The Startup CPG Podcast

David Fodge
I developed a pitch deck very early on in 2019 and started. We formally incorporated the business early July 2, 2019 and I started pitching it first to Angels. We were basically pitching a dream at that time. And so my first investors were angel investors that started, many of whom were my friends. I had been to la, were doing some formulation work there based in la and I had a bit of a panic attack after to be honest, because I think the weight of the taking a friend's money who had given me more than I had assumed they would be comfortable losing. I actually was pretty very direct, especially with like my personal friends and contacts of course, like don't invest where you're not comfortable with not getting back because startups are high risk.

01:02
Daniel Scharff
Welcome to the Startup CPG podcast. These days it is tougher than ever to find those pre seed to seed stage investors. I wanted to invite a brand that's been really successful fundraising and also one of those actually active early stage investors to just share some reflections and tips with us on how to raise at the early stage. So I've got David Fudge from Applos, he recently raised a $5.5 million Series A in 2023. And Amanda Amos from Collaborative Fund, which is a New York City based venture capital firm that has backed some companies you've probably heard of like Olipop, Sweet Green, the Farmer's Dog and a bunch more.

01:38
Daniel Scharff
So today you're going to hear both of their thoughts around fundraising in today's environment and especially just a lot of tips for how to present to investors and find them, how to talk about your business with them and also how not to talk about it. Stay tuned. I think you're going to learn a ton. Enjoy. All right, welcome everybody. I am very excited to get into it today for an insider look at fundraising in the current environment. Things have changed a lot is what I keep hearing from people over the last few years. And so I think it's really cool to get two perspectives here. So we have an investor and a brand who has successfully fundraised. Why don't we just start with some intros? David, do you mind going first please?

02:20
David Fodge
Yeah, sure. Thanks for having me and good to see you, Amanda. I am the co founder and CEO of Applos and we make functional non alcoholic spirits and cocktails.

02:30
Daniel Scharff
And I've got my apples here so I'm going to open it up. I've got my cola fashioned. Let me just talk everybody through what I'm tasting right now as I sip this.

02:40
David Fodge
Yeah. So the core of our business is our spirit. So our vision is to really build the first brand that will anchor the bar of the future. So elevated functional spirits without compromise. Right. And so what you're drinking there is the cola fashion, which is made with aplos arise, which is our spirit that's infused with functional ingredients that are for social occasions. So it's actually more of an upper when you want to socialize and you sort of want to get onto your head and connect with people. And so the cola fashion was inspired by more of a dark alcohol cocktail. And with each of our cocktails, we sort of root them in a familiar cocktail. So that one being an old fashioned, but we elevate it with an ingredient that feels really uniquely Apple's.

03:25
David Fodge
So for that one, it's a kola nut extract, which is actually the original ingredient in Coca Cola or Coca Cola Bradley.

03:32
Daniel Scharff
That's right. And yes, I do want to feel upbeat and socialize with both of you, so that's the perfect thing for me to drink right now. All right, Amanda, over to you.

03:40
Amanda Amos
Hi everyone, I'm Amanda. I'm an investor here at Collaborative Fund. We're a New York City based venture capital firm founded in 2010. We back founders and companies that are making the world a better, more interesting place. And we're very active early stage consumer investors. We were so fortunate to have backed Olipop, Sweet Grain and the Farmer's dog.

04:00
Daniel Scharff
Those are some big ones. Okay, so let's just start right with Amanda. Who do you think should think about raising money and when in the process should they start to think about it?

04:11
Amanda Amos
I think it entirely depends on the type of company that you're trying to build. If you are trying to switch swing for the fences and have a big venture outcome, meaning you're operating in a really big market, you're looking to build something quickly. You need the capital to be able to fund that growth. I think it makes a lot of sense to raise venture capital either early or after kind of that first million when you start to see a bit of traction. That being said, there are so many different types of investors that hard to kind of answer that question super succinctly because there are so many different investor types that might kind of meet type of company that you're looking to build.

04:49
Daniel Scharff
Okay. So I think also somebody who has really good perspective on the industry would know what kind of a company they're trying to build. Like, yeah, I'm not going to raise a beginning because of this. Whereas the default. Okay, I came out to Silicon Valley like SF food tech scene in 2016, it was just, you have an idea, go raise a lot of money, then it's a legit company and now you build it and grow it and who knows what happens with it. But you know, like only now, let's say 10 years after that, do I actually really understand about bootstrapping and that you can do it alone that way. How would you think about it, Amanda, when you're starting a business, you know, Amanda's next pasta sauce, protein infused, whatever, how would you be thinking about starting it?

05:29
Daniel Scharff
And kind of the most effective time to think about what kinds of investor capital.

05:33
Amanda Amos
I mean, I think in general it's helpful to engage with folks early and especially keeping in mind the type of investor type that they are and sort of what the time horizons are, what their incentives look like, just to make sure that there's alignment up front and that you are having a productive conversation. I think when I think about, you know, bootstrapping versus raising, the conversation that I navigate with a lot of founders is on the dilution piece is really on ownership, right. Where if you bootstrap, you own a hundred percent of your business. But lots of founders, especially those who raise venture capital, their idea is I would rather own a little bit of something really big and frankly, it can get really exp. Expensive to be able to bootstrap a company.

06:16
Amanda Amos
That being said, if I had a pasta sauce idea that I was able to build profitably with great unit economics that had pretty low upfront costs and this was something that I was looking to build for kind of the rest of my life and hopefully pass down for generations, then it's an idea that I'd probably bootstrap. But if I was looking to really swing for the fences in a really big market that had kind of higher capital exposure expenditures up front, if I felt like there was great traction, I had amazing community and I just really wanted to be able to fuel and turbocharge that growth, then I think that's a great candidate for venture and to be able to raise external capital.

06:51
Daniel Scharff
And so you mentioned some of the different types of structures and investors out there. Can you give us an overview of that?

06:57
Amanda Amos
Definitely. There are many different types of investors within CBG. So one bucket is within VCs. I work for venture capital firm that kind of sits within my specialty. I think of that as having a lot of category expertise, having retail networks, also having a designated timeline of the life of a fund, if you will. Many VCs are set up within a 10 year fund. The second group that's really popular within CPG investing are with family offices. I think of that as really flexible long term capital, kind of having different incentive alignment. The third group is really with angels. Think of it as having very early support industry ties, kind of similar structure to family offices where you have personal pool of capital, you have a different time horizon. And then the fourth group more broadly is really within strategics.

07:44
Amanda Amos
So think of it as having building those growth synergies early on thinking about M and A interest and either those strategics either kind of invest from a corporate CBC or from a direct corporate investing group. But it kind of depends on from corporate to corporate.

08:00
Daniel Scharff
Okay, so thanks for that explanation. And then how would you approach some of those different investor types differently, you know, based on who they are and what kind of stuff they're looking for.

