From DMs to Froco: The Smearcase Journey (to date)

Cottage cheese ice cream sounds like a dare until you hear how Smearcase made it taste great, look shelf-ready, and sell like a real brand. Keith sits down with founders Joe and Drew to unpack the full arc: a marathon-training craving for a healthier dessert becomes “Froco,” a high-protein frozen treat built around casein and a surprisingly powerful ingredient choice, collagen, to support creaminess without leaning on a long list of gums and stabilizers.

We also get specific about what most founders actually need: a financing and execution plan that matches reality. Joe and Drew share how they bootstrapped product development, kept spend tight, and pushed for speed over perfection by getting an MVP into market before overbuilding the logo, website, or “perfect” brand world. They walk through early capital decisions, including paid-in capital, zero-interest credit cards, and the moment they felt ready to open a friends-and-family round using SAFE notes, an FAQ, and honest talk about risk and portfolio fit.

From there, the conversation expands into practical CPG funding and growth levers: investor update emails as a duty and a network engine, the value of being visible and asking for help, and how non-dilutive funding can matter just as much as equity. Drew and Joe also talk next-step tools like SBA loans, AR factoring, PO financing, private credit, and strategic partnerships, plus what they’re most proud of as the business reaches more doors.

If you’re building a CPG startup or thinking about retail distribution, startup funding, and working capital, you’ll walk away with a clearer playbook and a stronger founder mindset. Subscribe, share this with a founder friend, and leave a review with your biggest question about financing your next stage.

Connect with Keith on LinkedIn - https://www.linkedin.com/in/keithkohler1/

Transcript

Welcome And What Keith Does

Keith Kohler 0:03

Hi everyone, it's Keith Kohler, your financing man here with the latest episode of How I Financed It. And again, by way of background, what I do as your financing man is I focus on transaction, helping companies get the right financing at the right time, and transformation on their learning and development and mastery of their business finances. And I do that by meeting them where they are and guiding them along their financing journey. So today's episode, we are talking protein and very excited to have your protein dealers with us today. So would you please help me welcome to the How I Finance It Stage from Smearcase, Drew and Joe? Welcome, Drew, welcome Joe. Our protein dealers are here on the stage.

Joe Rotondo 0:58

Thanks for having us.

Keith Kohler 1:00

Yeah, really excited to speak with you both today because um it's been an interesting arc since you started over the past couple of years, right?

Joe Rotondo 1:08

It's a goal, it's a wild ride, it's a roller coaster, moving full speed, and uh the roller coaster is is not fully built. So that's it's always fun.

The Cottage Cheese Ice Cream Idea

Keith Kohler 1:19

I'd say you're still a bit on that. You might have gone over a few hills, right? But there's still quite a bit of track left in this in this journey for sure. So share with us a bit about when you conceived of smear case and how you started um or how you brought it to market. What was the original launch plan?

Joe Rotondo 1:38

Yeah, so in June of 2023, I was trained for a marathon. Uh, wanted a healthy ice cream, couldn't find it. So decided to just start making it myself. I couldn't find something that was high in protein. Uh, all ice cream is high in fat, high in sugar, high in calories, incredibly long ingredient list. And I just wanted something that could, you know, in uh implement into my lifestyle, implement into my training routine, something that could refuel and recover me at night before I had that next training run. And for me, that was cottage cheese. It's high in, it's high in protein, low in fat, it's high in casein protein, which is solar release, longer recovery, it's good to eat before bed. And uh so I just thought, like, how can you how can we create a ice cream that is loaded with nutritional value? Every ingredient serves a purpose, and there's nothing in there that shouldn't be. Um, so it started in that ingredient list. Um, and the initial, you know, the initial batches were cottage cheese, milk, sugar, and collagen, and a little bit of vanilla, and that was it. Um and at first it was just for my own selfish uh pleasure. Um, but then you know, started sharing it with friends, shared it with Drew, shared it with athletes, other entrepreneurs, and just got a ton of validation of like, wow, this is really good. And then as I did research, uh really found huge white space in the ice cream aisle. It hasn't been disrupted since Halo Top and Yasso. Um, it seemed a little stagnant. Um, and yeah, timing couldn't have been perfect because cottage cheese was on the upswing because of good culture, protein was in the zeitgeist as like this leading macro that you need more of. And everybody wants a healthier dessert. It's like a timeless sort of need for humans. We want to be indulgent, but we sort of want to feel good about it. And uh that's what that was sort of the the foundation of how it began.

Keith Kohler 3:45

Did you think of any other products as an alternative to cottage cheese that may have helped you with either the recovery or again? You you've originally conceived of this because you were training for a marathon and you thought with athletes in recovery, right?

Joe Rotondo 3:58

Yeah, I think at the time, like I drink a protein shake every day with protein powder. But that gets a little boring, right? Like I can only have one or two a day. Like I want to eat real food, and I want like there's only again, there's only so much powdery, you know, nonsense you can you can have. Um, but my go-to healthy dessert was like cottage cheese, blueberries, and honey, and that just wasn't cutting it. The protein shakes weren't cutting it. And yeah, that was just like at the end of the day, at night, before you go to bed, like what do you want to eat that like serve, like I guess for me personally, uh it's like cereal, a bowl of Wheaties before bed, a bowl of cottage cheese or a protein shake. And that was and or or ice cream, but the that was the missing piece. So like I can't have ice cream before bed because it's so high in sugar, high in fat. Um, I don't know, Drew, what was like your like what's your nighttime snack?

Collagen As The Secret Ingredient

Drew DiSpirito 4:55

What's my nighttime snack? Oh my gosh. Um well Froco now. I tried answer. Good answer. Yeah, I the the irony for me is like I'm I'm kind of the opposite of Joe. I my most uh frequent occasion is the morning. Like I like to make afogatos with our product and or froco chinos, we call them. Um and and or put it in my smoothie. So I'm more of a breakfast occasion. Um, but yeah, I'm definitely more in the way of the whole foods consumer. Like I don't do a lot of supplements, I don't do a lot of powders or anything of any kind. I I caught on the green drink train for a little bit, uh, but I'd say probably off that or doing that sporadically at this point.

Keith Kohler 5:43

Just going back, uh Joe, one thing that caught my attention, collagen. You mentioned was on the ingredient deck. What was the purpose of that and how did that come into the mix?

