#190 Jubilee’s: Is $100M Thinking Too Small?

0:00Welcome to The Pitch, where startup founders raise millions and listeners can invest. I'm Josh Muccio. And I'm Lisa Muccio. And on the show today, we have Ashley with Jubilees. She's raising$1.5 million. We're going all in on kids' drinks this season because it really is that hard to get our kids to eat healthy. Our kids really only want to eat snacks. Or cucumbers and carrots, if forced. That is the healthiest they get, basically. So we have to sneak veggies in wherever we can. What if you could hide veggies in something like chocolate milk? That would be ideal. But would it taste good? Probably not.

0:39I mean, you have your own experiences with drinking veggies as a child. Yeah, I grew up on carrot juice. I was force-fed carrot juice by my father, which we found in last episode. I'm scarred for life. Well, Ashley from Jubilees says that she is able to hide vegetables in delicious chocolate milk. And to prove her point, she brought in some taste testers. Actually, we brought in some taste testers. They belong to us. We brought in our children. Can Ashley convince four VCs and the most discerning audience of all, our three picky children, that chocolate milk with vegetables is the next big thing since, well, milk.

1:24The Pitch for Jubilees is coming up after this. But first, we are hosting two live events this November, a live show in New York and also our Season 17 taping in San Francisco. You can learn more about either of those events by going to pitch.show slash events. Support for the show comes from Engine. For you and your team, travel is a matter of business. You know business. Anything you do all day? I'm a very serious podcaster. That's business. Anyway, Engine is the travel and spend platform that makes it easier and affordable to book and manage flights, hotels, rental cars, and everything in between.

2:05And their AI-powered personalization keeps track of your preferences and makes the booking process faster and simpler. More than 1 ,000 businesses join Enjin every month. Join them and get$500 when you sign up. Start traveling smarter at Enjin.com slash pitch.

2:25Welcome back to The Pitch for Jubilees. Let's meet the investors. Charles Hudson with Precursor Ventures. We have 500 companies, so you pick it, we have it. Ellie Barmazel with Perinot. Entrepreneurship is the dance between hubris and humility. Elizabeth Galbut with SoGal Ventures. Not all exits are created the same. And Jeff Cantalupo with Listen Ventures. Do you want this to be a premium brand?

2:58Jubilees. Nice. Hello, everybody. Hi. I'm Ashley. Hi, Jeff. Good to meet you. Great to meet you. Hi. Nice to meet you. I feel like I'm meeting famous people. I've seen you all on the video so much. Hey. Ashley. Nice to meet you. Nice to meet you, Ashley. Love that jumpsuit. Thank you. That's amazing. Cool. Well, I am Ashley. I am the founder of Jubilees. I am sitting here because a very common problem is fighting with your kids to eat healthy. This is something that 70 % of families really struggle with. absolutely my family. So I have a six and a four-year-old, my oldest of which is autistic.

3:36So flavors, textures, food generally is really, really hard for us. So I created my brand Jubilees to provide some relief to myself and other families like mine. It is a super milk for kids. What the heck is a super milk? It is real dairy cow's milk with some very special ingredients. The second ingredient is actually vegetable juice. Also has real fruit purees and extracts. This is such a novel approach, sweetening milk with these ingredients. I actually have a pending patent that I'm converting into a full patent. Also has eight grams of natural protein, just intrinsic in the milk itself. There's no weird protein isolates or protein systems or science involved in achieving that level of protein.

4:23It also has zero grams of added sugar and six times the nutritional value of a typical chocolate milk. And I know what you're thinking of vegetables and milk. That sounds absolutely disgusting. There's no world where my kid's going to drink that. But I have now spent hundreds of hours at the demo table handing out samples. And the number one description I get is that it tastes like melted milkshake. I know that as a mom, if it doesn't taste amazing, it's going to go into the trash. and mom's never going to buy it again. So that's exactly why I spent more than a year and a half creating the formula with a professional formulation company until it was absolutely perfect.

5:01And both of my kids couldn't live without it. Now I did not start my entrepreneurial journey thinking I am going to be the queen of dairy. I really iterated my way into this path. I've spent most of my career in consumer research and product development. First was several startups where I was part of a handful of employees, grew it to hundreds, and then ultimately exited. Then as a management consultant for huge consumer businesses like Allstate, Mattel toys, Skechard shoes, and then ultimately in-house for Google. And what that looks like in terms of building this business is starting with a problem.

5:38And then I went looking for markets and I found Flavored Milk. It is a$58 billion market expected to grow to nearly 90 billion by 2030, which just to put that into context, that is more than 30 times the size of ready-to-drink protein. It's more than twice the size of plant-based milk. I collected thousands of survey responses, hundreds of hours of focus groups, user interviews, and there were several themes that became very clear. Parents want protein, parents want vitamins, parents want low or no added sugar. So that is exactly where I built Jubilees. In terms of where I am as a business, I just celebrated my one-year anniversary.

6:18Very exciting. We're in 2 ,000 stores with our biggest footprint nationwide in Target, nationwide in Sprouts, Albertsons, HEB, Raley's, and then a bunch of other regional chains. I've raised$1.1 million to date. I'm seeking another$400 ,000 to fully close my pre-seed. I truly believe what I am doing here in milk is very similar to what Goodles has done in mac and cheese, what Poppy has done in soda. And by that, I mean very large family staple categories that are dominated by absolutely prehistoric brands that have done nothing interesting in decades. And to put it in the words of my all-time favorite entrepreneur, their mediocrity is my opportunity.