08:11
Amanda Amos
So first I would do my research on who the investors are, think about their portfolio, the types of companies that they've backed. How I typically like to explain it with different founders who are prepping for their fundraise, typically recommend that you think about the investment structure and then think about the incentive alignment. So when I think about investment structure specifically for VCs, I'm talking about think about the fund size. So how much capital are they deploying out of? When you think of kind of that fund, total fund size, the life of the fund. So kind of when are they beholden to have a liquidity event back to their LPs? I also think about average check size, what their target return profile looks like and then also think about the value added services.

08:54
Amanda Amos
So kind of beyond capital, are there any strategic levers that you can pull onto? And then on the incentive alignment piece of thinking about why is someone investing in a CPG company, what kind of their intent are what tent is and think about the incentives there. Right? So thinking about is it diversification, are they looking for exposure to a new category? Is it about long term wealth creation for a family or for your personal net worth? Or is it about investing in something that's fund returning for a vc? You're really looking to swing for the fences and make those types of power law investments that have the capability to return an entire fund.

09:31
Daniel Scharff
Can you tell us a little bit more about what funds do owe their LPs? Like you know what typically are they coming in if they're investing in a new fund or the second fund in that fund's life cycle or whatever, what is their expectation typically? I think that's really a good insight for brands to know what the potential investor is looking to give back to their investors.

09:51
Amanda Amos
Definitely. And it's a conversation that I navigate with often with many founders. I feel like lots of VCs, it can kind of feel like a little bit of a black box and fundraising and financing can be really confusing. I think at its core you can think of VC as investing in power law outcomes. And the idea of the power law is that a disproportionate percentage of your returns come from very few investments. Which means that every time I make an investment, I really have to swing for the fences of being able to believe that this investment has the potential to return earn my fund. And that's just kind of the law that many different investors will think about their different investments. Whether you're a tech investor or whether you're a CPG investor. Of course there are different nuances across categories.

10:39
Amanda Amos
Where for example, a software investor has a totally different margin structure than you would with cpg. You would also think about valuations differently. You'd think about growth and exit outcomes entirely differently. But I think the core principle remains the same, more or less. And so really so much of that comes from market size, from comp. Being able to look at what the exits look like in the categories that you're growing in. And given that there's a totally different set of strategic acquirers from the M and A side in cpg, you would really take a kind of close look at the different types of exits that this different category can support.

11:13
Daniel Scharff
And so I think I've just heard for private equity for example, that they work on a five to seven year horizon. That's when they want to be able to sell the business that they're buying. What do VC investors, especially at this pre seed or seed stage, expect? When do they think they can get their money out? And yeah, is there some specific kind of return that they're shooting for other than the moon?

11:34
Amanda Amos
Yeah, it really depends from firm to firm. And that's not me, I promise. Just being a vc, giving a wishy washy answer. I try to be very direct with my answers, but that's why it's so important to ask people about their time horizon, the fund life and then also average check size and the fund size that will tell you so much. Someone who is investing out of a 10 year fund that is very standard for venture capital. It's a little bit longer. Right. Because you're taking minority investments. And it's different from PE where you're typically taking a majority investment or maybe even an operating stake. And so Tenure is very typical. Some people invest out of smaller funds, whether that's 25 to 30 million, call it. Other folks are investing out of larger funds.

12:19
Amanda Amos
At Collaborative Fund, we make many of our early stage investments out of our seed fund, which is 125 million. And so typically the underwriting looks a little bit different from a smaller fund to a larger fund.

12:31
Daniel Scharff
Okay. So just to run through some of those questions and how you would interpret answer to it. So fundraising, you said like a 10 year fund, that means when they want the return back or like how long they'll actually make investments over.

12:43
Amanda Amos
Yeah, it's a little bit both, a little bit more challenging if you're making an investment at the tail end of that ten year time horizon. Right. Because that's typically the contract, the agreement that you have with your limited partners who have committed capital to the fund. And so let's say if you made an investment in, you know, year eight out of year ten, it's a little bit harder to return that capital in only a two year time horizon. So typically you make it much earlier on with the ability to both being able to double down on investments that are going really well and that require more growth or being able to kind of recycle and to make new funds if there's an exit event earlier on.

13:25
Daniel Scharff
Okay. And then amount or size of the fund and the size of checks they write, probably somewhat intertwined. Right. If it's a big fund, probably they need to write bigger checks because they just don't have all of the time and resources in the world to do a lot of small stuff. So that'll be a good signal to you of like either how much do they actually want to put into my business or how big do I need to be for them to look at me, Is that right? Or any other ways you'd look at that if they said it's big, it's small.

13:48
Amanda Amos
Yeah. The other nuance I would add is what someone's target ownership looks like. There are certainly many very large early stage funds that also just make very small investments. But then what's inferred is that you have to have a higher volume of investments. Right. Because the composition or the portfolio construction of that fund looks like just many more investments. And so I typically recommend that, you know, when people are fundraising that they also look at, hey, how much, how big is the fund that you are investing out of? What's your average check size? And then also how much are you looking to own of the company? So what kind of percent ownership are you seeking? And that tells you a lot about the strategy. I think it's also fair to have a conversation with your investor about fund strategy, how they work with companies.

14:36
Amanda Amos
It's one of my favorite part of any kind of pitch conversation about talking about a potential partnership and then also kind of diving into the areas of how we can be helpful, how we can work together and just remembering that it's a long term relationship. Right. And so you want to make sure that it's a great fit for both of you.

14:52
Daniel Scharff
So it sounds like all of the right advice, honestly. But also sometimes people will say that about like, yeah, when you're talking to the buyer, just ask them straight up, like, how much do I need to give you for slotting? You're like, I could never ask them that. No. They're like going to say no to me. David. So let me pull you in here. Do you feel like those are all questions that you were able to ask confidently? Did you know to ask those even in the early stages of applos or maybe you learned later on, what do you think about everything Amanda just said?

15:16
David Fodge
Yeah, I didn't know to ask those questions early on. A hundred percent. No, I mean, I think you learn by doing, right? And so over time, pitching your brand, meeting people, you learn the right questions to ask. And so, you know, I learned fairly quickly when I started fundraising, but I met with a VC very early on, before I even had a pitch deck. And sort of, I think I didn't overthink it, which is a good thing, but I did a terrible job of pitching it. And I think she gave me some advice and sort of introduced me to some other people and I learned from there. And so, you know, I think you have to learn as you go, but also, as Amanda said, you know, do your research. Right.

15:58
David Fodge
I think now a lot of us are using AI on a daily basis, like ask it to act like a VC and help you prepare for the kind of questions that they're going to ask and tell them about your business. And it's like having an advisor. Right. And so advisors in the real world are important as well. But you know, the amount that I've learned in the six years that I've been working on applos is, you know, I'm still learning. Right. And so, you know, you can't approach it in the sense of trying to be perfect. Right. One of our values, that app, is progress over perfection. So you just have to jump in and learn as you go.

16:38
Daniel Scharff
And so then how about later on in the journey are. Were you asking those questions specifically to a vc? At what point did you feel comfortable to ask those things and did it give you the kind of information that you needed to know if they'd be a good potential fit or to move on or what?

