H Venture Partners prioritizes investments that are good for the environment and your health
United States retail sales reached a record $5.58 trillion in 2020, but less than 2% of the venture capital investments in consumer brands were made in female-founded companies. Additionally, 85% of consumer purchasing was made by women, but less than 10% of investments were coming from women. Cincinnati startup H Venture Partners is tackling that imbalance — known as the The Trillion Dollar Blind Spot — by prioritizing venture capital investment in consumer products created by founders who are female and from underrepresented groups.
“Our focus is investing in women, people of color, hispanic and underrepresented founders and LGBTQ entrepreneurs, which is easy to accomplish because many entrepreneurs from the consumer sector come from those groups,” said founder Elizabeth Edwards. “Women also make up 85% of consumer purchasing, so there is a reason why retailers like Target refer to their shoppers with feminine pronouns. While we don’t exclusively invest in those groups, we are looking for teams that have cognitive diversity and have diverse lived experiences because they understand the needs of the majority of the consumers.”
H Venture Partners is a consumer-focused venture capital firm that also takes pride in investing in science-based consumer brands that prioritize health and the environment. More than $69 billion in venture capital was invested in the first quarter of 2021, but only $1.07 billion was invested in consumer products in general. Even with the major growth that the consumer market has seen, H Venture Partners sees the industry as a niche for VC investment and want to take pride in the type of clean and healthy brands they invest in.
“About 3% of venture dollars go to consumer products, even though it is a massive sector, so our focus is unique,” said Edwards. “The consumer product sector is highly technical, but it doesn’t receive as much attention in Silicon Valley as it does here in the Midwest. H Venture Partners is located right down the street from Procter & Gamble, the world’s largest consumer products company, and Kroger, the largest grocer in the US. We’re in one of the top consumer test markets in North America and we draw upon their network of expertise that extends far beyond Cincinnati. All of our capital comes from retired executives of Fortune 500 consumer and retail companies, so the individuals that are investing in our brands are very experienced.”
Edwards has worked as a venture capital investor for over 17 years in Cincinnati. Her portfolio includes investments in packaged food, medical device technologies and consumer FinTech and B2B software. She later shifted her focus to consumer products after working at Maywic and investing in Peloton, Freshly and 19 other consumer brands, where she noticed the lack of investment in the consumer industry. While many venture capitalists are generalists who dabble in other types of investments, Edwards believes H Venture Partners’ narrow focus and prime location gives the agency an advantage over other VCs.
“Cincinnati is a great place to be based for investors looking to grow products across North America because we are in the number one consumer test market in the country, and we’re surrounded by consumer experts,” said Edwards. “My next door neighbors worked for big Fortune 500 brands, which isn’t uncommon here. In Cincinnati, it’s not surprising that your next door neighbor developed the packaging for Crest. We’re in a community where consumer insight and know-how is all around us and the average American consumer is really understood. Cincinnati has the sensibility of the American consumer, which really helps focus on brands that can grow to become household names.”
H Venture Partners has a portfolio of 10 companies that have seen aggressive growth they say is on par with Amazon and Zoom, ranging from 60% to 600% annually, even during the pandemic. Some notable brands include Avaline, an organic wine brand by Cameron Diaz, Hazel, a highly-absorbent disposable underwear, and Cerebelly, a line of baby food founded by a neurosurgeon from Stanford and a mom of three children. The company is nearing full investment, with high hopes for the future.
“We are incredibly proud of the companies that we’ve invested in and the impact that they’re having on the lives of consumers — families, young kids, Baby Boomers, moms, anyone,” said Edwards. “Our existing investors are really strong, so we feel good about raising funds to deploy capital with this same focus, investment thesis and community, and partnering with entrepreneurs to really grow to be billion dollar brands and household names.”