7:02And that is exactly how I feel about chocolate milk. I'm obsessed with you. Oh my gosh, thanks. That was a great pitch. Thank you. Great progress for a year so far. Yeah, let me get you some simple. Thank you. So we have banana cream pie. So this one's carrot juice, turmeric, real banana puree. And then chocolate chip cookie. That does taste like a banana cream pie. Thank you. And then we have chocolate chip cookie, which is absolutely the fan favorite, the kids' favorite. And this one has cocoa powder, carrot juice again. And that chocolate one's really good. Thank you. The chocolate one you could drink instead of like a mocha.

7:41Oh, totally. Yeah. So recipes do outstanding on my social media. And we're always doing like, I've done lattes and banana bread. And I've even made like a white ration out of it. It's pretty good. So yes, the options are endless. Great progress so far in just a year. What's your revenue to date with all that store presence? $460 ,000. And how's your velocity doing? So my LTV on Amazon is$548. My repurchase rate is 78%. So that means that a customer that sticks around is purchasing on average 15 times per year. My subscriber retention rate on my website is 65%, many of which are buying multiple cases per month.

8:27My best customer buys five cases per month. In terms of in-store, so the category velocity average is three units per store per week. And the index I'm using there is eight ounce chocolate milk boxes. I am doing 5.8 units per store per week. My best stores, my top 10 % are doing eight units. And then my very, very best stores are doing 11. What's the channel mix? So it's 80 % in-store and then 15 % online. And then the last segment is what I call alt channel. So restaurants, coffee shops, bakeries, very cool dinosaur museum in New York. What have you learned from your subscriber base? Obviously, there's some super fans here.

9:07Like, what's the big insight? Who are they? And what does it cost you to acquire them? Yes. So I am a researcher, as I said. So of course, I've reached out to all these people and been like, what are you doing? Like, why are you buying so much? I mean, I love you. Thank you. And I've learned something really interesting. A super customer for us is people whose children have diagnosed food aversions called ARFIT. I actually did not even know that was a thing. Originally, I was calling this flavored milk, but I'm calling it a super milk because it's in between something like a chocolate milk, a Nesquik, which is the number one player in chocolate milk, and something like an Orgain or a PediaShore.

9:42So that's what these subscribers were using before. That's the biggest thing that I've learned. The other thing I've learned is I thought at the beginning that my customer was sort of like the Whole Foods mom. And I have learned those. That's more of like I drink raw milk. and my customer is more like me, which it's someone who just wants something incrementally better than Capri Sun and Cheetos. Yeah. Oh, and the cost of customer acquisition. So I've learned a lot about this as well. So I spent about$80 ,000 in marketing, tried a bunch of different levers and I saw a huge difference in cap. On the high end, it was like$12 per acquisition.

10:20On the low end, it was like$2. If you factor in repurchase rates, it can go as low as 38 cents. Wow. So now with like this next version of where I'm going to spend marketing, obviously, I'm going to narrow my focus to the areas that are the lowest CAC. What works in your experimentation? What is the message? I have so much passion for the answer to this question. So I think we've all been sold a lie in CPG, which is that demos are the only and best way to acquire customers. I actually read a whole book about it. The guy who invented Tessa May's dressing. That was his entire go to market. And it has worked well for a long time.

10:56And it's still, I guess, principally the right thing, which is you need to drive trial. You need to get liquid to lips. I absolutely hate that expression, but it's what we say in our business. So that is still true. But in terms of the cost per impact, it's relatively very low. Like if I'm doing it, hell yeah, I'm selling it all day. I sold like 30 cases in a single demo one time. But you have to farm it out. And these people a lot of times don't care. I had a store manager literally call me one time and tell me my demo person had earbuds in and was on their phone the whole time. So I'm still investing some in demos, but I'm investing much more in digital forms of trial.

11:33I'm really curious to know about your superpowers. When you think about what it takes to reach exit velocity on a product like this, what are the superpowers that are going to carry you through the next seven years? So I think one of them is data. I am super, super data driven. My best day is the day I spend in spreadsheets. Specifically at Google, I ran a whole experimentation practice and it's very much informed a lot of my go-to-market strategy. I think the other is resilience. I have had a lot of very challenging things happen in my life, both personally and professionally. I don't know if you've ever spent a lot of time with a consultant, but it is the worst grind of all time.

12:18So I do think I have a significant level of grit. And then the last is sales. And I was a consultant. I was account manager slash strategist. So I was responsible for building my own book of business. For example, at Google, before I worked in-house, I was a consultant for them. And I built a$4 million book of business over the course of two years. So I only brought on a fractional sales team within the last two months. That's amazing. Thank you. So I believe that the pre-seed stage is when you identify your riskiest assumptions and either prove or disprove. So when you think about this pre-seed raise that you're getting ready to close out, what are the riskiest assumptions you have right now that if you're wrong about this, it changes the whole dynamic of the business?