Joe Rotondo 5:53

Yeah, collagen was like the biggest happy accident. At first, it was like, again, how can we boost the nutritional value of this product? Um, I didn't want a protein powder uh in the ice cream and uh because of solubility. Uh but collagen was one of those things where it mixed in incredibly well. It boosted the nutritional profile of the product. A lot of people supplement with collagen already. And then, you know, over time, this was listen, I'm an ice cream outsider. I've never made ice cream myself before. I've made bagels, I've made you know meatballs and Italian dishes, but not ice cream. So collagen was this like outside, you know, because I'm not in the ice cream business or CBG for that matter, I didn't have any rules. I had no box, so I was already thinking outside of like what is possible. And collagen ended up being this secret weapon for us that boosts the nutritional value and removes our need to use gums or stabilizers, and it just adds to this like creaminess texture that uh people uh expect out of out of traditional ice cream. Um so it was just like this random thing, like, oh, I had like I always have collagen on hand. And it was just I was just like, let me let's just add this to uh make it even more healthy.

Keith Kohler 7:21

So as you're creating that formulation, you were doing just research online. Hey, this could combine, this could provide this nutritional profile of these benefits, or was it more trial and error?

Joe Rotondo 7:34

Uh honestly, Keith, there was very little research.

Keith Kohler 7:38

Really?

Joe Rotondo 7:39

To tell you the truth, yeah. I was I was my sister was helping the initial formula, and she's just like an incredible baker. She's incredible with numbers and ratios. And I'm just incredibly passionate about health, wellness, and fitness. So I'm like very uh well self-researched, just in terms of like what ingredients are good for you, what what doesn't belong in food. Um, so it was a little bit of testing, but it was also just like life experience of hey, this is what I think should make an ice cream.

A DM Turns Into Cofounders

Keith Kohler 8:17

That's really clever, yeah. Cause you were living a lifestyle and you knew that you knew the benefit of collagen already, right? You you knew that it could be play an important role in your in your deck. Yeah, that's right. Perfect. How did you both come together on this project?

Joe Rotondo 8:34

Drew, uh Drew reached out to me years ago, um, at a clothing brand at the time. Yeah, Drew, I mean, well tell the story and then get it together.

Drew DiSpirito 8:47

Yeah, little the little known fact is we actually met in the DMs. Joe and I actually had uh clothing companies before this. He was running Rocky Clark. Yeah, yeah. Uh had never met. He was running a sustainable denim brand, Rocky Clark. I was running what I called like an urban leisure brand uh called Delmonico. And I remember seeing either Joe's page or the Rocky Clark page on Instagram and just DMing saying, Hey, I I, you know, I run a small brand in New York, I know what it's like. I just wanted to give you props because I love what you're doing. And then that turned into uh a phone call, which I I vividly remember standing in the like lower east side, East Village on the phone with Joe, thinking, this is like one of the weirdest phone calls I've ever been on. This is a guy like I met in a DM a couple months ago, which then which that yeah, I was right outside my own apartment in the East Village.

Joe Rotondo 9:44

Like, I was just sorry, Drew. I was just thinking how I never thought I I knew I remember our phone call, and as soon as you said I have a vivid memory, the memory for me popped in. I think it was a rainy day. I feel like it was for me, it was a rainy day, and I was sitting in my office in my old apartment with a pile of jeans that I just finished on. That's that's funny.

Drew DiSpirito 10:08

Yeah, so the phone call turned into hey, let's grab coffee and let's just bounce ideas off each other. Let's like share some more stories of you know, building small brands in the big city. And we just immediately clicked and became good entrepreneurial soundboards. Um, Joe is definitely more of like a technical marketing background and and more um more of a like e-com background. And like for me, I I don't I don't want to touch web development or you know, e-com, econ e-com KPIs. I had no idea what ROAS was five years ago, you know, whereas Joe was living and breathing that stuff. So we were just complimentary from the onset, be able to share, share wisdom. And um, it was during a coffee meeting in the middle of that summer of 23 that he was telling me about how he had been making this and how he shared it with a couple people in the fitness community community, and I was just like, that is like the most differentiated thing I have heard in the longest time. I would take all your irons out of the fire and bet on that horse and just do that. And Joe was like, Well, do you want to help me? And we basically uh hit the ground running from that day forward. We got we see we incorporated a couple months later, uh, March of 24, we had the product in market June of 24, and then uh pretty soon after we yeah grew our store count pretty substantially. I mean, we're less than two years in market now, and we're about to be at a thousand doors nationwide. So it was a it was a like the roll. I don't know which which way that if down is good or up is good or what in this scenario, but it's just been it, it has truly been a wild ride. Um, it's it's interesting to juxtapose it against building a clothing brand where you sort of feel like you're beating your head against the wall, trying everything to get traction and and appeal to people. And you could have the coolest website, the coolest product, the coolest pop-up shop, but it's just really so hard to break through the noise. And and the same is true in CPG, but I think the hunch around it being differentiated was true. Like this this product is um recognized as one of the most innovative things to come out in in CPG in in the last couple of years, um, which is just really cool to be be a part of it.

Joe Rotondo 12:31

And what's funny is I starred I I starred in one of Drew's uh clothing campaigns years ago, made a commercial for like a mini mini film.

Drew DiSpirito 12:45

Wait a minute, even before you had met we well after we had met and started to become friends, I I like was really infatuated with Joe's like actual uh apparel design background and wanted to have him featured in one of our shorts. So like that uh Joe was like fake sewing um a piece of fabric and then like walking through the city streets. Um yeah, and like we just we just kind of uh share resources. Like he was in a commercial of mine, he put me on to a sample maker in the Garment district that we ended up using for one of our last collections we ever ran. Um and then I don't know if it ever released, Joe, but the interview at MoMA uh locked in.

Joe Rotondo 13:36

I still have it's on my phone somewhere.

Drew DiSpirito 13:39

One of the last things we did pre-partnership was uh Joe actually interviewed me in in his uh his podcast or his short um series that he was he was doing at the time. So it's yeah.

Joe Rotondo 13:53

And the first batch of ice cream we made together was was pretty gross. It was terrible.

