Defy-ning a New Type of Chocolate

Buckwheat in chocolate sounds like a weird idea until you hear the story behind it. I’m joined by Tatyana Jones, founder of Defy Snacks, who explains how she turned a “misfit” ingredient into a better-for-you snacking brand and a real early-stage CPG company with a clear financing path.

We dig into the leap from corporate brand building to founder life, including the parts nobody misses: politics, managing up, and spending more time getting approvals than building. Tatyana shares why she started Defy as a side hustle, how she stayed thoughtful about non-compete constraints, and what it felt like to go from a $100M budget world to fighting for every dollar as a bootstrapped founder.

Then we get tactical on startup funding and growth. You’ll hear how she prioritized inventory and brand foundations (including trademarks), found “free” marketing through founder communities, and used pitch competitions for far more than prize money. We also unpack how to work with high-caliber advisors in a cash-starved business, why standard agreements matter, and what she’s learning while raising a $1M SAFE round to fund product Gen 2, retail expansion, and focused DTC growth.

If you’re building a consumer packaged goods brand, thinking about fundraising, or trying to stand out in a crowded snack aisle, this one is packed with practical insight. Subscribe, share this with a founder friend, and leave a review with your biggest CPG financing question.

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

Transcript

Welcome And Founder Snapshot

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, what I'm all about is helping founders get the right financing at the right time. That's Transaction Me and meeting fine founders where they are and guiding them along their financing journey. And that's transformation me. So transaction plus transformation equals financing man. And what we do here on the How I Financed It podcast is we talk about the founder journey principally through the lens of how they finance their business from when they started to where they are today. And then we go and we talk about strategy and we're really wherever the energy takes us. Today's guest is Tatiana Jones of Defy Snacks, who's early on on our journey and yet has done many, many things, which I think you'll find interesting. So would you please help me welcome to the stage Tatiana Jones of Defy Snacks? Hi, Tatiana, how are you?

SPEAKER_00 1:07

Hi, Keith. I'm doing very well. How are you?

Keith Kohler 1:10

Excited to have you here because this is certainly going to defy all ideas about an early stage business because there's so many unique aspects to what you've done for sure, right?

SPEAKER_00 1:23

I love it. I love it. It's definitely we're definitely earlier on, but it does feel like it's been 10 years. So it depends on the day, but super excited to be here.

Keith Kohler 1:32

Yeah. And since I'd love for you to share with our audience a bit about how you got started and what motivated you and got you excited to be launching this brand.

SPEAKER_00 1:41

Yeah, that's awesome. So I started DeFi as a side hustle. I was kind of at a point in my career. My last job was as a brand director. Um, I was a little bit in a funk and I wanted to, instead of dealing with the politics, I wanted to build something. And so DeFi was my first access into building something. I worked for Mars Wrigley for years and I knew the category, the chocolate category inside and out. And so I'm also originally from Ukraine. I kind of um wanted to get this ingredient called buckwheat on the map as well. And so I took the two pieces and combined them. So chocolate experience and then wanting to make the chocolate healthier and better and more nutritious. I added this amazing ingredient, buckwheat, into the mix and started DeFi. Um, and I'm a fitness loving foodie, as I like to call myself and our target audience. So there is a fitness aspect to it or a sport nutrition aspect to it, to it as well. Um, but it's essentially a combination of all my passions, everything I've ever done, everything I've ever loved. So um it's defying expectations of snacking. It's a little bit of a misfit, which I've felt like throughout the years. Um, and it's and it's uh essentially a better-for-you chocolate, but really kind of meant for a real person like myself. That's not like counting every single calorie.

Keith Kohler 3:14

There's lots of good stuff in what you opened with, and I want to go back to a couple of them. Uh, first one that I identify with, uh, you talked about the politics of corporate.

SPEAKER_01 3:23

Yeah.

Keith Kohler 3:24

When you think about your corporate career versus what you're doing now, because that's a transition that

Leaving Corporate For Real Ownership

Keith Kohler 3:30

a lot of our founders make, right? And I'm just curious when you think about that, you mentioned politics in particular. Was there something about owning your business that was attractive? Was it something like, hey, no Mars, I want to kind of get away with that, or get away from it, sorry. About, you know, what what was that dynamic when you thought about moving over and founding a business?

