#147 Partytrick

I’m Josh Muccio

And I’m Lisa Muccio and This is The Pitch, where startup founders raise millions and listeners can invest. The pitch for Partytrick is coming up right after this.

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Josh: Party trick [clap]

Josh: Before starting The Pitch with me, Lisa was an event planner. 

Lisa: So I know the industry, and it’s a big one. $322 billion dollars.

Josh: But VCs haven’t been able to capitalize on it yet. At least not the high-touch, high dollar event planning part.

Lisa: You can’t just throw a tech bro at event planning. You need an industry insider who gets it. Enter, Virginia Frischkorn.

Josh: She’s taken her career as one of the top event planners in the country and turned it into an end-to-end software platform for planning events. 

Both: Let’s get this party started!

Today, Virginia is pitching Cyan Banister

Cyan: I'm Cyan.

Virginia: Virginia.

Cyan: Nice to meet you.

Mac Conwell

Mac: I'm Mac. 

Virginia: Virginia. 

Mac: Hi, Virginia. 

Ben Taft

Ben: Virginia, I'm Ben. 

And Elizabeth Yin

Elizabeth: Elizabeth. Nice to meet you, Virginia. 

Virginia: Well, hi, I'm Virginia Frischkorn. I'm the founder and CEO of Party Trick. We are the operating system powering the experience economy. So the last 16 years of my career, I've built four different businesses in the event space, done over $100 million worth of events. And when COVID happened, events came to a screeching halt. And at that point, I had three businesses, a full staff, two very young children, I'm a single mom. And then I went through one of the most disruptive life events you can imagine. I could sit there and feel sorry for myself. Or I could look at this as an opportunity to take all the tools, the systems, the workflows that had scaled all my businesses in the past and bring them to the masses. So fast forward, fall of 2022, we launched Party Trick as a consumer facing application. It's like having a virtual party planner in your pocket. Tells you what to do, when to do it. You can host any party, anytime, anywhere. A few months into it, we had our subscribers reach out and ask us for work content. They love their parties at home. No one really likes planning a work event. Corporate spend on events is $95 billion a year. It's a $322 billion industry. And we've been talking to customers in a wide variety of segments. So we're now building this new platform that scales repeatable events. But above and beyond that, we are capturing the data and metrics to help them calculate ROI on these events. We are raising $1.3 million dollars to disrupt the events industry by powering experiences with PartyTrick. 

Cyan: So question, how do you track ROI on events? 

Virginia: Everyone has a different definition. 

Cyan: Yeah, that's what I was gonna say, it's pretty broad.

Virginia: Right, exactly. So our first segment is the beverage industry. And depending on who our decision maker is, whether it's the sales team, the marketing team, they're all tracking it differently. Honestly, some people just want to know at a trade show what the breakdown is of, is it consumer? Is it trade? Is it media? Really, everyone has a different metric. So we've got about the 10 core for the beverage industry as well as CPG, specifically apparel and beauty. And that's what we're building in this 1st uh version. 

Mac: So you mentioned you launched in 2022. How much revenue have you done to date and how do you charge? 

Virginia: So the product in market right now is our consumer platform. It's $89 a year, $9 a month. With this evolution, the model changes a lot to B2B SaaS, and annual contract value of roughly 40,000, scaling up to roughly 100,000 based on the size of the business. 

Elizabeth: I think I'm still kind of unclear on what this exactly is. I don't know if you have a demo or -

Cyan: Yeah, I wish there was a visual demo or maybe you can walk us through. Yeah. 

Virginia: Yeah. I'll do a brief walkthrough. So just high level education on the events industry - events have three really core components: plan, design, execute. Party Trick delivers for our corporate clients basically what we call blueprints. So a blueprint covers all those - what you're doing and when you're doing it, and it goes on to the platform end to end. So from what it's going to look like, what you either need to buy, what you need to DIY. And then the execution is this timeline. So think of it as like a content loaded project management tool. But we also have the service providers as partners. So that if you need to find a bartender, if you need to have your beverage delivered, if you're looking for a venue, we can actually plug and play with some of the quote unquote competitors in the space so you can have a one stop shop. Does that make some sense?