16:52
David Fodge
Yeah, I mean, it's. There's not a silver bullet. Every investor is different. A lot of it early on, too, I think, is just like, you know, a alignment and rapport with the other person. It being a good sort of. It needs to be a fit in vision and values, as I always say. And so if that's not there, none of the other stuff matters. And so a lot of the questions that Amanda's mentioning are sort of nuts and bolts of understanding. Understanding how a fund works and what their, you know, return expectations are and how they work with brands and what their check size is, and do they lead or do they not lead? And, you know, what all of those sorts of things are? You know, there's a list of sort of standard questions that you should know.

17:34
David Fodge
And I. I think I learned that in the first six months to a year of me doing that. But, you know, a lot of it is the softer side, too, particularly on the early stage. Amanda, I'd be interested to hear more from your perspective on that. But I think when you're investing early stage, a big part of it is you're investing, like you said, in your belief that this thing can be really big, but also a belief in the people behind it. Because it's really your belief in their ability to execute on the vision, right?

18:02
Daniel Scharff
Yeah, I hope so, anyways, because, like, you know, it feels like there's not an investor that would just be convinced by a deck. Right. Without actually, like, meeting you and kind of seeing the person behind it. And, you know, obviously the opposite is true as well. Amanda, what do you think?

18:16
Amanda Amos
I just wanted to say that I totally agree with that, especially at the early stage. So much of it, of course, is about market size and, you know, the nuts and bolts on the mechanics. But it really comes down to team. And I love what you said about building rapport, making sure that it's a great fit on the values alignment, and also just vision alignment. So I couldn't agree more. On team.

18:36
David Fodge
Yeah. I think we're inherently emotional beings. Right. And I forget who said it, but, I always think about the phrase, most people think we're thinking machines that can feel, but we're actually feeling machines that can think. And I think that we often underestimate the importance of having an emotional connection and rapport with someone that you're going to sit next to in board meetings. Potentially, you know, the horizon for exits for some of these businesses can be 10 years. Some of them could be shorter. But, you know, it needs to be someone that you're excited to work with. And there's an alignment on vision with. And I also just want to respond to another thing you said that always kind of really irks me. These articles you see where it's like, this founder raised $100 million on this pitch deck. Like, that is such bullshit.

19:23
David Fodge
All of those articles are such bullshit. Because what you don't see is behind the scenes, they had been building relationships with investors before they started actually telling them they were and they were raising. Or it's an AI company that is backed by, you know, founded by someone who has a really proven track record. And so if you believe that someone is investing in something purely because pictures and words on a page made them compelled to make a, you know, multimillion dollar investment, that is such bullshit.

19:56
Daniel Scharff
Yeah. The more people I interview, the more people emphasize, like, the idea is a very small part of it and other things that they think are even more important. For sure, the execution of it and also a lot of timing that'll come into play. But yeah, I like what you're saying, David. I mean, that person who put that pitch together lived their whole life and developing all of the expertise and background and relationships to be the person who would have that credible pitch deck at that point. So definitely agree with you. Speaking of pitch decks, Amanda, what do you think? What do you really need to have in there? I know.

20:29
Daniel Scharff
I think definitely when I'm pitching buyers, and I think I would feel the same way pitching investors, like, no, I know everyone says just have a short pitch deck, but they need to hear the full story and everything needs to be its own slide. I'm rolling in there with 50 pages plus the appendix. But that doesn't always help you. It maybe hurts you. What do you think are really the absolute top things you really need in a pitch deck?

20:50
Amanda Amos
Great question. And I really empathize with people who want to have a 50 slide pitch deck. I feel like that would be me. I can definitely be very verbose and just overexcited about anything that I'm excited about. So I completely understand that instinct. But I do think that it kind of helps everyone to be able to edit that down and to be able to have a really succinct story if I. To really, you know, get into the nuts and bolts of it. I would say number one brand. Just thinking about how this is an industry where the barrier to entry is super low. And so brand is really your critical moat. How are you thinking about building an enduring brand? What gives you conviction that this is something that's built to last? To that end, how do you think about product?

21:31
Amanda Amos
Who and what are your hero products? If it's food and Bev, is this something that's truly delicious? Is there something that's kind of built into the behavior that will keep your consumers coming back again and maybe even paying more if it' a premium product? On team. To our discussion with David and his point, especially with early on, you're taking a bet on the people and on the people who are behind this amazing company that you're building. So both highlight what makes your team kind of equipped to win and scale this company. And then also, I think it's also helpful to be honest about any skills that may you may need to hire for down the road and just having being transparent about where those gaps might be. A few other little things that you don't need to have individual slides on.

22:13
Amanda Amos
But I would definitely touch upon market size. How big do you think the business can get where your ambitions are? Margins getting really concrete about product margin, gross margin contribution margin also, how does that fit both the outcomes and the incentives of your investors, your velocities? How are you really going to crush retail and continue to earn that retail and shelf space? And then ultimately on distribution, how are you going to market? What are the different channels? What gives you conviction in that strategy? And those are sort of the different elements of a successful pitch.

22:46
Daniel Scharff
Okay, so David, did you have all of those elements in the early days? Because, I mean, I know I can immediately think of some of those boxes that you would check off automatically. Like just, you know, being a really strong founder coming in, having a pretty, you know, incredible background. I think a lot of people know this about you, but just kind of being one of the OGs at Bonobos, which is like the OG digitally native brand carries a lot of weight, I'm sure with anyone you were talking to. Like, oh, this guy knows how to build a brand online. That's very powerful. What about all the other stuff that Amanda mentioned? Do you feel like you had that all the beginning or you learned to include all that later?

23:19
David Fodge
Yeah, I mean, I would say I've done hundreds of versions of pitch decks. Like, you know, I think as a founder, your primary job is sales, right? You're always Selling. And I think the more people you talk to, the better your pitch gets. And so I always encourage people to get in the practice of even pitching to friends and people that aren't necessarily investors or at a party telling someone about your business. But yeah, early on I had all those pieces. I mean, I think a big part of it too, as Amanda sort of alluded to previously, is like, how big is the opportunity? Right? If you're raising venture, it needs to be a big opportunity, right? If it's niche, then you're going to have a difficult time and it might better that you bootstrap or you raise from angels.

24:09
David Fodge
And so, yeah, I mean, I would say every. The other thing I would say that I learned is like, everyone has an opinion. And so other founders that have raised investors, like, everyone, I thought like dozens of times I had perfected our pitch check and would show it to someone and they would always have feedback. People always want to get in, like, their point of view. And so it's really important that you have a strong conviction and vision because if you're constantly like, people are gonna give you advice and be like, you should think about this, this, and this. And you could. It can be really dizzying and it can send you on all these wild goose chases where you have to learn how to filter feedback as well. Like, what am I gonna listen to and what aligns with my vision?

24:54
David Fodge
And, oh, I didn't think about that. Let me include this. And what doesn't. But in terms of the nuts and bolts, it is like, how big is the opportunity? What's your reason for existing? What's the insight that led to your business? What is your vision for the brand? What's the team behind it? What makes you better or different than the competitors in the market? What advantages, unique advantages do you have that could maybe help in distribution or brand building? Because there are thousands and thousands of brands out there. And so you need an edge in getting distribution and getting shelf space and being able to afford to the trade spin required to ensure that velocity early on in the brand awareness. And so, yeah, I mean, I think I have every pitch deck I've ever written for Applos.