13:02And how are you using these funds to tackle that? Wow, that is such a good question I've never heard before. The riskiest assumption, you know, I probably say around velocity growth. So my goal as a business is to grow to$60 million in revenue, be acquired for at least$100 million in five to seven years. That requires 5X-ing my revenue between this year and next year, and then 3X-ing my revenue every year after that, which is not outside of the world of sanity. You know, if you look at what a lot of companies have done, Fairlife did$90 million in their third year of business. But a big assumption that's built into that model is velocity growth.

13:46Say my percent retention rate assumption is off by 20 percentage points, or my number of units purchased on a regular basis is off by 50%, or my turn rate is more than what I expected. That would completely throw the entire model off. It would also change the dynamics in terms of what I've budgeted for customer acquisition, because I would have to acquire more customers. I'm just going to name right now. I really love what you're doing. Thank you. And I'm looking for founders who are myopically obsessed with the experience and the problem of the end consumer. So I would love to do 50 ,000. Thank you.

14:24Our diligence process, we spend a few weeks. We do our own discovery where we go out and find people who haven't tried your product to match your ICP and get our own data that way. But we'll do it in relationship with you as well as digging into like all the other fun stuff around your model. But I think it would be really fun to be on this adventure with you. Thank you so much. That's incredible.

14:48Well, that was a fast commit. After the break, Ellie's diligence starts sooner than planned when we bring in Ashley's ICP for taste testing. Our kids. That's coming up.

15:05Support for the show comes from Engine. A business trip doesn't end when the plane lands. According to Engine's data, 18 % of business travelers spend five or more hours filing expenses after a single trip. Five hours. Too many. Engine was built so that businesses could manage travel and spend all in one place. Finance teams get visibility before the dollar is spent, not after. You'll be able to set limits per employee, per category, per trip. so you're never surprised by a receipt again. And if you need to cancel a trip, an Engine Flex Pro subscription lets you change or cancel any booking up to the last minute without fees, without question.

15:49Last year, thanks to Flex Pro, Engine customers got$160 million back on travel they canceled. Bottom line, you could be saving time and money by switching to Engine. So what are you waiting for? More than 1 ,000 businesses join Engine every month. Join them and get$500 when you sign up. Start traveling smarter at engine.com slash pitch.

16:14Talk a little bit more about just COGS and pricing and manufacturing and sort of the operations side of the business. Yes. So my margins in terms of COGS versus MSRP is 63%. Landed is 55%. Wholesale is 38%. and 30 % landed. Manufacturing, I use Steuben Foods. They're an incredible partner. Same folks that do Horizon Milk. What's the retail price too? So it's between$269 and$349. We do$349 at Target. Talk to me about activation, like activating the brand. Building a kid's brand is unique, right? You have two audiences. You have the purchaser, which is the mom. And then you have the user of the product, which is the kid.

17:01So are you building the brand from an activation perspective around kid requests and generating kid excitement? Or are you building the brand for like mom approval? Mom. The messages I get from moms are like, oh my gosh, I can't believe this exists. Like, thank you so much. I just feel the excitement. Even though I am a data person, I do think that like anecdotal just sense and feeling of things is so powerful. And I am a mom. And so that's why I've really anchored on mom. I mean, kids have to love it, of course. But like, they're the ones with the spinning power. Speaking of kids loving it, Can we have a kid try it?

17:34Yeah. Yes. Is there a kid in the studio? I have some kids. Hey, children, how's it going? How many kids do you want? All of them. All of them, all of the kids. All right, come on. So cute. This is Gia, my oldest. Hi, Gia. Asher and Libby. Nice to meet you. Thanks for coming to be taste testers. Do you all promise to give us your honest opinion? Yes. You can't hurt our feelings. What's your favorite drinks right now, like in life in general? Banana pie chocolate or cookie. I would say, I don't know, I like a lot of the drinks. But I like milk. Dr. Pepper. Dr. Pepper. Can I try it? Saltries. Yeah.

18:20Asher, what was that face? Tell us about it. Really sweet. Really sweet? Mm-hmm. I like the flavor. I definitely like the chocolate chip cookie one, like, a lot. Very good. Mm-hmm. I like the banana because it's less sweet. Look at you. Normally it's the cookies. I like them both together. Oh. Innovator. When would you drink this? Is this like a breakfast drink? Is it after school? I used to drink it after school. After school? Yeah. Thank you. What do you not like about it? I think the banana one's good, but it's a little sweet, and then I can't taste like the banana as much. Okay. If you were at lunch and you just had a bottle of water and you had a friend who pulled out Jubilee, would you try and trade them something to get that milk?

19:12Only if it's a banana. Okay. Yeah, I would. If it's trade-worthy, I'm interested. Ellie, great question. She's got the banger questions over there. Do you guys think Dr. Pepper is healthy? No. Do you think this is healthy? Yes. Yes. You said it had vegetable juice. 100 % vitamin C, 100 % vitamin D. Can you taste the vegetables? No. No. It just tastes like chocolate milk, and I've never had anything like it. I didn't pay them, I swear. And there's the commercial.

19:52Thank you guys so much. Thank you so much. Thanks. You're welcome. So I have my first baby boy, a 13-month-old. And we're very deliberate about not trying to get his palate to be used to things that are too sweet. So we're like really big fans of, for example, like Serenity Kids, which is like the meat pouches. We really try and limit the sweet taste. How do you think about sweetness and how kids experience sweet and how you developed the product? Yeah, I mean, a lot of families are like that. Another interesting thing I learned in diagnosing this problem, 50 % of families have children that could be described as picky eaters that are otherwise normally developing.

