed today on December 16th of 2025, he just revealed that our founderland date for next year has been announced. Josh, you wanna reveal that?

44:41
Josh Wand
That's right. It's a pretty amazing experience with like 7, 800 founders, retailers, strategics and Malibu Commonwealth Ranch. It's the ultimate convergence and community experience. You know, for the consumer space, it's not up there. Applications can be filled out and can't just buy a ticket online. But we are, we have great people. Daniel was there from Startup CPG last time and it's just, it's an incredible gathering. But I would say like we're accessible. Like email us, hit us on LinkedIn, but don't just hit a request to connect, like tell us why you want to connect. Anyone in this world is so busy now. Explain what you want to talk about. That's really helpful going into a conversation. And if we can be helpful, we will. And if we can point in another direction, we will.

45:22
Josh Wand
And so let us be as supportive as we can and keep a lookout for Founderland. It's going to be magic.

45:28
Sean Kelly
Founderland us. You can sign up there for more information so you get the updates.

45:33
Hannah Dittman
Thank you both. Like I said, your passion, your intelligence, your wisdom all comes through. I can tell you're a high conviction, high empathy investors with a lot of love for the space and for the people around you. So thank you so much for joining us today and congrats on the upcoming event. I'm looking forward to hearing more about it and checking it out for myself. So thanks you guys.

45:52
Josh Wand
Thank you.

45:53
Sean Kelly
Appreciate you.

45:55
Hannah Dittman
Thanks so much for tuning in everyone. If you like this episode, show us some love with a five star review at ratethispodcast.com startup cpg I'm Hannah Ditman, podcast host and correspondent here at Startup cpg. I hope you'll join me again as we dig into more 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 alone. Like, join [e-mail] we'd love to have you. See you next time.