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A partner at M13, Anna was the managing director of Techstars LA and also a partner in The Fund LA. A certified executive coach, Anna has worked as a corporate lawyer, McKinsey consultant, product exec, and entrepreneur. She serves on the Advisory Board of PledgeLA and is a member of AllRaise.

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A partner and head of legal, Win has served in senior leadership roles at numerous consumer technology companies, including as General Counsel of MasterClass and early-stage startup Vessel (acquired by Verizon), as well as senior legal and business affairs roles at Hulu. A former electrical engineer, he started his legal career as a corporate attorney at Latham & Watkins

Win Chevapravatdumrong

Partner

Win leads all legal and risk matters relating to our investment activity and fund operations and provides operational and strategic support to our portfolio companies.

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Win Chevapravatdumrong | M13

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Zach’s focus is on architecting systems and processes that augment the data backbone behind all of the firm’s operating systems.  He held multiple roles at Quovo (acq’d by Plaid) and Plaid, including Technical Lead and Product Manager for Plaid’s Partnerships Team.  Prior to joining M13, Zach founded a consultancy focused on data engineering and a SaaS platform for B2B Go-To-Market Teams.

Zach Naglieri

Operator

Zach’s focus is on architecting systems and processes that augment the data backbone behind all of the firm’s operating systems.

Zach Naglieri SEO

Zach Naglieri | M13

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Emma manages all things content, from thought leadership, to reporting, to social media. Prior to M13, she was the managing editor at business intelligence startup CB Insights. Other experience includes working at a fintech startup, the country’s third most-circulated newspaper, and a top 5 global insurance company.

Emma Miller

Emma manages all things content, from thought leadership, to reporting, to social media. Prior to M13, she was the managing editor at business intelligence startup CB Insights. 

Emma Miller SEO

Emma Miller | M13

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As a partner and head of operations, Lizzie leads the Propulsion team that helps propel our founders’ businesses forward. She was previously the COO of sneaker marketplace GOAT Group, CMO of Gilt Groupe, and founding partner of Brilliant Ventures.

Lizzie Francis

As a partner and head of operations, Lizzie leads the Propulsion team that helps propel our founders’ businesses forward. She was previously the COO of sneaker marketplace GOAT...

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Lizzie Francis | M13

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As a member of the investor relations team, Talitha has worked with the team to build the IR systems at M13 from the ground up. She was previously the quality control and administrative assistant for the accounting and assurance department of Lindsay & Brownell, LLP.

Talitha Wright

As a member of the investor relations team, Talitha has worked with the team to build the IR systems at M13 from the ground up. She was previously the quality control and...

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Talitha Wright | M13

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Sarah was previously the VP of marketing and investor relations at Arlon Group and has served in IR roles at StepStone Group and Citi Private Equity. She is a public company board member, co-founded the Sustainability Investment Leadership Council, and has served on numerous non-profit boards.

Sarah Tomolonius

Sarah was previously the VP of marketing and investor relations at Arlon Group and has served in IR roles at StepStone Group and Citi Private Equity. She is a public company...

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Sarah Tomolonius | M13

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As M13's community program coordinator, Samantha aligns with M13’s commitment to creating an inclusive community through authentic experience, dedication to innovation, and creativity. Samantha was previously the development associate for outreach and programming at Rockefeller University.

Samantha Hughes

As M13's community program coordinator, Samantha aligns with M13’s commitment to creating an inclusive community.

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Samantha Hughes | M13

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As M13's brand project specialist, Generra brings her experience in operational excellence and community building from her previous time at The Knowledge House, a tech non-profit. Prior to that, Generra led project management, from enrollment and ops to data management, for Newark Public Schools. 

Generra Rodriguez

As M13's brand project specialist, Generra brings her experience in operational excellence and community building from her previous time at The Knowledge House, a tech non-profit. 

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Generra Rodriguez | M13

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Erik is M13's accountant and has a vast background working in tech companies and the applications used in accordance with GAAP for reporting. Erik was previously an accountant at Glamsquad and Stella Connect, which was acquired by NYSE listed Medallia in 2020, which gave Erik the opportunity to oversee the finance integrations of the two companies. 

Erik Grant

Erik is M13's accountant and has a vast background working in tech companies and the applications used in accordance with GAAP for reporting.