20:33This is actually like a scientific, like research-driven statistic. I'm still a picky eater at 36. Yes. So if your child is that way, there's no amount of like completely removing some version of improving the taste for kids that's gonna work. But there's some kids that are not like that. And I think it's perfectly smart thing to do, to do exactly what you're saying. And so something that's come out of a lot of the investor conversations that I've had is introducing a plain skew. And that's the largest segment of shelf stable milk, like as a category in the grocery store is plain. I don't know if it's going to work, frankly, because like, can you mask the vegetables without it?

21:11I'm not sure. But I would like to introduce a plain skew. I'm curious about the occasion. What occasion and ritual are you trying to own at the household? It's the lunchbox. So no one warned me as a parent, the daily grind of composing a lunchbox and the insanity you experience when you open it up at the end of the day and it all goes into the garbage can. So I would say the sister problem to fighting for kids to eat healthy broadly is lunchbox. And it also represents sort of my vision for the company as a platform. If I had an aisle in the grocery store where there was shelves that were all from a brand that I trusted, that were all things that were shelf stable, allergy friendly, school lunchbox friendly, and I could just fill up my entire lunchbox with those shelves, I would empty them every single week.

21:56Bobo's, it falls into that category for me. Bear snacks, we buy like five boxes of those. Five box chomps, meat sticks, we buy a ton of those. So that category for me is super powerful. That's great. Who else is on your team? So I have no other full-time employees. I have a sort of string of fractional people that all have really joined in the past like three months. That is a team that I have an advisory board. So I have the former head of sales for Spendrift who helps me on sales, the former CMO for Malk, who was also a GVP at Pepsi, helps me in the marketing side of things. The former CFO for Simple Mills, obviously financial models.

22:31She helped me a lot with like figuring out my runway and my race size. Then I have the former head of customer for Oatly. So he really helps in operations and also thinking about my customer. And then I also have someone who was the former CEO of Emerson, and he's like my CEO coach. I just added also the former head of R &D for Trebani to help with R &D. That's really impressive. It sounds like you've built kind of a dream team of advisors that actually work pretty closely. A lot. What's something that's keeping you up at night right now? What are your biggest challenges? The last thing that my longtime mentor said to me before I decided to burn the ships and jump off this cliff, it was don't run out of money.

23:13Do not run out of money. It's where most of the wheels fall off the wagon in CPG. And so that's why from the beginning, I was vigilant about understanding my unit economics. I've been fundraising almost the whole time, like get it before you need it kind of thing. I've got$260 ,000 in cash and ARR. I am super cautious when it comes to that part of my business, but still keeps me up at night. You outlined earlier your plan, like what's the ramp to get to 60 million? How do you think about the exit landscape? What's the capitalization strategy? How do you think about that? So if I close this round at my current terms, I'd be diluted at about 20%.

23:50It will give me runway through the end of the year. Technically speaking, my forecast says that I will be profitable by Q4 of this year. I'm basically rebuilding my supply chain right now, which is where a lot of those gross margin improvements come from. My wholesale margin will improve to close to 48 % just with the changes that I'm making in my supply chain. What's the biggest lever there? Milk. I found out I was getting absolutely hosed on my milk price. So the greatest thing about milk is it's public FMMO pricing. So they publish it, which I didn't know until later. And I'm currently paying 82 cents per pound.

24:22The market price is 22 cents per pound. So I had a lot of leverage to go out and like shop around. And so I have two agreements in my hands right now for milk that is 27 to 29 cents per pound. So this 400K gets you through the end of the year. How many stores? What's the run rate at that time? And then how much incremental capital do you think you need to kind of hit this escape velocity that you want to hit? So that would put me at about$1.3 million in revenue this year. My end goal is 34 ,000 doors, which to put that into context, Tom's is in 51 ,000 doors. Good to grow, which is a huge disruptor in the kids' healthier juice space.

25:02they're in 100 ,000 doors. Where I'm in 2 ,000 stores, I need to get from here to about 34 ,000 stores by that runway. And it's also a little bit of an X factor because my number one objective next year is to get into like Costco, which will be a different calculus in terms of number of doors. I'm really curious to talk about the end and how you arrived at your figures around exit velocity. I always ask founders, are you thinking big enough? And so when you gave us the numbers, right, You said 100 million exit, five to seven years. With what you know about this consumer and the trust that you're building with this consumer and the repurchase rate you've got with this consumer, is 100 million the biggest you think you can do?

25:46No. Okay, so what's holding you back from selling us? No, so that would be 0.1 % of the industry. Fair Life was sold for$980 million. dollars. So I think it's very conservative. And I think it's a reflection of my personality, which is to under promise and over deliver. So let's put to the side, the conservative version of you. And now let's go with the wildest dream version of you. Where are we actually seven years from now? If everything goes right, I mean, I think we can easily do$500 million. Easily. Truly. Given the size of the market, the lack of disruption, and the inability of the larger players in the space to move quickly.

26:33But I'm curious, what's stopping you from telling yourself that story every day? I don't know. It's funny you brought that up because I, in my mind, had just passed for that very reason. So we're in Bobby Baby. We're in a couple of other CPG companies that are minimum will do hundreds of millions of dollars in revenue. And I think it's both necessary and possible to have a venture scale outcome in these categories. So I was like, 60 isn't enough for like what our fund needs to see. But if you do what I think you can do, like 60 would be getting off the train relatively early. And I was like, well, if that's where she wants to get off the train, I'm not in the business of arguing with people about - I am not getting, let's be clear.