Drew DiSpirito 14:00

I know. I was like, I I remember I remember saying this, and it's I sound it sounds bad out loud, but I was just like, hey, I don't mean to be like a Mark Cuban here, but like if I'm gonna get involved, I gotta try this, you know? Like I need to know if it's good. And we we made a badge together and it and it was all messed up. We uh made the mistake of trying to utilize that time to fix his sister's freezer door. And so while we're fixing the freezer door, trying to go into the hardware store, trying to get parts to flip the way it it turned because it was turning into this into the oven. It was mounted wrong. The the component that uh the cylinder, the frozen cylinder that allows for the ice cream to actually be made, thawed out. And so that the texture was way off. Everything was but I tried I trusted Joe. Like he he assured me that it was uncharacteristic, and the next couple batches were were much, much better. So it was it was a it was a quick it was a quick turnaround.

Keith Kohler 15:01

First key lesson for everybody slide into everyone's DMs who you're interested in meeting because magical things can happen, right?

Drew DiSpirito 15:09

Honestly, it sounds silly, but if if you if you respect what someone's doing and they're inspiring you in some way, like acknowledging that in a genuine way can open a door for you. And and I like the last thing you want to do is like just DM people for the sake of DMing people. But if if they're doing something that you appreciate or they have a knowledge that you you could learn from and there's some value exchange, like there's no reason to to just um sit in your head with that. Like you you should act on it, I think I think at least.

Keith Kohler 15:42

I really believe that too. And it's worked for me as well, particularly in LinkedIn. And I think all three of us together probably get at least a hundred a day of solicitations that are AI generated through LinkedIn about this and that and the other thing, and software, and I'll get you a hundred leads and all that stuff. But when I do get that text that is sincere showing they actually read what I'm writing about, or they say, Hey, I saw what you're offering, I think I need help with this, those are the ones, right? That you respond to because it doesn't take that long to do it, number one. And you're right, I mean, I think we all recognize that building a business yourself is interesting, but finding the right people to collaborate, in your case, form a partnership. But even if it's just having the support or acknowledgement that, hey, the work you're doing is important, impactful, it's having an influence on others, it's great to build that community, whether again they're directly involved or kind of fans on the periphery. And so, yeah, I totally advocate that. I'm glad you all reached out to each other because uh, in the short time I've gotten to know you, I would have thought, and I'll bet you get this, that you've been lifelong friends since elementary school. Feels like it. I that total vibe from the two of you because and I think it may because also just the way you've shown up on stage and in competitions, and your at your extroverted way of again just showing up in the world.

Joe Rotondo 17:15

I think it's I think it's the amount of vowels and our last names that yeah, right.

Drew DiSpirito 17:19

I was gonna say when you're Italian American from the Northeast, Joe's one of four, I'm one of three. We like, you know, there's there's there's uh we we always said we're like cut from the same cloth, you know, there's just like um very, very um, yeah, very parallel paths in a way.

Keith Kohler 17:40

And um, Drew, coming back to you for a minute, we you mentioned what Joe's contributions were and what his his skill set was. Yours was more on finance as well, right?

Drew DiSpirito 17:51

Yeah, so a traditional finance major, minor in sustainability and supply chain management, um, and sort of brought, I would say, like more of the like general business acumen and finance knowledge. That's that's not to say Joe didn't have that. He was running a business, right? Like he's he's probably uh uh substantially further than most people, but yeah, I think that's kind of what I brought to the equation. Admittedly, you know, I rely on I rely on uh resources to inform my point of view on that as well, though. And that's kind of where you come in. And and I know that that the segue feels disingenuous, but like you know, you've been a sound lord for me early on. Uh, one of my friends who's in the restructuring space here in New York has been a soundboard for me. And then another older of mine is in kind of the growth, the growth equity um investment side, and he he's been a great soundboard, and it kind of goes full circle with the like if you need help or you appreciate something, don't hesitate to share that compliment or make that ask because you're you're only as good as the people around you, and um yeah, so I I would say generally that's kind of my wheelhouse. Um, I'm also um more acclimated in in working in larger environments, whereas Joe's um more in the startup field. So I think as we scale um some of the like project management background and things like to that effect will take hold and be important for getting to that next stage growth.

Keith Kohler 19:24

So, yeah, as I hear what you're saying, oftentimes what I see with co-founders is more of a similarity in skill sets, like almost always super strong in sales and marketing, being the face of their brand, very willing to be out there, right? Hey, I'll go to every meeting, I'll show up, I'll demo, I'll do that. Yours is, I think, dare I say, better equipped for the long haul because of complementary skill sets. Lots of good overlap, right, in the middle, because indeed you both ran a closing, clothing business, and that requires all the functional knowledge, or at least shades of them, right? And now here you're coming together, leveraging some of your traditional strengths, and then seeing where that goes. So that is a bit of a unique partnership that I've seen versus other co-founders, where there tends to be significant overlap and maybe some areas that aren't well covered, particularly in what I focus on in finance and financing.

Drew DiSpirito 20:25

Yeah, it's interesting that you notice that. I one of the investments Joe and I made at the start of this year was an executive coach to better understand our skill sets, our working styles. And uh I was a bit skeptical at first. It felt like, you know, business therapy in a way, but man oh man has it been super beneficial to really understand what makes Joe tick, um, what gets him motivated, what gets him demotivated, how does he appreciate being communicated to? All of those things are so important. And and Joe recognizes the same for me. And it's it's just been invaluable. But one of the outcomes of that was a better understanding of our Myers Briggs. And if I was to visualize it like a donut, like a donut with sprinkles, and if the sprinkles sit in one quadrant, you have that skill. Joe's donut had sprinkles on the left, and my donut had sprinkles on the right. Like our our skill sets were like very complementary, and to your point, most are sort of supplementary, where it's just stacking on the same skills. So it was it was cool to see. We're considered a golden pair or a golden, I think a golden pair in the Myers-Briggs realm.

Keith Kohler 21:37

Which is so no more yin-yang. We're gonna be talking donuts in addition to yeah, right. Number two, you can't leave us hanging. We gotta know what the four letters are for each of you.

Joe Rotondo 21:49

Do you recall? I'm an I'm an INTJ uh arc architect.

Keith Kohler 21:54

I and T J. Okay, Drew, give it to me. Do you recall?

