Founder Fundraising Journey: Jesse Konig, CEO & Co-Founder of Jesse & Ben's

In this episode of the Startup CPG Podcast, host Hannah Dittman sits down with Jesse Konig, co-founder and CEO of Jesse & Ben's, to explore what it really takes to disrupt a legacy category, raise capital in CPG, and build a fast-growing brand from the ground up. The conversation dives deep into the reality of fundraising as a first-time CPG founder, the mechanics of running a competitive investment process, and why great velocity data and fanatical customers are worth more than any polished pitch deck.

Jesse shares his unconventional path from running a food truck in Washington D.C. (serving gourmet hot dogs and hand-cut fries) to opening a burger restaurant—on a 10-year lease—right as COVID hit, to making the bold pivot into frozen CPG with Jesse & Ben's. Built on a simple but powerful idea—bringing frozen french fries back to their original glory with better-for-you oils (beef tallow and avocado oil), clean sourcing, and zero fillers—Jesse & Ben's has quickly become a true food industry darling, landing nationwide distribution at Whole Foods and Sprouts in their first full calendar year, with Target, Kroger, and Costco on the horizon.

Throughout the episode, Jesse pulls back the curtain on his fundraising journey from a friends-and-family SAFE round (20+ investors, hundreds of thousands to ~$1M) to a more institutional process driven by real velocity data, social proof, and competitive FOMO. He reveals how his valuation cap changed three times in one week once investors realized others were circling, why fundraising is a full-time job and a momentum game, and how he and co-founder Ben divided and conquered—Jesse running the investor process while Ben stood up a 6,000 sq ft production facility from scratch in 2025.

Jesse also shares what he looked for in investment partners (back-channel references, not just curated intros), how to size a fundraising round (raise more than you think you need), and why the only way to lose in CPG is to run out of money.

Whether you're raising your first friends-and-family round, preparing for an institutional process, or trying to figure out how much capital you actually need, this conversation is packed with hard-won, practical wisdom from a founder who's lived every stage of it.

Listen in as they discuss:

• Jesse's background: D.C. food truck → burger restaurant → COVID pivot → frozen CPG
• The origin of Jesse & Ben's: clean-sourced frozen french fries made with beef tallow and avocado oil
• "Turning junk food into joy food": the brand mission and why focus wins
• Vertically integrating production: opening a 6,000 sq ft frozen manufacturing facility in 2025
• The first fundraise: friends, angels, and small VCs via SAFE notes on a rolling basis
• Why fundraising is a full-time job and a momentum game—not a nights-and-weekends project
• Running a competitive process: how FOMO moved their valuation cap three times in one week
• What investors actually leaned into: velocity data, fanatical customers, social proof
• How to select investors: back-channel references, horror stories, and who you want to call in a crisis
• Sizing your round: raise more than you think you need and always build in a runway buffer
• The only way you lose in CPG: running out of money
• Advice for founders: think with the end in mind, divide and conquer, run a process
  
  

Episode Links:

Jesse Konig — Co-Founder & CEO, Jesse & Ben's

Personal LinkedIn: https://www.linkedin.com/in/jessekonig/
Website: https://www.jesseandbens.com/ 

LinkedIn: https://www.linkedin.com/company/jesse-and-bens/

Instagram: https://www.instagram.com/jesseandbens 

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• Questions or comments about the episode? Email Daniel at [e-mail]
• Episode music by Super Fantastics
  
  

Creators and Guests

Host

Hannah Dittman

Operations and Finance Correspondent at Startup CPG

What is The Startup CPG Podcast?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Jesse Konig
Fundraising as a skill set is really weird. It's a total side quest. Like maybe it correlates to being good at sales or selling a retailer or something like that, but it has nothing to do with your business being a good business or a bad business. Some people are just generally better fundraisers or worse. It's nothing against you if it's not in your skill set. It is something you can learn for sure, but it has nothing to do with whether it's a good business or bad business to invest. It's just sort of having the time, the space, being willing to kind of like network and not be afraid to reach out to people and ask for introductions and ask for answers on things. So it's built more of a confidence gain than anything else.

00:44
Hannah Dittman
Hey everyone, I'm Hannah Dipman, operations and Finance host of the Startup CPG podcast and today I'm excited to be joined by Jesse Koenig, co founder and CEO of Jessie and Benzion. Jesse and Ben's has quickly become a true food industry darling by doing something deceptively simple. Bringing frozen French fries back to their original glory. The brand is built on exceptional product sourcing, better for you oils, and absolutely none of the fillers or shortcuts that dominate the frozen aisle today. It's a fresh take on an old school cult favorite category that desperately needed a rethink. Jesse brings over a decade of experience in the food industry and together with his co founder Ben, made the bold pivot into frozen foods.

01:25
Hannah Dittman
What followed was a masterclass in resilience, navigating supply chain chaos, fundraising, entering retail and massive industry disruption while still managing to build momentum in a completely new space. That vision paid off. Jesse and Benz has cultivated a passionate fan base, attracted a lineup of excited investors, successfully completed multiple fundraising rounds and built a fast growing, high performing company that's redefining what better frozen food can look like. Jesse himself has been an incredible operator and a true fundraising powerhouse and he has so many hard won lessons to share. In this episode we dig into what it takes to disrupt a category, how to think about timing and pivots, the reality of raising capital and CPG and what Jesse learned about finding and converting investors.

02:09
Hannah Dittman
And if you haven't tried Jesse and Ben's yet, consider this your signature Grab an air fryer, open a bag and enjoy this episode alongside one of my personal favorite snacks. Enjoy. Hey everybody, welcome back to the Startup CPG Podcast. This is Hannah and today I'm here for another Founder Fundraising Journey episode with Jesse Koenig, co founder and CEO of Jessie and Benz. Jesse, welcome to the show.

