#129 RedDrop: Pitching the Big Vision

The Pitch 2 [clap]

So we ran the numbers, and surprise surprise - some of the biggest successes from our show so far - they’re not software companies. They’re consumer product companies.

Aunt Flow, a feminine hygiene company, pitched on our show in 2017. They recently raised an 8.5 million dollar series A. 

Fight Camp, a consumer hardware company that we met in 2016 - they’re worth hundreds of millions now.

And more recently on our show, a little startup called Pepper. You’ve probably seen their ads. They make bras, specializing in small cup sizes. They’re doing very well. So well that we’re not allowed to tell you.

AND YET!!! Most VCs still don’t invest in consumer products. And I’ve made it my mission to show them they’re wrong.

When we met today’s founder, Monica Williams, we saw the makings of another consumer success story. Now she just has to convince the 5 VCs on our show.

Will a consumer product, made just for tweens, become a billion dollar brand? Or will it stay tweeny tiny? 

I’m Josh Muccio, welcome to The Pitch. Where real founders pitch real investors for real money. 

Let’s meet the investors.

Elizabeth Yin with Hustle Fund

Elizabeth: Do you love the problem you're working on?

Charles Hudson with Precursor Ventures

Charles: I wish that had been your open. That was so good.

Pascal Unger with Focal VC

Pascal: That’s I think how you have a chance, outside of just raising a boatload of money

Beck Bamberger with Bad Ideas Group

Beck: [slaps table] I gotta start my muffin business.

And Mac Conwell with Rare Breed Ventures

Mac: As a unicorn hunter, I want to see every unicorn. 

Real quick, if you’re not following the show already, hit that subscribe button and turn on notifications. The Pitch for Red Drop is coming up after this. 

Josh: Lisa. Lisa.

[everyone calls for Lisa]

Lisa: We're rolling! 

Beck: Tell them to be quiet out there. Hello!

[hellos]

Monica: How are you all doing?

[very wells]

Monica: Good. I'm gonna start with a personal question, but I want to know: how would you feel if you went into the bathroom and you found blood in your underwear?

Beck: Well, that happens here and there, so yeah.

Monica: But for the men in the room -

Beck: Yes.

Monica: - it would probably be shocking at the very least, probably terrifying. But this is how thousands of US girls experience their first period. My name is Monica Williams. I'm the CEO and one of the cofounders of RedDrop, and we are redefining feminine hygiene for tweens. We have a system of products and education that are revolutionizing, transforming the period experience for elementary, middle and high school girls. We're working hard to capture this - you know, our slice of the six-billion-dollar pie. We've generated $5 million in revenue since our launch in 2021, $3 million last year, and we have a clear path to $100 million in revenue in five years or less. And I'd love to invite you to join a five - I'm sorry, a $500,000 seed round that we're raising for scale and to transform more periods for girls in America.

Beck: So tell us more on this tween market, especially since periods are starting much earlier. What does this kit help them prepare for? What are they getting, you obviously have the tools here, so tell us more.

Monica: Well, I welcome you if you'd like to kind of open them and play with them.

Beck: Yeah!

Monica: It might be noisy. 

Monica: I'll pass them both along. pop it open, there's all kinds of cool stuff inside. 

Beck: This is a sizeable pouch, and in here we've got tampons, small ones. 

Mac: Tween sized.

Beck: We got tween size, it says. You got a little - oh - little, little vagina. Little squishy.

[laughter]

Monica: It's a uterus.

Beck: Uterus. Yeah, uterus. Okay.

[laughter]

Beck: Uterus. But -

Monica: It's a stress ball. 

Beck: Stress ball.

Monica: Because this could be stressful.

Beck: Yes. Yes. There's different sizes of pads, in case you were wondering, Pascal.

Monica: One through four.

Beck: Yep. One through four. Wipes. You got to have the hygiene going. A bathroom pass. Ooh, I like that.

Monica: That's so you don't have to talk. If you're uncomfortable in like, let’s say, a male teacher, you can just - yeah. Because they only get two bathroom breaks a day, generally.

Beck: Yeah. Yeah. There's a lot in this bag. 

Monica: All right, so, what tween periods means for me is the normal age for a girl to start their period is eight to 16. It feels like girls are starting younger and younger.

Beck: Yeah.

