🎧 Lessons from Chewy.com, Chamberlain Coffee, and What VCs Get Wrong About Capital Efficiency
Consumer VC #346 with Larry Cheng, Founder of Volition Capital
→ Listen on Spotify, Apple, YouTube
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)
Thanks for listening! Let me know what you think of the episode in the comments