02:36
Jesse Konig
Thanks for having me.

02:38
Hannah Dittman
We're so thrilled for you to be here today. I think it's going to be an exciting episode with a ton of learnings from a well respected, high growth, exciting food and bev brand like yours. So I'd love to dive in with your background and the path and journey that led you to Jesse and Ben's.

02:55
Jesse Konig
Yeah, it's definitely a good unique journey. I think with one fun fact is that we while the business is only maybe 2 years old being in market and on retail shelves. Ben and I have actually been in the food business for like 12 years. So we got our start out of college. We launched a food truck business in Washington D.C. our original food truck we did gourmet hot dogs and cut fries. So fries have been on the original menu since we started. I made a lot of french fries in our day, built a what was exciting and well known and very small community of the in Washington D.C. food truck brand, farmers markets and kind of hustle our way to eventually getting into our first restaurant and went to go open our first restaurant in May 2020. So were building it in March.

03:36
Jesse Konig
Great timing. With the 10 year lease with a two food trucks and everything went to zero and your food truck, the restaurant wasn't going to launch. So we definitely had an interesting startup experience of finally feeling like we'd figured it out and we're launching this burger restaurant that we pivoted into and then everything sort of blew up in our faces. We were starting over from scratch. But a lot of that experience informed us really trying to think through what we could do and what we want to spend our time on and ultimately led us to making delicious frozen french fries in the grocery store and starting Jesse and Ben. So happy to dive into more of that story.

04:09
Jesse Konig
But the origin is Ben and I in a food truck cleaning lots of dryers and mopping the floor and doing all the fun stuff many years and now we're trying to take all those learnings and roll it into a fast moving CPG brand. It's been a lot of fun.

04:21
Hannah Dittman
Yeah, way to find the beauty and darkness. I feel like Covid was a make or break and a pivot for so many people and I can't imagine having dedicated over a decade to the in person food scene and then having to just totally change plans when you think you're just getting to the top of a mountain that you've been climbing for that long. So a huge testament to your resilience, adaptability, and tenacity. As founders, I'd love to dive into the Jesse and Ben's overview, understand your company a little bit more. For those unfortunate souls who haven't tried it personally themselves yet, shout out, go get some. But yeah, we'd love to hear about your company and what your vision and mission is with the brand and how it all came to be where it's at today.

05:08
Jesse Konig
Yeah. To give you, I guess, a quick snapshot of where we're on today is that we're about two years into coming up with the idea and kind of launching into market. We set our first full calendar year in business last year in 2025, which is really exciting. We are nationwide at Whole Foods and Sprouts or kind of been in the natural channel for all the CPG folks and what that means and getting ready to expand and some amazing national retailers this year like Target and Kroger and Costco, hopefully. And lots of other fun things happening. So been a whirlwind in terms of the journey and kind of how we got started in the Mission.

05:42
Jesse Konig
We really were thinking about how to solve a problem where we realized that frozen french fries were kind of the same things we always grown up with as kids, like same brands. When you walk in the store in the 90s with your parents lot of red bags, kind of thought of it as like freezer fries. Like they weren't the same thing as a french fry at the drive through, sort of a different thing. And we've been making french fries now for seven or eight years. We felt like we had a point of view of what a real house cut restaurant quality fry tasted like. And once we started messing around with frozen french fries in the restaurant world and started walking the grocery store aisles, we kind of just realized like, huh, there might be something here.

06:17
Jesse Konig
And then as were getting Jesse and Ben's off the ground, we really started getting deep in the weeds of formulation and commercializing and figuring out how we'd build the perfect french fries we made at home. And we'd always been really big on the sourcing component for our restaurant. In our very first food truck, we're sourcing from local bakeries and making stuff from scratch and even sourcing grass fed grass finished beef hot dogs in 2014, which weren't and had to convince a random meat pack and place custom thing for us which made no sense for the business. But were learning about grass fedish beef and local sourcing and regenerative agriculture. So when were getting into the french fry world or really pulling back the curtain and learning about it. You know, there's only three ingredients on the french fries, potatoes, oil and salt.

06:56
Jesse Konig
So we always thought of french fries. And I started doing our homework on sourcing and supply chains and realized the original sort of french fry as it started in Belgium, even though we call them french fries, they can be originated in Belgium where they speak French. And that original recipe is still today it's just potatoes, beef tallow and sea salt. We learned about the original McDonald's fries that were made with beef tallow. And we started seeing some of the different grumblings online of sort of like this post paleo movement of people thinking about ultra processed foods and talking about vegetable oils and seed oils and why isn't there something cleaner and better. And they're starting to see this emergence in other parts of the grocery store.

07:32
Jesse Konig
So we sort of married this idea of taking something that people know and love and want to have this really fun experience with putting people behind it and making it a little bit more trustworthy, Creating what we felt like was genuinely a restaurant quality fry and then really thinking through the provenance of the ingredients and celebrating the best possible ingredients. Ended up launching our fries with one kind of skew with beef tallow that we Talked about and two of our SKUs were avocado oil, which were doing really well on the potato chip and other parts of the grocery store. And were learning a lot about it and thought it tasted great. So that's kind of what got us to where we are today and the launch story. And really our mission is turning junk food into joy food.

08:09
Jesse Konig
That's what we get excited about right now. It's definitely very focused. And in the friend dry world, I mean they talk about those kinds of lessons learned from many others and have learned the hard way in our restaurant life too is like focus is the name of the game. So we want to be laser focused on french fries and frozen potatoes, be the very best and build a brand there. But we definitely have big ambitions on how can you take these nostalgic, all American delicious things a lot of us want to eat.