25:44
David Fodge
I could show you the first one that I actually ever pitched and wrote. And it had all those core elements, and I sort of have refined it over time, you know, based on how the business has evolved and based on like building the most compelling story that does the business justice.

26:02
Daniel Scharff
Can I post that pitch deck online? Like this deck got this founder x million dollars that's all you need.

26:08
David Fodge
Yeah. After six years and like 500 pitches, it's simple, like footnote. Yeah.

26:16
Daniel Scharff
I like what you said about one the founder always selling. And I also like, I wonder, David, if you knew that you were ready to be always selling and if you felt really confident about that before you started the brand or if you just kind of leaned into it and you're like, oh yeah, this is what I.

26:32
David Fodge
Have to do at all. No, I like have always had this identity where I'm like, I hate being in a sales position, like asking people for money. Like, you know, I always felt like if I like projected positivity of vision that the right people would come to me. And that's true in a sense. Right. But you also have to do the work of like proactively finding those people and reaching out to them. But yeah, I don't think I really, it didn't really sort of, I didn't realize it to the effect that it would be true. And I would say that's true of so many things. I don't know that most people would start a business. If I knew now what I didn't, if I knew back then what I know now, I'm not sure I would do it.

27:16
David Fodge
I mean I think part of, I say that a bit now but I'm always like, you know, I feel like I'm always going to be building something because it's just my personality. But it would feel really daunting if you overthink it early on. And there is a certain level of I think trusting your gut and just like taking a risk and like going for it. And if you're a growth minded person and you're resourceful and you have grit and resilience, I think building a company reveals, it peels the layers off of you in a way that is really, it's such a valuable and rich experience no matter what the outcome for me. Right. And I say that, you know, still with full conviction that Apple's will be a global iconic brand in the bar of the future.

28:04
David Fodge
And at the same time I feel like I'm all over the place now. But if you overthink it's difficult. But we're also, our brains work in that way. We're like, if we think something's going to be difficult, it's going to be difficult.

28:17
Daniel Scharff
I know what you're saying and I really, it actually helps me think about the different kinds of founders out there because like David, I know you socially, you're super nice Guy, you're not, like, crazy extroverted the way, like, there are many founders who are out there who are like, that. You're, like, a very nice and smart person, and it you like that, I can understand, like, you are doing this because you like building stuff. It's not because you wanted the spotlight. There are many other founders, and I would even maybe put me into this bucket where, like, I like it. I like to have the ball. I want to have, like, the spotlight. I like to perform. Like, I'm a musician. I like. I really actually thrive off a lot of that. That stuff. I like adding value and building great stuff as well.

28:54
Daniel Scharff
But I think I just, you know, I've met a lot of founders who kind of approach that from different ways or there are different things driving them. So I definitely understand that about you. Amanda, what do you think? Do you. Does this, like, have you. Because I know you meet tons of different kinds of founders. Can you recognize the ones who are like, look, I want to build this thing. To build this thing, I must be in the spotlight. Thus, I'm now in the spotlight, selling this thing versus ones who are like, I want to be out here selling something. Let me have a company, and now I'll sell it.

29:19
Amanda Amos
I mean, I love the way that David talks about pitching also building a company. It actually just reminds me of why I get excited to come to work every day. It's meeting amazing people who have a greater vision for a business, whether that's, you know, feeling compelled to put something out in the world. And it takes so much work. And, you know, to all the diligence that we do on the investor side, I try to ask founders, like, what is the personal diligence that you did when you went out to put in your personal savings, to put in your friends and family savings? And what gave you conviction that this was the idea? Honestly, super inspiring, and I just feel honored, frankly, to be part of it. So not to get too mushy, but I love hearing about this, and it's really inspiring.

30:11
David Fodge
Also, just to qualify one thing you said, Daniel, like, I'm not someone who naturally gravitates towards the quote, unquote, spotlight, but I do like to be in charge. And, you know, I think that has been a growth opportunity for me is I'm a person who naturally wants to come in and be like, okay, I think this is what we should do. But, like, the other thing I've really learned is you can't do it yourself. It takes a team, right? And the second you Decide to raise, venture or bring other people in the business is no longer just yours. Like, I tried to avoid saying that app is my brand, right? That it's, you know, and I have a co founder as well.

30:54
David Fodge
But I, I try and avoid that because my natural tendency in my youth too was to like, sort of bulldoze in and like take charge. And there is a part of my personality that I'm naturally like a bit type A, even though I'm more introverted. But it is important that to build something big, you have to, like I said, be selling and bring a lot of people under the tent with you. And you have to. The other big thing that you're doing is I often, you know, one of our other values is stop selling, start serving. And it's about sort of serving other people and inspiring the team. And as a founder, you also have to inspire people constantly. Right? Like, I have to inspire Amanda if I'm trying to get her to invest in my business.

31:43
David Fodge
That I have this big vision and I can execute it and I can create the world that I want to live in and create this big, huge thing. And also your team internally and inspiring your team to want to be a part of what you're building and not just follow you, but like build the thing together. And so yeah, but I did want to get that point in there. My natural tendency is like to take charge.

32:13
Daniel Scharff
I believe it. And you know, I think also when, yeah, when you do inspire Amanda and many other people also, it makes them want to take a bet on you. Not just because they feel inspired, but also because they're like, oh, he's going to be able to inspire consumers and buyers and influencers and a lot of people who then want to support the brand. And that's what's going to make this brand have a good chance of being successful. David, I wonder, can we just take it back a little bit? Can you tell everyone a little bit of the story of Applos with a frame of like, the funding history as well? So, like, why'd you start it? What'd you end up doing, but then also take us along that kind of funding journey?

32:52
David Fodge
Yeah, absolutely. You might want to edit this in post if I'm too long, but yeah, I mean, I think so. My background is I've been building consumer brands for over 20 years. Right. And aging myself now. But I was in New York City for the first 11 years of my career, and I got the opportunity in 2010 to join a startup called Bonobos. And I've been really fortunate to work alongside two founders and see two successful exits. And so in my second exit in late 2018, I thought, hey, I really feel like I understand how these businesses are built. I want to build something myself.

33:28
David Fodge
And so I knew from my previous businesses, I mean Bonobos was like I think 50,000 SKUs when I left, like incredibly capital, intense, operationally complex business that I don't know would get the same amount of funding that today that it did at the time. A lot of it is timing. And so I knew I wanted something that I could build a billion dollar plus business on, like a handful of SKUs that had a high repeatable purchase, but also something that was something that really I felt that I needed. And so there's one side of me, I'm a very left brain, right brain person, that I wanted something that was like a great sort of creative idea and concept, but also like operationally and logically was a business that sort of looked and felt like something that I, I would want to build.

