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

Josh: Welcome to The Pitch, where startup founders raise millions and listeners can invest. I’m Josh Muccio.

Lisa: And I’m Lisa Muccio. On the show today we have Ashley with Jubilee’s. She’s raising 1.5 million dollars.

Josh: We're going all in on kids' drinks this season because it really is that hard to get our kids to eat healthy.

Lisa: Our kids really only wanna eat snacks.

Josh: Or cucumbers and carrots if forced ...

Lisa: That is the healthiest they get, basically.

Josh: So we have to sneak veggies in wherever we can.

Lisa: What if you could hide veggies in something like chocolate milk?

Josh: That would be ideal.

Lisa: But would it taste good?

Josh: Probably not.

Lisa: I mean, you have your own experiences with drinking veggies as a child.

Josh: 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.

Lisa: Well, Ashley from Jubilee's 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.

Josh: 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?

The pitch for Jubilee’s is coming up after this.

But first! We’re hosting two live events this November. A live show in NY, and also, our season 17 taping in San Francisco. You can learn more about either of those events by going to pitch.show/events.

Break

Welcome back to the pitch for Jubilee’s. Let’s meet the investors.

Charles Hudson with Precursor Ventures

We have 500 companies, so, you pick it, we have it

Ellie Bahrmasel with Peranaut

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?

Charles: Jubilees. [clap]

Josh: Nice.

Ashley: Hello, everybody.

Ellie: Hi.

Ashley: I'm Ashley.

Jeff: Jeff.

Ashley: Great to meet you. Hi

Charles. Charles: Nice to meet you.

Ashley: I feel like I'm meeting famous people. I've seen you all

Ellie: Elizabeth.

Ellie: Hey. Ellie

Ashley: Hi. Ashley. Nice to meet you.

Ellie: Nice to meet you, Ashley. Love that jumpsuit.

Ashley: Thank you.

Ellie: That's amazing.

Ashley: 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, so 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.

Ellie: Hmm.

Ashley: 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. It 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, vegetables and milk, that sounds absolutely disgusting. There's no world where my kid's gonna 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.

Jeff: Hmm.

Ashley: I know that as a mom, if it doesn't taste amazing, it's gonna go into the trash, and mom's never gonna 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 and 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 with 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, Skechers Shoes, and then ultimately in-house for Google. And what that looks like in terms of building this business is starting with a problem and 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 Jubilee’s. In terms of where I am as a business, I just celebrated my one-year anniversary. Very exciting.

Charles: Congrats.

Ashley: We're in 2,000 stores, with our biggest footprint nationwide in Target, nationwide in Sprouts, Albertsons, H-E-B, Raley's, and then a bunch of other, like, 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'm doing here in milk is very similar to what Goodles has done in mac and cheese, what Poppi 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, and that is exactly how I feel about chocolate milk.

Ellie: I'm obsessed with you. Just so you know.

Ashley: Oh my gosh, thanks.

Ellie: That was a great pitch.

Ashley: Thank you.

Elizabeth: And great progress for a year so far

Ashley: Let me get you some samples. Thank you.

Ashley: So we have banana cream pie, So this one has carrot juice, turmeric, real banana puree. And then chocolate chip cookies.

Elizabeth: That does taste like milkshake.

Charles: It does taste like bana- it does taste like a banana cream pie, yeah.

Ashley: Thank you.

Ashley: 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

Elizabeth: That chocolate one's really good.

Ashley: Thank you.

Charles: It's good, yeah.

Elizabeth: The chocolate one you could drink instead of, like, a mocha.

Ashley: Oh, totally.

Elizabeth: It’s great

Ashley: Yeah, so recipes do outstanding on my social media, and we're always doing, like, we've done lattes and banana bread, and, I've even made, like, a White Russian out of it. It's pretty good. Um, so yes, the-

Ellie: Protein White Russian

Ashley: The options are endless.

Elizabeth: Great progress so far

Ashley: Thank you

Elizabeth: in just a year. what's your revenue to date with all that store presence?

Ashley: $460,000.