08:34
Jesse Konig
And then I are both young parents at this point with kids under 2 and thinking about what kind of foods we would love to enjoy with them, but don't only align with how we think about the ingredient profiles we want to feed to our families as they're just starting up and eating foods that we're feeding them. So I think there's a lot of opportunity outside of fries, but really laser focused on Trying to win french fries and see where it goes from there.

08:54
Hannah Dittman
Such a compelling company, great vision for a product, makes so much sense and clearly your guys passion just comes through and high level of education around the space and the scene. I am a potato junkie and I love french fries. So huge fan of what you guys are building and then the way you're thinking about it and getting the bad oils out and just kind of going back to basics and first principles on what really matters in a core staple, comfort food that brings joy, like you said, to so many people's lives in a better way. So huge fan. I'd love to kind of pivot into understanding a little bit about how you got to this point from a fundraising perspective. You know, you're two years in market, obviously you've got super impressive retail rollout under your belt already with more on the horizon.

09:41
Hannah Dittman
I'm sure that was very capital intensive to get all of that stocked and to get that all spun up. What's the fundraising journey been like so far? And especially kind of going back to the very early days when you guys were starting out. How did you get the initial funding going from kind of concept to day one and what's been the path like since then?

10:01
Jesse Konig
Yeah, at a high level. Happy to speak on it. We try to not talk specific numbers on too much on the fundraising side of the business, but can definitely share some nuggets that'll be helpful to people that are maybe in similar shoes and thinking about their business. But for us, we knew coming into it was going to be expensive. Our hope was to get out and not make too many mistakes and fall in our face and waste money and. But inevitably we know that one of the things you're trying to do is support a national business, which is trucks on the road and things all over the country. And there's a lot of different ways you can sort of just death by a million paper cuts.

10:32
Jesse Konig
So we wanted to make sure we launched the business that we had enough cash to not just get the packaging made and do that first round of packaging and get the product made. We wanted to really figure out how we could support this business to a point where there was sort of like proof of concept that this thing is going to work in the market. We're ready to take the next step. So we ended up raising the instrument we use, which founders, if they're not aware of, should learn about. It's really easy to learn about is we use a safe note. So for folks who don't know it's a simple agreement for future equity. It's kind of like a convertible note where those would have interest.

11:04
Jesse Konig
It's more like a debt instrument safe, sort of just an agreement to make it super simple for young founders when they started more in tech. And there's a whole backstory I'm sure people can read about, but it's a simple way that you have a uniform agreement with very simple terms, and all you're really negotiating around is just like the cap, which is effectively like a valuation of your company that people are going to get by supporting you early and taking a bet on you. So we learned about that. We ended up using safes for not only this funding round, the next one that we'll talk about in a bit here too, but raise some money for just friends and family. For us, it wasn't friends and family, like an uncle who's a dentist or something like that.

11:40
Jesse Konig
I'm not knocking that by any means, but because we've been in the food industry for about six, seven, eight years at this point, we'd made a lot of connections and new people and were able to reach out and had some credibility to our backstory being in the rest of the world of having built a business. So we kind of got a lot of these friendly angels. Some folks who have lots of investing experience, some people who just reached out to us and DM'd us on social media, asking if they can invest a couple of small venture funds. Tom ended up kind of coming in, helping us wrap up the end of the round with relatively small checks for like an institutional investment. So ended up being about 20, 22 different people. You know, good advice is it's a numbers game.

12:18
Jesse Konig
Certainly you've got to talk to a lot of people and get a lot of no's, but if you use every conversation as a way to learn something and get some feedback and maybe get introduced, some other folks who could be a better fit for the opportunity and just keep hustling as a way to make it happen. I will say our first fundraise definitely the hardest we ever did, mostly because so much just sort of like a pitch deck and a story and a dream, which so many founders are in that seat at some point. You need the cash to get the story and you need the story to get the cash. So you're hoping for the best with a case study and some information, but it's really limited. And we ended up doing our safe fundraise on a bit of a rolling basis.

12:54
Jesse Konig
We sort of got the first half in the door enough to get the packaging and the branding and get start pitching retailers getting that going. And as were getting closer to our launch, were to fill in sort of the back part of our round. But that fundraising round, you could think of it as like, you know, hundreds of thousands, maybe a million dollars. It wasn't tons of money, but it wasn't a hundred thousand dollars either. That basically got us to the point of proving out in our local market, getting into 400 grocery stores, pitching Whole Foods and Sprouts to hopefully go nationally with one of them. And we got a yes from both authentico national in 2025 at the same time.

13:29
Jesse Konig
So that's what prompt us to say like, oh, I think we are going to need a little bit more cash to support these launches. Because even if we stay super lean and scrappy and do everything we can to save every penny, just getting the inventory and working capital together, let alone finding a facility big enough for us to actually support the processing of our product and making ourselves. Because one of the beautiful things about going into an industry like french fries and doing things a unique way is there's not a lot of people who can make your product which can be amazing later on, have a bit of a on what you're doing.

14:00
Jesse Konig
But it's not great when you're trying to figure out how you're going to roll out into a thousand grocery stores all over the country and you know, you can't support it at your current manufacturing facility. So we ended up going out to raise money for funding a production facility and then also having the cash we need to sort of support the team build and marketing and just the normal kind of day to day cash needs to get the business off the ground. And this was more of a institutional, you know, quote unquote round of talking to more of the actual investors out in the space who are very active, smart consumer investors. I'm sure we can dive more into that. But that was sort of that first leg of the journey what got us into going hopefully nationally.

14:36
Hannah Dittman
Wow. So you guys are attempting to vertically integrate your production then? Did I understand that correctly?

