It began with a viral video. As soon as Mike Jones saw Michael Dubin swinging a tennis racket and riding a forklift through Dollar Shave Club’s downtown L.A. warehouse, he was intrigued. When Jones met Dubin and heard him pitch the business, he was sold.
“When we saw the video, when we saw the pitch and after meeting him, I definitely knew I wanted to be a part of that company,” said Jones.
Jones first met Dubin about three years ago when the future YouTube sensation was presenting his business to investors around Los Angeles, seeking investments in Dollar Shave Club, a membership-based online shaving retailer that sends razors directly to customers for as little as $1 a month. The company also offers two higher-end products for $6 and $9 a month.
Through Science, his Santa Monica business incubator, Jones became one of Dollar Shave Club’s first angel investors. That got him the chance to watch Dubin in action, which led to him introducing the young entrepreneur to his network.
“As part of our investment, we were lucky enough to have him sit in our office for a while and we supported him in whichever ways we could,” said Jones. “We helped him find talent and connected him with some best-of-breed practices and partners.”
While Science usually focuses on companies that specifically target millennials, Dollar Shave Club has a much broader range of customers, which was just fine with Jones.
Science first invested in the razor business two years ago, when the company raised $1 million. Dollar Shave Club then raised a $9.8 million Series A round in November 2012 and a $12 million Series B last October, with Palo Alto VC shop Venrock leading both later rounds. Rustic Canyon, a Santa Monica venture capital firm where Jones is a venture partner, participated in all three rounds. Jones has been a board member of Dollar Shave Club since the seed stage.
Jones said there was “tremendous demand” in the A and B rounds, which led to the high amount of capital raised. He also pointed to Dubin’s enthusiasm and passion for the business as something very attractive to potential investors, especially Science.
“He has this incredible personal wit and sense of humor that allowed him to create such a great brand,” Jones said.
Dubin’s video, which now has more than 13 million views, has given Dollar Shave Club a level of brand awareness that’s the envy of many startups and even established companies. And with the high cost of razor cartridges and the hassle of buying them at a store, which often requires a sales person to unlock them from a clunky anti-theft device, Jones sees a huge opportunity.
“I don’t see any reason why Dollar Shave Club can’t become a very, very big portion of the men’s razor market,” said Jones.
– Matt Pressberg
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