Elizabeth: And how's your velocity doing?

Ashley: 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. My 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.

Charles: What's the channel mix?

Ashley: Yeah. So it's 80% in store, and then 15% online, and then the last segment is what I’ll call alt channel, so restaurants, coffee shops, bakeries. Very cool dinosaur museum in New York.

Jeff: What do you, what do you, what have you learned from your subscriber base? Obviously there's some super fans here. Like, what's the big insight? Who are they, and what does it cost you to acquire them?

Ashley: 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 ARFID. I actually did not even know that was a thing. Originally I was calling this flavored milk, but I'm calling this 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 Pediasure. So 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.

Jeff: Yeah.

Ashley: Oh, and the cost of customer acquisition. So I've learned a lot about this as well. So I've spent about $80,000 in marketing, tried a bunch of different levers, and I saw a huge difference in CAC. On the high end, it was, like, $12 per acquisition. On the low end, it was, like, $2. If you factor in repurchase rates, it's can go as low as 38 cents.

Ellie: Wow.

Ashley: So now, with, like, this next version of where I'm gonna spend marketing, obviously I'm gonna narrow my focus to the areas that are the lowest CAC.

Jeff: What works? in your, in your experimentation, what is the message and vision?

Ashley: 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 Mae's dressing, that was his entire go-to-market, and it has worked well for a long time, and it's still, I guess principally the right thing, which is you need to drive trial.

Jeff: Yeah.

Ashley: 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.

Jeff: Yep.

Ellie: I’m really curious to know about your super powers. When you think about what it takes to reach exit velocity on a product like this, what are the superpowers that are gonna carry you through the next seven years?

Ashley: 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.

Ellie: Yeah.

Ashley: So I do think I have a significant level of grit. And then the last is sales. when 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.

Ellie: That's amazing.

Ashley: Thank you.

Ellie: So I believe that the pre-seed stage is when you identify your riskiest assumptions-

Ashley: Mm

Ellie: and either prove or disprove.

Ashley: Mm.

Ellie: 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? And how are you using these funds to tackle that?

Ashley: Wow. That is such a good question I've never heard before. The riskiest assumption, you know, I'd 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. Say 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 churn 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, 'cause I would have to acquire more customers.

Ellie: I'm just gonna name right now I really love what you're doing.

Ashley: Thank you.

Ellie: 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.

Ashley: Thank you.

Ellie: Our due 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, who 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, you know, all the other fun stuff around-

Ashley: Cool

Ellie: your model. but I think it would be really fun to be on this adventure with you

Ashley: Cool. Thank you so much.

Ellie: Yeah.

Ashley: That's incredible.

Well 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.

Charles: Talk a little bit more about just, COGS, and pricing, and manufacturing and sort of the operations side of the business.

Ashley: 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 have been incredible partner. same folks that do Horizon Milk.

Charles: What's the retail price, too?

Ashley: So it's between 2.69 and 3.49. We do 3.49 at Target.

Jeff: Talk to me about activation, like activating the brand. Building a kids brand, is unique, right? You have two audiences. You have the purchaser-

Ashley: Mm-hmm

Jeff: which is the mom, and then you have the user of the product, which is the kid. So are you building the brand from an activation perspective around kid request and generating kid excitement, or are you building the brand for, like, mom approval?

Ashley: 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 exci- the anec- 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.

Jeff: Yeah.

Ashley: But, like, they're the ones with the spending power.

Jeff: Speaking of kids loving it, can we have a kid try it? Is there-

Josh: Yes.

Jeff: Is there a kid in the studio?

Josh: I have some kids.

Ashley: Hey, children. How's it going?

Josh: How many kids do you want?

Ellie: All of them All the kids.

Josh: Okay. All right, come on.

Josh: Uh, this is Gia, my oldest.

Jeff: Hi, Gia.

Josh: Uh, Asher. And Livi.

Ashley: Nice to meet you.

Ellie: Do you all-

Jeff: Thanks for coming to be taste testers.

Ellie: Do you all promise to give us your honest opinion?

