#141 Christie's Chips

I’m Josh Muccio, this is The Pitch, where startup founders raise millions and listeners can invest. The pitch for Christie’s Chips is coming up right after this. And if you ordered some chips, now’s a good time to get them out for the taste test. [brunch]

Cyan: what I really want…

Josh: Pitch #3 Christie’s [Clap]

At The Pitch, we’re constantly on the lookout for people who are deeply passionate about a problem. So passionate that they will not stop until it’s solved. But I never expected to meet someone who’s passion lies in potato chips. I didn’t even know that potato chips were a problem to be solved.

But after meeting Christie, with Christie’s Chips. I was like, yes, we need to reinvent chips. We need a better Lay’s. There was only one problem: all her chips were sold out. So our very first taste test would happen in the pitch room.

Christie: Hi everyone, I'm Christie. Hello. Nice to meet you. Nice to meet you.

Our food critics today are Cyan Banister, Mac Conwell, a new investor to the show, Ben Taft with Genius Ventures.

Ben: Hi, I'm Ben. 

And Elizabeth Yin

Elizabeth: Hi Christie. Elizabeth. Nice to meet you.

Christie: Okay. I'm Christie's. Christie. I'm Christie, the founder of Christie's. But before we begin, I want you guys to visualize something for me for a moment. You're at a Michelin star restaurant. The food is delicious and balanced and simply perfect. Now take that same experience and think if you could have it with your snacks. Delicious, balanced, the best ingredients, the perfect potato chip. That's what you get when a Michelin-trained palate makes junk food with no junk. 

[rustling] 

Christie: So I've created Christie's, the very first potato chip brand that crafts nostalgic flavors using only plant based ingredients. I started with the all time favorite flavor, sour cream and onion. I removed the buttermilk powder, the cheese powder, the whey protein. And while I was at it, I also made it less greasy, it's less calories, but it has that same rich indulgence that we as consumers know and love when we think of a sour cream and onion potato chip. I felt at my core that it shouldn't matter if a consumer is lactose intolerant or vegan or just wanted something clean to snack on. I didn't want any flavor to be off limits. So with this brand, we're catering to that specific consumer, but we're appealing to all with the best tasting potato chips on the market. Because it's my belief that for a better-for-you brand to truly win in the market, it has to taste just as good, if not better, than the less healthy counterpart. I'm three founders in one. I come from the culinary industry. Then I worked in food manufacturing, and then I worked in sales for CPG brands. I've bootstrapped this business from the beginning, so I understand this business top to bottom. I started it out of a tiny commercial kitchen in South Central LA, where I built out this plant and I made everything by hand. Those were some long hours. And then I've grown it to where we are today, where we shipped POs this week for 100,000 units. We have strong unit economics and a path to profitability in 2025. We've made 800K to date, and we have more opportunities in the pipeline. When I look at Christie's, I want this to become the next BOOMCHICKAPOP. And I want it to become a global household name. I know that you all have the resources and the networks that can help take this brand to the next level, and I'm looking for that partner here today. I'm asking for a $400,000 SAFE with a $4,000,000 cap. I have samples, so I'd love for you all to try, and dive into any questions you might have. 

Elizabeth: Yeah, we would love to try these.

Christie: Do you want samples? 

Cyan: We want samples.

Christie: Okay, so we've got -

Elizabeth: Whoa. Whoa, wow. 

Christie: So these are the two newest flavors.

Elizabeth: What are they? 

Christie: Sweet and spicy habanero. It's sweetened with dates, so no sugar, a little bit of lime. It's got a punch to it because it's habanero. Then we've got the mystery flavor, the Zamboni bag. It's a little tart, a little sweet, a little smokey. We've got a sea salt, the original sour cream and onion, sea salt and vinegar. It's probably my personal favorite. And then the backyard barbecue is a sweet and smoky. 

Elizabeth: Okay. 

Christie: Yeah. 

Mac: Let me try the barbecue. 

Cyan: I’ll share barbecue with you

Ben: I'll take the sour cream and onion. I love the packaging, by the way, well branded.

[rustling] 

Elizabeth: I love barbecue. I actually, I love chips in general, so I'm very excited. 

Christie: And these were produced last week. We had a new production run. They're produced last week. I pulled the bags right off the line. 

Mac: That's good.

Cyan: That’s really good.

Christie: Thank you.

