The Founder Fundraising Journey: Karl Franz Williams, Founder of Uncle Waithleys

0:02A few years back when I ran a beverage company we had to launch using those plastic sleeves to put our designs on the cans. but they looked bad. The sleeves get stretched out. They don't cover the full can and overall, they just look and feel low quality. Lucky for you, digital can printing technology has come so far over the last few years that now you can launch your beverage brand or new SKUs with a fully printed look and it's at similar pricing to those plastic sleeves. Our friends at CanWorks, which is the largest US-based digital can printer, are happy to work with our community at very low minimums, even one pallet.

0:32They've got locations in the East Coast, the West Coast, Texas. Get in touch with them through our contact form. It's at canworksprinting.com slash startupcpg.

0:58If you're raising growth capital and then using that capital to invest in inventory, then you never have enough growth capital. You're only paying for your inventory, right? Even if your margins are great, you're never going to be able to win that cycle. So you literally have to fundraise along two pathways, building credit, which is extremely hard for early stage brands, and raising growth capital and having both at the same time. Hey everyone, I'm Hannah Dittman, operations and finance host of the Startup CPG podcast. And today I'm really excited to be bringing a special founder fundraising fireside episode joined by Carl Franz Williams.

1:36Carl's the founder of Uncle Waifley's, the small batch, real ingredient, Caribbean-inspired ginger beer redefining what a classic mixer can be. Uncle Waifley's isn't just another ginger beer. It's a celebration of island culture, real ingredients, and Caribbean craftsmanship brought to the masses with intention. In this episode, Carl gets real about the founder journey, early capital needs, scrappy fundraising, navigating friends and family rounds and crowdsourcing and how to leverage grant programs. We break down what's needed to drive and sustain velocity on shelf, where founders can easily make mistakes managing capital, what traction actually looks like and how to juggle it all.

2:12Carl shares the hard-won lessons from someone who's lived both big CPG corporate beverage and artisanal craft and is now channeling his roots, his background, his creativity, and his entrepreneurial muscle into building something truly unique. Enjoy!

2:32Hey everybody, welcome back to the Startup CPG podcast. This is Hannah and today I am here with Carl Franz Williams, the founder of Uncle Waitley's. Carl, welcome to the show. Hey, thanks for having me. We're super excited to have you today. This is a new type of episode we're trying out. Hearing the fundraising perspective from the founder lens now, I think this is going to be such an interesting conversation today. And thank you so much for joining us. I'd love to start out with getting a brief background of your own personal experience and journey and the path that led you to founding Uncle Wathley's.

3:04I didn't know it when I started that it was going to go this right way, but pretty much my entire career has been in beverage in some way. So I went to Yale, got a degree in electrical engineering. I know you're saying nothing to do with beverage, but I started my career. Screams beverage. Right, exactly. Said no one. But I ended up starting my career with Procter & Gamble and working in manufacturing. So I was using my degree, but I was working in a plant that made Sunny Delight and the Hawaiian Punch. And then with P &G, I moved into brand and I worked on SunnyD on the brand side. And then they put me on Gain Laundry Church, which I always say is the reason I left that company.

3:43You were like, I'm beverage only. I'm beverage. Gain is cool. I still use gain. It was just that I was in my early 20s and I didn't want to hear about laundry anymore. So anyway, I ended up leaving P &G and I went to work for Pepsi. So I was at Pepsi and did some work and I was on Mountain Dew, ran that for a while and then went into innovation, did some new product development work for Pepsi and then had this crazy idea. I say crazy now in retrospect. At the time, it seemed like brilliant, but that I was going to leave and start opening bars and restaurants. Yeah. Yeah. I did that, and I've done that for the last several years, and I guess I've done pretty well with it.

4:28One of our bars, 67 Orange Street, was top 27 bars in America on Esquire, and we were top 50 in New York every year in Time Out, but really sort of leaned into the mixology side of things. And I got to be really good at it to the point that today I teach the premier bar program in the industry. It's called Bar Five Day. I lecture all the time on spirits and cocktails. So it's definitely a space. But during the pandemic, the hospitality world shut down, and at least I largely did. And at one of the bars, the rum bar, I was looking for the right perfect ginger beer. I needed a ginger beer to complement the program we were developing, and I couldn't find anything that had the nuance and flavor that I grew up knowing.

