Harsh Truth Behind Beauty Exits ft. Rich Gersten

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He’s one of the most respected investors in beauty and wellness—and he’s seen every boom, bust, and bubble the industry has gone through.

In this episode, Mike sits down with Rich Gersten, Co-Founder and Managing Partner of True Beauty Ventures, a beauty and wellness–focused investment firm built by operators for founders. Rich has spent over 20 years investing in consumer brands—from early private equity days at North Castle Partners to launching True Beauty Ventures, one of the most influential early-stage funds in the category.

Rich shares how he accidentally stumbled into beauty investing, what makes the category so resilient, and why he believes the “beauty bubble” is finally normalizing. He also opens up about the reality of early-stage investing, the rise (and decline) of celebrity brands, and what he’s learned from building a beauty-focused fund from scratch.

You’ll learn:✅ Why beauty and personal care outperform other consumer categories✅ How Sephora and Ulta transformed the entire retail landscape✅ The biggest mistakes founders make when scaling beauty brands✅ How True Beauty Ventures approaches early-stage investing✅ Why most celebrity brands fail (and what makes Rhode different)✅ What’s really happening in beauty M&A and why exits have slowed✅ How Rich thinks about valuation discipline and pro-rata investing✅ Why execution—not product—is the #1 differentiator

👉 If you’re a founder, operator, or investor in beauty or consumer, this episode offers a rare inside look at what it really takes to build and back the next breakout brand.

Timestamps00:00 Intro01:20 How Rich Got Into Beauty Investing04:00 What Makes Beauty Unique vs. Other Consumer Categories07:00 Sephora, Ulta, and the Rise of Specialty Retail08:30 Why Rich Started True Beauty Ventures11:00 How They Add Value Beyond Capital13:00 The Difference Between Private Equity and Early Stage15:00 Lessons from Fund I & II: Check Sizes, Risk, and Returns19:00 The “Back Up the Truck” Investment Strategy22:00 How True Thinks About Pro-Rata and Founder Relationships25:00 Sephora & Ulta: Still Essential or Optional?28:00 The $5M Revenue Trap (and Why Early Might Be Better)31:00 How True Evaluates a Brand’s Potential34:00 Outbound vs. Inbound Deal Flow37:00 The Real Economics of Beauty40:00 Why Luxury Skincare Is Failing42:00 Amazon’s Surprising Role in Beauty44:00 The Problem With Celebrity Brands47:00 Why Rhode Worked—and Others Didn’t50:00 Returns, Risk, and How Beauty VC Actually Works55:00 The M&A Slowdown: Too Many Sellers, Not Enough Buyers01:00:00 The Future of Beauty Exits and Strategic Buyers01:03:00 Makeup’s M&A Problem Explained01:05:00 Valuations, Prefs, and Founder Pitfalls01:06:30 Book Picks: Outlive by Peter Attia & Founder Stories in Beauty

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