Asher: Yes.

Ellie: You can't hurt our feelings

Elizabeth: What, what's your favorite drinks right now, like in life, in general

Ashley: Banana cream pie, chocolate or cookie.

Gia: I would say, I don't know, I like a lot of different things. But like, I like milk

Asher: Dr. Pepper.

Elizabeth: Dr. Pepper.

Charles: Ooh

Asher: Can I try it?

Charles: Solid choice.

Ellie: Asher, what was that face? Tell us about it.

Asher: Really sweet.

Ellie: Really sweet?

Asher: I like the flavor.

Gia: I definitely like the chocolate chip cookie one, like, a lot.

Asher: Very good.

Gia: Mm-hmm.

Livvi: I like the banana 'cause it's less sweet.

Ashley: Look at you. Normally it’s the cookies.

Asher: I like them both together.

Ellie: Oh

Charles: There you go.

Ashley: Innovator.

Jeff: When would you drink this? Is this, like, a breakfast drink? Is it after school?

Asher: I usually drink it after school.

Jeff: After school?

Livvi: Yeah.

Elizabeth: What do you not like about it?

Asher: I think the banana one's good, but it's a little sweet and then I can't taste, like, the banana as much.

Ellie: 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?

Livvi: Hmmm… Only if it was the banana.

Gia: Yeah, I would, I would.

Charles: Yeah.

Ellie: If it's trade worthy, I'm interested.

Jeff: Ellie, great question.

Asher: I would get it.

Ashley: She's got the banger questions over there.

Elizabeth: Do you guys think Dr. Pepper is healthy?

All: No

Elizabeth: Do you think this is healthy?

All: Yes

Asher: You said it had, vegetable juice, so.

Ashley: 100% vitamin C, 100% vitamin D.

Elizabeth: Can you taste the vegetables?

Asher: No.

Livi: No.

Asher: It just tastes like chocolate milk, and I've never had anything like it.

Ashley: I didn't pay them, I swear.

Jeff: And there's the commercial.

Ellie: Thank you, guys.

Ashley: Thank you so much.

Livi: You’re welcome.

Elizabeth: So I have my first baby boy, a 13-month-old.

Ashley: Congratulations.

Elizabeth: 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?

Ashley: 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. This is actually, like, a scientific, like research driven statistic.

Elizabeth: I'm still a picky eater at 36.

Ashley: 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 who don't ha- that are not like that, and I think it's perfectly, smart thing to do, to, 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 SKU. 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 gonna work, frankly, 'cause, like- can you mask the vegetables without it? I'm not sure. but I would like to introduce a plain SKU.

Jeff: I'm curious about the occasion. what occasion and ritual are you trying to own at the household?

Elizabeth: That's a great question.

Ashley: Lunchbox. 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 with your 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, you know, 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. Bobo's falls into that category for me. Bear snacks. We buy, like, five boxes of those.

Charles: Yeah, we do those.

Ashley: Chomps meat sticks. We buy a ton of those. So that category for me is super powerful.

Jeff: That's great.

Charles: Who else is on your team?

Ashley: 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, then I have an advisory board. So I have the former head of sales for Spindrift, 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. she helped me a lot with, like, figuring out my runway and my raise 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 Chobani to help with R&D.

Elizabeth: That's really impressive. It sounds like you've built kind of a dream team of advisors

Ashley: Very much

Elizabeth: that actually work pretty closely

Ashley: And I use them a lot

Elizabeth: What's something that's keeping you up at night right now? What are your biggest challenges?

Ashley: 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. Do not run out of money." It's where most 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.

Jeff: 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?

Ashley: So, if I close this round at my current terms, I'd be diluted, at about 20%. it 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.

Jeff: What's the biggest lever there?

Ashley: 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. The 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.

Jeff: 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 wanna hit?

Ashley: 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, Chomps is in 51,000 doors. Good to Grow, which is a huge disruptor in the kids, like, healthier juice space, they'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 'cause my number one objective next year is to get into, like, Costco. Which will be a different calculus in terms of number of doors

Ellie: 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.