Drew DiSpirito 21:58

Yeah, I I took it. 10 years ago and was an ENTP, which is inventor. And then this time around, I was ENFP, which is campaigner.

Keith Kohler 22:08

Okay. So interesting, Drew. You and I overlap perfectly. I also ENFP. Nice. Yeah, and again, I love that campaigner side, right? Because with we thrive on once we feel quite certain of something, right? We're out there. If we if the analytics are good, we're willing to share that with the world. And I think you you probably find you're excited to be a good cheerleader for Joe and complimentary on that side, right? He might take the lead, like again, Expo House or some of the media or fun things you've done. That might be his original idea, and then you're happy to support it, right?

Joe Rotondo 22:51

Drew actually put that together. I don't even know whose idea it was sort of like a collective idea, a feel. Sort of like we all arrived to it, and then took it.

Drew DiSpirito 23:03

We had some buddies that had gotten the house, and uh I can't remember who threw out the idea to make some content while we were there, but I was I immediately thought of a LA creative uh buddy of mine from school, and this is another thing like in the DMs or whatever. This this kid was four years younger than me. We interacted only a few times in person at college, but I genuinely love everything he does. I think he's one of the most creative people I know. And so I just follow along and and I and I interact here and there, and I and I just said, hey, I know you're in LA because I follow along. We we need some we need some help producing what we think is a really good idea. You know, do you have any experience doing this? I I didn't even know this at the time, but he was like producing bar rescue, that that cookie show where that guy turns around those bars. And so he knew end to end like how to how to do this, and he came in and and and crushed crushed it. So we're we're pretty excited to drop those few episodes coming up. We I think we put out teaser number two today, actually.

Bootstrapping To Launch At Fancy Food

Keith Kohler 24:11

Perfect. Hey, for context for all our listeners and viewers, Expo West is the largest trade show in the natural uh CPG space. And again, I brought this up because Drew and Joe and a few other brands were very innovative in saying, what if we could come up with a new twist that's unique, right? It was no, I don't, no brand has ever done that to my knowledge. And doing this as a clever mini-series with all the television aspects to it, I think was brilliant, is capturing a lot of the imagination of certainly LinkedIn and and fellow brands and getting you a lot of airtime, right? Because I'm sure people are excited to view it and share it and everything like that. So that was incredibly clever. So um we've gotten to the point so far where I haven't even asked you about financing, and here we have to go back to that. So you had gotten the formulations going, they're happening the last the first batch, not so great. But after that, you knew you had something. And when you thought about getting it to market, what was the financing you originally used to make that happen?

Joe Rotondo 25:17

Bootstrapped. It was like a blank check almost. It felt like a blank check, honestly. I think we were both just we just sort of uh had a couple conversations and we were just both in agreement. Like we're we're willing to do whatever it takes to get this to market. Um, but every like we knew that boxes had to be checked before we made an investment. Um I think like I I operate under the philosophy of how far can you how far can you get down the field as fast as you can and as cheaply as you can. Okay. So, you know, doing all the product development ourselves. My sister and I made the original formula in my apartment. It it cost us 40 bucks from with the ingredients from Whole Foods. The uh the branding and packaging design, we worked with my brother to execute that. We spent a couple hundred bucks instead of tens of thousands of dollars, right? Um, so we like before I even came up with this idea, I I set parameters around myself. I wanted to work with people that I trust. I wanted to work with people that I that were talented in my life, right? I knew my brother and my sister were incredibly talented in certain areas. Um uh after having conversations with Drew, I was like, all right, like this guy is complimentary to my skill set. Like I trust him. Um, he's a friend, like it just felt natural. Um and I think by doing that, you're leveraging your network, asking some favors, asking for some help, not knowing where it's gonna go, right? Like it was, it was it felt like a genuinely crazy idea to make cottage cheese ice cream. Um, but I think once we were in agreement, we're like, all right, like let's let's put uh some resources behind this to get a minimum an MOQ production run.

Drew DiSpirito 27:22

Yeah, I remember Joe had a couple different zero interest credit cards going, and I would just Venmo him uh an occasional sum of money. And like to his point, our whole our whole mindset at the time was this is an experiment. Let's run a cheap, fast test. Let's let's get in market with a legitimate product, let's put ourselves in a position to grow. Like we don't want to half ass it by any means, but we don't want to overinvest in the wrong areas, right? And I think a lot of first-time founders get really excited about their logo, they get really excited about their website, they get really excited about all these things that are just a drain on capital before they even know if they have a legitimate product or service. Um, so and and Joe and I like we've gotten our reps in, so we know what to focus on. We we said, let's get the MVP product in the market, let the market decide. So I think getting into market, we probably had uh just under 50,000 and paid in capital, but this is the stuff that your viewers probably care about. Um and then a few months into being in market, knowing that we had a phone call with Whole Foods and had a phone call with big bigger distributors, and and we were gaining and garnering a lot of uh attention. We we felt comfortable opening up a family and friends around, um, which uh neither of us did in our clothing companies. And I think I think that's another responsibility you have as a founder is recognizing when it's okay and to begin accepting money from friends and family. Um you you have to have unwavering belief that you you have the opportunity to provide a return. You have no idea what's gonna happen. It could it could blow up in your face, but I think that's kind of your responsibility as a founder. And we both looked at each other and said, like this thing has legs. So we raised uh a small amount from family and friends, which got us uh a year or so of runway. Um, and we pretty quickly opened up uh another round preemptive to that burning out. Um, again, because we were getting more traction, wanted to have a war chest, um, and that round closed just under a year after that. And um, you know, inks not tried, but we're talking we're talking about um a more serious investment at this time, um, which would be really exciting for us getting to our next stage of growth. Um, and then on the debt side, we've you know had meaningful discussions with you about SBA uh loans that can be that can yeah, that continues to be the one of the most highly recommended instruments for profitable early stage businesses. Um PO factoring and P and PO financing and things of the AR factoring and PO financing have have come into the equation. We've had discussions around that. We've also met with and had discussions in the private uh credit space as well. Um, none of those levers we've we've pulled yet. Um, but I I anticipate that being an instrumental part of our next kind of stage of growth.