Monica: So, you know, nine, ten is not uncommon. We market to moms to really get prepared and start having the conversation, because what - the situation I described happens in schools. And so one of our other cofounders is a lifelong educator, and she can tell you a story of a child going into the bathroom and literally thought she was dying. So, just starting to have that conversation early is really, really important. And so that's a big part of what we talk about is just start having small conversations, normalize this, desexualize it. Google’s a terrible teacher. We want parents to be involved. What does mom really know about her period? So we step into all of those gaps, as well as provide better products for tweens in terms of size, um absorbency, it's odor control without fragrance and um just being there for them. 

Mac: So, You said you launched in December 2020, so call it 2021. You've done 5 million in sales; you did 3 million last year. Very impressive. 

Monica: Thank you.

Mac: I have multiple questions. 

Beck: Yes.

Mac: So my first question is how do you find these moms? How do they find you? Like, how - what has your customer acquisition been, to this point?

Monica: Customer acquisition right now is using social media marketing. Right now, we have two channels of business. So D2C is our biggest, and that's where social media marketing comes in. Our second is schools. And so in a lot of ways we're using the Always model. 26 states are required to buy feminine hygiene for students. And so we go and do conferences in school nurses spaces where we sell to schools as well. So it's really customer acquisition for which we are paying. 

Mac: Okay. And when you talked about D2C, is that - that's your largest customer base today?

Monica: Absolutely.

Mac: And so you talked about social media. What social media platforms do you use and are you using paid or is this organic? Like -

Monica: We use both. Organically, we use YouTube, Facebook, IG, primarily, and our paid is primarily Facebook and IG, we also do Pinterest. We really just try to to be in all places, but our biggest drivers are Facebook and Instagram.

Mac: Okay. How much does it cost for you to generate one of these packets, and how - and what are your margins on it?

Monica: So our direct margin's at least 80%. Our gross margin is around 65% for this. For our school product, it's a little bit lower, because we pay commissions on that. Our customer acquisition does vary. Like, Q - last quarter was awful, but I would say it's generally around $20. Our average order value is around $40.

Mac: Okay. And - and how much does it cost to make one of these?

Monica: About five bucks.

Mac: Okay.

Beck: And you sell them at 40?

Monica: Correct.

Beck: Got it.

Monica: Well, 37.99, to be specific.

Beck: 37, got it. 

Mac: What percentage of your customers are repeat customers? Like, I understand this is for - this is like, here's your first one, here's the pack, get ready. But I also have to assume that some of these tweens are gonna have a good experience with the product, and so like what percentage of these customers end up becoming repeat customers?

Monica: It's a great question. And I’d say if there's one where - one area where we didn't do a great job in the beginning but we're doing a much better job now is subscriptions. So we - we are just launching subscription. In terms of repeat customers, the best way I can answer that question for you right now is that when we have a sale event, 40% of our sales are from repeat customers. And so, the my best and most honest answer is I'm not sure yet, but we are - we are looking to have a lifetime value of upwards of $200 per customer. 

Pascal: How much - and I know it's early days - but how much are you thinking about digital tools as a retention tool on top of the physical products? 

Monica: It's definitely been a part of our planning. There is a tech play to this, for sure. I mean, just, we can start very basic with a period tracker. Most period trackers tell you when to get pregnant. But that's not the driver for this. So just to normalize that for her in a digital way and then tie that to the back end in terms of supply chain could be very, very powerful. So absolutely. That's certainly part of our plan.

Mac: So something like, hey, your period's gonna be starting in two days. Do you have -

Monica: Exactly.

Mac: - Motrin cos you know the first two days are going to be really heavy and really painful. 

Monica: Exactly. And tie it to mom, so she isn't surprised and she can buy the Motrin. 

Mac: Mhm

Monica: Absolutely. We've definitely planned some of those things. 

Pascal: The - for us, just because of our fund mandate, we focus our investing in software companies, and so it's way too far outside of our scope. But it's awesome what you're doing and fantastic job with the packages and everything. Not having gone through it myself, I'm very impressed by what all you have in there. And you very much see kind of the level of comfort that provides in what is a tough situation.

Monica: Awesome. Thank you.

Pascal: Yeah.

Charles: I think I - I really believe in this category. I think I'm conflicted. I'm an investor in a company called Aunt Flow that's focused- just on really the B2B and school and it is a huge problem and I'm really happy to see that legislation's moving in a direction to make this mandatory.

Monica: Yes.

Charles: But I think they're probably too close.

Monica: Okay.

Beck: Good to know.

Elizabeth: And similarly, I'm a personal investor in Ruby Love, so I think unfortunately that's going to be too much of a conflict. But I'm very impressed by what you've built.

Monica: Thank you. 

Mac: Charles. I don't know if you can - you can speak to this, but - and maybe you too, Elizabeth - what are some of the pitfalls that you've seen in the industry overall? 