14:42
Jesse Konig
Yeah, we did that. So I was. In 2025, we opened a 6,000 square foot facility. We were very lucky. We had a friend who had a frozen food CPG company and she was moving into a new space and had this other space that she was trying to lease out. So were able to go in the same way. We'd open a restaurant. That was the term in the restaurant world is a second generation space. So it's like it was already previously in use in something similar. So it was a second generation frozen manufacturing space, which was sort of a lucky break. There's not a lot of those around. So were able to go and sort of flip it the same way we flipped a restaurant opening and do it very scrappy, but obviously up to the standards and health codes and stuff.

15:18
Jesse Konig
You need to put stuff on the shelves nationally, which is rigorous. But that was what we had to do because there was no other option to get scaled up in time. And now we've been very lucky to have enough sort of buying power and built a brand and some data that we've been able to go and convince some larger manufacturers who are out there in the world to take a bet on us and work with them in more of a co manufacturing capacity. Which is great because the next level of investment gets to be very expensive. When you're trying to maybe not support a thousand grocery stores, but support five or 10,000 grocery stores, hopefully a lot of manufacturing space, a lot of heavy duty equipment. We found a great partnership and very lucky with that.

15:55
Hannah Dittman
Gosh, I can just only imagine what this roller coaster has been like in your shoes. I mean, you went from a product idea and concept essential. Well, first the whiplash of pivot during COVID re engineering your whole life plan probably. Then you had a compelling concept and product idea that you were all excited about. You guys had to go out fundraise to even get that ball rolling. Rolling. You scrape enough to get together a concept and enough to go talk to retailers without even having your inventory run done. Then you get your PO and you're like, this is sweet. Now we need to go manufacture this thing that is actually harder to manufacture than one would expect it to because of what you're trying to do.

16:41
Hannah Dittman
So then you keep going fundraise and then vertically integrate and then continue to grow and bloom at the same time. I mean, I'm sure it's like a huge adrenaline dopamine spike of happiness when this good news comes. And then kind of an immediate like, oh man, we're about to run a marathon and get back up another mountain and how are we going to get this done? Super exciting. And I'm sure for a lot of founders listening, not lost on them what the practicality of that and the reality of that actually entails. So congrats on getting through so much of that climb so far. I mean, impressive and awesome that you guys have been able to do that. When you're thinking about Fundraising.

17:22
Hannah Dittman
Did you ever consider bootstrapping at the beginning or did you know right away we need to get a friend and family together? Like, you had a good enough understanding of your capital needs that you really understood that was the only way that it was gonna go where you needed it to go.

17:38
Jesse Konig
Yeah, it was a couple factors, I think. One, it's a really important one, is you really need to think with the end in mind from day one. Like, what in your wildest dreams do you wanna have happen here? I think one thing that we knew is that the same way we kind of had this philosophy around opening restaurants is we like the idea of going really big because you want to have a big impact. So when were trying to open a burger restaurant, it wasn't trying to be the best burger in Washington, D.C. even though it was the hope in the short term. It was about dismantling fast food and showing a better way to make fast food accessible to more people and make a big impact on the food industry.

18:11
Jesse Konig
So when were thinking about this opportunity immediately, our vision for the business wasn't just like, oh, let's just kind of throw it in the store and see what happens. It was sort of like, oh, we could change this. We could do this in a much better way. It's kind of broken. We want to fix it. So when we had that in mind, I think we sort of knew from day one we wanted to go big. And we also knew that weren't necessarily trying to build this business because were going to pass it on to our kids in 20 or 30 years, which I think is a big important thing.

18:36
Jesse Konig
If this is your baby and your life's work and you want to do this forever, you know, bootstrapping in debt and going a little bit slower, like, those are all things that you need to consider because ultimately it keeps you in control of your own destiny. For us, we knew that there's big, multi billion dollar players in this space. They have hundreds and hundreds of millions of dollars invested infrastructure and manufacturing capacity and all these things that for us to give people a genuinely better product and compete at that level of scale and price on shelf and all the other things to be a real competitive product, not some niche, expensive premium product and health food source. We knew that we needed at some point to like unlock that level of infrastructure and capacity for lack of a better term.

19:19
Jesse Konig
And I think knowing all these things, we kind of knew that ideal world, we can build something up, grow really fast, because, you know, now better than ever, we got to move quickly here. And we knew that we could basically go out, prove this out, and eventually find hopefully a big incumbent, big food player that understands that the writing is on the wall and they need to do something innovative and new and do things a better way. And I think when you look at businesses that sometimes get some flak, but you look at Primal Kitchen or you look at Epic Provisions, you look at some of these companies and siete they got acquired and they've really been left alone. The big food companies know that, like these are the shining stars of their portfolio.

19:56
Jesse Konig
Let's not mess up the magic that we bought them for. So I think we're very aligned to that. If we can find an aligned partner who can bring a level of expertise and know how and infrastructure that can help us get our product into thousands of more grocery stores or to much more affordable prices so more people can enjoy it with better ingredients. Even if our product eventually suffers by 3 to 5%, it's better to be 3 to 5% worth and be touching millions and millions of households than be the perfect best source premium thing for like the one customer. But then you're only touching hundreds of people. So with all that in mind, we kind of knew if we want to go big, we want to go fast, we don't need to necessarily own it forever.

20:36
Jesse Konig
There might be a partner down the road. We should go out and raise capital so we can move quicker, make a couple mistakes and try to get there a little bit faster. And also, for lack of a better reason too, we just came off of basically starting from 0 and 10 years in restaurants and sort of rolling into this very survival part of the restaurant industry where we didn't have the luxury of having a 401k, we could cap, shout, let alone, you know, a savings account that we could invest our own money in. So it was sort of like we're either going to go all in on this restaurant thing again and really put our minds to that, or we can get really excited about the CPG opportunity. We can go all in on that.

21:11
Jesse Konig
But we know we need to find financial backing and a partner to help us go a little bit faster and go further together.