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Erik Grant | M13

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Feven was an investment analyst for KingsCrowd while simultaneously receiving a certificate from Cornell’s Women and Entrepreneurship program, where she focused on the start-up ecosystem for minority groups.

Feven Solomon

Investor

Feven was an investment analyst for KingsCrowd while simultaneously receiving a certificate from Cornell’s Women and Entrepreneurship program, where she focused on the start-up...

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Feven Solomon | M13

__I look for founders and teams who have an insatiable drive to learn.__ A learning mindset is probably the single most important quality in an early stage founder. There is a close to zero percent chance that the plan you have today will be the best plan in six months. Therefore, only the people who are willing eager to learn and adapt will succeed. As Brene Brown says, I’m here to get it right, not to be right. 

 __Curiosity has always driven me in career – and life.__ I don’t believe in the five year plan; instead, I’ve followed my curiosity and am most engaged and alive when I’m on a steep learning curve. I’m not afraid of risk launching a new venture, switching to a new industry, creating the space to travel around the world, talking to a stranger on a plane. What it boils down to is, I’m not afraid to be a beginner and have a beginner’s mindset. M13 is a team of bold thinkers who also embrace uncharted territory and value curiosity and asking the hard questions. There’s no better environment than a place to take risks with the full support and trust of a team around you. That’s what M13 has created. 

 __Entrepreneurs create a better future, and we need a better future now more than ever.__ LA is home to a creative, diverse community of entrepreneurs and operators who want to make the world better. LA is also a center for innovation in everything from media to biotechnology, from proptech to food. As a tech community, we’re also committed to growing in a way that includes everyone reflected in the work of PledgeLA, which M13 joined and where I’m a founding member of the Advisory Board. M13 embraces purpose-driven innovation and gives it fuel. 

 __Empathy is essential.__ Empathy is grounded in seeing and feeling things from the point of view of the other. “Become the other person and go from there,” the saying goes. I like to think about empathy as perspective, rather than feeling. It’s about working to turn the lens around so you see things differently, as someone else does. When we are driven by empathy, our interactions become transformative, rather than transactional. 

 __It all comes down to storytelling.__ Stories are how we understand, influence and connect with each other. The best leaders, teams and brands are master storytellers. And it’s one of the strengths of M13 and woven into everything we do. Helping our founders and brands tell their stories in the most impactful way.

Anna Barber

A partner at M13, Anna was the managing director of Techstars LA and also a partner in The Fund LA. A certified executive coach, Anna has worked as a corporate lawyer...

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Anna Barber | M13

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Morgan spent five years in investment banking at Morgan Stanley. She worked on a presidential campaign, at Bloomberg Philanthropies and consulted for start-ups in the political media space.

Morgan Blumberg

Morgan spent five years in investment banking at Morgan Stanley. She worked on a presidential campaign, at Bloomberg Philanthropies and consulted for start-ups in the political...

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Morgan Blumberg | M13

They may be the future’s great hope, the generation driving their Gen X parents crazy, or both. 

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How Gen Z is Driving the Future of Work, Commerce and Living

Gen Z may be the future’s great hope, the generation driving their Gen X parents crazy, or both.  They are driving innovation in how we work, shop, socialize, and live.

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What do Gen Z care about and how are they shaping innovation? | M13

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As a principal at M13, Brent leads investments across the firm's consumer investment themes. Prior to joining M13, Brent was an investment associate at Battery Ventures. Prior to that, he served as a strategy & corporate development associate for Samsung NEXT.

Brent Murri

As a principal at M13, Brent leads investments across the firm's consumer investment themes. Prior to joining M13, Brent was an investment Associate at Battery Ventures...