Ashley: Yeah.

Ellie: 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?

Ashley: No.

Ellie: Okay. So what's holding you back from telling us

Ashley: No, so that would be 0.1% of the industry. Fair Life was sold for $980 million. So I think it's very conservative, and I think it's a reflection of my personality, which is to underpromise and overdeliver.

Ellie: 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?

Ashley: 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 this space to move quickly.

Ellie: But I'm curious, what's stopping you from telling yourself that story every day?

Ashley: I don't know.

Charles: It's funny you brought that up, 'cause I in my mind had just passed for that very reason. So we're in Bobbi Baby, we're in a couple of other, um-

Ashley: Great company

Charles: 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-

Ellie: Mm-hmm

Charles: outcome in these categories.

Ellie: Mm-hmm.

Charles: So s- I was like, 60 isn't enough-

Ashley: Yeah

Charlie: 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

Ellie: Mm-hmm

Charles: relatively early. And I was like, well, if that's where she wants to get off the train, I, I'm not in the business of arguing with people about-

Ashley: I am not getting let's be clear. I am not getting off the train as soon as I reach $60 million in revenue. And I am 1,000% someone who sets huge goals and achieves them. So, and I think this is really good feedback.

Charles: Mm-hmm.

Ashley: And, 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.

Ellie: Then can I give you a piece of feedback

Ashley: Please

Ellie: Then, if you're open to it?

Ashley: Yes.

Ellie: Tell yourself that story and tell all of us that story. There's a reason why I was such a quick yes here, is 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. So why tell us a small story when it's not a small story?

Ashley: Never again. This is the last time. This is the last time.

Ellie: I want you to lead from the most bold and daring, data-backed, bold and daring place. You've got all the data to prove you can do the biggest, boldest, daring thing. Bring us there.

Elizabeth: And I just wanna clarify, you said $58 billion of flavored-

Ashley: Yes

Elizabeth: Milk? Is that just in the US or global?

Ashley: Global.

Elizabeth: Globally. But that doesn't include, like, Fairlife's bigger, fat-free milk.

Ashley: Correct. That's just the chocolate milk.

Elizabeth: That's just chocolate flavored milk

Ashley: Just flavored milk. Strawberry milk, vanilla milk. Yeah. It's 70% chocolate milk, 30% strawberry.

Elizabeth: And it doesn't even include, like, Horizon plain milk little boxes.

Ashley: Correct.

Elizabeth: Wow. Who knew it was that big of a market?

Ashley: I know.

Elizabeth: I'm interested. Milk is probably one of my favorite things in life.

Ashley: I love it. I need to talk to you more about Fairlife.

Elizabeth: 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.

Ashley: Thank you.

Jeff: I love everything about your story.

Ashley: Thank you.

Jeff: 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.

Ashley: Mm.

Jeff: 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. So I'd like to just keep in touch.

Ashley: Okay.

Josh: Charles, where did you land?

Charles: Oh, I'm, I'm out actually.

Josh: Say more.

Charles: Oh, I thought I was a no. Oh, no, sorry. Okay. Um, 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 like if I have greater ambitions for the company than the founder that like at some point we're gonna be at odds. And that I'm gonna want you to go for it, and that's not gonna 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. I 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, at 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

Ashley: Yes. Um, I, so I'm, and I'm not, not trying to change your mind.

Charles: Yeah.

Ashley: But 1,000% my dream is that big. And I fully believe I am capable.

Charles: Mm-hmm.

Ashley: 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.

Charles: Yeah.

Jeff: Just a piece of feedback on all that is that at the end of the day, CPG is really driven by the capital efficiency and the outcome. And so getting to 60 million, if you told me you did that on $5 million of paid-in capital, and you could get a 2 to 3X 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 that sell the dream, because I think you have it, and so it's, uh, it's exciting, and I'd love to, I'd love to continue the conversation.

Charles: And, and I'm not suggesting you turn off the rigorous side of your brain.

Ashley: Mm-hmm.