34:17
David Fodge
And so for me that was the idea of disrupting the bar. And the reason is because, you know, my co founder Emily, we met at Bonobos and she always calls me a reluctant drinker. And I grew up in the South, I went to big state school. I was like the kid nursing a beer at a keg party pretending like I was drinking. I just felt like I was barring tomorrow's happiness for today. And I also felt like I was in the upside down when people would shame me if you didn't drink. Like growing up in New York in my 20s, I had girlfriends that wouldn't date people that didn't drink. Like I would. If you asked for a drink something not alcohol bar, like the bartender would sometimes shame you or like assume you had a drinking problem.

34:59
David Fodge
And so I felt like at the same time, I really loved the experience in New York, particularly of after work, going with your co workers or your friends to a great craft cocktail bar. Like I don't know if you've been to the Swan Room at 9 Orchard in New York, but beautiful bar and the experience of the environment itself sitting down, the craft and care they put into their cocktails, where they make it in front of you and they present it in front of you. When I'm a 26 year old guy in New York City felt like a small luxury, right? And I thought I feel like I can't participate in this if I don't want alcohol. And that feels exclusionary. And I thought, I think there's an Opportunity here to elevate Non out beyond the moniker of Mocktail.

35:45
David Fodge
On the other side of that, you know, there were some brands early to market in the Non alk space that didn't speak to me personally because I felt like they didn't address why we drink in the first place. You know, we drink because we're either stressed or we want to have fun. Nobody likes the hangover, and so. But at the same time, we like the way it makes us feel in the moment. And so I felt that there was an opportunity to lean into elevating Non Oak beyond the moniker of Mocktails so that it could stand toe toe with the best spirits and cocktails in the world and also create something that was functional, that gave you people a healthier buzz without compromise. And so, essentially, I thought there was.

36:21
David Fodge
Alcohol has existed for thousands and thousands of years, and no one's iterated out the flaws of the experience. And there's a big opportunity here. And so that's really the insights that led to building applos. And I just followed my curiosity. Like, early on, I asked, I didn't know anything about beverage. And seeing Andy at Bonobos, really, I felt like that was an advantage because he didn't come from traditional fashion. And so it gives you a beginner's mindset where you can look around, you can think of new ways of doing things. You're not encumbered by a career in an industry where you're, like, baked in ways of thinking, especially when you're trying to disrupt an industry. And so I always saw that as an advantage. But I started applos, I think, when I was 37, and I knew what I didn't know.

37:11
David Fodge
And so I thought I need to surround myself with people who understand the rules to the game. And so I proactively sought out investors, people to join me in building this. I really understood that. And a big piece of that early on was meeting Lynette, our mixologist. Lynette Marrero, who is a James Beard honoree. She created Speed Rack, which is the world's largest female only bartending competition. She's essentially a celebrity in the bartending world. She did the masterclass for mixology, and I met with her, and it really resonated with her what were trying to build. And Emily and I sort of incubated this idea during pre Covid, and then Covid hit, and then, you know, we met her and developed the product, and really, that's how it started.

37:57
Daniel Scharff
That is very cool. And yeah, I know. Lynette we actually were on a very cool trip a number of years ago together and got to learn about her story. And she is a pro. And yes, she, like, literally teaches the class on spirits on masterclass that is super cool and works with JLo and. Yeah, cool stuff. And I also. I had totally forgotten about this, but I was actually just. I think three weeks ago, I was out, just unexpectedly ran into some friends when I was out walking my dog, and they were sitting, having a beer. I was like, oh, great, I'll just do this then. Cool. Like, we'll have fun. Had a beer. And then we ended up going to Soho House and then had, like, one or two drinks there.

38:40
Daniel Scharff
Really, like hitting the point where I'm like, okay, I can't drink more than this anymore. I used to be able to when I was a younger man, but now if I have one more drink tomorrow I will feel horrible. And luckily, on the menu at Soho House, they have applos. And so I ordered that, and I felt like I, you know, I was with, like, three dudes. Didn't want to be a buzzkill. Like, what do you mean you're not drinking? Like, are you not trying to have fun anymore? Is this not a fun night? Like, this is not special or, you know, you're trying to bum everybody out? Like, no. Okay. So it was really cool that there was a great option on the menu there that I could order and not feel like I was probably people who.

39:18
Daniel Scharff
There are people out there who are, like, more secure than I am, who would have no problem being like, I'll have a water, but it's cool, guys, let's keep hanging out. I'm not that person. I'd be like, you know, can I. Can you hold the liquor on this one? Like, you know, whisper it. But I just ordered the appalos and it came, and it's the rtd. I think it actually was the cola fashion that I ordered there. And it's beautiful. You know, it looks. It looks special. Looks very premium, and there's something exciting about it. And so, you know, nobody batted an eye.

39:46
Daniel Scharff
And I just could keep participating and having a really fun night without paying for it in a major way or just, you know, being feeling like I was past my limit where I just didn't really want to be, although I didn't want the fun to stop. So. Yes to what you're doing.

40:02
David Fodge
Yeah, it's actually the ume spread steak carry, which is my favorite.

40:05
Daniel Scharff
Yes. Okay. That's right. I. Yeah, as I mentioned, I was Two or three drinks in at that point, so I may not exactly remember, but I was quite happy that it was on the menu. So thank you. Okay, cool. So then, yeah, let's. Can you just then go back to a little bit about the funding trajectory that you were on as you started to grow. So like, you know, what was the, you know, revenue climb or stage of the business and how much were you raising along that journey?

40:31
David Fodge
Yeah, yeah, I think the other thing that I've so sure. I developed a pitch deck very early on in 2019 and started. We formally incorporated the business early July 2, 2019 and I started pitching it first to angels. And I had met, like I said, with a couple of VCs, but were pre seed and we didn't have a final sample of the product yet, which I actually would recommend that you have when you're meeting with investors. We were basically pitching a dream at that time and so my first investors were angel investors that many of whom were my friends. And I remember actually just to be, you know, completely honest, the first check, one of the first checks I had taken was from a friend.

41:23
David Fodge
I had been to la, were doing some formulation work there based in la and I had a bit of a panic attack after, to be honest, because I think the weight of taking a friend's money who had given me more than I had assumed they would be comfortable losing. And I think early on I actually was pretty very direct, especially with like my personal friends in context of like, don't invest well, you're not comfortable with not getting back. Right. Because startups are high risk. And I appreciate that you believe in me, but like, you know, I want to make sure that this is clear up front and you know, that moment actually sort of led me to get a business coach so that I could manage my mindset more productively, which I highly recommend for all founders.

42:17
David Fodge
But it was challenging early on, you know, was taking mostly angel checks and basically like cold outreach to a lot of people that, oh, you should meet this person or you know, every single connector I knew and friend that I had. Early on I emailed and told what I was doing and asked if they knew anyone that I should speak to. Got so many good intros and so many people ask me now, like, I think I have six beverage alcohol executives on my cap table, like the former CMO of diageo, the former CEO of Krug, the former CMO of lvmh, Wine and Spirits. Like a lot of people now that are really heavy Hitters and people are always like, how did you get those people? And six years in and networking every day for years led to that.