5:14And so my family's from the Caribbean, from St. Vincent, so I grew up knowing a certain we made ginger beer growing up, and it was like, this doesn't taste like that at all. So we created one. We're mixologists, so we kind of added some twists to it to make it extra special, but it was kind of really rooted in that sort of cultural flavor. And so during the pandemic, that bar was closed, but I was still selling this ginger beer, like in a bottles to go kind of thing for one of my other bars. And people loved it. And I was like, I don't know if this restaurant thing, this bar thing is the future.

5:45Maybe I need to take this journey full circle. Full circle. Yeah. Back to where you started. Back to where I started. That's awesome. Yeah. I mean, Carly, you're so cool. We should be friends. But that's awesome that every kind of experience in your life has really, you've almost had this like guiding North Star, even in circumstances where it wouldn't seem like it would lead you that way. That's kind of led you to where you are today. I think that's just cool that your passion has driven you in a way that's worked out so well. And now you're right in the thick of it, pulling from so many different experiences and your own culture and background.

6:19And what an awesome way to be focused on entrepreneurship. and you're the right person for the job, clearly. Thank you. You know what hits though, what you just said, I mean, besides we can be friends, we can definitely be friends. You're in New York, let's go. But no, like what hits is that you picked up on the sort of the authenticity piece, the cultural piece, the idea that like, that stuff has always mattered to me. So my family is from the Caribbean, but I grew up here. And so while there were Caribbean communities around, a lot was about, a lot of the experience or the connection to the culture, I had to seek out in a sense, right?

6:55And so do I seek it out? She brought it into what I do. And family is also extremely important. So the name of the brand is Uncle Waithee. Uncle Waithee was my grandfather. He was a farmer. I remember growing up like out in the banana fields and the like, and he grew ginger. He was passionate about health. He lived to be 100 years old. So obviously he got something right. Oh, Uncle. Yeah. My dad is also named Waithee. and to this day my dad is goes back and forth to St. Vincent he lives in New York but he goes back and forth to St. Vincent and he makes beverages that he sells on the island and so he's always coming to me like hey I got this new recipe that with this word probably it's cool because sometimes it's almost like there's a little bit of competition between us now my dad is 81 right so like I'm like dad you won on on jump but this is definitely something that has roots in both cultural experience, flavor profiles, but also in working across the years in terms of understanding what matters and what are motivating factors and what people want.

7:59So being actually in the space, being in a bar, I get to hear from people all the time. Being a bartender, I get to understand how bartenders think and work. And I think if I just had the Pepsi experience and the Proctor experience, I'd be a good beverage manager, a good GM. I could create and innovate and build and grow a brand. But this is real lived experience of the end user, of the person who's going to be experiencing and working with our product. And I think that gives us a very unique perspective. So all these flavors are Caribbean flavors. They're not just for Caribbean people. They're for a broad range of people.

8:35And we know they hit because I've seen them do that. And then the other side of it is like Caribbean culture is just on fire right now. starting with the culinary. So Caribbean food has been around for like top restaurant in New York City right now. Caribbean flavors, number four. So, you know, you have Tatiana, number one, number four is Kabbalah. You have huge restaurants just and chefs just crushing it, using these Caribbean flavors in ways that hadn't been innovated before. And it's sort of spilling over onto just like recognition of the neighborhood. So like Time Out picked Flatbush, which is like a Caribbean neighborhood as like the coolest neighborhood in the world, not just in the country, in the world, right?

9:14So there's a lens on Caribbean culture. And I think for a brand like this, it's the time. And you can't find these flavors anywhere else. They're not on the shelf yet. So it really positions us to really do something pretty amazing with this brand. Yeah, I see the vision and so much to unpack there. First of all, your family is probably not just proud of you, but proud of this whole concept and brand. It seems like really a generational representation of a lot of important love and passion and respect for all the people in your life that have contributed to who you are. What a better way to pay tribute than something living and breathing like this.