SPEAKER_00 3:52

Yeah, so it's always been in the back of my mind. Um, I actually uh the the idea of being an entrepreneur kind of sparked up years ago. Actually, that's when I was at Mars. We at the time acquired kind, and it was like a $50 billion acquisition. And Daniel Libitsky had come in and spoke on stage, and it was just so amazing because all I've ever known is, you know, my parents and everyone kind of around me telling me, hey, you have to go to school, you have to do this, you have to do this. There's a traditional path. And so that's what I thought I was taking. And my, you know, I went to NYU turn for my MBA. I did all the things that you were supposed to, right? I fell in love with brand building, wanted to build brands, went into brand management. Um, but then, you know, you get there and you see all of these super amazing but very polished people. And I just never thought of myself that way. And then I saw Daniel Lebitsky on stage and he took a call from his son in the middle of his presentation. He was so personable. And at that time, you know, you don't you don't have the context of what $2 billion is or what that acquisition was. I was actually jealous of how free he was. Like I was like, wow, that guy is so good on stage. I want to be like him. And so that's when the idea sparked. Fast forward 10 years at least later. I'm now a brand director. I'm at, you know, I've switched jobs a couple of times. My last job was uh at Baushan Laum, actually. And it was the smallest company I've ever worked for. But the politics still remained. And I just I just didn't feel like I was building as much as I wanted to build. Um, and a lot of time was spent, you know, managing up and managing around instead of actually, you know, do it, doing, building the brand and doing the thing that you're there to do.

Keith Kohler 6:06

I resonate very deeply with that aspect, Tatyana, because um I coming from an entrepreneur household thought I wanted that corporate career because of quote unquote safety.

SPEAKER_01 6:18

Yep.

Keith Kohler 6:18

Because I didn't want to deal with these ups and downs, because I had felt that deeply as a child and as a young adult and teenager. But what I found was structure really suffocated me. And you mentioned managing up, managing down. That's it. I loved doing my work at Procter and Gamble, the analytics, all that stuff, but I struggled with the people and what does she think of me and what is he thinking? And all of you know, and again, I'm not denigrating, I'm really not denigrating corporate America. I'm just saying, I think you and I resonated. Hey, no, that's more like who I am.

SPEAKER_00 6:55

Exactly. Yep.

Keith Kohler 6:56

More, more, dare I say, freedom to really no, I'm doing this today, or I'm gonna grow this a certain way, or I'm gonna change my mind. And that's the type of thing that was attractive to you, correct?

SPEAKER_00 7:10

Exactly. It's the freedom of building the way that you want to build, and you know, not changing things for your product, your marketing initiative, just just due to politics. So it's really having that ownership. Um and yeah, I just I just never thought of myself as that polished. Like even now, I'm I mean, now I have the freedom. Um with the freedom, I mean, financially comes other stressors, of course. Um, but it's it's it's um it's a different type of an experience where, hey, if you know, I mean, right now we're fundraising, so it's so it's kind of like you still you still have to kind of impress impress people and things like that. But you know what? If if I'm truly not someone's person, if I'm not their cup of tea or or whatever, even their shot of tequila, they I don't have to work with them, they don't have to work with me. Um, you don't have that choice that's right in corporate America. Your boss is your boss, and I took a class at Stern actually. Um awesome professor, it was it was Cobbie. Um, and he always said, Your boss is always right in corporate America.

Keith Kohler 8:29

Oh my goodness.

SPEAKER_00 8:30

Your boss is so wrong.

Keith Kohler 8:31

So my goodness. Wait, wait, wait, wait, wait, wait. When was that said? I I have to go down that path.

SPEAKER_00 8:37

So I uh he had like a longer name. Um, it was uh it was an Indian name, but he was one of the famous professors that I took. Um and it was like his last name was short, short uh the the short version was Kabi. And he had a bunch of different sayings, but one of the sayings was your boss is always right, even if they're wrong, your boss is always right. And yes, it sounds ridiculous, but in corporate America, I'm sorry, I hate to break it. Your boss is always right.

