From Actor to Alcohol VC: Noah Friedman on Top Shelf Ventures

Full Transcript

Jason Kirby: Hey everyone, welcome back to Fundraising Demystified. Today we have Noah Friedman, a venture capitalist and general partner at Top Shelf Ventures. Welcome to the show,

Noah: Thanks Jason, thanks for having me.

Jason Kirby: No, I'm excited to have you on the show and you got a pretty interesting background, you connected through mutual friends. I think it'd be best if you just tell the audience a little bit about your story, how you became, you know, start as an actor and, you know, now you're a venture capitalist. Be great to kind of fill that gap and hear your—

Noah: Sure. The actor thing is a funny one and I guess I'll circle back to that. But the short version is I started a fund called Top Shelf Ventures. We are generalist private equity and venture investors in the highly specific and highly regulated alcohol industry. So we take an institutional approach, deploying capital in the booze business and adjacent industries around it—highly regulated, underserved industries. I also started or co-founded and run an organization called Uncharted, which is a media and events business focused on bringing the best founders and funders together in extraordinary places and settings. I started that with a very close mentor and friend of mine named Michael Loeb and Top Shelf and Uncharted together have really taken off in the last couple of years. So that's where I spend most of my time—building those two things.

Jason Kirby: And how did you get to that point? How did you get from kind of earlier in your career to building what you built early on and moving on to what you do today?

Noah: Michael Loeb has been a big part of that story. I met him when I was an undergrad in college. He's a very successful serial entrepreneur and he took me under his wing early on and both mentored me and brought me into his ecosystem when I was still in school. I ended up graduating and serving as a COO of one of his portfolio companies, which is in the alcohol space. I had very little experience in alcohol other than having partaken in college, let's just say, and knowing that intuitively it was a big business. And I had to get very deep into the booze world in order to really effectively serve as an executive in that analytics business in the booze space. And so I got really deep into the alcohol world and I learned everything and anything about how it works, the origins, the history. And what I found was that you have this multi-trillion dollar global market that has historically been quite recession proof and uncorrelated, tends to grow every single year, highly acquisitive, often can trade at tech and software-like multiples. And punchline is just a super lucrative market, very powerful, and a lot of opportunity and shockingly underserved by traditional venture, right? Very few people who have institutional capital allocation experience were looking at the alcohol market, which was shocking to me, especially as someone who was really just starting to cut their teeth into what it looks like to build an investment firm and investment portfolio and investment thesis. And so after a few years running this analytics business and learning the alcohol trade, I started to think about what it would look like to invest in the space. And I ended up meeting a partner, Jason Sherman, who had frankly a much more impressive background than me—having run AB InBev’s venture arm and doing the merger when AB InBev and SABMiller merged and running his own alcohol tech startup. And he and I both had, I would say, complementary views of the alcohol world and where it was going, complementary skill sets, importantly. And after a few years of flirting on what ideas could look like, we landed on what it would look like to build the blue-chip fund in the trillion-dollar alcohol space. And that was about three years ago that we decided we're going to do this. And about two and a half years ago, we did our first close.

Jason Kirby: So you covered a lot there, but I want to kind of unpack some pieces of the story, specifically the glaring issue as to why the alcohol industry is underserved by venture capital. Can you speak to that and kind of why you saw that as an opportunity?