27:17I am not getting off the train as soon as I reach$60 million in revenue. And I am 1000 % someone who sets huge goals and achieves them. So, I mean, I think this is really good feedback and I should have an answer for that. In my true heart of hearts, I genuinely believe the outcome will be much larger. I wouldn't be doing this if it wasn't. Can I give you a piece of feedback then if you're open to it? Tell yourself that story and tell all of us that story. There's a reason why I was such a quick yes here. I see the passion for the consumer. I see knowledge no one else has. I see a solution that you're offering that no one else can offer in a way that creates real emotional relief for the parent consumer.

28:00So why tell us a small story when it's not a small story? Never again. This is the last time. In this time, I want you to lead from the most bold and daring, data-backed, bold and daring place. You've got all of the data to prove. You can do the biggest, boldest, daring thing. And I just want to clarify. You said$58 billion of flavored milk. Is that just in the U.S. or global? Globally. But that doesn't include like Fairlife's bigger fat-free milk. Correct. That's just the chocolate milk. That's just chocolate flavored milk. Strawberry milk, vanilla milk. It's 70 % chocolate milk. And it doesn't even include like Horizon plain milk little boxes.

28:38Correct. Wow. Who knew it was that big of a market? I'm interested. Milk is probably one of my favorite things in life. I need to talk to you more about Fairlife. I don't know if this is competitive or not. I'm going to have to find out. But if it's not, I'd be interested in$50 ,000. Thank you. I love everything about your story. I love your passion. I really like the brand and how you're thinking about building it. My biggest question is how you scale from the current channels you're in to more mass channels and how that consumer translates from a velocity perspective. And so I'm interested, but I think I'd probably be more positioned for later round as you get some more of that data online.

29:22So I'd like to just keep in touch. Okay.

29:27Charles, where did you land? Oh, I'm out, actually.

29:33Say more. Oh, I thought I was. No, sorry. Okay. I think there's a lot here. And I think deep down, you know it too. maybe not even that deep down, I just always have to believe that somebody has the big plan in mind. And that was what was lurking in my brain until Ellie brought it up. I always worry that if I have greater ambitions for the company than the founder, that at some point we're going to be at odds. And that I'm going to want you to go for it. And that's not going to be what you want. And in every case that I've had that situation, the founder wins as they should because they're the one who owns the business and the one who run it every day.

30:18I was really hoping to hear the story that you got to with a bit of nudging from Ellie, but the original version, I was just worried. I was like, gosh, it's 60 or 100. This feels like it's not enough for what we need to see as a fund and also what I think is capable in the category. But I have a feeling that's the last time we'll hear that version of the story. So I'm not trying to change your mind, but 1000 % my dream is that big. And I fully believe I am capable. I think the lesson that I'm taking from this is the part of my brain that wants to be like statistically conservative is not a healthy way to have this conversation.

30:58Just a piece of feedback on all of that is that at the end of the day, CPG is really driven by the capital efficiency and the outcome. And so getting the 60 million, And if you told me you did that on$5 million of paid in capital and you could get a two to three X multiple on that for my size fund, if I gave you that 5 million, it's a home run. I love the big dream. I want you to have the big dream. There's also a point in CPG that you get too big and not a lot of people can buy you. So, you know, I like the practicality, but I also agree with them and then sell the dream because I think you have it.

31:32And so it's, uh, it's exciting. And I'd love to, I'd love to continue the conversation. And I'm not suggesting you turn off the rigorous side of your brain. And most CPG companies that end up on the rocks, it's because they turn off the rigorous side of their brain. So it's sort of the inside voice, outside voice kind of thing. Because, you know, most VCs will hear a number and they will discount whatever you tell them. They'll say, if 100 million is your aspiration, reality is probably below that. And so like, OK, she thinks it's 100. So that's probably like the best case. And so I don't know.

32:00I think you deserve to have the opportunity to go big. Thank you. Thank you so much. It was so nice to meet you, Ashley. Thanks.

32:15That was fun. Yeah, she was great. Yeah, I can't believe she said the hundred million. If I would have known she just said that, I would have told her never to say that. It's all lessons. But it's true. She was great. The thing is, it's true. That doesn't mean that's where her head will be 30 days from now. But today, like, that's where her head, and if she'd come in and told the story she didn't believe and I'd invested in something that she told me because she knew I wanted to hear it, we'd still end up probably in the same place. So I'm actually glad that she was honest. And I think, I hope that the conversation was helpful for her.

32:48Well, I think there's also a question of like, do you actually believe this is your ceiling? Or are you afraid to tell me the size of your ambition because you're not sure I can meet you there? That's right. And so that's why I probed a little bit because her energy, the way she was talking about her business, I was like, there's no way in hell this woman thinks she's exiting for a hundred million. and she knows the bigger story and I want to hear it. And she has people all around the table that have been part of businesses that are much bigger. Yeah, she has the right win. She had the right advisors to think big, but she didn't have the right narrative.

