I am using real stories to illustrate the challenges entrepreneurs face and what solving them could mean to founders, investors, and the industry at large.

Mother Kombucha has set out to prove that an emerging beverage brand can be both profitable and sustainable, using the latter broadly from both environmental and financial perspectives.

Tonya Donati, the Co-founder shares, “Our model of deep, regional multi-channel growth harnesses the power of community. By staying hyper-focused, we’re building our brand to become so ubiquitous that retail becomes a place for replenishment rather than discovery.”

Mother Kombucha is a certified B-Corp and woman-owned. Self-manufactured, it champions second-chance hiring, composts 100% of food waste, and uses solar to help power its facility. It also uses single-sourced regenerative farmed tea. Simply, it is doing things right. 


Their trailing twelve-month revenue is more than $3MM. They have strong margins, great year-over-year velocity growth, and a clear path to $15MM with a double-digit EBITDA in the next five years. 


Rather than focus on national expansion in retail, a strategy that has proven to be very expensive and risky, Tonya recognized the opportunity to “grow where you are planted.” Their home state of Florida is home to over 22MM residents, and the Southeast region has over 40MM. That is more than the entire population of Canada. 


Tonya has her team focused on meeting their shoppers where they work and play. This means coffee shops, corporate campuses, travel, colleges, and universities. This takes the pressure off of driving trial and discovery at retail, which has been highly monetized. In this model, retail becomes a place for replenishment.. 


This approach is contrarian. It puts profit before growth. It requires discipline and commitment, and it has been the way we have built good companies for years. We’ve just lost sight of that fact. 


I’ve shared what I believe to be a pretty compelling business case. It is a strong brand, a company built on good unit economics, and a business that is doing right by people, the planet, and profits. Yet, it is proving difficult to find investors. Like Kelly Perkins of Spinster Sisters, Tonya has had countless investor meetings. Prior to pivoting to a hyper-regional focus, she heard the typical refrain: “Beverage is so expensive.” Since adjusting the focus of the business, she has heard that investors want to see a steeper growth curve and significantly more revenue. She is caught in a conundrum of our making. 


I get it! Mother Kombucha does not fit the typical venture-backed model. Unless Tonya gets sucked into the vortex of national expansion, this model does not have the brand rocketing toward $100MM in the next five years. However, the brand needs relatively little growth capital to achieve self-sufficiency and an impressive EBITDA. From an investor perspective, this means limited future dilution and the potential for a nice return on investment. 


Making this viable requires aligning the structure and terms of the investment with the outcome. This is the type of company where the right blend of venture debt and growth capital can work for all parties. 


In an upcoming article, I will outline a new structure we plan to pioneer called CARE (COGS Agreement Retaining Equity). This will be an example of the solutions we need as an industry to fund businesses like Mother Kombucha. We must make it enticing to invest in the Mother Kombuchas of the world. If we don’t, not only are we failing these founders, we will miss out on the positive impact their businesses have on people, the planet, and profits. 

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