Mac: That is a quality chip. 

Cyan: That is a quality Chip!

Mac: Like, typically with healthy foods -

Christie: Yeah. 

Mac: - you get a little bit of what you want, but not really.

Christie: Exactly. 

Mac: But it's not far, it's not so far off that like, if I wanted to eat healthy, I wouldn’t want to stay away from this. 

Christie: Exactly. 

Cyan: Is that the sea salt?

Mac: So that's super impressive. 

Christie: Thank you. 

Ben: You have to try the Zamboni. 

Elizabeth: I also like how it's not too salty. 

Christie: Exactly. 

Elizabeth: These are great. 

Mac: So, you said you've made 800K to date. How long have you been running this business? 

Christie: So we launched in a big facility in 2022.

Mac: Okay.

Christie: So we made 142,000 the first year 

Mac: Mhm

Christie: Second year was 325,000. And then to date we've made 335k. 

Mac: This year?

Christie: Yeah. 

Mac: Okay.

Elizabeth: And how are you selling right now?

Christie: We sell mostly B2B. So we sell wholesale. We do sell online. And then we have a couple wholesale websites where they sell to customers. 

Elizabeth: Why did you decide to do this? 

Christie: So I had this lightbulb moment. I had left the restaurant industry, so I was working at a two Michelin star restaurant here in San Francisco. Lazy Bear, if you don't know it. It's amazing. 

Elizabeth: Yeah.

Christie: I love that place. But I had just left that avenue and I started working in manufacturing, and I was their R&D point person. So I was the one working with the brands. So I was in stores all the time. So that was that market testing, that research of what are people selling, talking to managers, do they think this could sell? And then the idea is actually - like it originated with a buddy of mine. He's vegan. And he says to me in conversation one day that I haven't had a sour cream and onion potato chip in like 10 years. Like nobody just made a dairy free version. And so I went back to him and I was like, I'll match it for you. I can do this. I used to do it at the plant. I can do it now. So I took the sour cream and onion, matched it to a Lays, but I circled all the ingredients that had dairy, removed all of those. And then I made it less greasy, less calories. And then when I landed it, I was like, man, maybe we could do something here. Like maybe people would buy it. 

Elizabeth: So actually, can you back up?

Christie: Yeah, of course.

Elizabeth: Because I'm a bit ignorant in this and don't really read labels. Like I probably should on the back of these junk food things. So what is in here that is different? Or what is not in here? Like you mentioned dairy. Are there other things that are typically not plant based in chips? 

Christie: Sour cream and onion specifically is going to have a buttermilk powder, maybe a whey protein, a cheese powder. And so I removed like the milk powders, the buttermilk powders, and I replaced it. We had an onion powder base with the vinegar powder. So add that like oniony, that sourness. And then we use a buttermilk flavor that's vegan.

Elizabeth: Oh. Got it!

Christie: Yeah. To give it that like richness. 

Elizabeth: It's very interesting that you came in positioning this as, you know, plant based, and I guess it says super natural. It doesn't come out straight up saying like, this is, for vegans or whatever. You know.

Christie: Yeah.

Elizabeth: because I guess when I think of potato chips, I think, oh, well, they have potatoes in them, so they're already plants. Maybe?

Christie: Yeah, yeah. So I'm from Indiana originally, right. And my dad is like a meat and potatoes guy and he wouldn't touch a vegan product with a 10 foot pole. And so I wanted to make sure that we weren't ostracizing all the people that don't want to eat a vegan diet. We wanted to make sure that if you were vegan, you could see it and you could grab it. But I didn't want it to be too far in your face because I wanted this to be a brand that appealed to everybody. And it didn't write this off for somebody else to enjoy. Yeah. 

Elizabeth: Fair enough. 

Mac: You mentioned earlier that you had great unit economics. Can you tell us about what your unit economics are? 

Christie: Yeah, yeah, absolutely. So right now we have a 45 percent margin, but we have plans in place for next year as we continue to grow to decrease our cost of production. That's our biggest cost of production is the potatoes. So we have suppliers set up and we have metrics of when we get to this scale, we can drop the price. Like our seasoning, we purchase in like a thousand pounds. So when we get to 2000 pounds and 3000 pounds, we see those the cents dropping off.

Mac: The margins grow with scale.

Christie: Exactly. And then also as we continue to get bigger freight, we can start shipping full truckloads instead of less than truckloads. And freight is such a killer. So we can increase that way as well. 