43:14
David Fodge
But early on, I think it was challenging. I was getting. You're not good at. If you've never done fundraising. Like, you're not good at it when you start. And you don't get good at it until you do it more and you pitch more and you get feedback and you refine and iterate and get back out there. And I think that is that resiliency and that grit and that determination that I will make this happen. And an unwavering belief in that. Is it really important? Because if not, then you will. Some people give up pretty early on, and I think, you know, the, the experience too. Like, often in media, you hear the story of found ups and how they raised money and how they grew.

44:02
David Fodge
It feels so linear, but it's a pretty messy process for most people, to be honest, when you're going through it. And so a lot of these things, I'm saying just to make people to feel that it's okay to make mistakes and not be perfect and not know what you're doing, because most people don't. And I think for me, it was, we raised a seed round in, I think it was 2021 was the first kind of institutional investors that we had brought in about a year, 18 months after we started. But, you know, I think in it then we raised the A in 2023. But it's been a journey for sure. And yeah, I don't know if that's helpful. Maybe that's too broad, but.

44:46
Daniel Scharff
No, I think it is helpful. And I think, you know, it doesn't surprise me that you were able to also include some of those bigwigs in your dream that they would want to be aligned with you.

44:55
Daniel Scharff
I mean, I remember talking to you about your business in the very early stages and, you know, not that I know everything and I certainly didn't then, but I think one thing that really struck me about you and your business is I think just kind of the, like, maturity that you had about it where, you know, you would talk about it and like, what was going well and not well, but it, you know, you weren't phased by anything on it of just like, yeah, this is our plan to build a brand, like, really confident in how you're going about it and your ability to figure out this, like, stuff you hadn't done yet or didn't know yet. And I think just like it really was clear that you were going to be very patient about your approach also to growing the business.

45:30
Daniel Scharff
So I could see people like that responding really well to your just overall, yeah, like, demeanor, confidence and patience about growing the business. Like, yeah, this is somebody who can probably get that done.

45:42
David Fodge
One thing, sorry to talk over you, but one thing that was challenging for me early on is like, I'm not a hyperbolic person. I'm pretty pragmatic. Like my father's an entrepreneur, like very kind of responsible, safe, fiscally minded person. And I like to over under promise and over deliver. And that doesn't always work with the game of fundraising, particularly for like institutional investors. They want to see like a big vision, right. A big opportunity that you're swinging for the fences. And early on I definitely struggled with like we doubled what we thought were going to do in our first year because I was so in our forecasting, you know, the assumptions behind building a forecast for business that's not in market. It's like a house of cards. If one or two assumptions is off, then the whole thing falls apart.

46:33
David Fodge
And so I was pretty conservative with what I put out there originally, which in hindsight probably hurt me with like some early stage, you know, institutional investors. But, you know, it's just, that's who I am. Right. And I think I've learned over time now I'm incredibly bullish about our business and how big it's going to be. But I think that definitely worked against me a bit early on.

47:00
Daniel Scharff
I gotcha. And it's most of the pitch decks that I see from earlier stage brands, whatever number they're putting out there for their revenue, I'm like, it's a third. But like the assumptions are so aggressive that you're like, whatever you're telling me it's going to be, I think, yeah, like, let me just assume maybe you'll hit a third of that. And is that a good business? If you do and it might be somebody's like throwing out a second year revenue number. That's absolutely absurd. I'm like, I know that's ridiculous. Like, you know, anyone who's been in a brand knows that. But maybe if you hit a third, is that okay, Amanda, you must see this kind of stuff from brands all the time. Like, do you see ridiculous assumptions like that? Would you challenge them on it?

47:37
Daniel Scharff
Or you're just like, yeah, no, I get it. Like, like, but maybe if you hit a third, I still am interested.

47:42
Amanda Amos
Yeah, I'm really looking for Both the inputs of, you know, what are the assumptions modeled off of. For example, if you have built in distribution, if you're able to make some assumptions about, okay, this retailer wants to put me in X number of doors, I think I can get to this based off of comps that can be really helpful just to kind of ground you in some type of economic reality of where you think you might be able to hit directionally. If it's a D2C only business, oh my gosh, that is much more difficult to predict. But it does say a lot to your point, David, about ambition, how big it can get and the fact that for VC you really have to swing for the fences and know that you're signing up for a rocket ship, right? Really, really fast growth.

48:30
Amanda Amos
And so a lot of times we're just pressure testing that of are you ready for this? Do you think that this is sort of the product, the brand, the company that can sustain that type of growth and are there comps in the market that might be to point to that growth and that trajectory having happened before?

48:47
Daniel Scharff
All right, David, let me ask you because I know people must ask your advice all the time around fundraising specifically. Can you tell me what do you tell them usually?

48:58
David Fodge
Well, the first thing I ask is why do you want to raise money? Most people don't expect to be asked that question, you know, and I would say 8 out of 10 times they're like, like surprised by the question and fumble with the answer, which is a red flag for me. It means to me they haven't really thought through the why. And you know, a lot of people get caught up in the ego of wanting to say I raised X millions of dollars and you know, my valuation is X. If that's why you're raising money, then don't. It's the wrong reason to raise the money.

49:37
David Fodge
You know, I think it's really depends on the person and sort of what do they personally want from a lifestyle perspective, from the business itself, what is their vision, not only for the business, but for their life to really understand, you know, to dig under the surface a bit and their motivations because, you know, it's the profile of the business but also like the context of the person and what they want. And that's really important when thinking about why to raise. And then it's to me also like digging into the idea. A lot of the ideas that I've heard from people that have asked me for advice feel frankly a bit niche and it's A problem that they have themselves that's hyper specific, that they haven't really thought through the tam.

50:22
David Fodge
Or maybe it's something that is like, maybe like a decent number of people need this. But there's not a high lifetime value because there's not a repeat rate, a strong repeat rate, or the category is really competitive and difficult to compete in. So you're gonna have to raise a lot more money or you're gonna have to have an edge in distribution or whatever. It is the context of what all of that matters, like what is the idea, what is the sector, what is the distribution behind that idea? How do they see like the core business model working? What are the resources that they think they need to get to that next milestone?

51:00
David Fodge
Because I always sort of viewed it as like an almost like a marathon slash relay race where it's like, okay, I'm raising money and that's like a baton I've gotten where I'm trying to get to the next phase where I can pass, where I can like get to this one milestone. So it's often like you need a story, right? Whereas like, what are you saying to investors of like, early on, I think I was saying I'm raising, I think I raised half a million to launch the business, get the first 1,000 customers and understand the core unit economics of the business, right? Like what does it cost me to acquire a customer, what's the repeat rate, what's the lifetime value, those sorts of things so that I can understand a lot more and then leverage those insights to get to the next phase.

51:46
David Fodge
And part of it was like a thousand customers and maybe like I think half a million or a million dollars in revenue or something. And so a really clear sort of mindset of like, what's the story I'm telling of why I'm raising and what am I using that money for and what's my strategy to get there and then what's the longer term strategy? And so it's, people want like a silver bullet and it's just not, doesn't exist. It really depends on the person, the category, the idea, all of those things.