33:20Sometimes I meet founders who just got advice from people who tell them to shrink their dreams, who tell them like, you can't do that. It's going to be too hard. Are you crazy? And they like... Yeah, and I think that's the thing about investor feedback. You shouldn't take all of that. It's just an input. It comes out of flavors. Yeah, N of one. Each conversation, N of one. And that's a wrap. I like that as an end. Yeah. That's great.

33:48Ashley walked out of the pitch room with$50 ,000 commitments from Ellie and Elizabeth. And a speech about selling the big story, also from Ellie. How that changed everything for Ashley after the break.

34:04This is Advertiser Content from Engin. I'm Christina. I run a startup that facilitates care coordination for major hospital groups. In very basic terms, we want to improve the way patients can communicate and book appointments with their doctors. It's all in service of streamlining telehealth. The irony is that this requires our team to travel all over the country to different hospitals to onboard and train our clients. Two years ago, I mean, it was chaos. Not the service we provide, just the reality of constantly coordinating travel for the employees on our field team. Back then, we were doing everything manually.

34:43Half of our team was booking everything on their own dime and getting reimbursed because they wanted to rack up rewards points. I booked travel directly for the other half of the team, which was tedious and time-consuming. I had this pitiful little spreadsheet with everyone's traveler details, but it never felt like enough information. Every month felt like a scramble to stay on top of everyone's bookings and reimbursements. We just didn't know any better. That was before I found Enjin. The difference is night and day. Enjin handles all the annoying parts of managing corporate travel and saves us money.

35:19All of my employees have their traveler profile details, like frequent flyer miles, TSA pre-check numbers, things like that, plus their travel preferences saved in one central location. And all transit details are completely transparent. We can all see who's traveling where and when, which makes coordinating with clients so much easier. If ever we need to change travel to accommodate our client's schedule, it's not a problem. And we can track spending per person or per department. It's not just convenience. Enjin's FlexPro offering has saved my company thousands on trips that changed after we booked them.

35:53And Enjin stops out of policy bookings before they happen, not after. I honestly don't know how we ever did it without Enjin. It completely changed how we operate. Imagine what it could do for you. No contracts, no agent assist fees, 24-7 member support. Enjin lets you easily book, manage, and save on every work trip. You're going places. Enjin can take you there. Learn more at engine.com.

36:27Welcome back. We caught up with Ashley a few months after her pitch. And of course, before the official start of the interview, we had to know what she was drinking. An Alani, because I'm trashy. I don't even know what that is. You don't know what Alani is? Oh my lord. Sweet baby boy. Does Lisa know what it is? Oh, okay. It's so funny because the first time I had it, I was like, this tastes atrocious. I was like, I can't even finish this. This tastes so bad. And then somehow I just kept trying it. And then now I'm like totally addicted to it. As someone in the beverage industry, how do you feel about that?

37:10Like what happened here? I really don't know. You know, I listened to recently a podcast about the founder of Red Bull, and that was actually one of their key differentiators was the fact that it tasted like garbage. For some reason, that meant people, they believed the functionality of it. And then for some reason, someone invented this story that the secret ingredient was from bull testicles. And they did nothing to squash this rumor. They actually purposefully left it like hanging in the air. And it, of course, like benefited them phenomenally. So I love their story. My dad also was a U.S. distributor for one of the largest and first energy drinks also at the time called Balls, B-A-W-L-S.

37:59And my first job in beverage was hawking it out of my backpack at school, in middle school. And I got in big time, big time trouble. And I got expelled from school for selling caffeine to middle schoolers. As a middle schooler. Let's be clear. I was also a middle schooler. So you've been selling drinks to kids since way back. Since the beginning. Oh, my God. I've been selling drinks to kids since I was a child. You are the person to build this company. Talk about life's mission. I didn't even put that together until this very moment in time. Okay, I'm so sorry. I have derailed us so significantly.

38:38I am ready to participate. No, no apologies necessary. Okay, so what was your experience like pitching on the show? Your pitch was so fun. Like, the kids came in. Everyone loves a pitch you can taste. And I feel like this pre-conversation is proof that everyone loves a fun drink. It was fun. It was so fun. And I felt really good. You all do such a fantastic job of making sure that we're ready for the pitch room. Well, and you had the benefit of watching two days of pitches before you. True. And I remember talking to you, I think on day two, and you were like, okay, so there's so much talk about go to market.

39:16And so many pitches are falling apart on this question. How should I answer it? And you were like, here are the three different ways I could answer that question. Which one is the right one? I mean, clearly, you picked the right one. I actually did it. It was funny because the first time I came into the room where you could watch the pitches, I didn't fully realize that that was the live pitch until it ended and everyone was clapping. And then I saw the person walk out of the back room and I was like, oh my God, they were just doing that just now. So from then on, I was like, okay, this is where we set and like absorb a lot of helpful information.

39:54That's hilarious. I love that. There was a moment in your pitch where you said your goal was to grow to$60 million in revenue and be acquired for at least$100 million in five to seven years. And that wasn't the final straw for everyone, but it certainly was for Charles. I'm curious, like, where did you come up with those numbers? So the impact of that in the pitch room was transformational on what happened after the pitch room. I was keeping my real goal internal and my conservative goal external, which is not the appropriate order. And my purpose for that was that I wanted to be conservative and under-promise and over-deliver.

