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Many venture capital (VC) firms set out with an investment strategy targeting specific kinds of companies — it could be mobility and robotics, deep tech, region-specific startups, or any number of niches and verticals. Vice Ventures is no different, but its focus lies squarely on areas where investors have traditionally been less inclined to venture — including cannabis, alcohol, “sex-tech,” gambling, tobacco, psychedelics, and more.

New York-based Vice Ventures was formally launched back in January by founding partner Catharine Dockery, who was previously chief of staff and head of private investments for Andy Dunn, a prominent investor and cofounder of men’s clothing brand Bonobos, bought by Walmart in 2017. She joined Walmart’s digital consumer brands’ arm, with a focus on M&A, after the Bonobos acquisition.

Vice Ventures today confirmed the fund’s first close at $25 million, with big-name backers including investor Bradley Tusk and Marc Andreessen, the entrepreneur and cofounder of esteemed VC firm Andreessen Horowitz. And the fund’s final close will likely be higher. “We remain open for additional investment,” Dockery told VentureBeat.

The fledgling VC firm plans to invest around $500,000 in each of its portfolio companies, and has in fact made a handful of investments already, including in Recess, a beverage brand that infuses CBD and adaptogen into sparkling water; Bev, which sells California Rosé in a can, and also claims Peter Thiel’s Founders Fund as a seed investor; and Indose, a precision-focused cannabis vaporizer.

Above: Catharine Dockery

The ‘vice clause’

While there is nothing technically preventing any VC firm from investing in “bad industries” so long as they’re legal, many are precluded from doing so through so-called “vice clauses,” where fund backers stipulate where their money shouldn’t be invested. There have been some notable divergences from this norm in recent years, however.

Back in 2015, Founders Fund became one of the first institutional investors in the cannabis industry when it joined a $75 million investment in Privateer Holdings, a company that makes acquisitions and investments in pot startups. One of Privateer’s investments was in Canadian medical marijuana company Tilray, which went public last July, leading to Privateer’s 76% stake hitting a valuation of $12 billion.

Pot can now be legally consumed in 10 U.S. states (plus D.C.), while Canada also joined the fray last year, legalizing its use for both medicinal and recreational use. What this helps to demonstrate is that what constitutes a “vice” is not only subjective, but is prone to shifting attitudes and legal landscapes.

Founders Fund has previously touted its investment rationale in terms of backing “contrarian” industries, with specific reference to vice clauses. Last September it said:

The problem with a vice clause continues to be how often the popular conception of “vice” is wrong, and how quickly that conception changes. We don’t invest in what’s popular. We invest in what’s right.

Elsewhere, San Francisco-based weed delivery platform Eaze has raised north of $50 million from prominent investors including DCM Ventures, while Silicon Valley investment giant Sequoia Capital has invested in beer. For extra context on the potential out there for VC firms to invest in vices, San Francisco vape-maker Juul has raised a whopping $13.6 billion, and is now valued at $38 billion.

“Black and white approaches like fund vice-clauses completely ignore that many companies approach their work ethically and responsibly, leaving some exceptional operators struggling to get funding,” Dockery said. “Ignoring the role of vices in our society is not productive, and we believe progress can come from increased legitimacy of the best operators and an informed discussion on their impact.”


The fact that Vice Ventures has secured respected backers such as Tusk and Andreessen lends extra credence to its cause, but it also indicates that some investors are still hesitant — or unable — to invest in certain types of companies through their own investment firms. Thus Vice Ventures serves as a vehicle for these investors to freewheel.

“I have met him [Andreessen] in person and he is an investor who likes contrarian ideas,” Dockery said. “The thesis resonated with industry insiders who are aware of how much vice clauses affect investment.”

Dockery is quick to stress that Vice Ventures isn’t going all-out to find the biggest badasses to invest in — it will follow the same sound principles that other VC firms adhere to. It’s all about “growing good companies that operate in bad industries,” as the company puts it. And it will also focus on many positive movements within these industries, including addiction recovery.

“It is essential that we approach these investments with a strong moral compass,” Dockery added. “We care deeply about finding the highest quality operators in vice industries, and that includes a serious focus on harm reduction, informed consumption, and safe products.”

At its core, Vice Ventures is more about ensuring that not all “vice companies” are tarred with the same brush — there are good and bad players in every industry throughout the world. In her launch blog post back in January, Dockery drew parallels with other more VC-friendly tech companies such as Facebook and Google, which have demonstrated more than questionable practices in terms of enabling improper access to customer data, providing propaganda platforms for terrorists, and undermining democracy.

“In a world where the most mundane of companies can cause social harm, is it simpler for us to look for evil in companies which make products that society disapproves of?,” Dockery asked rhetorically. “The hunt for morally satisfying investments is challenging enough without reducing all vice companies to the same level.”

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