Undergraduate Blog

Meaningful Investments with Jackie Dunklau (McIntire ’07) of Aria Growth Partners

Observing a void for growth equity-stage brands, Dunklau and her Co-Founder realized that they could start a new fund and offer founders consumer expertise and a partnership that would be the right fit for their situation.

Jackie Dunklau

You’ve launched your product, it’s selling, and your brand is on the way up. Maybe it’s a lipstick; maybe it’s dog food. Either way, it’s what people in the industry call consumer packaged goods, or a CPG. After some time, your product is doing pretty well online and being sold in a major retail chain, but it needs some help to get to the next level. What should you do?

As with many things in this life, you probably need some more money. Also, given your hopes to stake out new lucrative territory, you could likely benefit from some solid, strategic advice.

Fulfilling those needs is where Co-Founder and Partner of consumer growth equity firm Aria Growth Partners Jackie Dunklau excels. Her expertise serves the emerging consumer brands they partner with, investing somewhere in the range of $5 million to $50 million in return for minority stakes in the up-and-coming companies.

Dunklau co-launched Aria Growth in early 2020 with Trevor Nelson and Dawn Techow, after spending the majority of her career in consumer investing. Having worked at bigger, later-stage firms like L Catterton and earlier-stage investment companies like CAVU Venture Partners, she says they provided a great background for her to deepen her skill set and to get a panoramic view of the CPG landscape.

It also allowed her to find her niche and what she calls her “favorite part of the market,” which represents the growth equity stage of brands that bring in $5 million to $50 million in revenue.

The Right Fit

While still in her previous role, she recalls that she and Co-Founder and Managing Partner Trevor Nelson noticed that the marketplace was changing: Many of the firms that started out as consumer-focused investment firms had themselves gotten bigger and turned to raising larger funds. That increase meant many wouldn’t get involved with brand founders for less than $50 million or so, thereby creating a widening gap between what investors were looking for and what founders needed.

“It was a little bit of like a mismatch between founders wanting that consumer specialist expertise, but not wanting to take that big of an equity check and a dilution. Or maybe they were not ready to take on that much capital,” she posits.

Having observed that void for growth equity-stage brands, Dunklau and Nelson realized that they could start a new fund and offer founders consumer expertise and a partnership that would be the right fit for their situation. “A $5 million or $10 million equity check is still really meaningful for Aria,” she says, explaining that the partnerships Aria offers are suitable for founders to get the insight they need without sacrificing their ownership percentage in their brand.

“Where Aria invests is a really exciting point in a brand’s trajectory because that’s where a brand has shed its concept risk and found that product market fit,” she explains. “But there are still quite a few building blocks needed to get it to that $100 million revenue brand—when it’s ready for an exit. And that’s where Aria comes in to be a value-added partner to provide strategic support to the founders as they scale.”

A Market of Constant Innovation

One reason Dunklau finds that her chosen area of investment is particularly interesting is its constant innovation.

“It’s one of the unique industries where someone can say, ‘I have this specific pain point,’ and they’re actually able to launch a company to go solve it,” she says.

An example of that problem-solving approach to product creation can be found with Hero Cosmetics, the first brand with which Aria Growth partnered. Hero’s founder, Ju Rhyu, was searching for a better way to treat her acne using a solution that was less harsh on her skin. “She’s Korean American, and when she was in Korea, she found this amazing acne patch, brought it here, and made it available in the U.S. So many of the companies and brands that we partner with started because the founder had an issue that they were trying to fix, were able to find a solution for, and were able to commercialize it. That’s unique to the consumer industry,” says Dunklau.

A second reason she says consumer goods are exciting comes from their ever-changing distribution channels.

“If you think about Amazon 20 years ago, it wasn’t the place you would go to buy face wash, and today it is. Or Tik Tok—it didn’t even exist 10 years ago. And now it’s a really major way to brand discovery,” she says, noting that the very avenues that consumers use to learn about products and buy them are largely driven by new technologies and the proliferation of platforms within them.

“That leads to a lot of opportunity for these new, upstart brands, because larger consumer packaged goods firms are slower to adopt new tools and channels.” Dunklau believes that reticence gives keyed-in entrepreneurs a real opportunity to build their capabilities to sell online and grow their direct-to-consumer audience via social media and other applications.

Finding Value Beyond the Bubble

The flipside of that potential excitement in a product is the relative simplicity with which an investor can find themselves caught by the hype as they’re analyzing a potential investment; as Dunklau puts it, “It’s very easy to say, ‘Well, I like this product, so everyone is going to like this product. Let’s invest in it.’”

She sees it as a danger specific to the consumer industry and those who invest in it. She admits that it’s simple to fall in love with the right product and imagine it taking off without proper time and analysis. “I’ve learned in the past not to let my own personal taste or bias lead me into deals too early. That’s why we really rely on the data and the diligence process to have concrete evidence a brand is working.” Dunklau has since learned to let the research support her personal opinion before betting that the masses agree with her take on a particular brand. “I may think I like something, but I’m also living in a bubble in New York City. It’s important to let the data validate my initial gut reaction.”

In addition to being a New York resident for the majority of her years since she graduated from UVA and McIntire in 2007, Dunklau is a female leader in the entrepreneurship and consumer space—which is still a minority in the industry. She says that, inherently, female founders have a bias against them. “The majority of private equity investors are male,” she says. “When you have a female founder presenting their idea, the #1 complaint I hear from them is when an investor tells them, ‘I’m going to give this to my wife, let her try it, and tell me what she thinks first.’”

While she retells how that type of interaction, unfortunately, is a little bit of a cliché, she’s encouraged by her and other firms’ current work fostering the efforts of female founders. “Funding female founders is becoming a priority in our ecosystem. I’m really proud that in our portfolio of brands, 80% have at least one female co-founder, and 60% have a female CEO. There are incredible businesses out there run by women, and particularly in the consumer space. Things are changing, but we still have a way to go.”

It can be difficult for any of us to keep the big picture in mind when we’re head down in the minutiae of the daily to-do list, but Dunklau is the right person in the right position to help others take their CPGs to their intended destination.

“I feel super fortunate, like I have the most fun job in the world,” she says. “I love meeting founders and hearing about what they’re building, the challenges they face each day, but also the wins.” She remains driven by a desire to be that difference-maker in a founder’s success story. “At the end of the day, I’m an investor, but I really do see myself as a service provider. We’re trying to serve and help our founders and add strategic value. And I’ve made some incredible friendships along the way,” Dunklau says. “It’s just a really rewarding job.”

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