00:39:59 · Guillaume Moubeche, Pete Maldonado
[00:39:59] S1: No. It's nice. And personally, like, when I cashed out in 2021, we sold like 20% of the business for $30,000,000. And after that, you know, I was... It kind of like changed my vision on the on the business and the risk that I was able to take. Can you share, like, how it impacted you and your cofounder after the the the secondary? [00:40:22] S0: It's... That's that. That exact thing. Right? So now we we did we did enough to where it was like, okay. If we never made another dollar after this from Chomps, like, the families are okay. We're not gonna be homeless. Right? Like, that's like... That's what we need. And so that was Unless you go [00:40:38] S1: play poker too much. But
00:40:38 · Guillaume Moubeche, Pete Maldonado
[00:40:38] S1: play poker too much. But [00:40:40] S0: Yeah. Exactly. Or my my wife goes shopping for purses or something like that. But, yeah, that's a... But... No. I I... That was the goal. And so, again, like, it was such a a weight lifted off of our shoulders. And we didn't really real... I'll be honest. We didn't realize how much of a of a relief it would be and how we can make decisions in such a different way. Thinking about... I'll give you an example. Like, so so up until that point, everything was all about getting an immediate ROI. So if I was investing money, I needed to get paid immediately. So what does that mean? I'm only serving the bottom of the funnel. I'm I'm missing all of my mid top of funnel. So what's happening there? Brand awareness is suffering. Right? And so we're not casting a wide enough net. And this is actually something that... So Stride Consumer Partners is our our private equity partner. That's one of the things that they actually, like, forced into our brain. Like, what are you guys doing? Like, you you... You're you're too efficient here. Your ROAS is, like, multiples higher than it should be. You need to bring that down. You need to be spending for top of funnel and get the brand awareness out there. So that's exactly what we started doing, and there was a massive unlock. And so, again, like, we would not be scaled to the point where we are right now without that investment.
00:41:56 · Guillaume Moubeche
[00:41:56] S1: And with the secondary fund, like, coming in, what's kind of, like, their their view on on the... A path for liquidity for them? Like, do they want to... Is it a fund that's gonna, like, take more and more of the business? Or eventually, do they want to exit? Like... Yeah.
00:42:14 · Pete Maldonado
[00:42:14] S0: They will eventually look for a liquidity event of some some sort, but I would say they are incredibly patient. Even like... So we have, like, a contract, obviously, when they bought the thing, but at some point, we're supposed to have to deliver equity back to them, and they are, like, verb... Verbalizing that, like, they have no interest in even... They'd rather... They'll stay in for the next ten years if they if they can. I would say that for all of us, we need to be thinking about what is the exit strategy because you should have something at some point. And at and at our scale right now, we're realizing the buyer pool from, like, a... For a strategic to be able to come and buy us. It's dwindling. There's only so many people that could actually acquire us at this stage. So now it's like, okay. And and we are we are always about having that optionality. I think optionality is... Has so much value. Right? Like, because you could do anything with the business. We could do another private equity raise. We can do a dividend recap because we're profitable. We can, you know, again, exit to a strategic or IPO. And so that... The IPO discussions becoming more and more real, the bigger that we get. And I think that... I think there's a massive opportunity for someone to come into the public markets with a better for you CPG company that's focused on food and beverage that... That's all they do. Right? And so you've got all of these... The the stand... You know, the the typical big CPGs that you have right now. Their stocks are suffering right now because they're being pulled down by these portfolios that are made up of products that nobody wants anymore. It's ultra processed foods. It's just a bunch of crap loaded with sugar and preservatives and all that. And and it's like, quite honestly, that's gone. That's not coming back. That's not... There's no cycle for that. Right? Like, this is like a cultural shift. People are too smart. They know what they're eating. And so we see that as a huge opportunity for Summit to build a portfolio of products that are only delivering on modern day, you know, dieting and food for the future. And so that's where, you know, I think we could I think we could accomplish that and starting with Chomps. Right? And with these meat sticks.
00:44:27 · Pete Maldonado, Guillaume Moubeche
And I'm not sure yet if it would look like Chomps is now extending into other categories and it's building off of that brand, or is it a portfolio of brands? Not sure yet. I have no idea. All I know is that the vision's there and kind of refining it. So [00:44:42] S1: What what would you say is is missing right now for Chomps to to do an IPO?
00:44:42 · Guillaume Moubeche, Pete Maldonado
[00:44:42] S1: What what would you say is is missing right now for Chomps to to do an IPO? [00:44:49] S0: A few things. I think, you know, I would like to have more scale. From a profitability standpoint, we're we're in a... At a period of time right now where beef has never been more expensive. We're at an all time high. You know? So it's very commodity driven. I think there's things within, like, the... From, like, a supply chain perspective that we need to be able to fix and button up. I would say, like, just for instance, we went from one to seven facilities. We're actually greenfielding another from from building it from ground up. That'll be our eighth. We need to be able to consolidate and simplify those things a bit. But what happens is from a continuous improvement standpoint, there's a lot of low hanging fruit. Yields are suffering, which means margins are suffering. So we need this... It's margin improvement over time. So we need to be able to do that. And then I think also having, like, a second and third leg of the stool would be nice. I mean, we're very... It's it's simple, which I think public markets reward in a way, but I also think it's risky because if somebody... People were suddenly like, we're not eating meat sticks anymore, what happens? And so there's inherent risk there. So we need to be able to diversify and have, you know, just something else in the in the portfolio. So...