Charles: I will just say retail distribution is really hard and online D2C can be hard. I mean, the good news is, there's like HoneyPot - there have been like a number - Lola, HoneyPot - a number of like D2C/omnichannel brand new brands that have like won shelf space. So I have no concerns about total addressable market or the ability to build a meaningful company in this category. Like, I think it's just because it is such a - it's such a emotional issue for the target customer that like you can build a passionate following. And I think in the beginning, for a lot of the companies I've talked to, it's just managing your inventory across channels, how much do you want to give to Target or Walmart or Walgreens or CVS? How much do you want to do D2C? Every company we have that's scaled, we have an incontinence brand focused on sort of the other stage of life. You end up being multichannel and the mix of D2C, B2B/wholesale and retail. Every company ends up with a different formula, but that seems to be the magic: getting that formula right for your brand and your customer.

Mac: How about you, Elizabeth?

Elizabeth: A hundred percent agree with that. Like, that has to be unlocked.

Charles: Yep.

Elizabeth: Yeah.

Mac: So, these three have already spoken. Very, very quickly. And the reason they've already spoken is because they're impressed by you and they want to say yes and they know they can't. Right? That's why we got to this point. Like Elizabeth and Charles, I have seen a lot of these companies. I've never made an investment in this space. I think this is amazing. I think what you've done is incredible. I think with the resources you've had, the building to 3 million in sales last year. You should be raising more than 500,000, first and foremost. That was a really small number for a company that's done as much as you have. But, you know, I get it. Those are different conversations. I don't know whether those are conversations for The Pitch Show, but have you had this kind of conversation -

[laughter]

Mac: Cos you know, you as a black woman, building a physical product, dealing with feminine care. You're gonna have a lot of things stacked against you. I think what you're doing right now is what's working. But I think to Charles and Elizabeth's point, you gotta figure out the omnichannel strategy. D2C is your way. There are some things I wish I had of heard from you. Like, I wish you had of talked us through like, okay, this is where you get started. This is how we get your young daughter going, but then this is how we build to the future, this is how we walk her through her journey.

Beck: Well - 

Mac: I'm sure all of that's in your head -

Monica: Yes.

Mac: It didn't come out per say.

Beck: Well, let's hear it.

Elizabeth: Let her say it!

[crosstalk]

Beck: Go ahead, Monica.

Monica: All right. So there's so many things I'd love to address. So, thank you. Let me start with that. Thank you very much for the compliments. I appreciate them. So the period kit is really our hero product. But we - our goal is to own elementary, middle and high school. So we start with these products, and we start with them because of size and fit and experience. But we currently we already sell period underwear, which is a more sustainable option, and is expanding us into an older kid, because we go - we have seven sizes. We're introducing menstrual cups um next quarter.

Mac: I was gonna ask about that next.

Monica: And um again, a sustainable option and um it's - it's good for tweens as well as older kids, and we have introduced tampons. And that's actually in our next kit. We didn't introduce it initially. Frankly, we're from the South and so there's - you know, there's some biases there. So our goal is to go a bit wider on this full - the full period experience for school-aged children. I didn't mention we also have education, so we partner with Rebel Girls, we have a book. 

Charles: I’m an investor in Rebel Girls

Monica: Oh!

Charles: Yeah, I was gonna say, I saw the book, I was like that looks like one of Jess's books.

Monica: Yeah. So we - so they reached out to us and we co-branded a book and so that was kind of our first foray into physical education. We do a lot of video education as well. We're looking to expand that so that we're - we can become the big sister. And so to your point about what's the experience where my friend has her period and how do I have this conversation with her about introducing her to RedDrop just as a word of mouth piece, that's definitely a direction that we have started and are growing into. So for us, I see RedDrop as being the tween and teen feminine hygiene brand. Can it grow beyond that? For sure. Now, as - you opened the door. As a black woman, for me to come on here and say, I'm going to become the new Always, that's super audacious.

Beck: Yes!

Monica: And I could be, for sure.

Mac: What makes it audacious?

Beck: Yeah. Let's do it. Let's do it.

Mac: Just tell us what you want. That's what I wanted to hear. Nothing audacious about that!

Elizabeth: And you have the numbers showing that you're on that journey.

Monica: Absolutely. But I will say, this has not been an easy journey.

Elizabeth: Sure.

Beck: No, of course not.

Elizabeth: We get it.

Monica: And so you learn to temper and to make it so that it is consumable for your audience. And so -

Mac: When you're pitching in front of investors, you don't got to temper nothing. You got to make us convinced -

Monica: I appreciate that.