21:17
Hannah Dittman
Yeah. What was the conversation with the retail buyers like, given where you were at in the market and then, you know, once you got that PO in, how much time did you have to get through financing and get the actual inventory build as you're kind of getting through the rest of that journey?

21:31
Jesse Konig
Yes. So we had a really great product we thought tasted amazing. We had the name and generally an idea of what the kind of brain stood for and where it was going. So when were getting out there trying to pitch retailers, were really trying to get them bought in on the story and how we thought this was totally new and novel and no one else was doing it. Luckily, were not competing in a category that had tons of other competition. It was basically a bunch of people had been around for 10 or 20 years and then us, so they were excited and willing to take a bet on us. And then the other part of your question is like, okay, so you kind of get a yes or a maybe.

22:04
Jesse Konig
At least now you're trying to figure out, like, okay, how are we going to fill these orders and get set up with the distributors and do all the things? One thing that was a really interesting part for us is we didn't know that much about cpg. We knew a lot about restaurants, so we knew we made a great fry that could service restaurants, too. So we actually started selling our fries wholesale to restaurant distributors to sell into restaurants. So we started with food service as our primary channel, and we did that from maybe March 2024 until it went a little bit beyond this. But it was our core business line until June when we launched on retail shelves. So we used that to kind of get the reps in, make a product for restaurant distributors.

22:40
Jesse Konig
It's a different part of the business, but it was enough to sort of get us inventory going, to get the equipment up and running, figure it all out. So when were able to launch into our first accounts, which were actually Mom's Organic Market on the east coast and also Whole Foods, we launched in their Mid Atlantic region. And then we launched with a DSD specialty distributor called Rainforest Distribution, who services the Mid Atlantic and Northeast and Boston metro areas. So sort of these core natural stores in the Mid Atlantic area, some independent stores all over the place, thanks to our friends at Rainforest. And we just sort of ran those accounts and used that as our way to get off the ground.

23:14
Hannah Dittman
Got it. That's really smart and strategic. So you kind of used your base foundation knowledge as a way to get some working capital in the door, iron out some of the creases and keep the momentum going as you were kind of really formulating the big swing down the road. I think super smart and strategic. You know, looking back, obviously, you've kind of gone through a couple fundraising cycles now. What do you know now that you wish you knew when you started your fundraising journey? Maybe some lessons learned or other pieces of advice that might be Helpful for someone just starting out to pick up on.

23:48
Jesse Konig
So one thing I'd say that was top of mind, as were a little bit earlier in the conversation that was really important is that there was two of us. So the way Ben and I have always split things up is that I sort of do everything outside the bag. So I get to do fun stuff like this. I'm in a lot of the sales meetings and doing marketing and brand and some painful stuff that's administrative or legal. But generally all the things that are sort of outside the back front of house, that's usually my kind of lane. And Ben has always been focused very much on the inside of the bag. The formulation, the operations, all these kinds of things.

24:16
Jesse Konig
Why I bring this up is that when went to go kind of go through this, hey, we just got Whole Foods and Sprouts Nationwide. Whoa, how are we going to do this? One part of it was signing a lease and going to figure out how to open a 6,000 square foot facility. The other part of it was to go figure out how to go raise the money. So luckily both these are very meaty projects and they took a lot of time and energy. We were able to divide and conquer where I basically went out and ran a fundraising process and Ben was able to hold down the floor and figure out how to stand up this facility and get three shifts set up and be running 24 hours a day and all this crazy stuff. I got to give him some gray hairs.

24:47
Jesse Konig
He did an amazing job figuring that out. So I'd say having two of us with different kind of lanes and expertise was really important. But maybe the meta lesson here I've heard a lot of good advice on, I didn't really believe it, but now I do, is that fundraising really is a full time job. Even if it's something that feels like you can sort of do it nights and weekends kind of do it, you know, 10, 20 hours a week. What we learned is that it ends up making the process a lot longer. It's going to ultimately take you more time than if you were able to spend as much time as possible on it for three, four weeks even and get a lot of that momentum because it is such a momentum game.

25:21
Jesse Konig
It's something where you can get one conversation to lead the others. People sort of have a little bit of this hive mind that when things are going well and there's a lot of people looking at it, everyone wants to get to be involved and you miss out on a lot of those things, you end up having all these one negotiations and these one things, if you end up having it spread out over a long period of time.

25:40
Jesse Konig
Whereas if you run more of a process, as it's sort of like called in doing this, if you run a fundraising process and there's a deadline and you're able to have tens of conversations in a very tight window, maybe even 50 or 100 conversations in a very tight window, there's this weird one plus one equals three that happens where investors all kind of get a sense that what other people are looking at and just other people being interested makes it more interesting to them, which is a little bit of a weird dynamic. But we found it to be true, especially in a little bit more of an institutional fundraising process. Whereas the friends and family thing, it might just be, you can convince people one one to come in, kind of believe in you, and they're really betting on you more than anything else.

26:19
Jesse Konig
When you have data and you have retail presence and you have a little bit more of a buttoned up pitch and a plan of where you're going, you're really trying to just get as much of that momentum and enough of the people looking at this business at once drive a competitive process and one stack and shares. And we did run a little bit more of a priced process. We're working with some of the larger, more institutional folks. There was one group, we got a term sheet, ended up being a safe, another safe with one number on it for the post money valuation cap, they would call it. The number changed three times in one week. So it started as a very low number, and then it went up by $5 million or something like that in five days.

26:59
Jesse Konig
And then five days later it went up again. And that was just because they realized at first it was sort of like, we want to do this deal based on the numbers we've been looking at in a vacuum. All of a sudden they realize, oh crap, there's other people that want to do this. Oh, we actually didn't look at this other new number that came out from this month's data or sales and how fast it's growing. And all of a sudden all of the very disciplined processes that are out there in the world, they all get thrown out the window. And it becomes a bit of a FOMO game where everyone wants to do the deal and they're able to kind of flex on some of the rules that were very steadfast when you first talked to them.