Cyan: Yeah, that makes a lot of sense. 

Virginia: Okay. 

Ben: And I'm only at a partial understanding of the blueprint. Would you mind getting me to the full understanding of exactly what the blueprint piece of the present model is? 

Virginia: Yeah, of course. So the blueprint is essentially what that plan is. It's like going to a party planner and saying, please tell me every single thing I need to know about this event. What should it look like? What am I buying? How do I build the balloon wall? What you're serving, what, like how you're actually going to design the space, what music you might play, what swag you might have, how much swag you might need. So it really covers every single thing of like, Hey, you are doing a brand activation. Let me design it for you. And then they put it on top of our project management base.

Ben: And are you presenting a menu of options for the customer or do you have a team internally that's literally curating those things?

Virginia: We have a team that's curating them. Now question is, how is that scalable? Right. So there are roughly 50 plus event types in our first few segments. 85% of those events are the exact same. You just go in and you tweak that last 15%. We have a team, they're all contractors, and we can go and basically pay anywhere between a hundred and $300 to have a blueprint created within a day. and It's pennies of what these brands would be paying an agency. I used to work with Ferrari. I worked with a lot of the LVMH brands. They would pay us like 200 grand to do an activation So it allows them to actually replicate it. And then if the staff changes again, a lot of times when there's staff turnover in the event industry, it's a pen and paper industry. You lose everything. Now, these blueprints they have and they can iterate on them, but they know exactly what happened and it's not lost when you lose a team member. 

Cyan: What about insurance and all that stuff? Cause obviously like if you serve alcohol, there's like all these weird things and -

Virginia: Technically the host would be the person hosting the event, not us. So we - 

Cyan: I mean like, like that tells them to go get insurance. 

Virginia: Yeah, there are reminders for all those fun things. Yep.

Cyan: Okay. 

Virginia: Imagine that Whole Foods is our client, right? You go into Whole Foods right now and you scan a QR code and you can go to their catering menu. Well, what if you could scan that QR code and it's, here's your Thanksgiving dinner, traditional, Friendsgiving, vegan, they can actually guide your shopping experience. They can tell you exactly how to have this phenomenal experience. One, it's great for them. As a consumer, it tells you exactly when to, like, put your turkey in, when to do the cream or orange relish, etc. Very smooth. You're going to go back there over and over and over again. And that's a great consumer experience for them. 

Elizabeth: Mm hmm. I think it might be good to disclose now that you have described this, that I think this is quite similar to a portfolio company of mine called Afterwork. 

Virginia: Mm hmm. 

Elizabeth: So I think I'm going to have to sit out. Thank you. 

Ben: So I know you already touched on it briefly in terms of pricing and business model, but I want to revisit the business model conversation. Could you walk me through it once more? And is it just subscription? You mentioned, you know, you're referring to maybe insurance or is there affiliate when you're helping with catering booking or talk us through that?

Virginia: Yeah, great question. So we have a core annual subscription to two year subscription. We then charge a seat based fee based on how many admins they need. And then we charge per blueprint. They can buy them in packs. They can buy them individually. Blueprints can be used as many times as they want. So again, it's not just the framework. Every event is designed with a CTA. Without that CTA, you can't capture the ROI. And so we will load it for them. 

Ben: And remind me the price for the annual subscription. 

Virginia: Yep, definitely. So the way we're structuring it, small, midsize, large business. So basically zero to 10 employees, because a lot of people don't actually have event staff. So zero to 10 would be the size of a company that would be small, up to $10 million in revenue. That's roughly a $15,000 a year annual fee. Blueprints range between 3000 and 6,000. Midsize businesses jumps up. It's between 25 and 35 annually. And then those are in the 5 to 8,000 per blueprint. And then larger companies would jump into that 45,000 to 65,000 annual. And then their blueprints are 8 to 10,000. 

Mac: You said you're raising 1.3 million. What's the valuation and how much of that have you raised to date?