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Brent Murri | M13

__*This is the first of a multi-part series on M13’s Future of Commerce thesis.*__ 
Changing consumer behavior has been at the center of M13’s [investment thesis](https://m13.co/article/m13s-investment-thesis-understanding-the-future-of-consumer-behavior) since the inception of the firm. We gravitate toward large markets that are undergoing massive consumer shifts, and we invest behind the entrepreneurs and visionaries who are building technology enabling these shifts. Perhaps the best example of this thesis in action is in e-commerce, where we ask ourselves how consumers will purchase goods and services over the next decade. 
We’re all aware that e-commerce gained momentum over the last two years, propelled by a global pandemic that forced goods and services to be purchased online. Even as the physical world has begun to open back up, however, e-commerce is showing no signs of slowing down. 
To put the size and growth of the U.S. market opportunity into perspective, e-commerce reached nearly [$800 billion](https://www.emarketer.com/content/us-ecommerce-forecast-2021) in total spend and represented 14% of total retail sales in 2020. Looking over the next five years, the TAM is expected to double to $1.65 trillion and reach 24% online penetration—meaning over the next five years alone, $850 billion of _new_ TAM will be created, which is more than the total e-commerce market size that has been created to date. 
<center>![Explosive Market Growth Yet to Come](//images.ctfassets.net/vcjxvx0h1a5n/6d2Vi6hn1U2QCUGkbWLgxX/83cc8c4dfe93444ccd57be3153298baa/TAM_v5.png)</center>
<center>*Source: eMarketer* </center> 
With so much market opportunity in the near term, we’re constantly asking ourselves three key questions about the future of commerce: How is consumer buying behavior shifting? Where can value be created from this shift? And who will capture the resulting value? 
Before looking forward, we want to first look back at our own portfolio evolution as we’ve adjusted to the evolution of commerce. 
## Fund I: Identifying DTC white spaces
Commerce investing has always been in the M13 DNA. The first M13 investments in the early and mid-2010s included category-defining brands such as Bonobos, Ring, FabFitFun, and Daily Harvest. These investments were made through Fund I, an evergreen fund with capital deployed between 2012 and 2018. The investment thesis was based on a changing consumer behavior toward convenience and brand community. DTC brands emerged, taking on retail incumbents as they built products in consumer white spaces. We saw the benefits of an online delivery model and the creative storytelling of online-native retailers, and we backed early leaders in food, apparel, consumer electronics, and more. 
Take, for example, Bonobos, which was one of our first Fund I investments. Industry pioneers Andy Dunn and Brian Spaly were doing something that was unique at the time—selling pants that fit, completely online. Few companies like this existed, and they helped create a white-space category for digitally native fashion. It’s crazy to think about now, but back then, one of our _risks_ in investing in the company was: “Will people feel comfortable buying pants online?” Thankfully, we were able to buy into Andy and Brian’s vision of what is now an obvious consumer behavior. 
<center>![Creating White Spaces](//images.ctfassets.net/vcjxvx0h1a5n/5bg1Lu1NXmn2WdRWgEFIyx/34412823918d0bd2611e87228d36ff0a/Whitespaces_v5.png)</center>
<center>*Source: M13* </center> 
## Fund II: Adapting to the changing DTC landscape
As we transitioned to Fund II in 2019, we began to see that the distribution model of selling online was no longer going to be a competitive moat in commerce. We attributed this to two primary drivers: 
### Competition: Infrastructure and software tools made it easy to set up a store and start selling online
Shopify, BigCommerce, Wix, and other online storefronts allowed small business owners to set up a site in just days. As the barrier to entry was lowered, gaining access to e-commerce distribution became easier and more entrants arrived. Take Daily Harvest, for example—in 2015, they created a new white space for healthy frozen foods shipped to a customer’s door. By the time Fund II launched, there were at least a dozen competitors knocking off the idea and selling their own versions (none of which taste quite as good, in case you’re wondering). 
<center>![Shopify number of merchants increased 12x](//images.ctfassets.net/vcjxvx0h1a5n/2EMkuNHADpxlywAjwxflia/aac402bb456f70237c3b2761f82a1922/Shopify_v5.png)</center>
<center>*Source: Shopify Quarterly Results; represents stats at the beginning of each fiscal year* </center> 
### Customer acquisition: Paid marketing became commoditized
Early commerce brands like Ring reached hundreds of millions in revenue through creative social media campaigns and online customer acquisition strategies. But as more consumer electronics companies flooded the market, digital CAC rose to unsustainable levels. It was no longer a viable acquisition strategy for Ring to grow sales by relying primarily on Google and Facebook, which had once been the bread and butter for digitally native brands. 