Keith Kohler 30:34

I'm gonna go back to what you first said about the 50,000. And Joe, um, both of you together, but Joe, you initiated the point about getting all the essentials done and doing it efficiently and cheaply. And I think you can add to that, but not cutting corners, right? And I thought that um also that point that was made about a lot of people might get caught up in again the logo, the the marketing, the branding, the that appearance, right? That may or may not get them something at all. And so I think here 50,000 is a fair amount of money, but that alone could be a a logo and packaging budget for an agency to do something. So again, I wonder how you made those choices when you think about, yeah, you could have maybe put more in and invested in other things, but it was really about the minimum viable product above all things, right? Yeah, and then and then the rest of the items.

Joe Rotondo 31:36

Just knowing that there's a v2 of everything. It's my favorite Virgil Ablo quote. He's uh uh RIP of Virgil, he he was an incredible clothing designer, just uh visionary. But he always said that there's a V2 of everything, you know, there's a there's refinement on the way, you know, knowing that at some point there'll be a rebrand, at some point there'll be a reformulation, better packaging. But like, what do you need to get into market? Um at the time, at the time, I came up with the idea for smear case. A week later, I got laid off from corporate. And it was just like uh there was a ton of uncertainty in my life, but uh uh much to my chagrin, I'm a I'm a I I love taking risk. And this was something I was willing to to bet on. Like I think the savest bet remains um remains to be on yourself. Um and like what we were building. Like, I just had an undeniable belief in in what we can what we can make happen. So knowing all that, like to Drew's point, like what gave us comfort to ask friends and family. It was it was something that we were both just like really uh I think we were both honestly conflicted, you know, like asking other people for money or like presenting this opportunity to somebody, but like it's just a tool. Um, but I think what gave us comfort was like the fact that you can go to a retail store and pick up the product off the shelf. It was tangible, it was real, it was shelf ready. We had like verbal commitments from Whole Foods, we were deep in discussion with Sprouts. So, like, those are like two huge banners and to juice point. Like, we took all of that and brought it and did it in a really organic way, and there was a lot of excitement from just our our small network, uh, and like initial network. Um, and I think at the time it was there was still a ton of uncertainty, but we got the ball down the field so far, and we we didn't really spend a whole lot.

Keith Kohler 33:44

Um yeah, at the time were you distributed mainly in the New York area?

Joe Rotondo 33:50

Yeah, yeah. So we took so um man, timing is everything like speed, speed over everything. We knew um it was pretty much like March was when we incorporated, so we did it at the last second. We knew we had to set it up as a C Corp because that's what uh the that's the structure we needed to raise capital, it was tax efficient. Um and then March, we made our first sample, like official sample run. And then once we had approval, really of like, okay, the sample tastes good. This factory can actually uh make this for us, those are the boxes we wanted to check. Then we're like, all right, we're moving full speed to launch this. Like we had to be first movers, we have to be the first cottage cheese ice from our market. We are, and we still remain to be, which is incredible. And then we had to do it in the summer. Um, so our timeline was all right, fancy food is when we're gonna launch. And we just made the bet on ourselves like we're gonna do a minimum run, we're gonna bring all that product that is retail ready in the packaging, UPC, nutrition label, insurance. Um, and we brought that to fancy food. People were trying the product that they were that was gonna stock their shelves and they were placing orders on the spot with the local distributors. So we really threaded the needle on timing. Um and yeah, it's in terms of like sequencing when to deploy cash, I think that's something that we were really cognizant of. Um again, like I was unemployed, so like I had to, you know, feed myself. I was still looking for jobs. I was unsure of like if I was gonna do this full time or if I was gonna get a job to buy some more time. So I was very frugal. I'm a just a frugal person in general. Um but like people are so quick to jump the gum gun on a trademark. And and we like you don't have to, right? You got to check if the name's available, but smear case is different enough that I don't I don't think anybody was thinking about trademarking it. So like there are certain expenses that you can put off until a later point. Um that was a long rant of a whole lot. So probably back.

Keith Kohler 36:12

So I'm gonna bring up two things that I loved. Um there's a V2 to everything. I I really love that because that you said that for me, that you're giving me a little bit of divine guidance because I was in my own head several times on launching initiatives and financing, whether it's uh CBG financing guide, by the way, I'm version version 1.4 is coming out soon, but even to get that 1.0 out because I was terrified it won't be right or they won't be complete. Well, it won't be complete because the people change and my contacts get updated and sometimes they move around. But I agree with you so much that it's not perfect, right? Get it out there. Now, of course, your product was perfect, but it didn't mean all the other executional elements had to be a hundred percent perfect. You got the proof of concept, the timing worked out, and so it made it easier to have those friends and family discussions.

Joe Rotondo 37:11

Yeah, if you wait for perfect, you're gonna wait forever. And trust me, like I have high expectations, I have incredibly high standards, but I will never wait for perfect. You know, I don't even proofread my LinkedIn post, Keith.

Friends And Family Fundraising Playbook

Keith Kohler 37:24

Okay, so as I hear what we've all been saying, not waiting on perfect also resonates a lot with me, too. And I think that's a good lesson for our CPG founders because we can get in our own heads, right? We can overanalyze things too much. And also sometimes too many advisors might have influence on us, or even our peers, right? As to what we could do or what's acceptable to do, or any of those other types of things. So I applaud the fact that again, you also talked about the speed over everything. You just seem to get it done. And so that's really cool. So you mentioned the 50,000, and then you went to friends and family when you knew you had the minimum viable product and you had some retail experience, right? You were you had your velocities, you felt like, hey, we have something, we know we can scale this. So I'm curious, who were the friends and family that you approached first?

Drew DiSpirito 38:20

Family and friends. Uh I mean, blood, blood relatives, you know, the immediate siblings, parents, um, and then friends that um are engaged, you know, friend friends that sort of pay attention to what you're doing, friends that seem seem to care. And um I think just yeah, you you cast you cast a reasonably wide net. You never you really never know who's gonna come out of the woodwork. Um, and so you can't be shy about that, but you also have to be very honest with them. And like my talk track was generally like, look, think about your portfolio at large, like your your 401k, your discretionary investments, your your checking and savings account. Like this the sum that you consider in this equation should be representative of the amount you're willing to allocate to the highest risk bucket. This is like crypto, but maybe even more, you know, more risky. Um, so that was that was generally my talk track. And then I I always close with like there is zero obligation if not if you're nothing but a customer, we still appreciate uh appreciate you. And and that's that's generally the dialogue I have. I'm never just like throwing a safe note in front of them and saying, hey, you know, let me know what you can you can offer here. It's it's it's it generally starts with a conversation and and then the note to follow if there's genuine interest.