Elizabeth: How much do you charge for this? 

Christie: We do a landed cost of 2.25, and then we sell, depending on the distribution channel, around 3.99 to 4.29. Depends on the markup of the distributor and what whatever the retailer wants to mark it up. 

Elizabeth: This actually is in line with the cost of like regular potato chips. 

Christie: Yeah, exactly. Because we wanted to focus on that. Like we didn't want there to be any reason that a consumer wouldn't buy our product, you know? So we're never going to be the most expensive. But we are never going to be the cheapest. We want to like live right in the center. 

Elizabeth: That's an interesting positioning. 

Christie: Yeah.

Elizabeth: Cause usually with these plant based things they try to be a more premium product.

Christie: Exactly.

Elizabeth: But you're saying you do want to go after like, let's say the Lays customer.

Christie: Exactly. My dream for this brand is that we like create something with better ingredients that was accessible to everybody. And at its core, yes, it is a plant-based product, but it's a potato chip nonetheless. You know, it's something that people recognize, something that people expect to cost between X and Y. You know what I mean? And so we can't go outside of that too far. We're going to negate that customer, this customer that wants to buy something or they're looking at this and then Lays and they don't understand why would Lays be less than ours, you know? 

Ben: What retailers are you in and what's the archetype of the consumer that's buying it off the shelves right now? 

Christie: Yeah. So we're in nationwide independents. So we have like the delis, the coffee shops, the gift shops. We do have a couple of hotels, and then we have Bristol Farms and we're launching with Sprouts in two weeks. But the consumer that we see most predominantly is a female focus. So we see 24 to 35. A lot of times we actually do see like the young mother. Because our chips are the classic style. So they're like super thin and crispy. They're not that like Kettle style that's like too hard to chew for a child. And so we see that be like a big demographic of people that like care about what is in their products. They don't necessarily trust those bigger corporations. They're kind of like getting to know that there's these ingredients that they don't really feel safe with. And that's where our brand comes into play. 

Ben: And what's the team like? 

Christie: So everything is external. Except my two friends, they came on board right at the beginning and they work in the creative space. I've hired an external sales team. I've hired brokers in different revenue channels because there's like the food service. We've just hired a broker for military commissaries, we have a retail. Cause there's all these different revenue channels that this kind of product can go into. 

Ben: So you have a lot of great external resources.

Christie: External, yeah.

Ben: And then out of all the people you mentioned, who's core on payroll full time, if any yet so far?

Christie: Nobody.

Ben: Cool.

Christie: Yeah. Nobody.

Ben: Very lean operation.

Christie: Very lean operation. Yeah. I have - one of my mentors, he's the guy that owns the facility. He did exactly what I want to do. He started a potato chip company and took it to acquisition and all that stuff. And he told me, you know -

Cyan: Which one?

Christie: Zapps. 

Ben: Cool.

Christie: Zapps and Dirtys. 

Cyan: Oh, okay. Yeah.

Christie: So he owns three facilities, but he's a mentor to me. You know, he tells me you can run a $3 million operation with a couple of people. You don't need - for something like this, we can have external teams that operate in all these spheres, all the revenue channels, and then have a really tight internal team that can manage all of that. Instead of sinking money into payroll, we can put the money into the brand, market it, get it out there in the public.

Elizabeth: I love that. So what do you think your burn rate will go up to after this round? I assume this is your first round?

Christie: Yeah. Yeah. Very first. So we are very, very lean. I'm not burning a lot of money at all. So we burn maybe 6 or 7000 a month. I would like to keep it pretty tight. We're working now with a factoring company, and that company does lend on inventory. So that money, we don't have to use -

Elizabeth: Oh yeah.

Mac: Smart.

Christie: Exactly. Right. So we can still fulfill like the Sprouts order before we get funding. We'll get paid for that immediately, 80%. 

Elizabeth: I'm impressed. You were able to land that like so early. 

Christie: Yeah, no, cause you, when you bootstrap the business, you're like, okay, how can I continue to grow, stay lean and not go bankrupt? You know, you gotta be creative in like what you're doing and how you can do it. So we're hoping that that burn rate stays really, really low. So we spend the money in the smart places that we know is going to get a return.

Elizabeth: How much have you raised of the 400k that you're looking for?

Christie: We have raised nothing.