Mac: - that you're going - that you're going to be - like, look, Uber's great but we gonna be bigger.

Monica: Oh, absolutely.

Charles: I get the sense Mac, her experience might have been a little different.

Monica: It has been. It has been. For sure.

Beck: Yeah. However, there's something very smart about getting in at an impressionable age. How many millennials will eat a bowl of cereal that they ate when they were 10 years old. Why? Because it's ingrained in you. Like, I will eat a bowl of Life cereal if you put it in front of me right now, because I ate it when I was 10. You know? So if there's a brand that could be, you know, secure at that age, you can ride into the decades until you get to the incontinence package over there. But then you could own that too. You could own the lifeline of a woman. That's kind of the storytelling and the aspect I want to hear, ideally, from you, is like -

Monica: Absolutely.

Beck: - hey, we're starting here. But women have blood forever. You know?

[laughter]

Beck: Until they don't, and then we have another thing. So, I mean, wow. That's - that's a long customer. 

Mac: So yes, we've spent a couple minutes telling you how much we think this is incredible and what you could do with it. So I'm in. Um. I'm gonna say I'm in for 50k. I want to be in for a lot more. um If I could, I would tell you I'd give you the whole 500, but I can't. But 

Monica: Thank you.

Mac: I'm in. 

Beck: So I am out. You are fantastic.

Monica: Thank you.

Beck: I like what you're doing. It's a crowded space for me and a little outside of what we do, but I really like what's happening here.

Monica: I appreciate that. Thank you, Beck.

Mac: I disagree on the crowded. Like, I don't think many of these companies are really focusing so much on the tweens. They're like, your mom uses this so your mom's gonna give this to you, or your dad's gonna run into the nearest CVS and pick the first thing he sees and hopes it's right. None of these brands - like, when you see their marketing, it's not to this demographic. Now as RedDrop gets bigger and they see the potential there, like, yes. So for this, almost more than anything else, is gonna be how well you can build a brand. But you've done something right to this point. Right? Your numbers speak to that.

Monica: Thank you. 

Mac: I don't know if I love the name RedDrop, but.

Monica: But to your point, Beck, there is honestly there is only one tween brand. If you go into the store, there's Always, Kotex and Stayfree. They have a teen brand. If you open the package, it's a size one adult pad. It doesn't fit. That isn't tween. That's teen. So to be honest, our space is not crowded yet. It's unbelievable that in 2024 that I can sit here and tell you that. Thank you.

[thank yous]

Monica: This was amazing.

Beck: Thank you.

Monica: This is our first institutional investment ever. Like we - we've bootstrapped.

[crosstalk]

Elizabeth: You haven’t raised any money? 

Monica: We've only raised 274 in total.

Elizabeth: Wow. That is very impressive. 

Pascal: It's quite impressive how far you've come with no outside or very little outside -

Mac: And being the first check, our first institutional check is kind of my thing. Granted I stole it from this guy and this young lady over here.

Charles: Plenty of room for all of us. 

Monica: Yay! Thank you.

[thank yous]

Beck: Oh, okay. Oh.

[falling noises and responses]

Mac: Great catch! Saved the mic!

Monica: That looked really expensive.

Charles: Incredible save.

Monica finished her pitch with a literal mic drop before leaving the room.

If you thought that pitch was short, you’d be right! One of the shortest pitches on our show ever. Mac decided to invest in just 20-minutes.

When we come back, the investors make a case for why more VCs should pad their portfolios with consumer startups.

[break]

Welcome back to The Pitch. Monica walked out of the room with a commitment from Mac for 50k. But all of the investors were bloody impressed by what Monica had accomplished in just a few short years.

Mac: Three million in sales and raised less than 300k.

Elizabeth: That's very impressive.

Charles: That's impressive.

Mac: For a physical product company? Come on! You know you wanted to say yes.

Charles: She's awesome. She's really awesome. If I wasn't in Aunt Flow, I would have gone in.

Mac: See, when I saw the both of you all and then like - oh yeah, yeah, yeah. I'm the only one without a conflict. This is - this is great.

Josh: Charles, I didn't know you invested in Aunt Flow. We had them back on the show forever ago.

Charles: You know what's wild is, for most of its life that company had an all-male board.

[laughter]

Beck: Are we surprised?

Charles: No. Shouldn't be.

Beck: See.

Charles: If you've met Claire, you know she handled us. It's a really good business.

Elizabeth: All male board.

Josh: Yeah. It's been impressive watching that company grow.

Charles: Yeah.

