Key Points from The Uncut Pitch Episode

Introduction

• Host: Josh Muccio
• Show: The Uncut Pitch, featuring unedited real pitches.
• **Investors Present: **
  • Paige Fendorti, Genius Ventures
  • Neil Bloom, Analog Capital
  • Elizabeth Yin, Hustle Fund
  • Mark Phillips, 11 Tribes Ventures
  • Charles Hudson, Precursor Ventures

Company: Handle

• Founder: Chase Robbins
• Business Model: Vertically integrated dark stores near college campuses.
• Service: Delivery of curated 700 SKUs to students in 12 minutes profitably.
• Average Ticket Size: $17, $4 contribution margin per order.
• Locations: USC, University of Oregon, University of Alabama, UC Davis.
• Funding Goal: Raising $3 million seed round.
• Market Size: 500 U.S. universities with over 10,000 students each.
• Comparison: Generates more revenue and higher margins than a typical 7-Eleven.

Financials and Operations

• Profitability: First two locations cashflow positive.
• Current Run Rate: $1.2 million.
• Profitability Goal: Stores to reach $500K in profit per year.
• Previous Funding: $1 million pre-seed round from angels.
• Current Burn Rate: Less than $10,000 per month.
• Employee Structure: Part-time student delivery couriers and recent graduates as managers.

Expansion Plans

• Use of Funds: Launch 11 additional markets, build corporate team, and invest in engineering.
• Customer Acquisition Cost: Under $1, significantly lower than competitors like Gorillas.
• Product Mix: Mostly non-perishables, less than 1% perishables.
• Delivery Fee: $1.99 flat fee, not surged.

Competitive Analysis

• Main Competitors: GoPuff, DoorDash initiatives, but Handle focuses on impulse purchases, not meals.
• Unique Selling Proposition: Quick delivery within college campus, low customer acquisition cost, leveraging student workforce.
• Trust and Safety: Use of student IDs for delivery access to campuses.

Challenges and Future Considerations

• Valuation Concerns: Investors found valuation high ($15 million pre-money for $1.2 million run rate).
• Personnel Management: Issues with managing and retaining student workforce as they graduate.
• Potential Risks: Rapid expansion could dilute operational quality.

Investor Feedback

• Elizabeth Yin & Neil Bloom: Interested in personal checks, but fund valuation too high.
• Overall Investor Sentiment: Impressed with the business model and profitability, concerned about valuation and market expansion strategy.
• Future Considerations: Focus on optimizing current campuses before rapid expansion.

Closing Remarks

• Outcome: Angels interested, but Chase sent an email causing the deal to fall through.
• Next Episode: Details about what happened will be in the next podcast episode.