On the heels of their entrepreneurial success with fashion brand Favorite Daughter, which became profitable in two years under Centric Brands, sisters, podcasters, and business partners Erin and Sara Foster announced on Tuesday the launch of venture capital firm Oversubscribed. Erin and Sara Foster will serve as general partners of Oversubscribed Ventures, which will also have the support of Corazon Capital.
Before founding Favorite Daughter, the sisters worked as creative directors of Bumble. With each experience better acquainting them to the makings of a successful business, they started to make angel investments in companies they believed in. “We would write small checks, and then we would get really involved in the company, and then we would just own this tiny amount of it. It didn’t feel like [the payoff] was matching the amount of effort and energy we were putting in. So we thought it would be smart to expand and get into venture [capital] so that we could make bigger investments and have a bigger impact,” said Erin Foster. To date, the sisters have invested in brands including canned wine company Bev and Exponent skin care. Sara Foster has invested in swimsuit company Summersalt.
Thus, the birth of Oversubscribed. Oversubscribed’s focus will be female-founded brands, though not as a rule. “If we don’t understand the customer, then we can’t help. We have a perspective. So we try to focus on [companies] where our perspective aligns with the customers,” Erin Foster said. That’s not even to mention the fact that just 2% of female founders receive VC money, which she called “depressing.”
“We’re not looking to even the playing field here. It’s so big, we wouldn’t be able to. But it would be irresponsible of us to not try to help as many women as possible,” she added. The firm will make investments in the range of $250,000-$500,000.
“We’re not A-list investors, who are a little harder to do a deal with and pin down,” said Sara Foster. “We’re kind of in the middle, where we ourselves have a platform, plus we also have an ecosystem of amazing co-investors.” Sara Foster has 690,000 Instagram followers, and Erin Foster has 612,000 Instagram followers.
“Money is the least interesting part of what we bring to the table; there’s a lot of capital out there,” Erin Foster said.
The sisters’ podcast, “The World’s First Podcast,” has provided them with a wealth of insight and an opportunity to exchange information exchange with fans and listeners. Via listener DMs, “we do real research for Favorite Daughter and for our portfolio companies, because it’s a female audience. They talk to us and we talk to them. We will spend hours a day reading messages,” Sara Foster said. “[They’ll say,] ‘That skin care you were talking about? I bought it I loved it.’ Or, ‘That app you were talking about? I just used it for my bachelor party, and I wore Favorite Daughter.”
The sisters will continue to follow their own instincts when it comes to making investments, Erin Foster said. “We didn’t go to business school, and we don’t want to see these long, drawn-out data sheets. We want to talk to the founder and hear about the product.”
“Are we the customer? Is our audience the customer? Ultimately, we have to be able to speak to our audience about the businesses we’re investing in. And if it doesn’t make sense, it’s not for us,” Sara Foster said.