We’ll be right back, after a quick snack.

Elizabeth: How much have you raised of the 400k that you're looking for?

Christie: We have raised nothing. So it's a clean slate. And I've bootstrapped all of it up to this point. 

Elizabeth: Wow. That's impressive. This is at a four post, four pre? Four -

Christie: Post.

Mac: So very clean branding. I love the fact that you have the ingredients like in super size to emphasize, you know, all plant based ingredients. But talk to me a little bit about how do you get this out? Cause like putting something like this in a big box store. Great. But how do you get people to go to this shelf of all the chips and have them hone in on Christie's? 

Christie: So I put a major focus, if not all of the focus on in-store promotions, sampling, demos. So I know that with any new food or beverage brand, we need to get consumers to try it if they're going to buy it. We pay for end caps. We pay for a temporary right price reduction. So we get like a sale tag of two for seven. And then we go in and we have people demoing at that store during high volume times to get that conversion, to share the story of the brand, because we see that people really connect with like a brand that the founder, the person that creates it is like really involved in the product. And so it really, it works really well for us and we get conversion and then we get a lift and it stays there. Yeah. So that's the plan that we have so far. For this Sprouts launch, it is a bigger scale. So we are going to implement some more of those like digital marketing opportunities, like Instacart. We're a certified women owned brand, so we get free ad dollars every month. So we're going to double that, and then we'll pay a certain amount each month based on like the recommendation that they gave us for new brands. I shy away from influencers because they're, they can get expensive. And I want to make sure that like the money, cause I bootstrapped, the money that we're spending is going to get that conversion 100%. 

Cyan: Where do you see yourself in 10 years?

Christie: In 10 years. Okay. In 10 years, I want to recreate all of like the favorite snacks that we all grew up with. Like, I can't tell you how many people have asked me, like, can you make a Flamin’ Hot Cheeto, and make it like, really good, but like, super clean, right? And so, puffs. 

Elizabeth: And do you think you can?

Christie: Yeah. Oh yeah, I can. Yeah. And then I've got - it gets me so excited because we've got puffs, tortilla chips. But then, okay, I have this vision of, you know, like Frito Lay has like their dips in front of the chips. Okay. Yeah. I want to do that as well, but I want to make them like super clean, plant based -

Elizabeth: Yeah, that stuff is really bad for you.

Christie: It's horrible. It's basically just oil and emulsifiers. Right. So I want to make that - like recreate that whole set, but like super clean all natural products. And like recreate everything that we grew up with. And so that's like, when I see in 10 years, like walk into like a Walmart, and see like a big set of like all of the branded Christie stuff and it like pops off the shelf and it's so beautiful. Like in 10 years, I want to create a company that like takes over that portion of the snack aisle. 

Mac: So the healthy, clean version of Lays.

Christie: Yeah. 

Mac: Let's say you get six years in, doing really well and company like Lays says, Hey, we want to buy this. Would that be interesting to you? 

Christie: So the thing that I would think about is who's the company that's going to buy the company? Because like at the cornerstone of this brand is I want it to be like integrity, sustainability focused, something that a buyer is not going to just torpedo everything that we've worked for, you know. And I've heard like the horror stories of like a company acquiring a company and it just falls apart. So It would really depend on who the buyer is. And are they going to take what we've built and make it even better and accessible to even more people and like carry on that mission. That would be what I would be looking for. 

Mac: I love that. 

Elizabeth: Related to margins, I know right now you want to do everything locally. Do you think the margins increase by doing other things, certainly volume helps you, but any offshoring thoughts or do you think that that's just not worth it? 

Christie: So I've had many conversations with people. They've come, you know, we have some like countries in Asia because it's like a non dairy product, they've like explored some interest, and always the hurdle with that is not necessarily like, do we want to do this business, but is the volume in there because of freight and can - freight can get really expensive. And then what's the conversion, you know, currency they're using, what's the conversion and what in their category is typical to their consumers. Right. So we like, until we can get the volume there and the right partner, the right - say there's like a chain account where the volume is going to be there and so we can ship multiple containers where like the freight is spread across all the units, then it will make sense. But it is something fun that we would explore. 