Josh: Anyway, but RedDrop. So you barely talked to her and you seemed like you had enough information to make a decision and I know her business because I spent a ton of time with her but -

Mac: Josh! She did 5 million in sales in two years with less than 300k of funding. She figured out her customer.

Beck: 65% gross margin.

Mac: She's got to figure out how to grow.

Josh: Yeah.

Mac: Figuring out how to grow is a problem money solves. A lot of founders we see have other problems that money doesn't solve that we're trying to get to. When you got a founder where their only problem is: I need money to solve this problem - that is something that VCs are really good at.

Beck: By the way, and she was clear on that, to scale. She said I'm getting this 500k seed round for scale. And I appreciated that because we're not hearing that sometimes from people. They come in, oh, I'm raising this and I'm like -

Charles: To do what?

Beck: For what? For what? Like, to survive?

[crosstalk]

Charles: To stay alive?

Beck: Just your lives? To hire? To market?

Josh: Cos we're out of money?

Beck: Like that - it's like it's buried somewhere -

Mac: And 500k is too low. She needs to be -

Beck: Also that.

Mac: She needs to be raising more and she probably needs to be thinking of a higher valuation -

Elizabeth: But I get why she made that ask.

Mac: Yeah. I get it.

Beck: Yes.

Josh: Okay, so this is something I've been talking to a lot of founders about. Actually, I remember the day I talked with Monica about it. And I said, I feel like with some of the smaller investors, early stage investors we have on the show, they want to feel like their money can go a long way.

Beck: Of course.

Josh: And so if you come in the pitch room and you say, we're raising a million dollars, or two million dollars, but we don't have anybody who's committed to that round yet, it's just a really hard ask.

Mac: That's true.

Josh: But if you come in and you say, I'm raising 500k, you can be the first check in, like, you see that pattern and think I can really help this founder. So I actually coach - I mean, she felt like she should lower it too, but like I was like I think your instinct's right. She was originally gonna come out with a $1.5 million ask.

Mac: That would have - with her revenue growth -

Josh: Yeah.

Mac: - that would have made more sense. And even for the - for us smaller investors, yeah, we're valuation sensitive. But a good company's a good company, right. Like, we've all done rounds much larger than what we normally do for the right founders and the right companies. 

Elizabeth: It's true, but I'm much more attracted to the smaller ask for a whole variety of reasons.

Mac: Yeah, fair enough.

Elizabeth: One is to this point. But two, also, and not only valuation, but the other is I feel like - like, I feel like when people come out with a big ask, my worry is if they don't hit that then -

Mac: Yeah.

Elizabeth: You know, it'll be troubled water. Right? Versus like, oh, she can make it work on half a million. Great. 

Pascal: And typically once you have one institutional investor in to help you get the rest of the round, and things start to become easier. 

Charles: Or like, Pepper you just won't ever raise money again and -

Elizabeth: Oh my god.

Charles: That thing is - phew. 

Josh: They are crushing it.

Elizabeth: I missed out.

Beck: Wait, which one?

Charles: Pepper.

Josh: I've been trying to get Jaclyn back on the show -

Beck: Wait, what's that one?

Josh: - but she doesn't - she doesn't want her numbers out there.

[crosstalk]

Josh: Like, we don't have to talk about the numbers. I just -

Charles: I wouldn't either -

Josh: - want to tell your story.

Charles: I wouldn't either if I were her.

Elizabeth: Yeah.

Mac: I wouldn't come back.

Elizabeth: Yeah. I don't know if I told you. I emailed her later. I was like, you know what, I changed my mind. I would love to do it personally. And she was like, too late.

Beck: Wait, what is this?

Pascal: What kind of a company is this?

Charles: It's a bra company.

Beck: Oh.

Pascal: Okay. Interesting.

Charles: Focused on smaller cup size bras.

Beck: Oh yeah. Yeah, yeah.

Pascal: I mean, we don't do any physical products and so for me this was a hard one.

Josh: No, I mean, in some ways it was quite easy.

[laughter] 

Josh: So Charles, you said something when she was talking about her experience and you were saying, no, pitch it all out there. Like, pitch the big vision. And there was some like hesitancy in Monica. And then Charles, you said, it sounds like you've had a bit of a different experience. What - can you tell me about that? 

Charles: I mean, I deal with a lot of - a significant chunk of our portfolio are female founders and founders of color. And especially if you're not in the coasts, you sometimes do get your ambition tamped down. You don't get encouraged to tell the big story, so people end up shrinking. She had no lack of ambition.

Mac: Yeah.