<center>![DTC Customer Acquisition cost has increased significantly](//images.ctfassets.net/vcjxvx0h1a5n/GXDQzFtChul0XfpJC1IsA/ac638aeee5b060374a89cb328ccefb50/DTC_Acquisition_v6.png)</center>
<center>*Source: [Profitwell 2018 CAC Study](https://www.profitwell.com/recur/all/content-marketing-customer-acquisition-cost)* </center> 
In response to the changing landscape, we began to explore investment opportunities deeper in the value chain—a shift from the _brand/application_ layer toward the _infrastructure_ layer of e-commerce. Rather than betting on which brands will capture consumers’ loyalty, we began to invest in the software and enabling technologies to help them get there. These e-commerce enabling investments include mission-critical infrastructure such as banking and financial services ([Rho](https://www.rho.co/)), shipping and logistics ([Passport](https://passportshipping.com/)), marketing ([PINATA](https://www.gopinata.com/)), and cart conversion ([Carrot](https://addtocarrot.com/)). 
## Fund III: Investing in sophisticated tooling for DTC
This takes us to where we are today, making capital allocation decisions that will allow us to support the next wave of commerce enablement businesses supporting the rise of online purchasing. And we transition from looking back to once again making predictions on changing consumer behavior. Moving forward, we’ll focus on investing in the infrastructure helping to build the next phase of commerce. 
Value creation is already beginning to validate this investing strategy. Today, there are <a href="https://www.cbinsights.com/research-unicorn-companies" target="blank">515 unicorns based in the U.S.</a>, representing $1.77 trillion in cumulative enterprise value. By our count, 20 DTC brands are on the list (we’re proud to have four of these as M13 portfolio companies: Rothy’s, Daily Harvest, Tonal, and Pax*), representing only 2% of the total enterprise value. In contrast, commerce enablement companies represent 11% of the total enterprise value, 5x the value creation of all DTC brands**. While select DTC brands will continue to reach unicorn status in the future, we believe the next wave of value creation in commerce investing will occur primarily at the infrastructure layer. As a result, we’re aligning our investment strategy to best capture this value.
<center>![Value Creation for DTC Brands](//images.ctfassets.net/vcjxvx0h1a5n/7GwKKVzHESlSlIxI0mA2Lo/0fc12b693aea6a684edaa557dcb3453b/Value_Creation_v7.png)</center>
<center>*Source: CB Insights* </center> 
This isn’t to say we no longer support the DTC community. On the contrary, we love DTC brands and still count more than 30 such companies as active portfolio companies in Fund I. We believe that there are now more advantageous capital allocation options for DTC founders to consider, including new equity structures (for example, at M13 we’re incubating brands in partnership with founders—we’ll continue to build select companies at the brand/application layer) and non-dilutive forms of financing (which we’ll explore in a subsequent article on the future of e-commerce financing). With $850 billion of new TAM coming online in commerce, we see a golden age for emerging DTC brands and founders, and we’re investing in the tools and platforms needed to support them. 
<center>![Fund I-III investing evolution ](//images.ctfassets.net/vcjxvx0h1a5n/5l0eWccWCZTjvfPgY0W6wH/6bf79c821e33a18e411cd6c27ab0c3d8/Ecomm_FundI-III_v12.png)</center> 
<center>*Source: M13* </center> 
M13 Partner Anna Barber and Principal Brent Murri lead M13’s commerce enablement strategy and will share more insights over the next year, including these topics:
<DotBullet highlight="" text="What alternative forms of financing are emerging to support DTC brands?" />
<DotBullet highlight="" text="How can brands employ Web3 technologies to better serve customers?" />
<DotBullet highlight="" text="How is the traditional retail model being disintermediated by the new wave of sellers?" />
_**If you’re a founder building in the commerce enablement space, we’d love to chat. Reach out to us at [brent@m13.co](mailto:brent@m13.co) and [anna@m13.co](mailto:anna@m13.co).**_ 
_* M13 exited our position in Pax in 2018._
_** Only includes current unicorns; DTC brands include digitally native merchants; doesn’t include marketplace models, digital services, or e-commerce acquirers and aggregators._

M13’s history of investing in DTC brands is propelling us toward the future of commerce.

Header Investing in the Future of E-commerce

Investing in the Future of Commerce

Here’s a look back at M13’s history of investing in DTC brands—and a look ahead at the e-commerce enablement tools changing the future of commerce.

Anna Barber

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