Mac: You are incredible. You know, this industry inside and out from multiple points. I've seen a lot of CPG companies and I think having a small team and all these brokers, super smart. It's allowed you to grow faster than some other CPG brands I've seen. Like this is going to be successful. At what level, I don't know. Like with what I'm struggling with personally is, I've seen a lot of CPG companies, it can be really, really tough for a new brand to break in, but even more so it becomes really tough for a new brand to scale. Like I've seen companies get to a million, two million in revenue, 3.5 and start to plateau And then it seems like there becomes a different game to play. So for those reasons, I'm out. But I feel this little tug, which is always a thing, but - But Rare Breeds is out but I would love to stay in touch. 

Christie: Thank you. 

Elizabeth: I - Hustle Fund does only invest in software, but I'm very impressed with all that you've done here. You know everything backwards and forward. So I would be in for a 10k personal check. 

Christie: I love that.

Ben: I'm in the same bucket as Hustle Fund over here. Heartbreakingly, my fund does not do CPG. So by mandate, I'm unable to invest in the company, which it just breaks my heart. That being said, spiritually and personally, I'm so in. You've got an insanely big vision, and you're resilient in the way you present that vision. You're operationally super excellent. You've really just nailed it with doing it solo right now, like leveraging partners. I love that you have a mentor who's done it before. So you've got the path well charted in front of you. And your curiosity and attention to details and turning over every stone. You know about the process, you know about currency exchange if you're going to sell internationally. Like, you've turned over every stone. I want to invest personally. And also I'm based in LA, and I have a ton of friends, in CPG and who own retail And we do a lot of just like consumer investing together as friends. So I'd like to, as much as you'd let me, help shepherd in a lot of capital to invest alongside me from that world, because there's a lot of really strategic value we can add over there. 

Christie: I would love that. Thank you so much.

Josh: How much will you and your friends invest? 

Ben: Probably like the $50,000 total range for all of us. And then we'll make a lot of introductions to - a lot of the funds that can maybe take the rest. 

Christie: Thank you. 

Cyan: So I don't do CPG, really. So, I would like to take a wait and see approach. This is one of the things where I would like to go back and talk to my husband to see whether or not we are investing in CPG personally. And, I would love to take some to him. 

Christie: Oh, absolutely. 

Cyan: So he can try them.

Christie: Please! And I've brought more. So we've got some over there. 

Cyan: Yeah. So I can't commit to a number right now, but I am intrigued. 

Ben: And if any of our funds did CPG, you'd have all the money right now.

[laughter]

Elizabeth: I think you can raise this pretty easily. We can help you pull it all together. Because I have a bunch of - so, because I cannot personally invest in things that Hustle Fund would invest in, my personal portfolio has ended up being a number of food entrepreneurs, a number of them angel invest so we can probably round up a good chunk of this round. 

Christie: Thank you. I'm so excited.

Mac: There you go. 

Christie: oh wow!

Elizabeth: I want to trade you for the barbecue. 

Christie: You want to try? 

Ben: Leave the chips. 

Christie: Yeah, I was going to say. 

[crosstalk]

Cyan: Don't go anywhere with your chips. 

Elizabeth: That's part of the deal. 

Christie: Yeah. I'm glad you like them. 

Cyan: Yeah 

Cyan: What you could do is make one chip that is vegan, by brand, and then vegans will notice that. And then they'll look at every one and will be like, well, they're all vegan. 

Christie: Yeah. 

Cyan: Vegans figure it out and they, they spread the information amongst each other. You only need one bag, but it's called the vegan chip.

Christie: The vegan chip. That's actually great. 

Elizabeth: That's why I thought like by calling it out, you get better word of mouth in sort of niche groups. 

Christie: 100%, right? 

Elizabeth: My, my intuition, which I have no background in this, is that maybe you might want to increase it a little bit. Still want it to be affordable -

Cyan: Plain is like the benchmark.

Elizabeth: But I think even if I look at, like, today's prices for Lay's, I think this is, like, exactly the price of Lay's ish. 

Christie: Around. Yeah. 

Elizabeth: I feel like this should be like 4.99. 

Christie: At some places they do bump it up to 4.99. We worked with a distributor in New York briefly. They were pricing it at like 5.99 and that just like - that's a little bit too high. We saw like, if it's sitting next to a Lays and it's too far out, then it doesn't do well. 

Elizabeth: So just sort of as an anecdote, I have a small check into Olipop and one of my initial reservations was the price. It's so expensive. Like who's going to pay whatever, 2.50 in the grocery store for a soda and then in the airport it's like $7 for a soda, but people do. It's crazy. And people do in part because it feels premium. 