40:43But I think the actual reason was, is I was scared of getting laughed at, which is ridiculous. Ridiculous. Something my coach said to me in debrief afterwards is, it makes me so sad that someone like you, who is so accomplished and has every right to achieve a goal like that, feels that way. And I've been a different person since that conversation. From that moment, I left the pitch room and I spent the next seven hours of travel time on my way home, completely redoing my projections and my exit assumptions. and it changed to$1 billion on revenue of$500 million in eight or fewer years. Wow. And now I have a financial model that shows that.

41:26And guess what? Every single time I send out my pitch deck, I include that as an asset. And that is no longer my internal goal. That is actually his external goal that I absolutely deserve and can absolutely achieve. Yes. Love it. So I want to know what happened with Ellie during diligence. So we had one more diligence call immediately after, and then she had a very structured sort of asynchronous thing you fill out. And then that was it. Then we were sending out term sheets. 50 ,000 is where we're at today. We would be thrilled to sign a term sheet. There are a few founders who know their numbers as well as you do.

42:01Your love for spreadsheets is evident in the way that you articulate the state of the business. And I'm just really excited to see where you're going to take the business. So she ended up investing? Yes. Then what happened with Elizabeth? So Elizabeth, I followed up with her quite a few times, and I was getting radio silence, and I just heard back from her last week. And she said that they had integrated some kind of new AI email triage system that let them down. And so that's why I did not hear from her until just now. Oh, no. That's unfortunate. Ah, AI strikes again. I know, I know. All right.

42:41So while all of this is happening, I got an email from you that you got into Whole Foods? Indeed. It was a very unexpected situation. Wait, how do you get into Whole Foods unexpectedly? They just surprised you? I know, right? So, I mean, I've been talking to my Whole Foods buyer since the first week of the company and they wanted a smaller pack size. So we started developing a smaller pack size together. and about four months into that journey, my buyer left. No problem. You can also have a forager. So foragers are in charge of just like the regional launches and then the buyers are national launches.

43:20So I had a forager. We continued working on the pack size and all of a sudden he went dark on me and I was like, that's so unusual because we're usually talking like once a month. Finally, after just going silent on me, I was like, all right, well, I guess that's just not happening for me. I got an email from one of my investors who is very friendly with the broader Whole Foods buyer community. And he was like, so your forger left. He's no longer there. That's why he's not responding to you. And I was like, oh, okay. Oh my gosh. An autoresponder would be great, but sure. But he was like, but there is a new beverage buyer.

43:51And guess what? They just lost a product in your set. And the new buyer was very motivated to come in and make a big splash and fill this hole. So I literally went from meeting with her in the cafe at the Whole Foods headquarters in Austin, Texas, to being offered a nationwide Whole Foods launch within two weeks. And then the actual launch is in September. So that's three months. I'm in the middle of the three months of planning for a nationwide Whole Foods launch. Jeez, that's, you know, overnight success. No big deal. No big deal. No big deal. So if you're wondering what I'm doing with my time these days, that is what we are doing, is we are making sure that Whole Foods just flies off the shelves.

44:37That's amazing. So you're not launching regionally. You're launching nationally across all the Whole Foods? All Whole Foods. So originally I said no. Originally I said I do not want to do that. That sounds like too much to bite off at one time. And to no surprise, advisors and investors said you're crazy. How often are you going to get this opportunity? Yeah. That's why ultimately I was like, burn the ships. I'm going nationwide in Whole Foods. I like it. Wow. So you're probably going to need a lot more money to do all of that, huh? Indeed. Yeah. So how did that affect your fundraise? Overnight, I updated all my financial models, of course, my favorite activity.

45:17And I say that with 0 % facetiousness, literally. I know. I can tell you love Excel. It's like my Zen garden, for real. It's like tending to my financial model. And so hardcore on the financial model and included in that is like a whole tab on cash flow. So the output of that exercise was like, this is exactly how much more cash I need to ensure that I have like a large enough buffer to sustain the business, you know, for X amount of time. And then updated my valuation. So because obviously the value of a company increases significantly with a launch like Whole Foods. I sent it out to like a small group of folks that have been following along Jubilees for a while.

46:02And then I opened it up more broadly last week for the first time. So we've really like formally announced the raise only in the last basically week and a half. Okay. So you were trying to raise 1.5 in your initial round. On the show, you had 1.1 million signed and wired. Did you close out that last 400 ,000? So I closed that early because of the change in valuation. So I closed it at 1.3, which the pitch show closed us out. Oh, did we? That was great. I love it. Yes. Yes. We got to ring the bell. That closed the second tranche of our pre-seed. And then there's kind of two possible scenarios. The materials I put together said we were raising another$1 million to give us runway through Q1 of next year.

46:53Through the process of sending this out to a list of people that I've been talking to for a long time, one of them had an interesting proposal, which was what would you think of going ahead with the priced round now, going ahead with the seed, and raising twice that to give you runway until the end of time. So either third tranche at X valuation for X amount or price seed round at this amount for a higher evaluation. Okay. Well, we invested$150K in your last round or whatever the round is called at this point. So thank you for honoring the original valuation for us. That means a lot. We're excited to be partners with you in this.