Virginia: So we are raising on a safe. It's a 9 million post cap valuation, 20 percent discount. We're at 850,000. 

Ben: So you mentioned you're pre launch, but we just talked -

Mac: Pre launch on the B2B product. The B2C product -

[crosstalk]

Ben: Totally understood. But then we talked about the B2B pricing.

Virginia: Yeah. 

Ben: What validation do you have that these customers will be willing to pay those amounts of money? 

The Pitch for Partytrick will be back after this.

Ben: What validation do you have that these customers will be willing to pay those amounts of money? 

Virginia: So, we have 20 brands in our pilot program right now. We have over 80 partners on our consumer platform that we've been talking to about this. And we actually have a $47 million pipeline for year one, And that's comprised of primarily beverage industry, apparel, as well as beauty. I've been in the industry for 16 years. They're the brands I've been working with. So I know, and I've been talking with them pretty much non stop. It's a fraction of the price they would, again, pay an agency. Average event planner in America is $76,000. So from a pricing perspective, we are way less.

Ben: And you mentioned 47 million in pipeline. How did you come to that number? Are there LOIs? Do you know like what each customer is willing to pay specifically? Help us break down that 47 million.

Virginia: Yeah, definitely. So again, it's just about a thousand brands that are in our pipeline that have been active, and I have been talking nonstop with them. So, long story short, we have not issued LOIs. As we transition from a consumer platform into this enterprise platform. Reputation is everything. I've been in a reputation based referral based business my entire career. If we botch our first few, it's why wouldn't we just wait one or two months? I would rather wait a little bit longer, make sure we hit the nail on the head and go out strong. 

Ben: Amazing. 

Mac: This is really interesting. So, I love founders who are building in a space that they have deep knowledge in, who aren't the technologists, but who are the true operators and understand it. The $47 million pipeline, I believe that, because that's your network. These are the people you've been working with for forever. But I do have a question. You had three businesses. You did over $100 million in events. COVID is over. The world's opened up. There are a lot of people who could use your services where you can make a bunch of money right off the bat, starting another agency, or doing what you were doing before. Why do this? 

Virginia: I'm almost 40, turn 40 this year. I have two young kids, single mom, right? And I've shut down a company that was one of the top 50 event planning companies in the world, Why? So what happened during COVID, my dad died - not COVID related - went to bed, didn't wake up. He was my everything. And he was an entrepreneur. He'd started the White Peter chapter where he grew up. My brother and my sister were all entrepreneurs. He used to joke, though, and he goes, you guys have such cute little lifestyle businesses. And I took great offense. But in my mind, I'm up for a challenge. Always. So I was getting bored, then this happened. My dad was the most amazing host. If everyone could host the way that he could, it could be a happier place. We would all feel a little more connected and have this community. We can help that. We can bring it to everyone. 

Cyan: Well, I think this is amazing. So I would love for my firm, Long Journey Ventures, to take a look at this. And if we do and it goes through diligence and everything, I would love to take the rest of the round.

Virginia: Amazing. 

Cyan: I'm a visual person, too, so like I would want to get in and look at how everything is built.

Virginia: Yes. 

Ben: I'm in the same boat, and if Cyan would have us and our diligence checks out, then we'd love to sneak in a quarter million into that same round. 

Virginia: Amazing. 

Josh: Well, crap. Can we put in a hundred. 

Go Josh! Get that allocation for The Pitch Fund! 

We’ll be right back.

Josh: Well, crap. Can we put in a hundred? Hopefully there's room for us to all work together. 

Cyan: Yeah. And if there's not, then I'm happy to scale back and do personal, because one of the things I can do is track this for later rounds. 

Virginia: Yeah.

Cyan: Because we do concentration rounds later on.

Virginia: Yeah. 

Cyan: Because you would want more people at the table helping you right now. So it just makes a lot more sense to have all of us. 

Mac: Generally, I'm not excited with the event space. It can be a very hard space. But I value your experience and your network. I was at a no. I want to learn more. I will say I'm not excited about the company as much as I am about you. Right. So I will give that caveat. But I want to learn a lot more. 