Keith Kohler 39:47

Yeah, I appreciate the transparency in that. Because maybe you took a very complete approach. And what I found with founders is many of them may not have had the depth of the discussion that you had, talking about risk and comparing it to something that was tangible that people can understand. Yeah, because probably a lot of our friends and family do have 401ks, or they might be in crypto or other assets on the higher risk side of a portfolio. And I think that was very clever to think about as a portfolio strategy, because on the assumption that people might have traditional 401ks in mutual funds or bonds, whatever, and they have lower risk items or more traditional risk items, whatever that might mean, you're you're a new toy in the sandbox, and it's not unreasonable, it's not unreasonable to say, okay, I'm gonna move upstream to this, but I'm still on a portfolio side or portfolio viewpoint pretty good, or at say a medium risk or a risk tolerance that I can handle. So that's a super clever strategy.

Drew DiSpirito 40:58

Um yeah, I just recognize that most family members that are writing checks are are this is the first time they've ever written an early stage venture capital type of a check or angel check, right? Like no one's almost none of them have ever operated into in this capacity. Like if I were to pull up the sheet right now and go through the names, uh maybe two percent uh of people who wrote a check in round one and two had had done this before. And the other thing, so the other thing we did as part of that, and this is another lesson from founders, is like leverage was already there. Um use like the Y Combinator template's a great, a great template for safe agreements. We actually spent a small a small um amount of money with our lawyer to dumb that down. And uh, because there's so much legal ease, just even in a simple standard agreement, we just we just said, hey, can we have a lot of first-time investors? Can you can you just make this a little bit more first-time friendly? Um, so that was a small, small sum that we were willing to spend to just help get people up to speed. Um, definitely not necessary, I I think. Like I would argue maybe the using the standard template is a better idea for for founders out there, just because there's reassurance that it's industry standard. Um, but that was that was a decision we made at the time to help help people out that were first timers.

Joe Rotondo 42:24

Yeah, we also put together an FAQ sheet, obviously a deck. We had like a deck. Um, but that yeah, the friends and family was true friends and fam family, but I think sort of towards the end of it, we started to venture out in like the network effect just started to take shape. Um it just sort of happens. I don't even know how. It just sort of you get in touch with somebody, they tell somebody else, oh, you gotta talk to this person. Next thing you know, you're talking to, you know, I think that's where Drew's campaigner energy really stepped in of like of finding people to talk to that um could add value in some way outside of capital, right? Like, even though it's a friends and family round, like you should be starting to lay some foundations with potential funds, bigger angels, uh CPG execs, veterans, former founders, um, all that's important to weigh in on like you still wanna you have to fundraise, but you still have to operate the business, and you still have to forward think and strategize of what's next. Like, what are you gonna do with this money? Um so there's yeah, there's a lot of that's there's a lot that goes into it.

Drew DiSpirito 43:43

Yeah, one maybe one thing I would just add my last note on the family and friends round is uh you know, there's this adage of having a clean cap table. And you know, maybe in a in a liquidation event, having a clean cap table makes things easier, whether You're folding or whether you're selling. But if you're trying to get to uh a positive outcome, having more people with skin in the game only helps. So if if you know my high school friend's ex-coworker's dad loves it and wants to write a check, sure. You know, and so for us, it's like uh having more disciples that can kind of preach the good word of Froco in their communities, um, and then and or make more introductions uh to other resources. Um yeah, there's a network effect. And I I think you I think I think I don't know, I've met some founders that are very exclusionary in their fundraising in the beginning. And I I just think um you you really know you never know what someone can do for you. Like we had an investor who bought our domain name as a gift um after writing a check. He said you guys ought to have smearcase.com. So you just never really know who's gonna do what.

Keith Kohler 45:05

That really resonates with me as well. Um and I agree with you that some people might have a thesis about here are my ideal people that I want to work with, and they might stay well within those boundaries. And I think that's a missed opportunity for sure. Um, I've been surprised by myself in the past year in particular, the more I create, the more I talk about launching new initiatives, websites, kind of my own IP, and the more I have the opportunity to share with people what I'm planning, it's astonishing how things start to show up. Because I really believe, particularly in this industry, um in CPG, people are excited if they can help, if they can contribute. And whether they figure it out on their own, or it's a very direct ask, hey, I need a co-man in the West Coast because I'm expanding and I'm doing this, or I need a new vendor for dairy, all those different things I find nine times out of ten people do respond and they're happy to help. And I think we all can hold ourselves back, right? Some I think not in your case, I think you were out there like we were sure we were gonna do this. Speed, as you said, not waiting for perfection. But a lot of our other founders out there, my experience is they will hold themselves back. Asking for money can be daunting, right? Particularly in the friends and family space. But in any type of decision making, holding back and not and realizing, wait a minute, I can make these decisions and I can be supported at the same time. And I can allow myself to feel supported. And that I was that guy. I didn't not allow I did not allow myself to feel supported for a long time because I viewed that as not having much value. And boy was I wrong.

Joe Rotondo 47:02

Yeah, asking for help is a superpower for sure.

Keith Kohler 47:06

And yeah, in our a lot of times, men were raised or socialized to believe that that's a sign of weakness.

Investor Updates Network Effects And Debt

Joe Rotondo 47:13

Yeah, takes a ton of humility, vulnerability. Um, but I mean, I think in CPG, this industry is incredible. I think fashion was just like so draining, it was so sceney and competitive, and the trends were fast. But in CBG, everybody recognizes how difficult it is to build one of these companies, especially from scratch, especially as a first-time founder, um, limited resources. And I yeah, help comes and goes, and it's value like you give, you get, you receive. It's it's just like this whole cyclical uh journey. Um and I think that's what honestly, that's a cool part about being in New York City is that the CBG community has blossomed into this powerhouse where now you have so many founders, so many new brands, so many different communities, events. Um so you you know, you grow, you sort of grow up with these founders, um, and everybody wants to help each other. Um yeah, rising tide with solve ships, that's for sure.

