What Erin and Sara Foster’s VC Arm Means for Startups

Exponent Beauty

Celebrity venture companies are the new norm. From SKKY Partners, co-founded by Kim Kardashian, to Marcy Venture Partners, co-founded by Shawn Carter (JAY-Z), celebrities are moving past endorsements and licensing deals and looking to get a bigger piece of the pie.

With that, Erin and Sara Foster, the daughters of music producer David Foster, have recently launched their own venture capital firm, Oversubscribed Ventures, which focuses on early-stage consumer tech startups. So far, the firm’s investments have touched on skincare and beauty, party planning and NFTs.

Where Oversubscribed Ventures Stands to be Different

The Foster sisters are looking to lean into the experience they bring to the table. They previously served as co-heads of creative for Bumble Bizz and Bumble BFF, assisting individuals in discovering appropriate professional and social connections. They also founded a clothing line called Favorite Daughter.

The pair launched Oversubscribed Ventures with Phil Schwarz, a partner at Corazon Capital who played a key role in bringing the Foster sisters into the workout company Mirror, which was later acquired by Lululemon.

See also: Lululemon Enters Deal To Buy Interactive Fitness Firm MIRROR For $500M

Oversubscribed Ventures is currently in the process of raising a $20 million fund, but information regarding the fundraising process has not been publicly shared.

“Between our podcast, Favorite Daughter, our investments and a lot of our speaking engagements, we really feel connected to women. That’s really been the through line that has helped us. We didn’t go to business school so we can’t list for you the reasons why we knew that we’d be able to do this or why we are able to do it,” Erin Foster said in an interview with TechCrunch.

The pair said in that interview that their “sweet spot” lies in working closely with the founders of their portfolio companies, and that their skills are most valuable at the seed stage of a company’s development. In that, they call on their own experience.

It was the success of their previous ventures that got them interested in investing in early-stage startups and obtaining advisory shares. While they didn’t invest significant amounts of money, they worked to help support these startups in exchange for small ownership stakes. They soon realized that approach could be scaled with external funding.

Where They Invest 

Oversubscribed Ventures’ investment strategy is reportedly centered around personal connections, along with a strong belief in their vision and ability to pitch it successfully. Trust and the founder’s capacity to handle the stresses of entrepreneurship are also critical considerations.

The VC firm focuses on early-stage consumer tech startups that have the potential to disrupt traditional industries and transform the way people shop and interact with brands.

The firm has already invested in six companies, including bachelorette party planning app Bach, boxed wine company Juliet, home manicure machine maker 10Beauty, skincare startup Exponent, infant formula firm Nara Organics, and non-fungible token (NFT) marketplace OpenSea.

“We’re not for everyone, and that’s OK,” Erin Foster told TechCrunch. “Not everyone wants to work with a firm that has two people running it that have an unconventional way of doing things. But if you do, then great.”

The firm plans to expand its investment portfolio further in 2023.

Erin and Sara Foster aim to bring a fresh and valuable perspective to the table with their background in media and entertainment. Like most celebrities, the sisters have extensive connections in the entertainment industry that can benefit startups. But the two stressed their role of providing mentorship and guidance.

The Timing for VC Funding 

Just over a year ago, the startup funding landscape was basking in the glow of a sizzling 2021 and hoping to carry the momentum into the new year. However, at the beginning of 2023, funding for startups has considerably slowed down, almost to a crawl.

In late February, PYMNTS reported that VC funding dropped 65% year-over-year in Q4. The amount of money raised in new funds in the fourth quarter of 2022 was the lowest total for that quarter since 2013.

See also: VC Fundraising Dropped 65% Year-Over-Year in Q4

In December, the Financial Times reported that due to the scarcity of venture capital, tech startups have turned to alternative forms of funding such as bridge loans, structured equity, convertible notes, and participating bonds to finance their operations.

The rules of the VC game have shifted due to significant changes in the economic landscape over the past year. While it may not be possible for a celebrity venture company to entirely close the gap on funding for upcoming brands, having connections and resources can certainly provide an advantage.

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