‘Founders In Residence’ Program Helps Brands Transition To D2C

Large marketplaces like Amazon create an amazing first step opportunity for entrepreneurs looking to test out if their business idea works — if they can create any consumer demand for their widget. And many brands do: there are over 15,000 thousand marketplace sellers on Amazon bringing in over $1 million a year.

The problem is, Foundry CEO Helen Vaid told PYMNTS, figuring out where to go next once an idea has been proven can be very challenging. Small sellers on Amazon often don’t have a direct-to-consumer business they run on the side or a physical location — their home marketplace is the only place they’re selling because figuring out expansion is often just a bridge too far.

“These talented people have capability to grow the business and actually add more ideas to it, but they haven’t got the headspace because they’re so busy trying to worry about operational issues and marketing issues and making sure somebody sent a CRM email out. And because they’re three or four people who are scrambling to run a business, they just can’t take on the labor of expanding,” Vaid noted.

Foundry, which launched earlier this week with the announcement of $100 million in debt-free equity capital from LightBay Capital and Monogram Capital Partners, was founded to help those brands take that next step. Using the $100 million it just raised, Foundry aims to build a robust portfolio of omni-digital brands through acquisition and work in tandem with founders and entrepreneurs to help develop their retail endeavors to the next level.

Founders In Residence  

There is, of course, no shortage of investors out there doing a variation on what Vaid called “Amazon Arbitrage” as they look to scoop up and flip the marketplace sellers running successful businesses. But Foundry is thinking of its acquisitions differently. As its name implies, it’s not just looking to build a portfolio but to work with founders to forge their business expansion and evolution into its next steps.

Foundry is not the platform for founders looking to make a quick exit with some cash in hand. The conversation they want to have, she noted, is one of collaboration with founders to figure out how they want to grow their business and expand to markets they might never have considered before.

“We don’t want them to leave the system. It’s almost like an acqui-hire business, we think of it almost like a founder in residence program where these folks would be part of our business,” she said. “So as much as we are acquiring brands, we are also looking for talent that can then grow … in vectors that we may have never even thought of. “

It’s a different way to think about acquisition, she noted, as opposed to the more typical “here’s your check, have a safe drive home,” method that dominates the segment. Still, it’s one Vaid says will help shepherd the next generation of eCommerce innovation into existence in the U.S. and worldwide.

Building A Better Long Term Market 

Vaid noted that a competitive market is a better market for consumers, who ultimately enjoy the benefits of a better selection of a broader range of goods at lower prices. We are all much better served in a world where Walmart and Amazon constantly try to outdo each other to win the customers’ loyalty than in a world without competition.

And there is an opportunity out there for really sharp, creative and clever eCommerce up-and-comers to break into that competition and add to it.

There are incredible players out there, Vaid said, in a world where commerce platforms of all kinds and all descriptions are blowing up. The opportunity is there for merchants to capitalize one — if they can work with the right partner, getting on that path to expansion to selling globally or evolution that broadens their core offering.

“I personally think the potential is so huge for great ideas and great brands that if done properly, you will just see growth patterns you’ve never seen,” she said. “We think we can help brands harness that growth — and develop into the big companies they deserve to become.”