Christie: For sure. And it's like, Oh, it's better for my health. So I'll pay more. 

Elizabeth: Exactly. Yeah. Better for my health. I'm worth it. I'm going to pay more. 

Christie: Yeah. I like that. 

Elizabeth: I think a lot of people are afraid to bump up the price. I think you should. I actually think it would help you -

Christie: I like that. 

Elizabeth: - to bump it up.

Elizabeth: Even if it's 50 cents. 

Elizabeth: Try it. 

Christie: Like if we go to like a 4.99. 

Elizabeth: Try it. 

Christie: I'm curious. 

Elizabeth: And then see what happens.

Cyan: Thank you. 

Christie: Thank you so much. This was crazy. This was great. 

Mac: Awesome. 

Christie: I was sitting out there with him and I was like, what is my life? Where are we? Where are we going? But in like the best way. Like, okay, one more. One more thing. It's great. Yeah. Thank you so much. 

Ben: Keep going. 

Christie: Thank you. Should I take out the -

Mac: Josh might be -

Cyan: Awesome. We definitely - we want them.

Elizabeth: We will eat them, so. 

Mac: The barbecue is really good. 

Elizabeth: Right before this, I was almost going to eat a bag of the, what is it, like the Maui chip barbecues that's out there. But this is way better. 

Josh: So good. 

Elizabeth: It's less salty. 

Josh: Guys, that was Christie. From Christie's Chips. The Christie. 

Cyan: The Christie. 

Josh: So good!

Josh: What do you think the end state of this business is before it sells? 

Elizabeth: If she continues, it's easily a billion dollar business. Easily. 

Okay, I’ll bite. We’ll be right back after the break.

Elizabeth: If she continues, it's easily a billion dollar business. Easily. 

Josh: Billion dollar chip brand. 

Elizabeth: The thing about food and beverage I've learned in the last few years is people eat so much of it that's how these brands are worth a lot. Like it actually is kind of frightening how many sodas people drink, how many chips people eat, like just people consume a lot of this stuff. Like there's a reason why -

Cyan: Chips are like a go to thing too, like the party food.

Elizabeth: Yeah. So.

Josh: I'm making a serious dent in this bag, y'all.

Elizabeth: I mean, you're contributing to her lifetime value with that one bag in an hour. 

Cyan: Remember it's slightly healthier. 

Josh: Slightly healthier. But I'm slightly allergic to dairy. So that's perfect. 

Cyan: Yeah, there you go.

Ben: I mean the whole like CPG company life cycle basically is like there's a lot of noise. There's a little bit of signal. That signal breaks through. And then it's like, they are between a hundred million and a billion dollar valuation. And then like Kellogg's will buy them or like one of the other like five or four holding companies. And like, that's just the state of CPG. 

Josh: Okay. 

Ben: And I, I, I too think that she can easily break through into that range. 

Elizabeth: The cycles are faster too. 

Ben: Yeah. 

Josh: Oh, interesting. 

Ben: And you have to catch the cycle too, because like the consumer sentiment shifts. So like people - like CPG brands will ride a particular wave. Like right now, the waves are all like no seed oils or like microplastics or like those things like will carry consumer sentiment for like three years. Right. 

Josh: Yeah. 

Ben: And you want to sell one that's like hot and then people stop caring about those things. And that's also why you don't want to pigeonhole into vegan necessarily. Cause you know, who knows how cyclical that is. 

Mac: Yeah. Cyan, what was the most impressive thing for you? 

Cyan: Her breadth of knowledge, the bootstrapping of the business, just her scrappiness. It's so hard to bring a physical product into the world. 

Mac: Yes.

Cyan: And interestingly, she reminds me a little bit of the founder of Smitten Ice Cream, but maybe this is sort of a common founder story. Like, I sold to convenient marts and I was making my own chips and I was putting them in their own bags. And, and there's something to that story that really hit me. 

Josh: I've just never seen someone so passionate about chips. 

Cyan: And it's good. And it’s good!

Mac: Early on in my journey, there was a company in Baltimore that made hash and they were selling it in stores. Like this founder's just like all in hash. 

Josh: Hash? 

Mac: Yes. Like umm shredded potatoes with -

Josh: Oh, that kind of hash. That kind of hash. 