Keith Kohler 9:08

Yeah, I guess maybe another way of saying that is our bosses have the last say, right, on on what can be approved or not. And yeah, I mean, I think just I I have to I had to go after that. That's kind of interesting. The

Why Buckwheat Powers The Brand

Keith Kohler 9:25

other part I wanted to bring up because you mentioned buckwheat, and I think what's interesting, Tatiana, is over time in the natural organic space, is we've seen iterations of well, you know, I I'm celiac, so gluten-free was a thing, and top of mind when you go to the expos, whatever everyone's talking about. There was times when it was asaii was everything, and coconut was everything. And so I'm curious again, buckwheat, you said came from Ukraine, and I'm curious again that you can share with our audience a bit more about why that ingredient, what difference it really makes for you, and why do you think that can be a cornerstone? Andor how is it a cornerstone of your marketing or or your product or things like that?

SPEAKER_00 10:10

Yeah, it is definitely a cornerstone. Um, and I mentioned another thing that I I've always felt like I'm a little bit of a misfit in corporate America and just in general myself. Uh, buckwheat is one of those ingredients that that that is a misfit. It's misunderstood, but it's amazing, amazing for your gut. It's really it's perfect for our brand because we stand for this uplifting rebel. You know, we're we're an uplifting rebel, and so is buckwheat. Everything it touches, it makes better. So not only is it amazing for your gut, it has a ton of vitamins, it has probiotic fiber, it has protein of its own. Um, it even has things like magnesium, which are now being put on the map.

Keith Kohler 10:57

Magnesium, okay.

SPEAKER_00 10:58

Yeah, something that people are focusing on. Um, but then it's actually also good for the soil it grows in. Um, farmers actually really like it. Sometimes they even grow it and um they throw it out because they don't have enough of kind of people purchasing it. And so I think as we get bigger, we intend to create this circular economy where potentially we can even get it directly from the farms so that there's less waste. Um, but it makes the soil very fertile. So it's kind of like I I just fell in love with the story of buckwheat. I love how you know it is it is a true superfood, it's much better. Quinoa had its day, especially, you know, with friends. Yeah, uh, but buckwheat really hasn't been put on the map. And there are a lot of really great brands that are now trying to put it on the map. So we just wanted to contribute to the efforts of those brands and really kind of put our full force. I think my strength is brand building, and I wanted to put my full force of brand, like brand builder me behind Buckwheat. And so I started ideating there, and then I actually thought of a bunch of different categories. Could I do it in skincare? But I had to stay not competitive to Baouch and Lum because they they made you know eye drops and things like that. So I had to stay away from skin and eye. So I ended up doing the other category that I knew well, chocolate. Um, but buckwheat is this like amazing, amazing kind of misfit of a superfood.

Keith Kohler 12:36

I love that characterization because certainly less well known, right? And so yeah, and for celiac people like me, we see the word wheat, and what do we think right away?

SPEAKER_00 12:49

Oh, you know, forget it, right? Yeah, exactly. And that's why it's misunderstood. It's actually because of the name.

Keith Kohler 12:55

And 100%, even by yours truly, it was misunderstood at first until I thought, well, wait a minute, I better be smart and look into this and not you met me as when you were my mentor during one of the pitches. Well, that's right. And you educated me on I I knew at least, yes, it's gluten-free, but I didn't know the depth of what you just described, which I hope that story continues to be something. I know you'll be out there with the megaphone talking about it. I just hope it reverberates and that more people cover it so that again, at least for the community I know best, celiacs can say, wait a minute, okay, don't be a fool. Just because it says wheat doesn't mean at least that level, and then deepen their understanding. But in the general market, all those other cool attributes you mentioned about what it does for the soil and and the nutritional properties. I'm here for it. And I hope that there's more coverage of it. And the second thing you just said now that really intrigued me was you really led with buckwheat, and then chocolate is the format and the delivery. I would have thought you led with the chocolate and said, Hey, I need a way to stand out in an ingredient, but it could have been a little bit of a mix of the book. But you're indicating it was the buckwheat was truly the lead.

SPEAKER_00 14:07

Buckwheat was the lead, and what we I did. The name came after the buckwheat because I I thought of buckwheat as this like defiant ingredient, misunderstood, but just like in all the right ways. And it was this like uplifting rebel, really. Um, so we kind of it all it all really started with buckwheat.