Noah: I think why it's underserved—it sometimes still shocks me, honestly, that it's this underserved. And I have a feeling if we continue to be successful, we will see more start to, and I welcome this, not come after us, but come after the space, which I think is good for the market. Look, I think there's a few reasons. Traditional venture and traditional private equity raises money from a lot of large institutions. And many of those institutions may have preference or requirement that they don't invest in vice. And so there is a path-of-least-resistance approach to raising large sums of money where you are inherently shrinking your total available capital pool and total available LP base by saying I'm going to invest in a vice. So the amount of LPs who can do that inherently is going to be smaller because you have churches and you have pension funds—you have all these types of institutions that may just out of either history or preference or whatever ethics they believe say we won't invest in this. Right. And so for many of the funds who want to raise gobs and gobs of money consistently, it behooves them to just say, you know what, categorically, we're not going to invest in booze, right? The second part is that many who can invest in booze just don't understand it, right? Alcohol is a very competitive, confusing, veiled and ambiguous market and industry that has laws and regulations that literally date back to prohibition and many of them are still in place. And so it takes certainly having lived in it or being close to someone who's lived in it to understand the nuances of what it takes to win in alcohol. And I think the blend of those two things has just made it easier for most people to say, you know what, we're just not going to touch booze. And so when you look at it from the macro, it can look complicated and scary. For me, as someone who both understands the industry and also, you know, as most VCs will say, likes to be contrarian—to me, that smells like opportunity. I think that where everybody is zigging in investment tends to be a good time to zag, right? ‘Be greedy when others are fearful and fearful when others are greedy.’ I think this is an unbelievable time to be investing in booze. I think many of the headlines that are trying to either demonize booze or say that it's going the wrong way—I believe them to be incorrect factually. And so I think this, in a 10-year window, is as good a time as we will ever see to be investing in—and betting on—this juggernaut industry of alcohol.

Jason Kirby: So for clarification purposes for the audience, can you define what vices are for maybe people that aren't familiar?

Noah: Well, some people may say vice is subjective, right? But anything that the average person and endowment or investment fund that's going to define vice would probably say it has anything to do with alcohol, drugs, nicotine, pornography, maybe weapons—anything that is in those general ballparks is generally going to be something that would be considered vice. Some define it differently than others, but it's generally in, you know, inebriation, drugs, pornography—those types of things.

Jason Kirby: Yeah. And this is very common in terms of just—it wipes out an LP base in terms of going out to market. And I speak to a lot of funds doing really interesting stuff on psychedelic therapy and very different treatments out there that have historically been considered drugs, but have this medicinal benefit. It's so much harder for them to go out and raise money and do whatever they want to do, whether they're a company, a fund; it just becomes inherently restrictive and you got to kind of know a much smaller pool of people to get that across the finish line. So I want to get to kind of what it was like raising a fund. I think to get there, you mentioned your mentor, Michael Loeb—you know, as a venture fund, a studio, a successful individual. How do you go about building that relationship with a mentor to create opportunities for you down the road—like getting involved with the software company and things of that nature?

Noah: I am a big believer in mentorship and the power that it can hold for people who treat it the right way. I think it's often misunderstood and I think the biggest issue is that many people don't either know how to mentor or, more importantly, know how to find a mentor. I was fortunate growing up that I was able to find a few and obviously Michael Loeb being on the Mount Rushmore for me of mentors. I think it's important, when you're finding a mentor, that you have to find some common ground—either emotionally or on your interests or on your background—to connect on. You have to remember when you're looking for a mentor that the assumption—and I think it's the right one—is that that mentor probably has, in theory, better things to be doing with their time from a pure return-on-investment perspective. If there's someone who is worthy of being a mentor, they're probably some combination of busy, successful, have a lot going on, high demands on their time and a lot of people asking for it. So they have to have a reason to want to give it to you… and much of that comes down to the emotional remuneration of seeing somebody go through the journey that they went through and grow—that's rewarding. But that's often not enough to transcend how busy a successful person will be. So you have to find some way to connect with them on a real personal, emotional or business level. And more importantly, you have to get them to believe in you. Honestly, an interesting analog—if you think about venture capital investing—you're taking kernels of ideas that you believe will one day be worth something much more than they are now. There's something inherently rewarding about the journey of seeing them grow. If you're a VC, you have an incentive interest in seeing those things grow if you play your cards right. Mentorship is a similar emotional journey. If you find somebody who you disproportionately believe in, reminds you of you, or you just really like—you respect their curiosity or something along those sorts—there will often be very successful people that are willing to give you even just small slivers of their time. And for you as a mentee, from a return-on-time perspective, there is nothing more important or valuable if you’re an aspiring business person—or frankly anything—than just spending time around people doing it at the top level. I've always learned by doing… jumping into the deep end and learning on the fly. I'm 29 now, I still take that approach. The best way to learn—whether a new sport, a method of doing business, or the law as a VC—is to be around people who are really good at it. Mentorship at its core is about aligning those interests and intuitively understanding why a mentor would want to give you their time.