Keith Kohler 48:18

Oh, I totally believe that. And one of the tactics you've done very effectively, because I've received them, are your investor letters and updates. And I think that's an opportunity for more founders to do more effectively for sure.

Joe Rotondo 48:34

It's your duty, it's your duty and obligation. Like you want these people to know where this money is going, who who who are the stewards of this of this cash. Um, keeping people on the loop is yeah.

Keith Kohler 48:50

I like what you said about a duty and an obligation. I'm personally invested in about nine companies, and only three or four keep me updated as much as I would like. Wow. Yeah.

Drew DiSpirito 49:03

We're the opposite. We overshare and we share to people that don't even have skin in the game, but we think it's important to share our wins, and then it's even more important to include our asks. Like, hey, we need help here. Yeah. Um, so like we're yeah, I I think that's it's that's a shame to hear, to be honest.

Keith Kohler 49:22

But yeah, yeah, and it's I'm putting a little bit of blame on myself. I really should be more in their face and demand that I get the updates that I deserve because I wrote a check after all, right?

Drew DiSpirito 49:33

I do not I do not believe the onus should be on you as the investor, period. Like the I would argue that the investor, the investor uh should be engaged to the effect that they read what the the founders provide, but shouldn't be um bothering uh founders. The found the onus is on the founders, and um I know things get busy, but like Joe and I always have a running Google Sheet with investor updates. We have our template, and as we get wins, we drop them in, and uh as we have a major ask, we drop them in, and then when we feel the time is right, it's like okay, let's let's you know let this out in the world. And we've been told that we overshare, but I think, yeah, I think it's it's it's really silly not not to be transparent with people that can help uh change the trajectory of your business.

Keith Kohler 50:22

It's working for you though, right? I mean, you feel comfortable continuing to be in that quote unquote overshare mode, at least for now, right?

Drew DiSpirito 50:30

Oh yeah, definitely. I I think the slippery slope with oversharing is that it it god forbid you're not doing well um having to tell the story that you're not doing well because once the music stops, it's gonna it's gonna raise flags. So um, you know, we fortunately haven't encountered that, but I I I think I I I I I know that we will continue to have that like open dialogue with our parties, and hey, this is what we're seeing, and why like maybe we have to pull out of a retail banner because it wasn't the right customer base, and we lost a fair amount of money trying to do that or something to that effect. You know, I I it god forbid that did happen. I I think that's the the type of open dialogue we'd have about it.

Keith Kohler 51:15

Yeah, it's funny. Um my choir director says it best, I'd rather have to try to slow you down than speed you up.

Joe Rotondo 51:24

Yeah, that's it's funny you say that. I I send a weekly email and in a quote a week or two ago was uh man, it was from net the Netflix CEO Reed Hastings, and it was something very similar is comp uh more more companies die because they're too slow versus too fast.

Keith Kohler 51:43

Yeah. And actually, in singing, it is absolutely true. It's easier to slow acquire down because if you speed them up, then everybody speeds up at different rates.

Joe Rotondo 51:53

Right.

Keith Kohler 51:54

Right.

Joe Rotondo 51:54

It's kind of an interesting dynamic, but um but you gotta understand, like those investor update emails, like these people are spending their hard-earned money and they believe in you. Yeah, some of a lot of them, like people from my network have never formally met Drew, and vice versa. Like I have a that's our responsibility as leaders of the business. Like, we're working for them in a way. It's really it's like we like we want to provide as much value as possible to these folks um who who've put their time and energy into us. Like, we're gonna do we're gonna work our butts off to to make sure that um they get the returns that they that they want to see. And also it the update emos are also a form of marketing in a way, you know.

Keith Kohler 52:46

We have a top of mind in the inbox and exactly go back into the store and buy a new case or something, advocates, ambassadors, customers.

Joe Rotondo 52:56

I mean, that's not the only reason, but um, and it's just a network effect. I think it's yeah, yeah.

Drew DiSpirito 53:03

We've we've never we've never sent one without a slew of responses, and sometimes it's just congrats keep it going, but a lot of the times it's hey, have you ever did you guys connect with so and so yet? Or have you have you come across so and so? No, but we take an introduction and then it leads. So I I I think it's just again, it's just like all this is about I feel like the theme for this podcast is like plant as many seeds as you can, um and and and uh but don't spend too much time uh watering any one uh plant. Like you gotta kind of yeah.

Keith Kohler 53:39

Well, it's true. The way you've chosen to build your business, again, as we're coming to our conclusion, speed, not waiting on perfection, you've cast your net wide, right? You're willing to be very visible and very vulnerable. The oversharing, that's the first time I've heard that word doing now 15 or 16 episodes of this. No one's ever said that. And I think while I can see some people thinking that's perilous, and probably you might get that feedback more from investor style people saying that, I think it's the opposite. I really do. I think there's a win for being out there, um, available, visible, all those different things you want to talk about. And it's working for you. So now you've been, now we're here in 2026 and you gotten into sprouts, and that's the next phase of your growth in retail and other places. And just to close the loop, you talked about different working capital financing you might be getting, but um AR um factoring and and PO financing. Beyond that, what do you think could be next after that?

Drew DiSpirito 54:48

From uh from a debt perspective?

Keith Kohler 54:50

Or any type of financing mix?

Drew DiSpirito 54:53

I mean, there's there's certainly um larger lines of credit um available. I I think you know what we'll do is we'll likely lean on our um institutional uh investors to give guidance on the different instruments and when it makes sense, lean on you to give guidance on the different instruments and and what makes sense. I like very few founders understand their way around a PL early on, let alone what when and how to leverage debt, right? Like I think most people understand an interest-free credit card is a is a is a is a fun little way to uh you know finance an engagement ring without actually having to pay interest or something that to that effect. But most people aren't sadly enough to understand all the different debt facilities and instruments at their disposal, and and um we fall into that camp. So again, like relying on people that do know the area to give us guidance and sort of um be diligent enough to capture all the different options, really diligence the different options, and then make the decision that you think is best for the business.