[laughter] 

Josh: We all have that friend, Mac. 

Mac: Like breakfast hash. And they were doing, like, interesting, combinations like crab meat and stuff like that. And um I helped them get some investment and that just took off. But, like, I never met somebody so passionate about breakfast hash. 

Elizabeth: You showed me that one and I missed out. 

Mac: [laughs] 

Elizabeth: But actually I think, of all the sort of non VC categories, whether it's hardware, ecommerce or all these other things, I think food is actually one of the most lucrative. Just people eat and drink so much stuff. 

Josh: Yeah. 

Elizabeth: Like, I don't know whether that's a good or bad thing.

Josh: And they love their brands. They love their chips. 

Elizabeth: And so if - once you kind of get to actually where her stage is, you've got the formula, people love it and you have some sales, then it actually doesn't take that much money. 

Josh: So our fund mandate does not say that we have to only invest in software. We can invest in anything if we think it's interesting, because it's funded by listeners and they get to hear exactly how we make investments and decide whether they want to be involved. So it's a small fund. It's like 5 million under management in fund one. Is this a good investment for our fund? 

Mac: You have three other people here telling you yes. 

Cyan: What is your LP base? Like they're, they're fans? 

Josh: Entirely listeners. 

Cyan: Oh, then yes. 

Elizabeth: Yeah.

Cyan: Absolutely. This is a - this is a safe bet for them. 

Josh: Yeah. 

Cyan: Yeah. Yeah. Safer. 

Josh: But still has that billion dollar outcome potential.

Cyan: Potential. Exactly.

Elizabeth: Yeah. 

Cyan: If I were you, I would take the rest.

Josh: The rest of her round?

Elizabeth: Yeah. Yeah. This is a low valuation for all that she's accomplished. 

Mac: Yeah, super low.

Elizabeth: And the product's already there. She already has relationships in selling. She has great people around her. She hasn't spent any money really. And this thing could have a billion dollar outcome. 

Josh: Yeah. Man, this is a savory investment. 

[fake laughter]

Josh: That was the listeners all laughing. Or cringing.

Cyan: Or cringing. 

Josh: You guys want to go eat lunch? Or are you full? 

Mac: Yes.

Cyan: Yeah. We'll definitely go eat lunch.

Why do people keep telling us to bet the whole fund on one deal? Come on now, they taught us not to do that on day one of venture capital class. They also didn’t teach us to write personal checks into food startups. That hasn’t stopped Elizabeth.

But with this deal, something else might…

Elizabeth: Sorry, what is your structure? You have an LLC and a -

Christie: I do have an LLC, yes

Elizabeth: Hmm… I would actually convert the LLC into a C-corp. Especially institutional investors, like they will not invest in LLCs. They’ll only invest in C-corps.

Will Christie’s convert to a c-corp and secure the bag? Tune in to our season finale on December 11th to find out. We’re hosting a virtual watch party that night at 7pm eastern. More details to come. But you can register right now at pitch.show/party

At The Pitch Fund, we’re bullish on any industry that can make us money. Including, but not limited to, chips. So if you’re bullish on humans eating, you can invest with us at thepitch.fund. Fund I closes to the general public on December 15th.

Next week on The Pitch...

Devina: We began with trying to solve the problem of hospital falls from a risk assessment standpoint.

Mac: Look, y'all, I know we, we just in here, it's only 11 minutes, but at this point in the proceedings, I want to tell you, this is dope.

Ben: What's your ultimate ambition with the company?

Devina: Five years from now I think we are probably going to be bought out. We’re being realistic, we realize there are much larger players -

Mac: Don’t be realistic with investors, that doesn’t help you 

Elizabeth: Is it okay if I can be an asshole for a moment?

That’s next week! Subscribe to The Pitch right now, and turn on notifications so you don’t miss it.

While we’re talking food, I need a minute to thank one of our listeners. Bryan Tublin. He generously offered to cater our season 12 recording event. And the food was delicious. If you find yourself in the bay area you should definitely check out his restaurant Kitava.

–

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, Enoch Kim, and Jackie Papanier. With deal sourcing by Peter Liu and John Alvarez.

Thanks to friend of the show Dimple Kochikar for introducing us to Christie.

Music in this episode is by The Muse Maker, Breakmaster Cylinder, Jules Blueprints, Onders, Imagined Nostalgia, Freedust and FYRSTYX

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