Jason Kirby: That is incredible in terms of just the accuracy of the recommendation for mentorship. I completely, wholly agree with that… and that point that you bring up in terms of the relatability. Like at the end of the day, there's not much value you can provide as a mentee outside of that reward of listening, heeding that advice and growing—and showing progress over time, which I imagine has worked out for you in your relationships. Parlaying that to the conversation around Uncharted: it sounds like relationships matter to you and you want to add as much value as you can. So how did you parlay that into Uncharted and what's the founding story of this—from what I hear—an incredible group of founders and business people coming together?

Noah: Here's the founding story of Uncharted—it's quite simple. As COVID was subsiding, Michael Loeb called me late one evening, as he tends to do, with an idea, which is not abnormal. His idea at the time was the following very vague and exciting prompt: “Noah, it's been many a year since the best entrepreneurs that I know—and you know—have gotten together in the same room to just talk about ideas. We should change that. I wonder what it would look like to either get people together or try to build some community as we come back in a world where we can now gather. Can you think on some ideas?” I agreed, and it was an exciting prompt. I had (and have) a pretty good network of younger entrepreneurs. I called Michael back a day or so later and said: here's my idea as a way to give us something to action—can I use your house to host a dinner? Michael has a stunning townhouse on the Upper East Side—great for hosting. I’d bring the people; he just had to show up. Immediately he said, “I'll do you one better. How about we host a dinner, you bring some of your friends, I'll bring some of my friends, we mix the two generations and let's see what happens.” Within three weeks we had a date, venue, and a guest list of 18 people—several billion in aggregate net worth. We spent about an hour in his office planning. At one point he said, why don't we hire a journalist to moderate? I said: let me do it. If I mess it up, I'll never ask again. He said: game on. I prepped relentlessly. One thing I did—which has lived on—is I rehearsed an opener that tees up the intention, vibe, rhythm and goal of the evening, introduces everyone in one sweep, and gets people truly dropped in. The difference between a memorable dinner and a terrible dinner is often the conversation and how welcomed you feel. I nailed that opener because I practiced. By the end of that first dinner, everyone said: connect us—we're going to do some stuff together—and “I want to nominate someone for the next dinner.” We did another the next month, then another, then a summit in the Hamptons. Fast-forward three years: Uncharted is now a multi–seven-figure business, all built around bringing the best entrepreneurs and investors together to talk about interesting things.

Jason Kirby: That's pretty powerful—having that home run on the first event and having your mentor trust you and then delivering. What turned it into a business? You say seven figures—what became the business behind Uncharted to be as successful as it is now?

Noah: The short answer right now is advertising partnerships. We’re disproportionately good at getting exceptional, often hard-to-reach people with buying power into rooms where they drop their guard and pay attention for many hours. That's rare and valuable in media/advertising or sales. We've built guardrails around what we are and are not willing to sell against so attendees don't feel overly commoditized. We're aggressive about who can sponsor and the rules. We bring in sponsors that can actually accelerate these businesses—good fits people want to hear from. We’re becoming the conduit between entrepreneurs who’ve already made it (or are close) and companies—luxury, software, tax, consulting, etc.—that need to reach them, with vetting on both sides.

Jason Kirby: You now have this successful network. Did you leverage that for Top Shelf Ventures when building the fund, or were they completely independent?

Noah: A little bit, for sure. Jason (my current partner) was at the first ever Uncharted dinner and has been to many since. Some Uncharted people have gotten involved in Top Shelf and I try to cross-pollinate because it benefits both, but I keep church and state separate. I want these things to stand on their own—and they do. There’s overlap and the two complement each other: Uncharted is social; alcohol is social. My LPs are often extraordinary founders and funders who belong in Uncharted and vice versa. But it’s never explicit or expected in a way that would trivialize either.

Jason Kirby: Let's talk about Top Shelf. When it came to raising a fund—you nailed the pitch and the opportunity—but getting people to write checks and then writing checks yourself: what was that experience like?