Side Hustle Risks And Non-Competes

Keith Kohler 14:30

That's brilliant. I really love that. And of course, that thing you mentioned when you left Bao Shanlam, you had to sign something that said you can't you can't do something in that uh product class, or yeah, so I have been around the block for for a while.

SPEAKER_00 14:45

Um, and so I knew before I started I should really speak to a lawyer. And so they reviewed my employment contract and my um all all of all of the things that I signed with Baushan Lum. And so basically what it had to do is, or what I had to do is stay non-competitive to the category to make sure that it was a um not a perceived conflict of interest. Because if I did something that's close to either eye drop or or a face cream or something like that, which buckwheat has a lot of anti-inflammatory properties that would have actually been quite interesting to look into. Um, but I wanted to stay away from that for at least a year, a year and a half, because I was the head income. I really needed that job for for that time.

Keith Kohler 15:34

I really appreciate that because probably not a lot of founders making the transition from corporate would have been thoughtful enough to really even think of that. And I think that's that's that's honoring, that's being showing real integrity here and honoring something like, yeah, you had a good career there, and you realized, hey, I don't want to mess with that legacy. And and yet I think it allows you the freedom, as you indicated, to start fresh and start new, knowing, hey, there's no potential of anything from the past coming back.

SPEAKER_00 16:09

Exactly, exactly. And then at some point they actually made me sign um something additional where like I wasn't supposed to, I so I I don't I guess I don't do anything quietly, is what I've learned about myself. I started this as a side hustle, and then of course, like it showed up on my LinkedIn. I started doing pitching.

Keith Kohler 16:32

Sure.

SPEAKER_00 16:33

And still, still as a side as a side hustle and a hobby, but really not, you know, you utilizing a lot of my nights and weekends and pretty much every single vacation that I had. Um, but it did, it did appear to Baushan Lum that I was doing it. So um I had gotten guidance to say, hey, um, really like your don't use your personal LinkedIn. And that's kind of when I was starting to make a decision of actually going to lean into this, and this is going to be my main hustle versus versus my side hustle.

Keith Kohler 17:06

Yeah, I can certainly appreciate the dance of that, right? The yeah. And yet you made it through on that, and you you did what you needed to do and you addressed issues. And I think that shows a lot of upfront resourcefulness.

SPEAKER_00 17:24

Yeah, yeah, yeah. Some of it was uh uh very well thought out, and some of it was not very well thought out, and I've probably made mistakes, but here we are.

Keith Kohler 17:34

And we're

Bootstrapping Inventory With Personal Savings

Keith Kohler 17:35

here now, and um so I'm excited about you got buckwheat, you determined chocolate. When you were just starting out and you had your initial business plan, what did you think about the initial financing and how did you wind up doing that?

SPEAKER_00 17:51

So I wish I was more strategic when it came to this. Um, but initially I just used my personal savings and kind of leaned in. I knew a CPG business. I mean, even when I was at Mars, cash was one of those things, what was one of the KPIs that we were rated on, even though you as an individual employee didn't have like major, major impact on the overall corporation's cash number, right? Like you didn't divest brands or whatever, but they really did a nice job with holding everyone accountable to the overall company KPIs. And so we always talked about cash, right? But like when it's your own cash, it hits so differently. And I went from Bauchhalam, where I managed over a $100 million budget, to essentially having no budget for marketing. So I allocated a lot of it to actually creating the product, paying for the branding, but then really like it was mostly spent on inventory. And so we didn't do it right. Like we didn't, I mean, no one would give us a loan initially, and still probably to this day, I I I'll I'll struggle with getting a loan until I can show profitability. Um, but I utilized a lot of my own savings and really kind of didn't spend a ton on marketing, which felt very strange because I'm like a flash marketing.

Keith Kohler 19:26

From where you came from.

SPEAKER_00 19:27

Exactly.

Keith Kohler 19:28

And I think Tatiana, I appreciate you bringing that up because for a lot of early stage brands, um, when I speak with them, I hear what you're saying, which is hey, I'd love to do this and this and this, and yet I know primary is I gotta get my product produced.

SPEAKER_01 19:47

Yep.

Keith Kohler 19:47

And all the other things, can whether it's consumer marketing or working with other vendors or who whatever that is, that has to take us a back seat, at least in at least in the initial period for sure.