Virginia: Amazing

Cyan: Thank you so much 

[applause]

Cyan: Great pitch. 

Mac: Yes.

[applause from outside]

Cyan: Oh, that part's my favorite part. 

Josh: The product is so cool. 

Mac: I bet.

Josh: I can't wait for you guys to see it.

Cyan: It sounds cool. It's one of these things where like I'm trying to visualize it. It's a lot. 

Josh: Yeah. 

Cyan: I mean, she does need to get down the one sentence elevator pitch. But there's a lot of insider knowledge and there's a moat here from her experiences, as well as the relationships that she may or may not have. We have to do diligence. But, for me, it comes down to UI and ability to actually design this thing. And so I just want to get in and play with the consumer product and figure it out. But this seems like a no brainer if - if it is what we think it is. 

Ben: Yeah. For me, I'm, I'm really just want to diligence the traction. I mean, if she's got customers willing to pay her between 15 and 65k a year annually as a baseline, and then tack on the per blueprint, she's got a thousand brands capped. I mean, if that's at all real to any degree. We could see her go into 10 to a hundred million in ARR in, you know, a pretty finite amount of time. And then the other axis I want to diligence, which might cannibalize this, would be like AI and does that - will AI really drive the cost of event planning down to zero? And does she lose her pricing power over time if that happens. 

Cyan: Or can she turn her thing into an AI – build an LLM based off of what she knows.

Ben: Certainly. Certainly. 

Josh: Party AI.

Cyan: Party AI.

Josh: All right. That's great. Let's turn it around. Squeeze in one more pitch

Cyan: That was a good party trick.

Ben: That was a good party trick. That was awesome!

Josh: I can see that I’ve begun to rub off on the VCs. Virginia walked out of the room with commitments from two investors. Cyan was interested in investing personally OR leading the round out of her fund, and Ben wanted to invest $250k.

Lisa: And we’ll take 100k too.

Josh: After the show… the diligence gauntlet begins!!!

Cyan: Thank you for walking me through that demo. It's very clear about your expertise and your past experience as an event coordinator and what you've done just lends itself so nicely to this product.

Ben: it sounds like by the end of the year, you will hopefully close a few of the bigger fish, if not a hundred plus of the smaller contracts. 

Virginia: We like to shoot for the stars. The goal is a little bit more than that.

Ben: How are you bankrolling your core team plus contractors right now, pre big fundraise? 

Virginia: Bootstrapped primarily. I've personally done about a million and a half into it.

Cyan: Okay, And what is left?

Virginia: So roughly, if Josh and Lisa take 100, I would say 400 or so is kind of available.

Cyan: Okay 

Lisa: Is there room in the round for everyone?

Josh: Party round!

Lisa: Speaking of parties, join our season finale watch party at 7pm on December 11th. 

Josh: We’ll tie up all the loose ends, and the founders from Season 12 will be there, answering your questions in the chat. You can register right now at pitch.show/party 

Lisa: No offer to invest in Partytrick is being made to the listening audience on today’s show, but LPs in The Pitch Fund do have access. You can learn more and invest in our debut fund at thepitch.fund. Fund I closes to the general public on December 15th.

Josh: Next week on The Pitch … 

Julia: We are the AI platform that is democratizing college admissions. 

Jesse: So you're doing it in a way that is simpler, easier to do, bite sized

Charles: How do the existing guidance counselors react? 

Julia: Yeah, we've done a lot of customer discovery with counselors. We consider them our enablers.

Mac: Currently you say you have 2 percent of your users transitioning to paid. That’s not enough

Julia: I’d say it’s a starting place

Elizabeth: I guess I just go back and forth between like, do you include more people in the existing system? Or do you try to take down the system?

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

Lisa: Applications are open for season 13 of The Pitch. We’re taping January 14th-16th in Miami, FL and it’s gonna be a party. 

Josh: And she’s planning it! 

Lisa: VCs and LPs will fly in from all over to attend in person. Founders can learn more at pitch.show/apply

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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 Luke Barkley Young at Outlines (from Season 10) for sharing this deal.

Music in this episode is by TK

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