Noah: Way harder than I ever thought it would be. Starting your own fund—unless you have an anchor willing to push you off the dock—is really hard. Raising money from a cold start is difficult and long. You have to be comfortable hearing “no.” When we started raising (back half of ’21 into ’22), it felt like ZIRP times—everyone was raising. But just as we got serious, the world shut down for first funds. The pipeline shrunk; it was hard. I learned a lot about building and closing LP relationships and being a good steward of capital. It was (and is) a lot of relentless follow-up, getting on planes, and, most importantly, having a clear, defensible, disciplined thesis we had conviction would make people money—then guiding interested LPs through getting comfortable with the space and with us. This is a partnership where LPs bet on people over years. It’s different from the stock market. The difference between what I know now and when we started is night and day. It's still hard, but now we have enough proof and track record that people come to us—way easier than before. But fundraising’s a grind.

Jason Kirby: From first contact to a check—how did you get in front of LPs, and how long did it take with how many touchpoints?

Noah: Many paths: some we already knew; lots of “friend of a friend” intros; and a healthy amount of cold email—volume plus relentlessness to get the first call. We have amazing LPs we met via cold email—so don’t write it off. LPs aren’t like VCs looking for pitch meetings. LPs often don’t want to be pitched; there’s gatekeeping. There’s no simple path or database that just works. It’s checkers: who you know and who they know—and persistence until you get firm noes. Average first-meeting-to-investment is usually at least 3–4 touchpoints, preferably a couple in person.

Jason Kirby: What was your cold email secret?

Noah: I used a friend’s company that helped with deliverability and targeting. If anyone’s interested, email me (Noah at Top Shelf Ventures) and I’ll intro you. Deliverability matters, sourcing qualified leads matters, and so does good copy. Nothing ultra-proprietary—just disciplined execution.

Jason Kirby: Where did you source LPs—given many want to be invisible?

Noah: For cold email: use intuition—where would LPs gather? Look for firms with history of investing in VC funds and identify the CIOs/VPs; find or infer emails. For warm paths: feel around your network for people liquid enough to invest—or those who can get to such people—and sequence intros. But the real “secret” is having a good, defensible product (thesis + team) that earns a second meeting.

Jason Kirby: Let’s pivot to capital allocation. You say alcohol and alcohol-adjacent. What are you ultimately looking for—what makes a company stand out?

Noah: Our focus is quantitative first, with a qualitative layer. Core metrics: velocity and retention. In alcohol/CPG, a strong product sells quickly and sees repeat purchases. Our model: ~75% focus on hyper-growth brands (usually seed), ~25% on special situations/distress. We look for brands that are disproportionately selling quicker and more consistently than set competitors. There’s a big difference between $1M in one state vs. in 13 states—concentration often implies stronger velocity and better relationships. If velocity/retention are great, most other problems (margins, ops, cash flow) are solvable. If customers don’t love the product, it’s a fundamental issue.

Jason Kirby: How do you value these companies at early stages?

Noah: Often low single-digit revenue multiples as a starting anchor when we lead—varies by strength, growth, and category. Acquisition multiples in alcohol have ranged from ~3–4× revenue up to 20–40× in hot years/categories. We’re fundamental investors who prefer simple structures with good protections—founder-friendly and supportive—so if things work, everybody makes money.

Jason Kirby: And exits?

Noah: It depends on revenue and category. Median acquisition prices often fall in the low nine figures; you see occasional billion-dollar deals and a long tail of mid-to-high eight-figure outcomes. Our intention is to help brands grow an order of magnitude so they become compelling strategic targets—often filling portfolio gaps or capturing share for incumbents.

Jason Kirby: Before we wrap—parting advice for emerging fund managers?

Noah: Philosophically: perseverance—it’s harder and longer than you think; you’ll hear “no” a lot. Tactically: understand portfolio math early. It’s not just “get into great companies.” Entry points, protections, exit timing, number of positions—all matter to 3–5× a fund. There’s a difference between neutral returns and great ones that often comes down to discipline.

Jason Kirby: Where can people find you?

Noah: Twitter/X: @NoahSFriedman (search “Noah Samwear Friedman”), and LinkedIn—I'm responsive there. Shoot me a note.

Jason Kirby: Awesome—links in the show notes. Thanks for joining.

Noah: Thanks, brother.