Charles: But I was like, this is a person who's had an experience -

Josh: Why would investors tell them to temper their pitch?

Charles: It's - there's been -

Elizabeth: Because they don't believe -

Charles: They don't believe this person or someone who looks like this person can -

Elizabeth: Like, credibility goes down.

Charles: Credibility. Or you're pitching - or you're pitching investors who -

Josh: But why would a less ambitious pitch be better?

Mac: So -

Elizabeth: I know. It's crazy. It's just -

Beck: This is a psychological thing.

Elizabeth: The weird line to straddle - and sorry, I cut you -

Charles: No, no, no.

Elizabeth: Is I think for everybody is you have to sell the dream to the investor but you also have to be believable, right. And so there's - so I think there are certain people who can get away with selling a bigger dream because the investors believe they can execute on that. But if the investors already go in, either with preconceived notions for whatever reason, whether it's your idea or who you are or whatever, then -

Josh: They think you're blowing smoke?

Elizabeth: - then all of a sudden you seem like you're not credible.

Charles: You're not - you're not a serious person.

Beck: You're not serious. You don't live in San Francisco, you're from the south, you're a black woman. Mm, I don't know if you understand this.

Elizabeth: And you're selling a female product that is a physical good.

[crosstalk] 

Charles: There's also like I just see like there's an appreciation for ambition in Silicon Valley and in New York, and I think there are other places where investors are more conservative. 

Mac: I think it's also deeper than that, right. So to Charles' point, like, I've spent my career as an investor specializing working with diverse founders and female founders. I've invested in everybody. But, you know, very often I meet these founders who they don't want to sound too audacious because they believe in authenticity. They're like, I'm just getting started. How am I gonna be a billion dollar company? I don't want to sell you on this dream. But then, they'll also get dinged from investors, like, they're like, well, you're not thinking big enough. And so it becomes this double-edged sword of like, am I not thinking big enough? But if I think too big, I'm not a serious person.

Beck: This is back to the Barbie script. Can't be too much, can't be too little. 

Josh: But yet, you like humble founders, too. 

Pascal: Yeah, but there's a - I think humble is almost like more of a personality trait, versus the vision to a certain degree.

Josh: So you'd rather hear a humble person pitch an ambitious business than a proud person pitch anything?

Beck: I think there's some nuance in that. It's something to say and walk in and say, hey, I have a vision for the plan for this to be a - a hundred million in revenue and a billion dollars eventually. That question you just asked me, we haven't figured that out yet.

Mac: Yeah.

Beck: I need your help on that, actually. 

Josh: So you can be both sometimes?

Beck: I think you can be both.

[crosstalk]

Elizabeth: That is the line you are walking. And it's a very hard line to walk.

Mac: That's why there's an art to pitching. 

Charles: And Josh, I just said what I said because I could tell by the look on her face, I was like, oh, she's had some experience.

Beck: Yes, she has.

Charles: This is not - she's not projecting. She's had some experiences that have convinced her that this is the way she should show up.

Josh: Okay. 

Charles:I would've probably done the same thing Mac did if I didn't have a conflict. She was great.

Elizabeth: Yeah. She was great.

Mac: I know my teammates. I learn from the best. But, I will say this, right. This pitch also epitomizes some of the issues in the venture space.

Beck: Yes.

Mac: Because very quickly, we got to the point of this isn't tech, this isn't software, so you don't have as much access to as many investors You're a black woman doing fem tech, right? So that's even a smaller group that's even gonna take you serious. So when she goes into rooms, there's going to be a section of VCs that just already are just -

Josh: Right.

Mac: Can't do. 

Pascal: Yeah. I mean, I don't think we could raise a fund if we wanted to invest in D2C products, so right it’s - 

Mac: I personally disagree on that piece, but -

[crosstalk]

Pascal: - what we understand, right. First person.

Elizabeth: - but having - we also don't invest in D2C with our firm, but over the last couple years, having had a bunch of misses, like Pepper, I've now started writing those personal checks because actually there's a really lot of good companies in D2C, especially because there are not a lot of VCs in it.

Charles: Three of our best companies, Bobbie, Pepper and Pair Eyewear, all D2C and they're all like real companies. 

Josh: We get pitched a lot of D2C companies.

Elizabeth: I'm sure. 

Josh: So if we were to sit this one out as a show, we'd be missing a lot of good stuff.

Mac: D2C is hard, but, you know, there's only - generally speaking there's like, what, 50 to 80 unicorns a year. All of those aren't in software.

Beck: Correct yeah.

