This founder sold her all-natural deodorant company to Unilever before getting into the venture world. Now she’s using her experience to spot the next great consumer brands.

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Jaime Schmidt

Jaime Schmidt.

Courtesy of Jaime Schmidt

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    Jaime Schmidt is the founder behind Schmidt’s Naturals, which she sold to Unilever in 2017.
    These days, she’s focused on making investments through Color, her venture-capital firm.
    Schmidt told Insider about how she’s met founders during the pandemic and her investment criteria.
    See more stories on Insider’s business page.

Jaime Schmidt wanted to invest in a startup so badly, she posted her way into a deal.

Schmidt and her business partner, Chris Cantino, were aiming to invest in Popshop Live, which allows brands to stream live directly to consumers and makes it easy for consumers to purchase a product as they see it. But unfortunately for Schmidt and Cantino, who are married, Popshop had just closed its latest funding round.

That’s when they took to social media. “We just started sharing content, tagging the founders, and talking about what they’re doing,” Schmidt said. They even went so far as to host a Clubhouse room with the founder.

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All of that paid off when they got a spot in Popshop’s round, announced in November. Popshop has raised $4.5 million in total investments.

That strategy is emblematic of the networking Schmidt’s had to do during the pandemic as an investor. Even browsing Twitter can lead to a connection or a potential deal, she said. And as the Popshop example shows, it’s not only the brands that have to work to get deals done in that environment.

“There’s this understanding that brands put in all the work, but a lot of times, if an investor wants a deal to happen, they have to put in just as much work,” Schmidt said.

Schmidt understands both the brand side and the VC side of the funding equation. In 2010, she founded Schmidt’s Naturals by making deodorant and other personal-hygiene products at her home in Portland, Oregon. Seven years later, she sold the brand to Unilever for an undisclosed amount.

Today, Schmidt still maintains connections to the brand she founded, but she spends much of her time taking stakes in today’s up-and-coming brands through Color, the venture-capital firm that she and Cantino run, which focuses on seed to Series A funding for consumer products. Aside from Popshop, their investments over the past year include a $1.7 million funding round in Live Tinted, a beauty brand that caters to consumers of color, as well as children’s-book startup A Kids Book About.

For Schmidt, vetting startups through digital means has been tough during the pandemic, something that many investors and others in charge of getting deals done in the world of consumer packaged goods have echoed recently. But there are a few things she looks for, especially around the longevity of a brand.

“That’s the first thing on my checklist when I meet a brand: Is this a fleeting trend, or is this something that’s going to stick around?” she said. Founders who have a decade-long plan for their brand are especially appealing, Schmidt said: “Can they speak to 10 years down the road? And how are they going to grow and expand?”

Schmidt also looks for brands that aren’t afraid to move beyond the part of the market where they came up. “I really enjoy brands that are rooted in a niche culture but have the opportunity to expand more into the mainstream,” she said. “And those are the brands that I get really excited about.”

Many CPG brands, especially those with a natural or better-for-you focus, are reluctant to start selling at mass retailers or to cater to customers who aren’t their target market. But that’s where her own experience running a brand comes in, Schmidt said. For example, as Schmidt’s expanded into retailers such as Walmart, Target, and Costco, shortly before its acquisition by Unilever, to get on the shelf the brand had to offer custom-size deodorants and create exclusive products that would only be available at a certain retailer.

Some founders see those kinds of changes as dilutions of their brand, Schmidt said, but she counters that it’s a key part of appealing to new consumers and growing a brand. “I have a saying: Don’t make assumptions about who your customer is, because you might be surprised,” she said.

Schmidt is far from the only investor focused on startups in the better-for-you CPG world.

Jason Karp, the founder of Hu Chocolate, recently raised $288 million for acquisitions and investments through a

SPAC
connected to his HumanCo. And CAVU Venture Partners, which has invested in names such as Oatly, Beyond Meat, and Health-Ade, anticipates a wave of new startups coming to market with health-focused ideas as society opens up after the pandemic.

Schmidt also sees more opportunities for natural-focused personal-care brands, but added that products like the ones she created face challenges, especially “taking away the stigma that naturals don’t work” and getting more consumers to try them. “There’s still a lot of work to be done there,” she said.

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