27:31
Jesse Konig
Now they're a little bit more fluid and people are able to Be a little bit more flexible with you.

27:35
Hannah Dittman
What a nice place to be in. I get to get wined and dined and fought over. That's really awesome. Congrats to you guys for the success. Obviously, you've been very competent on the business side, but also on the fundraising side, and those two go hand in hand. When you think back about what really started making people lean in or resonate with your fundraise the most, what do you think some of the things you were saying or attributes in the business or narratives were what they were really anchoring on and you believe to kind of be attributed to the success you've had on the fundraising side so far?

28:11
Jesse Konig
One thing I want to point out is that, like, fundraising as a skill set is really weird. It's a total side quest. Like, maybe it correlates to being good at sales or selling a retailer or something like that, but it has nothing to do with your business being a good business or a bad business. Some people are just genuinely better fundraisers or worse. It's nothing against you if it's not in your skill set. It is something you can learn for sure. But I just want to point out too, that, like, we've been lucky that I've been able to spend time on it. Ben's an incredible operator. He's been able to give me the space to go and do it naturally. Like, I'm a little inclined towards being good at it, I think, on the spectrum of things.

28:44
Jesse Konig
But it has nothing to do with whether it's a good business or bad business to invest. It's just sort of having the time, the space, being willing to kind of, like, network and not be afraid to reach out to people and ask for introductions and ask for answers on things. So it's built more of a confidence gain than anything else, which it can sort of be fake confidence, honestly. Like, you can sort of just fake it to make it a little bit. I'd say genuinely, though, what made our business stand out is just like, we had a good product, I'd say a great product, and we had really fanatical customers and really great data. So, like, that first fundraising round, we didn't have the fomo.

29:16
Jesse Konig
It was very much of, like, one by one, just, like, trying to, like, leverage every contact and person that ever talked to and asked for introductions and figuring out one by one over the course of six or eight months. And then our second time went through the process, we had a little bit more of, like, real regional sales data, and we had authorizations from whole Foods and sprouts. And we can sort of paint this picture. Like, here's where we're at today. Here's this incredible velocity data of what we're doing on shelf. If we can't even get 80% of that or 60% of that nationwide, like, that would look like this. This is how this would look in 12 months.

29:48
Jesse Konig
So you can sort of just like paint a picture using real data today and be able to show people what's going to happen in the future. But we had the basis of it working because we had amazing Velocity Beta in our core regions. We were tested and learned and it was working really well. We had even silly things like really good engagement on social media. I had multiple investors that would comment, you know, either kind of like after the fact when we worked with them, or just during the process about, oh, my God, I was looking at your Instagram post. You guys have 30 comments from real people that are obsessed with the product.

30:19
Jesse Konig
It seems like a small detail, but it is as important as these other things because people can start making those pattern recognition things in their head where they say, oh, this reminds me of that other amazing brand that we invested in at Solar, that one we missed, that was really amazing that we should have invested in. And a lot of it comes down like, do you have genuine fans who love your product? Or they'll be disappointed if they go to the shelf and you're not on it. And being able to send a sample and know that it's going to be an amazing experience and people are going to love the product.

30:46
Jesse Konig
Those truly were like, the main things was like, the velocity, the engagement we'd be able to build on social and the quality of the product that when people sampled it, they kind of understood it, they gave it to their friends or asked their friends feedback on it, really liked it. Those were really the underpinnings that allowed us to run a good process because were able to sort of like, use that data, build a really good story and narrative, and then be able to talk to enough people all at once to get a little bit of that kind of fomo, that it led us to be in a position where were able to sort of like, pick who we wanted to work with and am super grateful, like, and privileged to be in that position.

31:21
Jesse Konig
I understand that not everyone can get there, but I do want to encourage people that, like, there's an element of luck, certainly. But really, if you build a great business and you get good advice and you build a good story, if you really are thoughtful about like dedicating the time and running a process, getting a lot of people looking at it all at once, way more than you expect. It might be 80 conversations to get like eight genuinely interested people looking at it at the same time. That's really all you need, is you need five, eight really true believers. And hopefully that leads to two or three people that want to do the deal.

31:49
Jesse Konig
And if you have two or three of them instead of just one, it gives you all the leverage in the world because they're fighting over a precious resource, which is you and your business and believing in you. And at the end of the day, mostly what they have is dollars. And that's not that special. A lot of people have dollars. Even though it seems like the only thing you need, when you need it seems like it's the most precious thing in the world. But if you can take a step back, you realize there's a lot more people with funds, a lot more people trying to invest in brands. And there are amazing founders like you, if you're listening, that are out there pushing through the hard times and figuring it out. So don't sell yourself short.

32:21
Jesse Konig
Don't think that just because someone's bringing you an offer, it's the only one you're going to get. Make sure you do yourself the service of talking to enough of these funds to get enough perspectives to realize, like, what does market actually look like? And it might better or it might be worse than what you think. And if it's worse, you can get feedback and learn from that. Maybe you put a pause for three months, fix some of the things you got feedback on, and go back out and run a process once you've solved those things.

32:43
Hannah Dittman
I love the mentorship and empowerment. I think that's a really inspiring, energy boosting words of wisdom from you, knowing that you're in the trenches alongside so many of the other founders out there, climbing the same mountain and fighting the same fight. When you were selecting investors to join you on your journey, what mattered to you in an investment partner? What was kind of your selection criteria and why?