9:51You mentioned earlier before we got on the episode that you have kids and cool for them too. So mad props for that. And then, yeah, I think the movement for sure. I think there's been so much development on global awareness and culture and different things, even with music. I mean, there's so much going on in so many different scenes. I see what you're saying. And then from a more tactical product perspective as well, I'm just thinking of myself, like ginger beer is like a staple entry level item. Like when you get out of college and you're like, oh, yeah, I'm going to be an adult now and start making actual drinks.

10:28Like one of the first go-tos you're going to go to as a Moscow mule because it's just like such an easy entry point and when you go to the grocery store it's like there's the one option in the small portion and there's like the one four pack of ginger beers that you're going to buy from whatever Canada Drive you're going to replace it with there's some crazy thing so yeah I think it's definitely something that people drink a lot maybe don't even think about all the time but definitely drink a lot. And it's not like some huge artisanal representation or deep effort has been put into the mainstream on these items.

11:02So I think there's a huge opportunity. I can see where your mind's at. And I agree, you definitely have the background and the knowledge of the right people using it in the culinary and the mixology space. So exciting chat. I'll say that the other part of it is I think ginger beer, it's an entry point. It has a reason. So the other thing that's happening is people are just drinking less, right? They're drinking less alcohol and they're looking for options. And so the numbers are crazy. Like that segment, so the alcohol replacement segment is up 27 % year over year. It's over 800 million right now.

11:36A few years ago, it was barely an existing marketplace. We're seeing a lot of numbers around millennials, Gen Z and younger, just not drinking the way that older generations drank. And so options become important. Now, a lot of bars have ginger beer because just what you said, It's a great mixer. But they're just pouring it as a mixer. And when someone's like, oh, maybe they don't have a mocktail menu or something like that, they're getting a ginger beer. So that's good of an experience. But it's already there is the point. There's already a reason to be there. And so one of the things that I'm seeing is the entry point for a lot of the emerging NA brands is difficult.

12:10They're trying to figure out how to get into the on-premise space. But for the bartenders and consumers in that space, there's not an easy set. Like, they're a bartender. I want to create my own. a lot of them sort of, they're essentially RTDs, right? I mean, the NA spirits, and they've begun to find a place, but a lot of them are RTDs. And if it's an RTD, especially in a craft bar, you're not bringing in an RTD because you're going to make your own. That's what bartending to do. We bartend, right? We create. Yeah, for sure. You're like, let me just crack this can for you real quick. Right, right.

12:43That's not what you do. So what it does is it gives us a reason to be there. And once we're there in those places, like we actually can substitute in either place. So there's three flavors of a product. There's the original flavor, which perfect Moscow, I mean, whatever ginger beer was going to go, you can use this. We also have sorrel, which is a Caribbean drink made with hibiscus and various spices. We have a smoked pineapple with anise, star anise and thyme. And you're like, thyme? Okay, right. Because we were thinking about that. We were thinking about how do we put those flavors in. So it becomes super easy for that bar.

13:18Either you just pour Spirit Uncle Waitley's and you're done, or just Uncle Waitley's. A lot of our bars and restaurants have it on the shelf. So our business is uniquely positioned to win both on and off premise. Uncle Waitley's, one of our first customer outside of our own bars was Whole Foods. And that relationship has grown tremendously there. We're in over 200 of their stores today, about 225 of their stores, all the way up down the East Coast from Boston to Florida. They invested in the brand. And so they're on our cap table. And so if you needed a validation from one of the most discerning buyers in the industry that this is something that's more than just real thing, has real legs like that, I think that's a great example of that.

14:01So I'm bullish on this. I'm passionate about it. It is something that I enjoy both making and marketing and putting out there because of all the layers that we just talked about. yeah I think there's so much exciting interesting opportunity and traction that's already happened for you guys it's really cool and I think a space that maybe someone especially you get a lot of kind of like MBA business ideas where someone was in business school and they had to come up with a concept and they they think through it and they're like oh I'm gonna launch that you know a brand like this will never be created in that way because there's so much more nuance and passion and things going on.