52:20
Daniel Scharff
So let me, Here's a dumb question. This is about market size. Like how do you know if you are talking about the right market size or tam? Or if you're like, hey, maybe you're talking about your specific niche, but it's actually part of a broader one that you're going to be taking share from. Or you know, like I'm just trying to think of some Examples. But if, okay, let's say we're talking about poppy, in one world, you'd be like, no, your market size is prebiotic. So soda, which was very small. Right. But in another instance, oh no, it's just regular soda.

52:49
Daniel Scharff
And you know, for like even, let's say a non alk drink, like you could say, you know, when you launched your spirits initially, like, okay, the market size for non alk spirits was not huge, even though there had been at least one really notable success. But the overall market for, you know, alcohol and just like, you know, drinks in general, where a lot of that volume was going to be coming into non elk is quite large. So like, how do you think I want, how do you think about that, David? And then Amanda, I want to hear from you also.

53:17
David Fodge
I still get a lot of skepticism around how big our category can be, which I find really interesting and motivating. I'm one of those founders who like, when I get rejection or you know, when people don't believe in it fuels me. I'm like, that'll be fun when I can go back to you in a couple of years and be like, what do you think now? But I think that for me, what I find helpful is to make it relatable to the person you're pitching. And so again, we like respond more to stories than we do like pure like numbers, I think. Right. And so I often say, like, when's the last time you went out to dinner? Like, did you notice non out cocktails on the menu? Are you going out to dinner tonight?

54:01
David Fodge
Look on the menu and tell me if you see a not out cocktail there. That's like a hyper specific answer. But like, for me the TAM is like I think how many of your friends have complained about having a hangover before or have made some comment around like wanting a drink but like weighing the trade offs of that. Like just anecdotally, how many people do you think you've had those sorts of interactions with? And think about how many millions of those people there are globally. And then you can put it in the context of like in our industry, there's a body called IWSR that does a lot of like research.

54:44
David Fodge
Andy, our investor is actually on the board and so we see all the data of the trends of like consumers drinking less, the motivations behind that, where they're discovering non alk drinks, the trends in the category. And so we can show directional trends. But like, the challenge for my category too is I think like people often try and predict the future by looking at the past, which is just like flawed in itself. Right? Like, like it's history rhymes. It doesn't repeat itself. And so I think that can be difficult when you're building a category like us to sell that opportunity. But I always try and do it in two parts. One is just like, here's some data and let's look at the data and like look at the growth trajectory of our business specifically.

55:32
David Fodge
And then like the softer, more kind of personal side of it with the other examples that I get.

55:38
Daniel Scharff
Dave, I gotcha. And I mean that. I can feel that because I would just think about when I have a party now, how many people are not drinking alcohol. And it feels like about half, which it would, you know, that's a huge difference versus five years ago when you'd be like, oh, you're not drinking, like, what's wrong? Now it's just like, yeah, half the people just who want a sparkling water or, you know, one of your lovely apples drinks, which I usually have in my fridge. So.

56:00
David Fodge
Well, and the other thing people assume is like they're drinkers and non drinkers. That's not the case. It's the growth in the industry is really driven by moderation. And so it's people that it's still drinking, but they want to moderate and they want an option in certain occasions. And so I say often it's not. We are going through a once in a generation realignment of the adult beverage industry. And it's really about a diversification of the industry, whereas it's been monopolized by one, you know, functional ingredient, alcohol, for thousands of years. And that cultural grip is loosening pretty rapidly.

56:40
David Fodge
And so, you know, I think it's like to me, it's still five past midnight when it comes to the not hoc space broadly, I think we may get to a point where it's like, you know, maybe even look down on if you drink alcohol at some point.

56:59
Daniel Scharff
Yeah, for sure. Definitely. Okay. Amanda, let me ask you that same question. Around market size, tam, how people talk about it, when it's like, all right, that was a bit of a stretch how you phrase that. Like your TAM cannot be the universe, you know.

57:12
Amanda Amos
Yeah. I think the biggest challenge with tam, especially to your. Even the question like total market size, total addressable market, it can feel super obtuse. If you Google or search what is the market size is, let's just call it soda. There are a ton of different calculations that kind of go into informing that answer. And sometimes I see people do the bottoms up approach of being like okay, there are X billion people multiplied by the price of my good equals this as a total market. That's a little bit of a challenging intellectually I think to make it a little bit more tangible if you can find revenue figures of similar companies.

57:51
Amanda Amos
So for example, if you have a personal care brand and you are marketing in men's personal care, can use acts and can you parse out what their revenue figures look like for their personal care lines or looking at what your acquirer said, how much revenues they're doing and then also being able to look on the M and A side if any of those acquirers kind of publish their comps of how big those acquisitions are. So for example men's personal care, you might want to point to Dr. Squatch or maybe you'd want to point to dude wipes recently and being able to use that, those proxies of those sort of very large valuation or liquidity events to be able to point to. Here's how I'm thinking of the market size.

58:31
Amanda Amos
This is also speaking to how acquirers are thinking of the space and it also points to consumer trends and really kind of grounds in. Here's how many different parties are pricing this category.

58:43
Daniel Scharff
All right, very helpful. So as we're just kind of coming towards the end of the episode here, David, just very tactically, can you explain to people how did you structure the investments? I know there are a lot of different ways you can do it, like safe notes, all this other stuff. Can you just explain what was the route that you went and do you feel like that was the right way to go?

59:01
David Fodge
Yeah, for sure. I mean I would say another recommendation I would have is just like get a mentor and a lawyer early on that has experience in working with startups that have raised money. And for us early on we raised as a safe before we did a converted round. And so it's very common now. Sort of, you know, coined or created by Y combinator stands for simple agreement for future equity. And the benefit of that is you are not putting a price valuation on the business before you understand how big the business can actually be and what traction you're seeing. Right.

59:45
David Fodge
And so pre seed there's some comps, right, depending on your category of like and you and sort of the your background, like your team's background, like any sort of like edge you may have in the business of like, you know, you may raise a pre seed safe at a valuation cap of 3, 5, 7, 10 million on a safe. Right. Which Just means that when you convert in a price round, so when you raise money where you negotiate evaluation, where you actually sell preferred stock in the company and you set a share price, those people that invested, I'd say that $10 million SAFE will convert their investment at the 10 million valuation.

01:00:29
David Fodge
So if you end up raising your first price round at 20 million and you raise a safe at 10, then those people are getting quite a discount and a benefit because they made a bet early on in the business. Now safes often come with a discount. It can be the lower of the twos you could do and you should do your own research for this. And, and it's very easy to do. And there's the forms are very simple. That's literally why it's like one of the words in the acronym. It's a very easy way to like raise money without spending a ton of money on legal fees. Before that, the most common was probably like a convertible note which is like a warrant for future equity.

01:01:08
David Fodge
But I, I in my experience, and I'm curious what you see Amanda, but like a safe is more common and then for our a, we raised a price round and sold preferred stock shares.

