Why Early-Stage Consumer Investing is Rare

The mandate for almost all private equity investors is to raise a fund, deploy the capital and generate returns. For funds with hundreds of millions of dollars, it is impractical to spend time on small deals that do not make a dent in the capital deployment. In consumer, smaller deals mean extensive time spent finding and diligencing deals. Since investors have to deploy their funds in a certain time frame to satisfy limited partners, it’s nearly impossible to allocate too much time to early-stage deals. The clock is ticking.