14:41I think those are the coolest brands that end up succeeding. It's like ones that you don't really recognize what a big market there is or how much use cases there are, how important having a better option might be. So I'm super excited to jump in the rest of the chat. I think this is amazing context to kind of lay the land to get in some more fundraising conversation. I'd love to kick it off with just what has the capitalization and fundraising process and journey for your company from inception to now been like? Obviously, you're mentioning Whole Foods being on your cap table. But yeah, I would love to hear kind of just the story through that lens.

15:19Yeah. Fundraising is always sort of a, I mean, it's an interesting topic for me because I've experienced what it's like to work on a brand where money is no option. We were launching a product and I was at Pepsi and I got a$5 to$10 million budget to go launch this brand. And then I know that there's like another 30 of those millions available should I need it, right? Unlimited resources on product development, testing. I have all of the data I want about how it's performing in the market. I can do conflict segmentations, work with huge agencies on figuring out positioning. Yeah, that's not the world of being a startup entrepreneur.

16:01Yeah, at all. I've had those experiences too. is a hard pivot when you're, it's just you and your dining table. It's so different. And I would say that the other side of it is like, I think this perspective is resonates because like when I moved into sort of the hospitality space and started opening bars and restaurants, I was doing that with my own money. And so that's a whole nother world where all of a sudden you're resource constrained and you're trying to figure out how to do this, but you don't have the money to do it. And I think the way that this journey is sort of like, it's been a learning experience because you kind of come into this and the way that you talk about what you're trying to do, the way you position it so that is on the exit potential.

16:43It's on where is it going. You're not building like restaurants and bars are cash flow businesses. They operate in such a way that no one's looking at when you open a unit or even five units, they're not thinking necessarily about the exit value on that. It's like, what are we doing on a day to day? Whereas if you're building a company like Uncle Waife's, you're thinking about exit and thinking about where you're scaling to and how that sort of plays out. And then the other side of it is because of that, and just because of the economics of building a beverage brand, there's these huge entrenched competitors, right?

17:19There's, it's a crowded space, there's constantly new entrants. You have to invest quite a bit to be able to create scale. And so just the perspective that you're coming from as a beverage entrepreneur. The other side is sort of the separation in terms of the sort of the paths of fundraising. If you're raising growth capital and then using that capital to invest in inventory, then you never have enough growth capital. You only pay for your inventory, right? Even if your margins are great, you're never going to be able to win that cycle. So you literally have to fundraise along two pathways, building credit, which is extremely hard for early stage brands and raising growth capital and having both at the same time.

18:00The other thing that I've sort of learned along this is kind of like this idea that you can't really, capital coming in drips can also be very difficult for these businesses like this. You kind of need large sums so you can plan things out and build a calendar and forecast. I think for a lot of entrepreneurs, just in terms of my interaction with folks coming into this space, a lot of it starts with, hey, I got this product that I love or I see this opportunity in the market and I want to fill it. And then there's almost this kind of hesitancy about, do I want to actually go out and give up some of my company for money?

18:38Do I want to raise? Do I want to take, like, how much do I really need to do this? And I think it's really easy to get sort of maybe slowed down to lose. I've seen entrepreneurs lose the opportunity just in that initial stage because they don't raise enough to kind of get through the initial hurdles that you need to even get the critical mass to get to the next place. and you can talk and raise cycles and seed and pre-seed and all that. But washing all that away, just thinking of it in terms of like, if you're raising capital in this space, you're raising enough to be able to create the traction that you need.

19:16And that means in terms of both on shelf and what it takes to do that well. And so you find entrepreneurs catching up on that part, right? It's like, okay, now I'm in retail. Let me learn how to do retail. But I didn't know how to do retail. So I haven't budgeted for all of my TPRs and promos and merchandising and sales folks and slotting fees and blah, blah, blah, blah, blah. And all of a sudden that budget is gone and you're in the five stores that you're in. You're trying to figure out how to scale those stores to get to the next level to make sure the velocity is there. I almost wish that there were more resources in the early stages of building brands for folks.

