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  1. #1

    Angel Investor sought for Hard Seltzer Product

    Greetings,

    I have colleagues who are looking for funding for a great tasting Hard Seltzer Product which has zero carbs, zero sugars and an 8% ABV. I’ve personally tried the product and purchased it myself.

    The company has been in business about 1 year has generated $600K in sales since product launch about 4 months based. Revenue has been generated based on word of mouth from their podcast network only. The product founders produce ~120 podcasts per month across their properties and have over 150 million downloads across their various podcasts. So the community and initial marketing plan are already in place.

    The ask is for $5 million USD to expand to nationwide distribution of the product. Preference is for an angel investor looking for an equity investment though debt is also a possibility. The primary constraint is having enough cans available to support a large push into wide distribution across all currently available distribution channels. Funds will also be used to put people on the ground to restock shelves and make sure the product has great shelf space.

    The product is private label manufactured by a brewery that has been in business as a contract brewing facility for nearly 15 years. The brewery is in the process of expanding its footprint by an additional 200,000 square feet to meet anticipated product demand.

    The product has been bootstrapped by the founders from the beginning. The brand name is trademarked with the USPTO so the IP is in place. The product is currently sold direct to consumer and 70+ locations across one state. Licenses have been secured for 2 additional states with additional sales and distribution licenses in process based on largest potential populations. There is a national distribution agreement in place with a large alcohol vendor which has a physical presence in almost all 50 states. This agreement will be executed once funding for a large production run has been secured.

    While many of you may balk at the funding ask, the rationale behind the large ask against the current sales volume is simple, this product is likely to blow up very quickly once real marketing effort is put behind the product and it is available via wide distribution.

    If you’re interested, in learning more, please let me know. The preference is for an equity investment partner, but debt would be considered.

    Thanks…



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  2. #2
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    You have a great proof of concept, and you developed and launched with revenue generated, so congratulations there, you're ahead of 99% of startups.


    The way an angel investor will look at you is that you've had a great 4 months so far, but most new products do well out of the gate, because they're novel and new. What's the plan for the rest of the year? Year 2? Year 3?

    Can your brewery grow organically without that 5 million? 4 months isn't a lot of time to know the answer.


    The asset you have now is the national distribution agreement with the large alcohol vendor, so you'll get some potential interest because of that, but we don't know the size or dollar amount of the agreement, and what type of covenants and/or "gotcha" criteria is in the agreement.


    Most of what you posted is speculative:

    You'll market more and that will increase sales, but that doesn't guarantee anything, and who what where when will do the advertising/marketing.

    A trademarked name has no value until time and money have been put into it.


    Do you know what is the killer feature of your product that is making people buy it, is it proprietary and can a competitor easily copy it?

    Are you going to be niche or compete with the larger players in your area (which is usually suicide as they'll just steal your formula and price you out).

    If you need the money to fulfill a large order, by all means take it.


    If not, I think it's better to show you can use some of your current profits to grow your customer base, before you take on a mountain of debt.








    www.UccRadar.com

  3. #3
    Franklin - thanks for the feedback. You’re comments are appreciated. I wont’ reply to all of them but here’s some responses:

    1. Product has no carbs, no sugars AND tastes great. While it’s never going to compete in a full carb/full sugar beer it’s unique in the seltzer space at 8%. Could be copied for sure. It’s absolutely better than every other high ABV seltzer product on the market. Product is veteran owned.

    2. These guys have an active and engaged community that support just about everything they do. They do live events/podcasts with celebrities all the time. So that’s gonna continue to generate buzz. They reach hundreds of thousands of people per month across their podcast properties. There are very few products that come with a built in target market and large organic marketing reach. They are extremely well connected within the podcasting community which is growing like crazy and replacing many forms of traditional media/entertainment consumption.

    3. You’re completely right that more sales are needed to proof the concept. Also, the more sales happen organically and profits are reinvested, the less risk for an investor and the less opportunity for an upside. The risk is great, so is the reward.

    4. The co-packing brewer is organically growing on it’s own supporting their other brands, they don’t need this product to expand but are using this product as part of their plans to expand production. The baseline products are readily available in the US so supply chain issues, apart from transportation costs tied to high diesel prices aren’t a significant concern.