47:38But you did, if you remember back, get one more commitment outside the pitch room. A character that keeps coming up on our show. Rich Smith, LP in the pitch fund and tax credit aficionado. Love. Love Rich. Oh, my God. So he wired within like a week of the show. He didn't wait for any of the VCs or anything. He was just like, I'm in. No. He was like, I'm in. I'm so in. And then last week, he caught wind of the Whole Foods news. I wonder how that happened. I mean, actually, I told him anyway. So he is the first check in the new route. He gave me some recommendations on how I think about my R &D expenditures.

48:21And I thought I was just being nice. And I was like, OK, great. I'll look at it. Thank you. But no, next thing I knew, we had a full-on meeting with my tax manager. He was like, OK, I met your tax manager. I think we've got it all squared away. but here's just like some documents I need from you. And I was like, okay, so also some sweat equity. We love, we love that. So he's like, here's some money and I'm gonna help you save money on your taxes. Yeah, I mean, it's also going to have great monetary value because obviously as a CBG company, I spend a lot on R &D. Gotta love a value add investor.

48:51That's a pretty unconventional value add though. It really is. I've never heard of an angel investor. I know, so niche. But when it's a value add, it is about, I will take it all. Well, I mean, we're excited to be invested in you. I feel like we have been astounded by you along the way. We obviously have been talking for a long time. A long time. But it's been incredible to see your progress along the way and also get to know you more. And I love the way your mind works. I love how you're obsessive about learning and the data. And your Zen garden is your financial models. I love all of that. And it makes me super confident investing in you that you're going to do a great job building this company.

49:34Oh, thanks. I want to make sure I say thank you very much. I really didn't totally understand what I was getting myself into with this thing. You know, it was motivated by like, I'm fundraising, you know, it sounds great. Let's do it. And then I got into it and realized like, this is a program. This is a community. What was said to me in the pitch room was transformative in a huge way. So thank you for creating this space and pulling all these crazy people together. And I'm so glad that you guys did this. So thank you. You're welcome. Thank you. You're welcome. I definitely was not expecting that.

50:12I could have just as easily seen you be like, Charles got it wrong. He didn't listen to me when I said I wanted to build a bigger company. It's ridiculous. I'm so upset. But instead you took the total flip side of that. It's fuel. It's fuel. Did I send him an email afterwards with my new financial model? You bet I sure did. Yes, you did. Did I hear back? No. But that's okay. You can't win them all. You cannot win them all. I have a bunch of like sort of mantras pinned up on my wall. And one of them says, not everyone will see your vision. And that is okay.

50:55Ashley's not the first founder to come on our show and pitch the small vision. No, not at all. I don't know. Some founders, you can see why they're selling the small vision. Because the small vision is what they're capable of. I don't think that's the case here at all. Like, it's very clear. Yeah. It's like in her blood to build a company just like this. Yeah. So frankly, when she said that we'll sell it five to seven years for 100 million, I was stunned. Same. I mean, she talks about the big market, you know. Yeah. I don't know, what was the number? $57 billion market for chocolate milk, which even saying it, like, is that wrong?

51:34Like, that sounds insane. It's definitely a huge market. So the exit price that she quoted seemed way smaller than necessary. 0.1 % of the market. I remember thinking in that moment, why is she saying this number and who has coached her to say this? There must be an angel investor somewhere that wanted to know her exact exit number or something. Right. A VC would never coach a founder to say that. No, absolutely not. And it's interesting, too, because we saw this with Monica in Red Drop, where she wants to pitch this smaller vision in an attempt to under-promise and over-deliver. Pitching VCs is not the time to under-promise and over-deliver.

52:20Never, ever. Your goal as a founder is to paint a picture of how big this business can get to convince me it's worth investing in. I like the way Ellie asked it. She said, what happens if everything goes right? Yes. That's what you have to think about. And things are going well so far for Ashley. She's raised over a million of her new round. Speaking of. No offer to invest in Jubilees is being made to the listening audience on today's show. But we do have a venture fund where we invest alongside the VCs on the show. If you'd like to invest in Jubilees like we did, you can invest in fun too. We're open to new investors through the end of the year.

52:59To learn more, go to thepitch.fund. Next week on The Pitch. It may sound like we haven't tested these exact mechanics, and that is true, but we have actually done this hundreds and hundreds of times. As multiple-time founders, why have you not tested before you've asked for money?

53:20That's next week. Subscribe to The Pitch on your favorite podcast player so you don't miss future episodes. And you can watch full-length versions of every pitch over on our Patreon at The Pitch Uncut. And if you're a founder raising a pre-seed or seed round, apply to pitch at our next event. Just go to pitch.show slash apply. We'll see you next week. In the Pitch Room.

53:45This episode was made by Josh Muccio, Lisa Muccio, Anna Ladd, and Enoch Kim, with deal sourcing by Peter Liu, John Alvarez, and Phoebe Sun. Music in this episode is by The Muse Maker, Breakmaster Cylinder, The Firmware Rebels, Camufingo, Evergreen Static, Gemini, Different Angle, and Peter Jean and the Runaway Queen. The pitch is made in partnership with the Vox Media Podcast Network.

54:18Support for the show comes from Enjin. Enjin is the travel platform that takes the hassle out of business trips. Their AI helps match travelers with hotels and properties that are the best fit. That means the more you use it, the better it knows you, and the faster it can book exactly what you need. More than 38 ,000 businesses and groups have joined. Now it's your turn. Get$500 off when your business signs up. Start traveling smarter at engine.com slash pitch.