Charles: Most CPG companies that end up on the rocks, it's because they turn off the rigorous side of their brain, and-

Ashley: Yes.

Ellie: Yes

Charles: So it's, it's sort of the inside voice, outside voice kind of thing. 'Cause, 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."

Elizabeth: 10.

Charles: And so like, okay, she thinks it's 100, so that's probably, like, the best case. And so I d- I don't know. I think, um, you deserve to have the opportunity to go big.

Ashley: Thank you.

Charles: Mm-hmm.

Ellie: Thank you. 

Ashley: Thank you so much.

Charles: Thank you so much. It was so nice to meet you, Ashley.

Ashley: This was great. Thanks.

Josh: That was fun.

Elizabeth: Yeah, she was great.

Josh: Yeah, I can't believe she said the $100 million. If I would've known she would’ve said that, I would've told her never to say that. Um

Elizabeth: It's all a lessons.

Charles: But it's true. But Josh, the thing is, it's true.

Jeff: Yeah.

Charles: That doesn't mean that's where her head will be 30 days from now. But today, like that's her, where her head… And if she'd come in and told a 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.

Elizabeth: Same spot.

Jeff: Yeah.

Charles: Yeah. So I'm actually glad that she was honest, and I think, I hope that the conversation was helpful for her.

Ellie: Well, 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-

Charles: That's right

Ellie: because you're not sure I can meet you there?

Charles: That's right

Ellie: 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 $100 million." She knows the bigger story, and I wanna hear it

Elizabeth: And she has people all around the table that have been part of businesses that are much bigger.

Ellie: Right.

Charles: Yeah.

Ellie: Yeah. She has the right team.

Elizabeth: So it's like she had the right advisors to think big, but she didn't have the right narrative.

Charles: Sometimes I meet founders who just got advice from people who tell them to shrink their dreams.

Elizabeth: Yeah.

Charles Who tell them like, "You can't do that. It's gonna be too hard."

Jeff: Yeah.

Charles: "Are you crazy?" And they like...

Elizabeth: Yeah. And I think that's the thing about investor feedback. You shouldn't take all of it.

Charles: It's just an input. It’s just an input.

Jeff: It comes in a lot of flavors.

Ellie: N of one. Each conversation, N of one.

Jeff: Yeah.

Josh: And that's a wrap. I like that as an end.

Charles: Yeah.

Josh: That's great.

Ashley walked out of the pitch room with 50k 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.

BREAK

Welcome 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.

Ashley: … An Alani because i'm trashy

Josh: I don't even know what that is.

Ashley: You don't know what Alani is? Oh, my boy. Sweet baby boy.

Josh: Does Lisa know what it is?

Lisa: Yeah.

Josh: Oh, okay.

Ashley: 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.

Lisa: What?

Ashley: And then now I'm, like, totally addicted to it.

Lisa: As someone in the beverage industry, how do you feel about that? Like, what happened here?

Ashley: 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... It, 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 US distributor for one of the largest and first energy drinks also at the time called Bawls, B-A-W-L-S. And my first job in beverage was hawking it out of my backpack at school, in middle school.

Lisa. Oh. What?

Ashley: And I got in big time, big time trouble, and I got expelled from school-

Lisa: No ...

Ashley: for selling caffeine to middle schoolers.

Lisa: Wow.

Ashley: As a middle schooler, let's be clear. I was also a middle schooler.

Josh: So you've been selling drinks to kids- ... since-

Lisa: Since the beginning

Josh: ... way back.

Ashley: Oh my God. I've been selling drinks to kids since I was a child.

Lisa: Wow. You are the person to build this company.

Josh: Talk about life's mission.

Ashley: I didn't even put that together until this very moment in time. Okay, I'm so sorry. I have derailed us so significantly. I am ready to participate.

Lisa: No, no apologies necessary.

Josh: 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.

Ashley: 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.

Josh: Well, and you had the benefit of watching two days of pitches before you.

Ashley: True.

Josh: 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, and 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, uh, clearly you picked the right one.