19:53Perhaps there are just in terms of what it takes to actually do this. Like what are the amounts you need and how you do that? I've had that same thought before. I think that part from a high level, investors definitely know it takes capital to start a brand. But I don't think a lot of people, and this is category dependent on how complex what you're doing is and all these things, but I really don't think a lot of people know how much it takes and what it's like in the zero to one capital needs space, even before you have your product final. there's like traction milestones that you have to show in each gateway of your growth journey getting into retail is very rarely just concept to retail you've already had to go zero to one then you're going one to two then you're in retail and maybe from the part of two to three is where most investors are seeing brands even on the very early side so it takes a lot I mean And like you're saying, especially if you even if you are in CPG and you come from that background and you're working for a big company or you've had good experience, like you don't realize if you want to do any flavor development, anything that's going to be required to make an early scrappy brand stand out.

21:10Because you can't just put a whatever stock product out there with no budget, no marketing and expect that to soar. you're going to have to put a lot of investment in the product development side and getting that right to even have a chance at getting to that next gateway. And that takes extra time because you don't have the agencies, you don't have the resources, you don't have the things that money buys efficiency a lot of times too. And you don't have that. It's all on you. Yeah, it's complex. We'll be right back. Are you going to crush it on Amazon this year? It's such an important channel but it's so hard to do alone and most agencies are a total ripoff we can't afford five thousand dollars a month and a commission on our sales they just don't get it that's why i love our partners at daybreak they are full service meaning they do the creative work the listings the logistics and of course all the ads all with the most reasonable retainer out there i work with them personally i'm so grateful we have such a good partner to recommend out to you our community they do evaluate your product first to see if it might be a fit so if you want them to have a look, email them startupcpg at daybreak.agency and they'll do a free audit for you.

22:16Good luck, everyone.

22:21What was kind of the journey like for you from getting to that? You said you started bars and restaurants with your own money. What was the journey of getting from your like day one? I'm working on Uncle Waifley's to getting any sort of capital in the business and being able to kind of start to grow in that way. I came into this initially assuming that I could build it the way that I had built the restaurants, which was invest some capital, add some sort of loans or debt to that, and then scale up to a point and then you're okay. And you quickly realize that that model isn't work. So we initially started, I made an initial capital investment, and then we raised money through a few CDFIs.

23:05And so we got some initial loans there. And that kind of got me out the gate, got the product, developed it on the shelf. But again, like just on the shelf doesn't mean anything, right? Like there's no velocity there. Now you got a demo. Now people don't know what the product is. You got to talk about it. And I quickly realized that we needed a lot more than that sort of initial capital. Even as simple as production on beverage, there are very few co-packers who will do small runs for beverage. There's better options in can and glass, but in glass in particular, you're just not getting. They want to see, we were seeing the number we heard a lot of was we want to see a 5 ,000 case run to start.

23:46That's$100 ,000 or more. Like, what are we talking about? Yeah. Right? No, same boat and personal care for custom too. I mean, same boat. Right. And so it's like, okay. And if I do well and I sell through that, and that meant that I had to invest in marketing and brand. So saying again what we said initially, which is just having the right amount. And this is something access to capital then becomes a question, right? Like, so where do I get this capital? And it's extremely rare that just on the strength of your pitch deck and your background, a VC is going to say, yes, I'm getting institutional money from day one, right?

24:23Like, that's very hard. It does happen. It's very rare. There's a small percentage of folks that are going to do that. It's friends and family. That's where you want to be. It also gives you the greatest flexibility to sort of control the direction that you want to go. So there's benefits beyond the fact of it's almost impossible to get venture or institutional. You also are able to build in a more controlled way. And so we initially started with how can we do that with some scale? And so crowdfunding was the first step that we took. We looked, we did a raise on StartEngine. And the thinking was, I'm doing two things there.

24:57I'm creating a group of free marketers, free influencers who are going to go around the country and talk about my products, right? Because they're invested in both meanings of the word and the success of the brand. And secondly, the valuation is up to me, right? Like, obviously, with anything, pricing is pricing, right? There's supply and demand. And ultimately, what the demand is for what you're doing is going to determine whether your price actually works. And so you got to price it right. But that decision is up to me. And there's no one who's going to tell me what my price should be, except me at the end of the day.