One of the three founders of superstar CPG venture capital firm CAVU is leaving the fold.
Clayton Christopher, the founder of Sweet Leaf Tea and Deep Eddy Vodka, told BevNET that he’d left an active role within the CAVU organization earlier this year, although he is continuing to work as a board member and advisor to the brands in his portfolio from CAVU’s first two investment pools.
The firm is currently starting to raise money for its third fund, with its remaining partners Rohan Oza and Brett Thomas taking the lead.
Christopher, an Austin-based operator/CEO, formed CAVU with Oza, a world-renowned marketing executive, and Thomas, who brought a background in finance and connections to the outdoor advertising industry, in late 2015.
The combination quickly won attention from the industry and the business press due to its principals’ strong reputations and the three quickly found success raising money and choosing brands. Their first fund raised $156 million; the second, buoyed by the $1.7 billion sale of Bai, an investment Oza had brought to the fund, raised $209 million.
But maintaining offices in three different cities and differences in personal style began to show through. In separate interviews with Christopher and then Oza and Thomas, both the departing partner and the remaining pair cited the communication difficulties that come with disparate offices, as well as philosophical differences with regard to the future of CAVU as the reasons for Christopher’s departure.
“With another fund coming, it was like signing up to work with your partners for another six or seven more years,” Christopher said. “Geographically, it was more challenging than we thought. If we were all under one roof, it probably would have worked better, so we all decided that it would be best if we parted ways.”
The firm initially started in late 2015 with Thomas in New York, Oza in Los Angeles and Christopher shuttling between Austin and Jackson Hole, Wyoming. Thomas later moved to L.A.
“We got the ball rolling,” as three partners, Oza said. “But it became tough from a communication standpoint, from a culture standpoint,” to have partners in different locations so early in the enterprise.
“CAVU has gone significantly past me, Brett, and Clayton,” Oza added, noting that a third, fourth, fifth or sixth fund meant long-term commitments.
Christopher said he will remain what he called “highly engaged” as an investor and advisor in the portfolio companies in CAVU’s first two funds. He said he will stay on the boards of several of those companies, including Rebbl, High Brew, Kettle & Fire, Waterloo Sparkling Water, Austin EastCiders, Mighty Swell and Good Culture. He is planning to depart plant-based dairy company Kite Hill’s board in the near future, although CAVU will retain a board seat.
At the launch of the fund, it was clear that three contrasting personal styles were involved: Oza, the Glaceau marketing wizard with ties to Hollywood stars –and as of 2017, a media figure himself via Shark Tank — brought flash and an international Rolodex; Christopher, a highly regarded bootstrapping entrepreneur who had launched and sold both Sweet Leaf Tea and Deep Eddy Vodka, brought operating experience, while Thomas, with his Wall Street background, was regarded as a steady financial caretaker and the partner who would hunt down promising brands.
“We had all hoped that our differences would be a strength, and in many ways they were but ultimately it proved too much,” Christopher said of the different personalities.
Nevertheless, the partners did not note any specific conflict or that triggered the change in structure.
“After funds one and two, we just got busier and busier, and communication decreased,” Christopher said. “We’re all running so hard.”
Noted Thomas, “At the start, we were about the few, and now we’re about the many.”
Christopher is still listed on the CAVU web site as a co-founder and “Senior Advisor.” Meanwhile, the remaining partners said they believe the firm had already begun to evolve at the time of Christopher’s moving on, with the firm’s growing team sourcing deals and raising money alongside the original partners.
“We’re looking at the DNA of the firm now,” Oza said. “Everyone is so passionate about consumer brands, about their journey. We want to be around for 20, 30 years or longer, and we’ve got an incredible team now. It didn’t have to be all three of us to do it.”