    5. A high ABV product is niche and, you’re right, a competitor could come in and try to rip off the formula. There is some barrier to entry in that arena as the production process is patented and protected IP. That said, if a major really wanted to crush a little guy they could come in and do it. However, there are many examples of great alcohol products being bought out rather than there are being crushed by the majors - 10 Barrel (bought by AB/InBev), Stone (bought by Sapporo) and Boneyard (bought by Deschutes) all come to mind.

    6. Working several angles for funding including lining up large POs to get traditional PO factoring funding, etc.

    I’m by no means an expert or a genius on any these things but I know that great products, marketed well, with a great community supporting it often do very well.

    And ultimately, I’m gonna figure out a way to help this endeavor succeed through every method I can think of.

    Thanks again, have a great weekend.

  4. #4
    Quote Originally Posted by Botso View Post
    Franklin - thanks for the feedback. You’re comments are appreciated. I wont’ reply to all of them but here’s some responses:

    1. Product has no carbs, no sugars AND tastes great. While it’s never going to compete in a full carb/full sugar beer it’s unique in the seltzer space at 8%. Could be copied for sure. It’s absolutely better than every other high ABV seltzer product on the market. Product is veteran owned.

    2. These guys have an active and engaged community that support just about everything they do. They do live events/podcasts with celebrities all the time. So that’s gonna continue to generate buzz. They reach hundreds of thousands of people per month across their podcast properties. There are very few products that come with a built in target market and large organic marketing reach. They are extremely well connected within the podcasting community which is growing like crazy and replacing many forms of traditional media/entertainment consumption.

    3. You’re completely right that more sales are needed to proof the concept. Also, the more sales happen organically and profits are reinvested, the less risk for an investor and the less opportunity for an upside. The risk is great, so is the reward.

    4. The co-packing brewer is organically growing on it’s own supporting their other brands, they don’t need this product to expand but are using this product as part of their plans to expand production. The baseline products are readily available in the US so supply chain issues, apart from transportation costs tied to high diesel prices aren’t a significant concern.

    5. A high ABV product is niche and, you’re right, a competitor could come in and try to rip off the formula. There is some barrier to entry in that arena as the production process is patented and protected IP. That said, if a major really wanted to crush a little guy they could come in and do it. However, there are many examples of great alcohol products being bought out rather than there are being crushed by the majors - 10 Barrel (bought by AB/InBev), Stone (bought by Sapporo) and Boneyard (bought by Deschutes) all come to mind.

    6. Working several angles for funding including lining up large POs to get traditional PO factoring funding, etc.

    I’m by no means an expert or a genius on any these things but I know that great products, marketed well, with a great community supporting it often do very well.

    And ultimately, I’m gonna figure out a way to help this endeavor succeed through every method I can think of.

    Thanks again, have a great weekend.
    I'll be very honest, I am not very impressed with the deal but very much with the product. I appreciate very much that it has no carbs and "it tastes great" (cant wait to taste it myself)

    I really believe that its going to be tough to get this type of numbers in the beginning but I do have lots of clients in the beverage industry that can start doing business together with your client as far as product is concerned

  5. #5
    ihniwtw - thanks for the feedback.

    I admit I’m ever the optimist and there are many with better deals.

    I’d be curious to know how many startup beverages went from 0-600k and inked a national distribution agreement in first 4 months? I’m going to keep this feed love and post a “you told me so” or “I told you so” post when this blows up.

    You’re right the ask is huge, so is the upside. This is not the founders first rodeo in CPG space. Ask is commensurate with supply chain needs to go wide fast and not need to pull back to meet demand. Move quickly and break things, right?

    If you’ve got beverage partners who would be interested, let’s get some POs working and factor them, then I don’t have to jump through all VC hoops and show off my ignorance in forums like this.

  6. #6
    Quote Originally Posted by Botso View Post
    I’d be curious to know how many startup beverages went from 0-600k and inked a national distribution agreement in first 4 months? I’m going to keep this feed love and post a “you told me so” or “I told you so” post when this blows up
    How many *Independent beverage makers…

  7. #7
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Sell it to Coors or Busch...
    Steve Benjamin
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  8. #8
    Well you’ve gotta generate the sales to get there but that is the exit plan. Sell now, get nothing. Sell in five years make a lot of money.

  9. #9
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    Reach out to CircleUp. They have relationships with a lot of consumer product angel investors and family offices. Some of the large alcoholic beverage distributors have family offices and might have an interest. Distribution in their network is key.


    The large breweries are not going to be interest until the company hits 1Mil cases.
    Hedley Lamarr......That's Hedley

  10. #10
    Thank you for the heads up.

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