33:05
Jesse Konig
We took this really seriously. And I think again, it comes back to some of the things were just talking about, where you have to have the discipline to run a process, you have to have enough options around the table. But if you do have multiple people around the table, and some of this could just be a level of discipline around like a lot of outreach and more than you think. But we looked at this as like, as important or more important than interviewing for a new employee who's going to be your third or fourth hire or first hire or as important as life, thinking about your girlfriend or your boyfriend or your spouse.

33:35
Jesse Konig
We really wanted to know the horror stories and the good and the bad and the ugly about some of the investors were considering, especially those that might come in and lead a round or kind of be the person helping you set terms for a round. And I think a lot of it. It's easy for investors to be great partners when everything's going well and it's easy for them to provide references to. Say, hey, these are two or three brand founders. I can introduce you can talk to them, get a good read. We wanted to find the nuggets of who's not on their website portfolio, who do they not market that they're a part of, or who is the brand that was kind of interesting and cool a few years back, but lost a little bit of the luster.

34:11
Jesse Konig
And get in touch with those founders because they're all smart people, they're on the same boat as you. They could one turn in a business, could have you be in the exact same position, get their feedback because the folks that aren't in the shiny object Cinderella story everything up into the right, which is a lucky position to be in. And almost every business has hiccups. So it's very rare that those things happen for five, six, seven years in a row without a hitch. Some of them do happen and God bless them and we hope that could be us if everything goes according to plan, but we know it probably won't. But I'd say that if you find those people and maybe things go a little bit flat, a little bit sideways, they're trying to figure things out. How did the investors react then?

34:47
Jesse Konig
Were they in their corner? Were they trying to help them solve problems? Were they really annoying and asking for tons of homework assignments to get them up to speed and help them solve the answer? Did they think that they were the smartest people in the room? Were they genuinely there to help? And that's what became our biggest metric of what were looking for, is who is the investor that you want to call if there's a recall and something really bad happens, it could be the end of the business. And you want to call when you get like a huge win with one of your big main, like big retailers just gave you a new SKU or they're launching you nationwide, like that's the kind of relationship you have.

35:20
Jesse Konig
But when your phone rings, you want to be excited to pick up the phone and kind of jam out and talk to them. You don't want to be like, oh my gosh, this person's calling me again. Like, I can't believe I got to talk to them. Life's too short, honestly, to take money from folks that like don't have high integrity or you're not excited to talk to or you're just not aligned with just because they have like a brand name that gets you excited or that's going to look good in a news headline or something like that. That's how we tried to look at it. And I would say like the best investors. And we had some really amazing ones join our group in the last round.

35:50
Jesse Konig
Many of them had a very similar pattern that we learned and they'd say, you can talk to any of our brands. It's like reach out, sending them on your own. I'll introduce you to any single person you want. They're going to give you an honest assessment. And when there are funds that give that kind offer and then you take them up on it. And it rings true that every single person you talk to is just singing their praises. They're such good people. They always had my back. They were there when this thing happened. Even when their expertise, they're leveraging their network and sending emails and solving problems for us. That is something that you can't really replace. And I think that's been our biggest thing that we've always been looking for.

36:24
Jesse Konig
And then there's certainly degrees of smart money and reputation and all these things. But at the end of the day, you're getting married, for lack of a better term to these folks for, you know, five, seven, ten years of your business. And if you're the co founder or founder of your business, you're going to have a lot of interactions and a lot of them could be around negative things and hard things and you want to make sure that you're not signing up to be, you know, sort of in your honeymoon phase and just excited because someone's throwing money at you and you realize that you're stuck with somebody that is really not aligned how you see the world.

36:54
Hannah Dittman
Yeah, back channel reference is so important and I love your advice. I think it's so true. What a better way to get to know what someone is going to be like for you in a quote unquote job than hear what they were like in a past job with a very credible person and a lot of data points on it. So definitely echoing that advice and think it definitely sage advice. I Think a lot of investors will even tell you themselves. If you want to know about us, best thing you can do is ask people about what it's been like to work with us to your point as well.

37:23
Hannah Dittman
So I feel like the more open and collaborative they are and not afraid to be like that, the more they know that they've got soldiers out there with some good data points to back it up. I'd love to pivot into a Slack question. As you know, startup CPG has the largest Slack community in the industry with now over 35,000 members. I'd love to pull a question directly from our channel and have you answer it as a case study for any founder that may have a similar question. Today's question is what is the best way to determine the size of a fundraise round that I need?

37:54
Jesse Konig
That is a great question, one that we're always trying to figure out ourselves. And I think there's not a right answer. Like so many things in our business, there's a series of trade offs you make. And I think one thing that we've learned from very smart people or smarter than us, have been in the industry longer than us, is that you usually need more money than you think. That doesn't mean you need to take it all in today, but you want to make sure you have enough to get you to the kind of next inflection point in the business.

38:21
Jesse Konig
I think the one thing that we learned a lot that I think could hopefully help people, they're thinking about more of a traditional fundraising process, is there's sort of an unwritten rule in a lot of ways where you kind of need to just have this plotted line of going up to the right. And that's how you keep momentum, you keep your investors happy, and you get your new investors excited is that you need to be able to essentially kind of always go like two or two and a half, three times more valuable than you were previously. And these can be on safe notes or price rounds or valuations. But generally you need to basically show that where you're at today is going to get you to two or three times more valuable with the amount of money you bring in the door.

38:57
Jesse Konig
So if you can think about it with that rule in the back of your mind says, you know, just super made up numbers here. If we raised at $10 million and we're not sure, should we take 2 million or 3 million or 5 million and you're thinking about, you know, the different dilution that could come with a $2 million raise versus the $3 million raise on a $10 million valuation could be a huge swing. But you also need to think about, like, what does my business need to look like to be worth 25 or 30 million dollars and what do I need to do to execute?

