Framework only
Numbers are illustrative until imported
How this model was built
This is a working financial framework calibrated to publicly-observable comps from the mid-market DTC beverage category. The architecture is real operational work; the specific numbers are illustrative until replaced with actuals via the Import button. Every assumption below is sourced and tagged with a confidence level so you can see at a glance which numbers need verification first.
The single insight this model exists to make visible: most pre-Series A operating decks show 50%+ headline GM that drops to 25-35% post-trade once retailer deductions actually settle. Channel CM% — not blended GM — is what determines mix strategy and fundability.
1 · The comp set
Numbers are anchored to publicly-observable data and commentary from these comps:
| Comp | Why it's relevant | What it informs |
|---|---|---|
| Comp A | Public mid-market functional beverage at scale | Trade rates, pricing power, mass-retailer deduction patterns, GM trajectory |
| Comp B | Recent strategic acquisition in adjacent functional-beverage category | Exit comp · pre-Series A path · founder-led brand build |
| Comp C | Premium-priced functional water · $1B+ valuation comp | Premium pricing structure · marketing playbook · category disruption |
| Comp D | Functional beverage challenger · category-positioning comp | Direct comp for positioning · pricing for category entrant |
| Comp E | Emerging-beverage distribution-network comp | Distribution and exit network for emerging beverage |
| Public retailer commentary | National mass MSAs, mid-tier grocery norms, regional authorization patterns | Slotting, trade rates, payment terms, OTIF deductions |
2 · Distribution & pricing
| Assumption | Value | Source | Confidence | How to verify |
|---|---|---|---|---|
| Retailer A doors | 1,850 | National mass-retailer set scale; calibrated to public DTC-comp reach | Med | Vendor authorization letter; ship-to door list |
| Retailer A VPD target | 5.2 | Functional-beverage category average per public commentary | Med | Syndicated scan data; retailer EDI portal |
| Retailer A 4-pack list price | $7.49 | Observed shelf pricing for emerging functional beverage | High | Retailer site or in-store check |
| Retailer B doors | 520 | Typical emerging-brand mid-tier grocery launch authorization | Low | Ship-to list; banner-by-banner authorization |
| Retailer B VPD target | 4.8 | Mid-tier banner functional-beverage shopper over-index | Low | Syndicated scan data |
| Retailer B 4-pack list price | $7.99 | Typical mid-tier grocery pricing 6-8% above mass for premium SKUs | Med | Retailer site check across banners |
| Retailer C doors | 385 | Regional grocery footprint | High | Public store count; authorization list |
| Retailer C VPD target | 6.1 | Regional functional-beverage shopper over-indexes vs. national | Med | Syndicated regional cut |
| Marketplace list price | $26.49 | Per 4-pack assumption · subscribe & save margin headwind | Med | Marketplace listing |
| DTC list price | $29.50 | Highest GM channel · 4-pack at premium | High | brand.com |
3 · Cost stack (per 4-pack)
The cost structure is the most consequential and most assumption-laden part of the model. A functional-ingredient base is structurally above commodity-beverage competitors; this is the category differentiation tax.
| Cost line | Value | Source / rationale | Confidence | How to verify |
|---|---|---|---|---|
| Bill of materials (BOM) | $2.10 | Functional-ingredient base premium vs. commodity (~$0.70); adjusted for 4-pack packaging | Low | Co-pack agreement · supplier invoices · ingredient costing sheet |
| Co-pack tolling fee | $0.62 | Industry tolling range for canned beverage at 1-5M unit/yr scale | Med | Co-pack master agreement · per-unit fee schedule |
| Inbound freight | $0.21 | Standard inbound rate for ingredients to co-pack | Med | Carrier invoices · BOL log |
| Outbound freight | $0.48 | Blended retail DC + DTC fulfillment | Med | 3PL invoices · retailer routing guide compliance |
| Slotting amort (Retailer A) | $0.70 | $250-400K mass-retailer slotting + free fills amortized over Y1 unit volume | Low | Slotting invoice from retailer · check actuals against Y1 unit forecast |
| Slotting amort (Retailer B / C) | $0.35 | ~50% of mass-retailer amount given smaller door count | Low | Per-banner slotting agreements |
| Fully-loaded variable COGS / 4-pack | ~$4.11 | BOM + co-pack + freight + slotting | — | Re-derive from above with actuals |
Highest-impact unknown: the BOM. A $0.40 swing on BOM (very plausible at scale) is roughly $4-7M of EBITDA over Y1+Y2. This is the first number to validate against the actual co-pack agreement on day 1.