01:01:18
Amanda Amos
Yeah, I think from my side, I agree. I've seen a lot of safes. They're very popular for pre seeds and they also help with I think saving legal fees. From the founder perspective, I think sometimes the benefit of doing a priced round is that you have complete clarity on how much of the business everyone owns. And so if you have legal budget or resources or if there's kind of a preference one way or the other. But yes, very common to have a safe early on and then do a price round a little bit at the early growth stage or at a priced seed or at na and the watch out.

01:01:55
David Fodge
I think too Daniel, there is like to Amanda's earlier point is you should use a tool early on like captable IO or something like that where you really understand dilution. Because if you don't really understand the numbers behind it, you could raise a lot of money in a safe that could end up depending on your price crown. You know, when it converts could be a huge amount of dilution. And so there's a pre money safe, there's a post money safe. Like I'm not going to get into the detail of what all those are, but the, you know, the benefit, as Amanda said of a price round is you're re.

01:02:31
David Fodge
There's real clarity of like what your dilution is and what you own and there is a danger when you're not actually selling, you know, when you're not doing a price round where you're maybe going to be surprised by delusion down the road. And I've seen that from quite a few other founders.

01:02:51
Daniel Scharff
All right, so just as we wrap here, I would love to just ask one final question, which is there any. Any, like, big mistakes that you feel like you might have made, David, on the journey that might help another founder just to avoid it? Obviously, you guys have been very successful and managed to. To continue capitalizing the business and growing just a ton, come out with great products. But any. Anything where you're like, yeah, okay, kind of wish I had that one or two things back that somebody could avoid.

01:03:20
David Fodge
And for terms, I think that, I mean, I've made a ton of mistakes or a ton of things I've learned from. Right. Like, we learn so much more from mistakes than we do from successes. But I think, yeah, I would do this. I would do it totally differently. I think I was, like, figuring a lot of things out as I went early on, whereas now I have a much better sense of, like, you know, just like the dilution, the sort of. Even the common stock shares and sort of the vesting behind those. Right. I've learned a lot there. And. But one specific mistake, you know, I think a mistake people make, and I certainly made early on, is like, reaching out to investors and wanting to, like, know if they're going to invest right away. Like, this is a relationship thing. Right.

01:04:24
David Fodge
So you should, if you. If you think you may want to raise, like, the sooner you can meet someone, if they're willing, if Amanda or someone like her is willing to meet you for coffee, then that is a privilege that she is, you know, giving you her time, and you should take it and you should develop those relationships and share information over time of your progress and not just be like, okay, I'm ready to raise now. Like, let's do it. You know, that's just. It doesn't work that way.

01:04:54
Daniel Scharff
Amanda, what do you think? Does that resonate? Any other final tips?

01:04:58
Amanda Amos
That's very nice to say that my time is a privilege, David, I adore you. I would say, to your point about manufacturing false scarcity, that's something that sometimes happens. Not too often. But when folks are like, my round is going to close tomorrow. I'm looking for commitments by the end of the day today. A lot of your shrewd investors are going to see that as a flag of, you know, is there either something under the hood or a reason why you would want to speed along diligence and is a difficult timeline for people to make, especially when they're formal processes for a reason.

01:05:33
Amanda Amos
You really want it to be a great fit given that to your point, David, and what you've been saying also Daniel, it's a really long term relationship where you're working as a team and you want to have a great mutually beneficial outcome. I think another thing is that it's just really on timing and practicing the mechanics of the pitch. Of course you want it to be conversational, but not getting anything too tied to the timing of certain slides or it has to be with certain materials. I have to get to this point getting comfortable enough with what the kind of core ask is, what the pitch is and being flexible on that timing.

01:06:09
Amanda Amos
There are certain times where I meet with founders who are fantastic but end up giving the whole pitch for the full 45 minutes that we've budgeted with very little time for questions. And it can just make it a little bit challenging for followers, especially when maybe there was a small element of the pitch that is more resonant to one investor or another and you kind of don't get to delve into the fun conversational bits. So I would say, you know, be ready with sort of what the core mechanics of the pitch are, but also have some flexibility to make it conversational and just remember that at the end of the day, you know, you're looking for a mutually beneficial partnership. It really is a partnership, you're on the same team and it's a really long relationship.

01:06:51
Amanda Amos
And I can at least say for myself as an investor, personally, my favorite part of this job is being able to meet amazing founders, support them on their journeys. And the conversation is exciting for me too. So I love whenever it is conversational.

01:07:07
David Fodge
Has someone really given you a 24 hour commitment timeline?

01:07:11
Amanda Amos
I don't know if I've personally I would say more of the spirit of that of saying like I am looking for something by like five o' clock tomorrow. I don't know if it was exactly within 24 hours, but yeah, across different windows there is a little bit of that and if it works for you, maybe it works. But that's an Amanda asterisk of I don't know if I can work with that sometimes, but we can move quickly.

01:07:35
Daniel Scharff
And I've heard that from a few early stage investors like don't try to over FOMO us, we don't really work that way. But I don't know, FOMO is Also a powerful thing. So got to FOMO the right way. Not, you know, hey, I need this right away. Otherwise they probably are like, why are you out of. Are you out of money? And you're absolutely screwed unless I give you this bad money check.

01:07:54
Amanda Amos
Yeah, to David's point, are also about so much of it is market timing and so much of everything is timing looking back at your careers and how everything happens. And so I respect the game, I guess.

01:08:07
Daniel Scharff
All right, so a lot of amazing insights here today as we conclude. Do you guys each mind just letting people know how they can kind of follow along and support your journey? David, do you want to go first?

01:08:19
David Fodge
First? Yeah, sure. So you can find applos@applos.world or at Applow's World on Instagram. You could find me on Instagram at David fudge or on LinkedIn and on TikTok. But I think I have a one of those underscores. David Fudge. I think I should know this.

01:08:38
Daniel Scharff
All right. It's an Appos world. If you need me to write a jingle for that, I will. Amanda, what's the best way for people to follow along with you?

01:08:47
Amanda Amos
So we're collaborative fund. Our website is collabfund.com and then if you want to reach out to me personally, I'm Amanda Amos on LinkedIn. I try to answer all of my LinkedIn DMS and love, love meeting all of you guys.

01:09:01
Daniel Scharff
All right, thank you so much, guys. What a. What a pleasure this has been.

01:09:05
Amanda Amos
Thank you.

01:09:06
David Fodge
Yeah, thanks for having us.

01:09:11
Daniel Scharff
All right, everybody, thank you so much for listening to our podcast. If you loved it, I would so appreciate it if you could leave us a review. You could do it right now. If you're an Apple podcast, you can scroll to the bottom of our startup CPG podcast page and click on write a review. Leave your company name in there. I will try to read it out. If you're in Spotify, you can click on about and then the star rating icon. If you are a service provider that would like to appear on the Startup CPG podcast, you can email us at partnershipstartupcpg.com lastly, if you found yourself grooving along to the music it is my band. You can visit our website and listen to more. It is super fantastics.com thank you everybody. See you next time.