Joe Rotondo 56:04

And to add, like we've we've been fortunate enough, like we've we've won over $350,000 in grants, cash prizes, and services uh just by entering pitch competitions. And that's been a huge source of uh working capital, but also uh part like strategic partnerships have come out of that with with the California Milk Advisory Board. They've not only given us grant funding to help support our business, but they support us with retail launches, they support us with supply chain, uh ingredient sourcing, manufacturing. Uh so there's a lot of tools at your disposal. I think you know it's it's your job to to have your finger on the pulse in every single type of uh function and and opportunity. Um and I think that's just a result of keeping your eye on the ball. And and and I think the investor update, going back to the investor update email, Drew always says, like, if you tell somebody, if you let it be known that you're working on something, somebody's gonna find a way to help you. By staying top of mind, by telling them, hey, I'm working on this. Everybody, you're always at one degree separation from someone, um, but they don't know how to help unless you ask it or let it be known. Um, and it's part of the job. Like it's part of the job. You think that you think a player who loses the Super Bowl wants to do a post-game interview? Absolutely not, but it's part of the job. You know, it's it's part of your job to put yourself out there and um and what it be known. It's it, you know, as a as a founder, you are the face of the brand and the business. Um and and and I think consumers these days want who is actually making their favorite products or especially their food. You know, like who is the person behind making your food that you're nourishing your body for, that you're spending your hard-earned dollars on? Um so I think it's I think it's an obligation, it's a duty, it's also an honor and a privilege. I don't think we take that for granted. Um, I think we recognize the positions that we're in, and and um we carry that that badge with honor and integrity.

Pride Lessons And Final Advice

Keith Kohler 58:16

I'll let that ring in the room a minute, right? You carry your badge with honor and integrity. Um I really appreciate that. That's again a unique, you've strung together a lot of vocabulary and and expressions, which we've not heard that much. Um, my producer can attest in the podcast to date. So I really appreciate your framing and you summarizing your journey that way. And as we conclude our time together, Drew and Joe, I always uh use two questions that I'm happy to share with you and would love to get your reactions. And the first one, and you can each answer individually, is what are you most proud of?

Drew DiSpirito 58:56

I'll jump in right now because um it's very timely. Um my sister-in-law went to Sprouts down in Maryland and bought her three kids our product and filmed it and sent it to me. And um honestly seeing that, I've never been more proud to be their uncle. I've never been more proud to be an entrepreneur because they'll grow up knowing that they can they can do it. Like Uncle Drew has an ice cream brand. So they're gonna walk through life now knowing that they can have a brand or a business of their own. And like I I give all the credit to my uh the three, the three men on my paternal side before me, my great grandfather, my grandfather, my dad, who have all uh ventured off to to build their own businesses. And I walk through life knowing that I can too. So honestly, that that was like by far and away one of the most proud moments I've ever felt, just seeing how elated they were to have our product, and then hear them say Uncle Drew's ice cream was one of the coolest feelings I've had since launching.

Joe Rotondo 1:00:02

I love that. I love that. I think I'm most proud of um us as newcomers. Like we went to Fancy Food June 2024 as outsiders to the industry, and we made so much freaking noise. We barely knew what we were doing. We were still figuring it out. Um, it was still very much sort of like this project, and we just went in and we we executed, made noise, and put ourselves on the map. Uh, additionally, I'm proud of like how we've grown as men, how we've grown as leaders, how we've grown as individuals. Like, man, I'm obsessed with the fact that uh entrepreneurship is really uh you're not building a business, you're building yourself. You just so happen to be building a business on the side. And as you go through that journey, you get punched in the face, uh, you're on the mountaintop, you're in the valley, um and and there's a lot of growth that that needs to get done from a personal perspective. And I think both Drew and I have really taken a lot of shots on the chin, and we've held each other accountable, have done the work to um make sure that we're most equipped as men to put ourselves and the business in the best possible position to succeed.

Keith Kohler 1:01:27

Fantastic. And our final question is this what would you tell yourself and say June 2023 when this all started with the wisdom that you have now?

Joe Rotondo 1:01:45

I think I I mean at the time I I was so scared to jump in. Like I knew I wanted to leave corporate, but I don't think I would have uh jumped myself, so I got pushed off the ledge. Um I think I would have told myself like you gotta you gotta actually run a little bit faster. You gotta actually push yourself a little bit more, um, believe in yourself more. Um yeah, I think there was there was a little bit of uh hesitation to pull the trigger, but really glad I did.

Drew DiSpirito 1:02:22

True. Man, that's a tough question. It's a good question. Um my inclination is to say um two things. One, the path will reveal itself every time you step forward, and and there will always be the question mark of what's what's behind what's what's in the path that never goes away. That feeling will never go away, and you you just continue to need to walk walk through and let it reveal itself. It's something Joe said um a couple months into our journey, but I I feel like it would have been a good reminder or a good thing to hear early on that that that that feeling is is is uh everlasting. Like there's there's no magical sense of clarity that that you will arrive at. So you just need to continue to make that step forward. And then the other thing I would tell myself is um, you know, recognize that today is the day you will know the most and you will know the least. And tomorrow you will know a little bit more and and trust that you can continue to learn and and you can continue to develop. And don't let the um insecurity of not knowing paralyze you from continuing to learn. Um, you need to continue to learn in order to have that to that feeling to dissolve. But that feeling will also kind of remain consistent because with every stage of growth of the business, there's a new stage of growth required and learning required of you as an individual. Um, so that's going to be that's going to be a hamster wheel that you're you need to be prepared to get on.

Keith Kohler 1:04:06

Brilliant. Uh, I really appreciate those insights and all the wisdom that you've shared with us today. Certainly a lot of great sound bites and mic drop moments because there were just so many of them here. I can't wait to do all the clips on this one. Um but truly, guys, thank you for being here. Um I always lead off this podcast by introducing myself as Transaction and Transformation. It's particularly exciting to see that you've um you've absorbed that transformation aspect of what you're doing. Right. Um I can't wait to see not just the business you build, but the people you'll become as individuals, as a team together, and all the people you get to choose to involve in the smear case family. So it's gonna be a great ride. It's already been an interesting one already, and we can't wait. So here's to your continued success, and thanks for stopping by and joining me today to share all of the smear case journey with my listeners and viewers and more to come. So that's us signing off for today's episode of How I Financed It. Thanks, Keith. Thanks for having us. Yeah, thank you so much. Thank you so much for joining me on this episode of How I Financed It. I encourage you to reach out to me on LinkedIn at Keith Kohler1, and I look forward to connecting there.