4 · Trade & deductions
Trade economics are split across four separate accounting buckets, each captured on its own line in the unit-economics waterfall. They do not overlap:
| Bucket | What's in it | How it's modeled | Frequency |
|---|---|---|---|
| Wholesale margin | Retailer's gross margin from selling at list (their cut) | 40% discount off list price | Every invoice |
| Trade spend (recurring) | TPRs, MDF, co-op advertising, off-invoice promos | % of net wholesale (15-18%) | Monthly accruals / off-invoice |
| Chargebacks & deductions | Damages, OTIF penalties, freight differentials, MAP violations | 5% reserve on net wholesale | Auto-deducted from invoices |
| Slotting + free fills | Upfront fee for shelf authorization + initial free product | Fixed $ amount, amortized over Y1 units | One-time at launch |
The "all-in trade burden" some CFOs report = Trade spend + Chargebacks + Slotting amort. For Retailer A at base case that's roughly 16% + 5% + 17% = 38% of net wholesale in Y1. The model splits these into four lines because each has different optimization levers — TPM for trade spend, OTIF compliance for chargebacks, negotiation/scale for slotting.
| Assumption | Value | Source / rationale | Confidence | How to verify |
|---|---|---|---|---|
| Wholesale margin (retailers) | 40% | Industry-standard conventional grocery wholesale margin | High | Retailer MSA · vendor agreement |
| Wholesale margin (Marketplace) | 25% | Includes subscribe-and-save discount + fulfillment fees | Med | Marketplace vendor terms |
| Wholesale margin (DTC) | 0% | No middle-margin in direct sales | High | By definition |
| Retailer A trade % (recurring) | 16% | TPRs + MDF + co-op for functional-beverage set entrants. Slotting and free fills captured separately below as upfront costs. | Med | GL trade spend register · retailer deduction history |
| Retailer B trade % | 14% | Lower-trade environment vs. mass at this stage | Med | Mid-tier trade spend register · syndicated reports |
| Retailer C trade % | 15% | Mid-tier between regional and mass norms | Low | Regional trade spend invoices |
| Chargeback / deduction reserve | 5% of net wholesale | Industry standard reserve for damages, OTIF, MAP violations | Med | Retailer EDI portal · trailing-12-month deduction rate by SKU |
5 · Operating model
| Assumption | Value | Source / rationale | Confidence | How to verify |
|---|---|---|---|---|
| Marketing % of net rev (Y1) | 24% | Heavy trial investment for an emerging brand · drives velocity | Med | Brand actual Y1 marketing budget · brand investment plan |
| Marketing % of net rev (Y2) | 17% | Normalizes as repeat takes over · industry benchmark | Med | Updated forecast based on Y1 actuals |
| Headcount cost (Y1) | $2.1M | ~11 FTE incl. founders at ~$190K loaded average | Low | Actual org chart · payroll register · founder compensation policy |
| Headcount cost (Y2) | $3.6M | Scale to ~20 FTE through Y2 | Low | Hiring plan · function-by-function add roadmap |
| G&A % of net rev | 7% | Insurance, legal, audit, software · industry benchmark | Med | Existing G&A run-rate vs. revenue |
6 · Y1 → Y2 growth assumptions
| Assumption | Value | Source / rationale | Confidence | How to verify |
|---|---|---|---|---|
| Door growth Y1 → Y2 | +30% | Adds second-wave national accounts (mass-grocery and specialty) | Low | Sales pipeline · retailer authorization status |
| VPD growth Y1 → Y2 | +18% | Compounding category awareness, repeat purchase, shelf upgrades | Low | Syndicated scan data 6mo into Y1 · repeat rate trend |
7 · Cash flow architecture (13-week)
The 13-week rolling cash flow models weekly inflows and outflows with explicit line items for each retailer's AR collection timing and Retailer A's deduction cycle. Pay terms drive when cash actually arrives:
| Assumption | Value | Source / rationale | Confidence |
|---|---|---|---|
| Retailer A payment terms | 75 days | Mass-retailer standard 75-90 days; negotiable to 60 with leverage | High |
| Retailer B payment terms | 60 days | Industry standard for emerging brands | High |
| Retailer C payment terms | 45 days | Faster-pay regional banner | High |
| Marketplace payment terms | 30 days | Marketplace vendor standard | High |
| Retailer A deductions | 10-15% of gross | Damages, OTIF, MAP, missed PO accuracy, freight differentials | Med |
| Beginning cash | $5.0M | Placeholder · post-launch catch-up assumption | Low |
The 13-week cash flow is the single most important deliverable in the first 30 days of the engagement. The board reads it before the P&L. Retailer A deductions are modeled explicitly because they are the #1 surprise on emerging-operator cash flow statements.
8 · Series A framing
| Assumption | Value | Source / rationale | Confidence |
|---|---|---|---|
| Pre-money valuation | $95M | Public-comp adjusted for stage and velocity validation | Low |
| Raise size | $22M | Sized to 24-month runway + Y2 scale capital | Med |
| Post-money valuation | $117M | Pre-money + raise | — |
| WC revolver | $6M | Asset-backed against retailer AR · SOFR + 5% | Med |
| Equipment financing | $1.5M | Term loan against owned production equipment | Low |
9 · What's deliberately not in the model
- Tax line. Operating losses through Y2 mean tax is irrelevant pre-profitability. Add when EBITDA inflects.
- Interest expense. Excluded until WC revolver or Series A closes; modeled as annotation.
- Stock-based compensation. Excluded from EBITDA bridge (standard practice for early-stage operators).
- Foreign currency. US-only model. International expansion adds complexity; not relevant pre-Series A.
- Inventory build / working capital ladder. Not yet modeled at SKU level. Add when SKU count expands beyond 3-5.
- Customer cohort analysis. Repeat purchase rate is shown as a KPI but not modeled cohort-by-cohort.
10 · Verification checklist · first 30 days
To convert this framework from theory to reality, the following data needs to be in hand within the first 30 days of the engagement:
| Document / Data | What it unlocks | Owner to ask |
|---|---|---|
| Bank statements (trailing 6-12 mo) | True beginning cash · burn rate · payment timing patterns | Founder / bookkeeper |
| Co-pack master agreement | BOM accuracy · co-pack tolling fee · minimum volumes · QA terms | COO / Ops lead |
| Top-retailer vendor agreement & MSA | Trade rates · slotting paid · OTIF terms · deduction history | Sales lead / VP Sales |
| Secondary-retailer authorization letters | Door counts · ship dates · trade terms per banner | Sales lead |
| Syndicated scan-data subscription | Actual VPD · category share · pricing observed at shelf | Sales / Marketing |
| Accounting GL export (12-mo) | P&L restate basis · trade categorization audit · accrual gaps | Bookkeeper |
| AR & AP aging | Working capital truth · deduction patterns · vendor relationship health | Bookkeeper |
| Cap table | Pre-money math · existing investor terms · option pool sizing | Founder / counsel |
| Insurance binders (E&O, GL, D&O) | Coverage gaps · D&O extension for the fractional engagement | Insurance broker |
Bottom line: the architecture of this model is real operational work. The numbers shown are synthetic. Within 30 days of being in an engagement with the data above, this dashboard becomes a client's actual operating model — same structure, real numbers. The Import button on the Dashboard tab is what makes the conversion frictionless.