Ashley: I actually didn't- It was funny 'cause the first time I came into the, the room where you could watch the pitches, I didn't fully realize that that was the live pitch- Oh. ... 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, they were just doing that just now." So from then on I was like, okay, this is where we sit and, like, absorb a lot of helpful information. That's hilarious. I love that.

Josh: 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?

Ashley: 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 underpromise and overdeliver. But 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.

Lisa: Wow.

Ashley: And now I have a financial model that shows that, and 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 Ashley’s external goal that I absolutely deserve and can absolutely achieve.

Lisa: Yes.

Josh: Love it.

So I wanna know what happened with Ellie during diligence.

Ashley: 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.

Ellie: 50,000 is where we're at today. We would be thrilled to sign a term sheet. There are few founders who know their numbers as well as you do. Your 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.

Josh: So she ended up investing?

Ashley: Yes.

Josh: Then what happened with Elizabeth?

Ashley: 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.

Josh: Oh, no.

Lisa: That's unfortunate.

Josh: Ah, AI strikes again.

Ashley: I know. I know.

Josh: All right. So while all of this is happening, I got an email from you that you got into Whole Foods?

Ashley: Indeed. It was a very unexpected situation.

Josh: Wait, how do you get into-

Lisa: Yeah

Josh: Whole Foods unexpectedly?

Lisa: Yeah. They just surprised you?

Ashley: I know, right? So, I mean, I've been talking to my Whole Foods buyer since the beginning, 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, are national launches. So I had a regional, 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," 'cause we're usually talking, like, once a month. Finally, I 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 forager left. He's no longer there. That's why he's not responding to you." And I was like, "Oh. Okay"

Lisa: Oh my gosh.

Josh: Geez.

Ashley: An autoresponder would be great, but sure. But he was like, "But there is a new beverage buyer, and 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.

Lisa: Wow.

Ashley: 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.

Josh: Geez. That's, you know, overnight success.

Ashley: 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.

Josh: That's amazing. So you're not launching regionally, you're launching nationally across all the Whole Foods?

Ashley: All Whole Foods. So originally I said no. Originally I said, "I do not wanna do that. That sounds like too much to bite off at one time." And to no one's surprise, advisors and investors said, "You're crazy. How often are you gonna get this opportunity?"

Josh: Mm-hmm.

Lisa: Yeah.

Ashley: That's why ultimately I was like, "Burn the ships. I'm going nationwide in Whole Foods."

Lisa: I like it.

Josh: Wow.

Lisa: So you're probably gonna need a lot more money to do all of that, huh?

Ashley: Indeed.

Josh: Yeah. So how did that affect your fundraise?

Ashley: Overnight, I updated all my financial models, of course. My favorite activity, and I say that with 0% facetiousness.

Josh: I know. I can tell you love Excel.

Ashley: Literally. It's like my zen garden, for real.

Lisa: I love it.

Ashley: Is like tending to my financial model. And so I'm hardcore on the financial model. And, included in that is like a whole tab on cash flow. So the output of that exercise is 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.

Lisa: Mm-hmm.

Ashley: 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 Jubilee's for a while, and 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.

Lisa: 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?

Ashley: So I closed that early because of the change in valuation.

Lisa: Okay.

Ashley: So I closed it at 1.3, which, the pitch show closed us out.

Lisa: Yay.

Josh: Oh, did we? Yes.

Ashley: Great. I lo- I love it. Yes. Yes. We gotta 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 one million to give us runway through Q1 of next year. Through the process of sending this out to the 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 priced seed round at this amount for a higher valuation.

Lisa: Okay.

Josh: 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. But you did, if you remember back, get one more commitment outside The Pitch Room. A character that keeps coming up-

Ashley: Oh, yeah!

Josh: on our show. Rich Smith, LP in The Pitch Fund, and tax credit aficionado.

Ashley: Love. Love Rich. Oh my God. So he wired within, like, a week of the show. He was like-

Josh: He didn't wait for any of the VCs or anything

Ashley: He was just like, "I'm in. I'm in. I'm so in." And then last week he caught wind of the Whole Foods news. Um, I wonder how that happened. Um, I mean, I should've told him anyway. So he is the first check in the new round. Um, he gave me some recommendations on how I think about my R&D expenditures.

