🍿 Elite Engagement · Better-For-You Snack Brand
$156,000 Recovered — And an Institutional Round Closed at 40% Higher Valuation
A better-for-you snack brand at $5.1M had received soft interest from two strategic investors. Both had asked for clean financials and a credible unit economics story. The problem: the brand’s internal financials were structured in a way that obscured profitability. They needed a financial overhaul — not to hide anything, but to present the business in a way that reflected how it actually performed.
Elite
Engagement Type
Funded
What We Found
| Layer | Finding | Impact |
|---|---|---|
| L1 — COGS | SKU-level cost rebuild across 4 sites: 2 SKUs were 12 points less profitable than reported | +$41K/yr |
| L1 — COGS | Packaging supplier: 3-quote benchmark revealed 14% cost reduction available at current volume | +$33K/yr |
| L2 — Overhead | Facility overhead allocated equally across all sites regardless of volume — rebuilt to actual allocation | Fixed |
| L3 — Working Capital | AP terms restructured with 2 key suppliers: Net 15 → Net 45. Offset against Net 75 retail AR. | $48K freed |
| L4 — Pricing | Broker commission structure: startup-tier rate still in effect 3 years post-launch | +$28K/yr |
| L5 — Growth Tax | 3PL: volume milestone passed 6 months prior — lower per-pallet rate applied retroactively | +$14K/yr |
The Situation
Good Numbers — That No One Could Explain Clearly.
The COGS rebuild was significant: the brand produced 9 SKUs across 4 manufacturing sites with costs tracked at the site level, not the SKU level. Once we rebuilt the cost allocation properly, two SKUs that had been reported as the brand's strongest performers turned out to have contribution margins nearly 12 points below what management believed.
The financial restatement produced a business that looked significantly more attractive on paper — not because performance had changed, but because the performance was now clearly visible. Both investors converted to term sheets within 60 days of receiving the rebuilt financials.
The brand closed its institutional round at a valuation 40% higher than the founder's original estimate.
"We raised money at a 40% higher valuation than I expected — and I think a big part of that was that our financials finally told the real story. Scotty didn't change the business. He made the business legible."
— Founder, $5.1M Snack Brand
Key Lesson
Institutional investors don't just buy revenue — they buy financial clarity. A brand with $5M in revenue and murky unit economics is worth less than a brand with $5M in revenue and a clean, defensible margin story. The financial cleanup that unlocks better capital terms will always cost less than the dilution it prevents.