Mac: And so from my standpoint, as a unicorn hunter, I want to see every unicorn. Not just the unicorns in the one pen. But that's just my personal belief as an investor. I get a lot of crap for that. Sorry LPs. I invest in everything. This is why! 

Beck: But blood and boobs.

Mac: Recession proof.

Beck: Recession proof.

Charles: Blood and boobs. Wow.

Josh: All right. That's a wrap.

Beck: Thank you. What's our next one?

Did you catch that? Charles said three of the best companies in his portfolio… Bobbie, Pepper, and Pair Eyewear, are all consumer product companies! 

This was the moment I realized, I’m not the only one who’s excited about investing in consumer. 

So much of the talk about consumer product startups has been negative. 

It doesn’t scale like software, inventory costs are high, Facebook ads don’t work anymore … it’s just too hard! 

But actually there’s real evidence that consumer products can produce venture-scale returns too.

It doesn’t mean it’s easy, but building a billion dollar company never is!

But I digress, this story is about Monica. And that story is coming up after the break.

[break]

Welcome back to the show. Monica got a $50,000 commitment from Mac Conwell in the pitch room. After the show, we caught up with her to see what happened.

Josh: Uh. You had quite an eventful experience pitching on our show, you seemed almost hesitant to talk about the big vision and something about the way you reacted when Mac was trying to pull the big vision out of you and say like, no, you should pitch it big. You don't have to hold back. And like, Charles was like, ah, I feel like Monica maybe had a different experience pitching VCs. Is that true? 

Monica: For sure. I mean, Josh, you and I talked about this. I could, I could clearly articulate that I see 100 million in topline revenue for this company in 20 months or so. Um. But I really was relying on this pitch to go well, and so I was definitely straddling that line of projecting a, a big vision, but making it manageable. 

Josh: Yeah 

Monica: I have no doubt that we will be eight figures in 18 months and nine figures in probably 24 to 36 for sure. But that wasn't something I don't think I ever would have said in the room first meeting these people. 

Josh: But that's what they wanted to hear.

Monica: That's what they wanted to hear. Since then, I certainly pitch a way more audacious idea. I mean, I've learned so much just, just that experience. I'm way more confident in all of these sorts of situations, not just pitches, but introductions or connections I put those things kind of front and center and I'll say that it does work. So thank you for that. 'cause I definitely got some training 

Josh: Yeah. gave you a little boost. 

Monica: Amen 

Monica: I mean, there was a fire, it was a, it was, it was, it was amazing. But it was definitely, I didn't know what to expect and I, I don't think I, I could have handled it better.

Josh: I think you did great.

Monica: I'm just saying.

[laughs]

Josh: All right. So let's talk about what happened after the show. 

Monica: Okay.

Josh: Many of the investors in the room seemed to love your business right from the start. A couple were conflicted out, which is obviously a bummer, but you can't do anything about that But that seemed to give Mac even more boldness and make him more excited to commit on the show.

Monica: mhm

Josh: So walk me through what happened after the pitch in the room.

Monica: So he kind of, he said he had some concerns …

Mac: So Monica, We are slightly a little concerned about the competition. You have to push as hard and fast as you can. To be the market leader in the space and that means a huge focus is going to be big box stores and building that brand recognition 

Monica: Absolutely, and ironically to that end. We just hired a retail strategist last week. She has got amazing credentials. She was the, the lead feminine hygiene buyer for target for 10 years. She brought in honeypot. So, in terms of just the strategy side, I feel like we're getting that covered. as well, we are Girl Scouts partner now for feminine hygiene and I think we'll have our first placement in retail in the fall at Ulta. And then one other thing, we did have a really good meeting on Thursday with a, a buying group for Walmart. They were so excited. 

Josh: I have to say you crushed the answer. I mean, I was getting, I was on the call and I was like a little bit nervous. I was like, Oh, he's going back into competition. I know there's a lot of competition. and two of the investors in our show are invested in the competition. Oh boy. And then you just like. came in hot with the answers. And I was just like, Oh, all right. Like, it sounds like Monica's got this thing down

Monica: No, I'm telling you. I learned a lot in the room. Josh, thank you. 

Josh: It was wild, like as soon as you were done with that, that answer, he was like, yeah, that sounds great. We're ready to invest. 

Mac: I love you. And I love what you're doing. And I love what you're building

Mac: we would be honored if you would so have us. So we would like to commit 50 K funding. 

Monica: Yayyyy! So does this mean you’re like our lead investor?

Mac: I don't know. Cause like the dollar amount is small. So people probably won't consider us lead, but we have a strong enough brand that if we set terms, they may go ahead and go with the terms. 

