🎧 Lessons from Chewy.com, Chamberlain Coffee, and What VCs Get Wrong About Capital Efficiency

Consumer VC #346 with Larry Cheng, Founder of Volition Capital

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Hey friends,

Our guest today is Larry Cheng, the Managing Partner at Volition Capital, a $1.7B growth equity firm behind breakout brands like Chewy, Chamberlain Coffee, and BURST. Currently they are investing out of their $650mm Fund V.

Volition’s unique approach? Prioritizing companies that didn’t take early VC checks. No burn-at-all-costs playbooks. Just capital-efficient businesses with traction—and a partner who’s okay being the first check in.

In this episode, Larry breaks down:

• How Chewy went from a “low-margin pet food startup” to the largest e-commerce acquisition in history

• Why Volition bets on unsexy markets and skips the Valley hype

• How Chamberlain Coffee learned the hard way that virality cuts both ways

• Why most VCs misunderstand capital efficiency—and how it actually creates alpha

What makes a founder irresistible without raising a single VC dollar

Episode Chapters:

01:10 Why Larry Left Traditional VC to Start Volition

03:25 The Two Types of Founders Who Bootstrap to $5M+

06:20 How Volition Approaches Valuations

07:55 Why They Backed Chewy When No One Else Would

10:45 Investing in Physical Products vs. SaaS

12:30 The Truth About Virality and Bad Product Experience

14:10 How They Evaluate Customer Acquisition Channels

16:30 Defining Capital Efficiency (Pre and Post Investment)

19:00 Why Most of Their Portfolio Never Raises a Series B

22:00 What Changed Post-ZIRP: Founder Power vs. Investor Power

24:45 The Secret Sauce to Surviving the Hype Cycles

26:30 The “Unsexy Markets” That Became Home Runs

29:45 Why AI Might Be SaaS 10 Years Ago—But Riskier

33:00 Lessons From Grove Collaborative’s Public Struggles

36:50 Chewy’s Secret Weapon: Negative Working Capital

38:40 Existing vs. New Market Creation (And Why Larry Prefers Existing)

41:10 Knowing When to Exit—and What That Conversation Looks Like

44:10 Fund Horizon, Exit Timing, and Founder Alignment

45:40 Larry’s Book Picks: The Bible and 5 Types of Wealth

46:30 The Biggest Consumer Red Flag Today: “Made in China”

48:40 Favorite Innovation: Teslas Driving His In-Laws Around

49:50 The Biggest Venture Lesson: Power Law Is Real

51:20 Why Volition Intentionally Concentrates Their Bets

52:10 Pattern Matching: Useful Signal or Dangerous Bias?

53:25 The Biggest Myth About VCs (Hint: They’re Not All Sharks)

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Thanks for listening! Let me know what you think of the episode in the comments