Industry: Focusing on convenience stores, an under-penetrated market in tech.
Product: SaaS platform to assist with stocking, selling in-store and online for convenience stores.
Current Usage: 330 stores, 21% growth monthly, 95% conversion from free trial, 99% retention.
Revenue: $25,000 monthly from SaaS, $44,000 from advertising partnerships.
Funding and Equity
Amount Sought: $1.6 million
Use of Funds: Acquire 2,000 stores, build product integrations, achieve $3 million ARR.
Equity Structure: Founder Jason owns 14%, founding team 70% overall.
Previous Funding: $930,000 raised, including $300,000 family round, $25,000 from accelerator, and $605,000 pre-seed.
Valuation: Looking at $9 million post-money valuation cap.
Challenges and Concerns
Sales Strategy: Primarily inside sales, supplemented by outside sales.
Market Penetration: Difficulties due to "unsexy" nature of the industry and resistance to new tech.
Competitors: Market competition like Mercado.
Investor Concerns: Low equity for Jason (14%), high need for capital, complex cap table.
Investor Feedback
Concerns: Jason's low equity, sales-driven model could be costly, complex business model (retailer and brand partnerships).
Impressions: Strong personal command of business details, impressive presentation skills.
Potential Solutions
Equity Adjustment: Possible to negotiate more equity for Jason with co-founder Victor.
Sales Model: Consider pivoting to more self-serve options or improving marketing strategies.
Investor Decisions
Charles and Elizabeth: Interested if equity adjustments are made.
Others: Passed due to sales complexity, market penetration challenges, and equity concerns.
Next Steps
Follow-up: Jason aims to renegotiate equity with Victor.
Potential: $100,000 commitment contingent on equity changes.
Conclusion
The pitch highlighted both potential and challenges in the unglamorous convenience store industry. Adjustments in equity could sway investor commitment.
Additional Notes
Host: Josh Muccio
Investors: Paige Fendorti, Neil Bloom, Elizabeth Yin, Mark Phillips, Charles Hudson
Upcoming: Episode 120 of The Pitch Podcast for updates on Jason's equity negotiation.
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