It Doesn't Take a Genius to Find an Exit

And, why trading is NOT investing from M1 founder Brian Barnes.

Heyyyo,

You can look for this sweet bobble head on my shelf in future pods 🤦🏼‍♂️

Now that the dust has settled a bit on $GME and Robinhood, I think it’s time to do a little reconciliation: first, this is FAR from the last time we hear from r/WallStreetBets and the retail Reddit collective. Second, I hope my hedge funder friends took a few notes. The next few years are going to be pretty interesting (and lucrative, if you’re paying attention). Between $TSLA dropping $150B on Bitcoin and the relative silence from the corporate spectators; Bitcoin’s meteoric rise is primed to continue, as are several cryptos like $ETH and (I cannot believe I’m saying this) Dogecoin.

I’ve started sharing my portfolio on Twitter, give us a follow if you want to talk shop.

Shout-out to our sponsors at M1 Finance: the finance super app that makes money management easier, smarter, and more automated than ever 👉 sign-up now and get $30 when going to M1finance.com/kitun.

For my newbs; every week I breakdown a startup pitch with the added hook that you don’t have to be a rich guy to invest (if you don't know what that means, click here).

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Side Note: Before you put money in play, you should really decide if you’re an investor or trader (or both). There is a big difference. Retail traders tend to favor apps like Robinhood, though the recent fallout has led to a massive exodus to the platforms like M1 Finance (a pretty obvious sponsor of mine), Public and TastyWorks. I was curious to know what that might signal, so I invited M1 Finance founder, Brian Barnes, on the Podcast.

Here’s my convo with Brian Barnes 👉 https://apple.co/3rKMhya

Scott


Company Bio

Genius Juice is a 100% organic, plant-based & dairy-free whole coconut smoothie.

Full disclosure: The first-ever exit I had from Equity Crowdfunding was a smoothie company called Blendtopia, which sold to Peak Foods. It was a nice 2x return on my investment inside of 9 months, so if I seem overly upbeat on this it’s because it looks very familiar. Genius Juice is not even the same type of product, but it has the 3 things Blendtopia had going for it; great branding, massive distribution and flavor.


Meet the Founder

Watch my full interview with Genius Juice founder, here.

Alex Bayer is Genius Juice’s Founder & CEO. Prior to this, Alex was the Marketing Director for an organic food company in Los Angeles. He’s always followed a clean, plant-based lifestyle and it shows.

What I like about Alex is that he takes this very personally. If you think Genius Juice sucks, he thinks that means he sucks. I love that. This dude treats his product like a mad scientist and that is why he is so successful. You don’t dedicate nearly a decade of your life to something you don’t take extra personally.


Traction

  • Sold in 2.8k+ stores nationally such as Whole Foods, Target, Costco, & more

  • 242% revenue increase from 2019 to 2020, with $2M in sales

  • $12M+ in projected revenue by end of year 2021

  • Raised $1.1M in last capital round

There is no shortage of options in the beverage section of the grocery store. So it would seem like Genius Juice would have an uphill battle when it comes to carving out a niche in an already crowded industry.

But Genius Juice has a great story to tell, and a strong brand should never be underestimated. The company sits at the nexus of several macro-food trends — agricultural and environmental sustainability; supporting local, independent farmers; the contemporary health craze; and plant-based and low-carb diets.


Market Opportunity

Genius Juice is more than a plucky newcomer, though. The company has generated impressive sales, increasing revenue by 242% from 2019 to 2020. Its products are already available in more than 2,800 stores nationwide, and it expects to earn $12 million in revenue in 2021.

There are numerous coconut water brands Genius will have to contend with, including Vita Coco, Harmless and C20. But Genius’ emphasis on using the whole coconut in its cultivation process gives it a leg up.

When presented with a large number of similar choices, the only thing that stands out to a consumer is a strong brand story. That makes Genius worthy of consideration.


Terms & Takeaway

Invest in Genius Juice here 👉 https://bit.ly/3jEPTip

Security Type: Crowd Safe
Valuation Cap: $14,000,000
Discount: 20%
Investment Goal: $1,070,000
Raised (as of publishing): $213,820
Minimum Investment: $100

Here's what I like: I hate coconut water, but I love Genius Juice. Original, of course. CPG is hard AF, but if you know what you’re looking for it can be like shooting fish in a barrel. I’m lucky. I had a front row seat for RX Bar, Dude Wipes, Tiesta Tea and a few others. In some ways, I’m the target customer: lazy, pretend-health conscious and a total brand whore. So, when I see something that stands out, then find the founder connected, charismatic and equipped with strong business fundamentals… it’s pretty easy to pull the trigger. Genius Juice is all of these things. It could totally flop, but I just feel like if he keeps after it, and hits that J-curve with momentum, exit papers are imminent.

Here's what I don't love: There’s a million choices for beverage/smoothies. And, even if it tastes like God’s private stock, who cares if no body tries it?? I typically eliminate garbage branding first, then look at distribution connections and sell-through. Genius Juice checks out here; but still no assurances. That’s what sucks about this category. If Alex decides enough is enough, it’s over. Or, if for whatever reason Costco puts his product behind a bag of Oreos and units don’t move, he loses distribution. Also, inventory is a real thing, both from the coconut prices to shipping product — shit can go off the grid in a flash… you’d love to see a line of credit, celebrity endorsements and a large PO. But then, I probably couldn't afford it.

Who should invest and why: Genius Juice has been around since 2014, the product and founder are tested and solid — and staring the hockey stick in the face! If you stay away from CPG, please continue to do so. If you like to invest in products you enjoy, or support founders building a healthier world, take a shot.

Here’s what I’ll tell you about my experience in the space; it’s really hard, but like most startups, if you see enough pitches the common denominators begin to show.

So, let’s check a few boxes: Can Genius Juice get widespread distribution ✔️ Does the branding feel relevant ✔️ Does it taste not like shit ✔️ Is the product aspirational ✔️ Are there buyers spending on that combo ✔️ Would you buy it or try it ✔️

The rest is reverse engineering. At $14m value cap ($11.2m w/ discount), is the Genius Juice worth the squeeze?? For me, that’s the real question. I’d like to get in under $10m here, but also recognize the opportunity relative to growth rate. At this price, my Blendtopia exit would have been only 1x, they didn’t have the distribution, though 🤷‍♂️

As always, startup investing is super high risk, anything can happen. So, don't go cocoNUTS ... 🥥💸

Invest in Genius Juice here 👉 https://bit.ly/3jEPTip

Questions? DM me on Twitter @kitun


Disclaimer: It goes without saying, but this information should not be constituted as financial advice, my investing opinions are my own and all diligence is the responsibility of each individual investor.