Monica: It was good. I got, I really, I feel more ready just in general now. I'm like, I'm ready for the shits 

Josh: Ready for the shits? 

Monica: I'm ready for the shits. Because it's always, somebody's always come with some shit. So yeah, I'm ready for it. 

Josh: Bring on the shit. How's the rest of the round going? 

Monica: It's, uh, so far it is going. It's a lot of work. Everyone always says, you know, fundraising is a full-time job, and I don't think I ever really believed it. And we just, you know, we rebranded

Josh: Yeah. Hmm.

Monica: We relaunched, we've got some major partnerships that we're trying to work through, and it just feels like there is so much to do in addition to lead this team. it's a lot. It's a lot.

Josh: Yeah, it is a lot. 

Monica: Part of it is just finding the right VC. And so like we are a Femme Hygiene, CPG. I'd say that's tough. 

Josh: Yeah 

Monica: But other than that, when I tell our story, and now that I've learned how to craft it in a way that's more aggressive and more bold about what we have been able to do, if we get a really good reception, and I know this is a process, and so we're just getting started. And, you know, I'd say hopefully in three months, I'll have some better results, like actual results, but I'm not getting the pushback that I kind of expected. So it's good.

Monica’s got the traction, the confidence, and her first institutional check. But there’s one thing she’s missing, terms! 

Mac and Monica are supposed to meet up again soon to set said terms. This is a call Lisa and I are eagerly awaiting… because…

Josh: we're interested in investing out of the Pitch Fund.

Monica: Ahhhh I was hoping that you all would! That's amazing! 

Lisa: … Yes of course.

Josh: And we're, we're ready to cut the check. We've got the money ready to invest in companies and we want the companies we invest in to have that capital so that they can deploy. You've been bootstrapping this thing for years and accomplished so much. I'm just like, get the money in Monica's hand and let her go. So anyway, I'm like, I need those terms so that we can, uh, invest. 

Monica: Oh man. 

Lisa: yes!

Monica: I would, yes, absolutely, definitely would love to add you all to the family and let's just make it happen.

Josh: Let’s do it. Let’s just need those terms 

Monica: Let’s get those terms

Will Monica really be able to build the next Always? Only time will tell. As investors, we’re on a ten year journey with our founders, at least. Sometimes they pop off before that, but usually it takes a decade or more to see a company mature to the point of exit.

But then again, it isn’t just about the exit. For me and Lisa, it really is about the relationships we get to forge with these founders over the long haul. To be a part of the thing that they pour everything into, it’s really special. And some people might scoff and say that a teeny tiny tampon startup couldn’t possibly change the world. But I think that’s ridiculous. Helping tweens enter adolescence with just a little bit more confidence? Anyone who’s ever had, or been a tween will tell you, that’s a big deal. PERIOD. 

We want to work with more founders like Monica, so if you’re doing something meaningful and you think you can turn it into a really big business, let’s chat! We’re talking to founders right now for our next pitch event, this time we’re back in California! San Francisco. Details are up on our site, thepitchevent.com - founders you can join us by applying to pitch, and for the investors listening! Angels and VC’s alike, you can join the live audience for our next event. It’s a super tight knit community, we did this in Miami earlier in the year and everyone LOVED it. You should consider joining, just go to thepitchevent.com to learn more.

Next week on The Pitch… would you like fries with that?

Kenny: People are what make franchises run. the person who knows the business inside-out.

Jillian: Yeah.

Kenny: Not someone who came off Wall Street because their check clears. 

Kenny: FranShares is the first investment marketplace where people can invest in franchises.

Beck: So you said 800 billion is what this market is a year? And hundreds of businesses are actually franchised businesses?

Kenny: Thousands.

Beck: Thousands and thousands. Okay.

Kenny: There are more brands franchised than there are stocks on the Nasdaq.

Beck: Oh! 

Mac: So, you're raising a 4 million dollar priced round. 

Jillian: And what are the terms on that?

Kenny: 19 million post-money valuation -

[oof sounds]

Jillian: And do you not think that the valuation is a little frothy?

Next week, things get frothy when Kenny Rose brings a new alternative investment class to retail investors. Subscribe and turn on notifications so you don’t miss it.

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, Enoch Kim, Jackie Papanier and Alma Langshaw. With casting help from Peter Liu and John Alvarez.

Music in this episode is by Onders, Serene Sloth, Raided G, Our Many Stars, FYRSTYX, Breakmaster Cylinder, Imagined Nostalgia, and The Muse Maker

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