39:24
Jesse Konig
And if you're conservative and thinking about, well, like we need to get our trailing revenue to a certain threshold and you need to have three times your trailing revenue is going to really get you to where you need to be again, like, this is all kind of stuff you have to do your homework on and realize, like, how are investors going to look at your business and understand how you can work that work. But let's just say that you think that if you can get to three times your trailing 12 months of revenue, that will get you where you need to be. So if I can get to $10 million in revenue from where I am today, that would get me to a $30 million valuation. I'd sort of be safe at that point to go out and raise money again.

39:56
Jesse Konig
And everyone's super excited and get to pick what we want to work with. So if you can do all that, you got to figure out what's going to get me from here to there in terms of cash. And it really depends on your business. It could be you're vertically integrating and you've got to make some big infrastructure investments in your space or a co manufacturer space. It could be working capital and inventory and just filling the orders and knowing you're not going to get paid for 60 or 90 days by your distributors. And how do you fund that in the meantime? And I think the biggest piece of advice I give is there are unknowns you can't really plan for. And the only way you lose the game is you run out of money.

40:32
Jesse Konig
That's the only way you can lose the game of entrepreneurship and CPG is if you run out of money, run out of oxygen, you're at. You're knocked out of the game. So I'd say, like, you don't want to get too cute and over optimize. If you think you need $2.2 million, don't raise 1.8 and get a $400,000 line of credit, right? Like, maybe you don't even raise 2.2. Maybe you need to raise 2.4 or 2.5. And if you're asked by an investor or you're just for your own practices, you're writing out where that money's going to go. Just write unknowns or write miscellaneous and you don't Know what you're going to use it for.

41:06
Jesse Konig
You just know you want to have an extra few months of Runway so that if that fundraising process takes a little bit longer or that launch gets delayed or one of a million things happens, you're not going to be in the position that you need to go out and fundraise earlier than you thought you would. And now you're risking being in a situation where investors have a lot of leverage and they can kind of give you not great terms or you're going to be in a rough spot. So that'd be my main piece of advice, is that generally, and this is all advice we've gotten and we've been taking to heart, it's like you don't want to go too crazy, but a little bit extra to keep you in the game.

41:36
Jesse Konig
That extra four, six months, if that's going to be the difference to get you maybe to be in a really great spot versus being stuck with really bad investor terms just to stay alive in the business, it's worth maybe an extra few points of dilution. And at the end of the day, you're hopefully building something really valuable. Especially if you are building it thinking you might sell it one day and you won't be kicking yourself if you have generational wealth or you have an amazing outcome for your family and your life. And it's a few million bucks short because you sold a couple points early to make sure you could get there. So I'd say there's a rainy day fund and I was certainly sure I wouldn't say like double the amount.

42:12
Jesse Konig
But if it's a $500,000 or a million dollars more than you think you need, it probably is going to be a huge difference maker just from your own sanity and keeping you excited and in the game.

42:22
Hannah Dittman
Such a great piece of advice and a really smart way to think about Runway and all the different dynamics and factors that influence capital needs. Not just the straightforward monthly burn, but the growth, determination and what that implies for valuation and a future fundraise and all the other aspects that are really important factors to consider as well. Jesse, I have a huge admiration for you as a founder and a lot of appreciation for you speaking with us today. Huge fan of your brand. For any founders or investors that want to reach out to you or follow along on your journey, where can they find you? And for anyone that may want to join the Jesse and Ben's team as you guys continue to grow and take off, what advice would you have for them?

43:09
Jesse Konig
So if you want to get in touch. Easiest way would be through our website or even just like DMing us on Instagram. I actually run most of our community stuff on social still these days, so if you're DMing us, it goes to me. If you really want to get us or get our attention, buy some fries, take a picture of them, share them. We love seeing people trying the fries and likes them what they think, so that's always a good way to grease the wheels. And then in terms of people thinking about joining the team, we are growing the team.

43:33
Jesse Konig
We've been super scrappy, we've pretty much got the business to where it is today with basically Ben and I and a ton of amazing fractional people and consultants and stuff like that, which is a little bit abnormal but totally in the realm of possibilities nowadays with all the amazing people doing fractional agency work. But we are at the point now we're trying to build out a full time team and looking for some amazing folks both. So if you got a resume, if you've experienced in CPG and you're really inspired and excited about what we're doing, we'd love to hear from you. Please just shoot us an email. We've got a contact form on our website. We'd love to meet you.

44:05
Hannah Dittman
Awesome. Well, thanks again for the time today Jesse and all the amazing learning. Huge inspiration for a lot of founders out there and I know the whole Startup CPG ecosystem is really rooting for you as well. So thanks again for your time and for sharing all of your nuggets and your story with us.

44:21
Jesse Konig
Thanks. We're rooting for everybody else too. It takes a village. This is our favorite part about food in cpg, whether it's restaurants or CPG is like everyone's in it together. It's super hard and if we can ever be helpful, really happy to chat and hopefully help you out. As you know, this business is hard and demanding on time and we've got young kids, there's even less time in the day, so might not be able to answer every question or hop on every coffee or call, but if we can ever be helpful, happy to try to point in the right direction. Wishing you all the best.

44:46
Hannah Dittman
Awesome. Well, thanks again. Well friends, we've now arrived together at the end of another episode of the Startup CPG Podcast, the top globally ranked podcast in cpg. And if you love this podcast, you'll love our Slack community even more. Here at Startup cpg, we're a community of brands and experts and you should join sign [e-mail]. You'll then get an invite to our online Slack community of over 35,000 All Star CPG members, hear about amazing events near you and all our special opportunities to get you in front of buyers, investors, brands and more. It's a free community. So what are you waiting for? I'll catch you on the next episode and I'll see you on the Slack.