Lisa: Mm-hmm.

Ashley: And, I thought he was just being nice and I was like, "Okay, great. I'll look at it. Thank you." But no, next thing I knew he had a full-on meeting with my tax manager. What? He was like, "Oh." He was like, "Okay, 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."

Josh: So he's like, "Here's some money, and I'm gonna help you save money on your taxes"?

Ashley: Yeah, I mean, it- that's also going to have great monetary value because obviously, as a CPG company, I spend a lot on R&D.

Lisa: Gotta love a value-add investor.

Josh: That's a pretty unconventional value-add, though.

Lisa: It really is.

Josh: I've never heard of an angel investor-

Ashley: I know, it's so niche, but when it's a value-add, it is a va- I will take it all.

Lisa: 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.

Josh: A long time.

Lisa: But it's been incredible to see your progress along the way and also get to know you more, and, like, I love the way your mind works. I love how you're, like, obsessive about learning and the data, and, like, your Zen garden is, your financial models. I love, like, all of that, and it makes me super-

Ashley: Oh, thanks

Lisa: -confident investing in you that, like, you're gonna do a great job building this company.

Ashley: Aww. 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.

Lisa: Yeah.

Ashley: And then I got into it and realized, like, this is a program. This is a community.

Lisa: Yeah.

Ashley: 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.

Lisa: You're welcome.

Ashley: So thank you.

Lisa: Thank you.

Josh: You're welcome. I definitely was not expecting that. I could've 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.

Ashley: It's fuel. It's fuel. Um, did I send him an email afterwards with my new financial model? You bet I sure did.

Josh: aha yes you did!

Ashley: Um, did I hear back? No. But that's okay. You can't win them all. You cannot win them all. No. 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."

Lisa: Ashley's not the first founder to come on our show and pitch the small vision.

Josh: No, not at all. I don't know, some founders, you can see why they're selling the small vision, 'cause 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.

Lisa: Yeah.

Josh: It's, like, in her blood to build a company just like this.

Lisa: Yeah.

Josh: So frankly, when she said that we'll sell it in five to seven years for 100 million, I was stunned.

Lisa: Same.

Josh: I mean, she talks about the big market, you know?

Lisa: Yeah.

Josh: I don't know, what was the number? $57 billion market for chocolate milk? Which even saying it, like... is that, is that wrong? Like, that sounds insane.

Lisa: It's definitely a huge market. So the exit price that she quoted seemed way smaller than necessary.

Josh: 0.1% of the market.

Lisa: 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.

Josh: Right. A VC would never coach a founder to say that.

Lisa: No. Absolutely not. And it's interesting too, because, like, we saw this with Monica in Redrop-

Josh: Right ...

Lisa: where she wants to pitch this smaller vision in an attempt to underpromise and overdeliver. Pitching VCs is not the time to underpromise and overdeliver.

Josh: Never ever.

Lisa: 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.

Josh: I like the way Ellie asked it. She said, "What happens if everything goes right?"

Lisa: Yes.

Josh: 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.

Lisa: Speaking of!

No offer to invest in Jubilee’s is being made to the listening audience on today’s show. But did you know we have a venture fund where we invest alongside the VCs on the show?

If you’d like to invest in Jubilee’s like we did, you can invest in Fund II. We’re open to new investors through the end of the year! To learn more, go to thepitch.fund

Next week on The Pitch…

Luke: 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

Mike: As multiple time founders-

Luke: Mm-hmm ...

Mike: Why have you not tested before you've asked for money?

That’s next week! Subscribe to The Pitch on your favorite podcast player so you don’t miss future episodes. 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/apply

We’ll see you next week, in the PITCH ROOM.

–

This 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, GEM!N!, Different Angle, and Peter Jean & The Runaway Queen.

The Pitch is made in partnership with the Vox Media Podcast Network.