SPEAKER_00 20:02

That's right. Yeah, you got to have the thing that you're actually going to sell. So that that always comes.

Keith Kohler 20:09

So when you started out, I'm curious. Did you prepare projections? Did you come up with different buckets? I'm curious if you could share with us kind of how you came up with the initial plan and thought about all those trade-offs about where to spend your savings.

SPEAKER_00 20:25

Yeah. So since I started it as a side hustle, I was more reactive than I am being now. So now I actually have a financial model. Um, it's interesting because you're you can have you know five years worth of projections, but like even in corporate, your projections are they they change every day, right? So um, but now I have three to five year projections essentially. Um, and of course, knowing that they're gonna change. Initially, it was very like, hey, this is what I need for this run. This is what I need for the bare minimum marketing that I'm going to do, which is essentially like really just branding and creating.

Keith Kohler 21:05

There it is. Wait, wait, wait, wait, wait. Product shot. Let's see it.

SPEAKER_00 21:08

Oh, yeah. So this is actually my favorite flavor. Um, I I I have it for lunch and for my three o'clock pick me up more than I'd like to admit. Um, but peanut butter is delicious if anyone wants to try. Um, but essentially I was very reactive, right? Like I I had a pretty demanding job. So it was almost impossible for me to kind of find time to be super, super strategic. I did um um, I got I got the thing that I knew how to do. I got the pack in, I got the branding in, I got the logo, I did my trademark submission. Um, and I'm a huge believer that you should actually, you know, because later on, changing your brand name and resubmitting your trademark is so different. So if you're creating a brand, start with the product and start with the brand forward, get those things right, and then everything else. Like, yes, you will need more money for marketing because people, people are generally just are not going to know anything about you. But there are also really scrappy ways of doing it. So we did all the things. We did the pitch competitions, we did the, you know, we're part of Startup CPG, which is another community. Um, Naturally Network or Naturally New York. Um, so we joined all of the different communities and kind of started networking and getting our name out there that way. And that got us connected to a lot of retailers that generally we would not have talked to at that stage. And so um, yeah, it was a combination of, hey, what do I, what is the bare minimum of what I need? And then how can I scrappily get any essentially free marketing that I can organically?

Keith Kohler 23:01

I think that's very clever because the organizations you mentioned, certainly there's a lot of information. I'm glad that you found a way to say, wait a minute, hey, I'm gonna learn the people, right? And make the connections and get out there and get those retailer introductions as a result of using these databases and probably networking with fellow peers and founders, right? Who are we at similar stages or maybe one step ahead who had already been successful. Is that fair to say how you best work with those organizations?

SPEAKER_00 23:40

Yeah, that's super fair to say. And I think one of my favorite things about being a founder is it can get really lonely. And um, you can kind of get in into your own your own head, and especially when you like you'll have people that just love what you're doing, but you'll have people that just like absolutely either hate you or hate what you're doing, and that's fine, whatever. Don't pay attention to those people. But it can get really lonely. And like one of the things that I truly, truly love is other founders and just can like you can learn whether someone's younger or older than you, at any stage of life, you can learn something from some from everyone. And so getting, you know, founders that are just starting out, you can learn something from them. Getting founders that are like fifth year in into their journey, maybe they're at a growth stage, you can certainly learn something from them. Um, but having those communities, and that's where these a lot, a lot of these networks come in. Having those communities with other founders has been absolutely incredible. Um, and then beyond founders, people like yourself, just you know, we met during a pitch, and we've kind of stayed stayed friends since then. Um, I feel like you've taught me, taught me a lot. And I'm hoping, and I I know at least I taught you something about buckwheat, so that's also right there.

Keith Kohler 25:02

Well, and what was unique about you, Tatiana, you showed up with great energy. With I'm not saying others don't, but you really stood out as someone who's wow, she's intent. She's got again, I think you leveraged your experience and your love of branding. So you came in at a high level of the branding elements well sorted, the packaging, the whole look and feel, that broader what I would call presentation. And that's of course what you knew and how you have stood out, I think, in addition to having a great product. And then I think honestly, a lot of founders at different times, neither you nor I is 20 year old, 20 years old and about to graduate college, right? So I think leveraging also the the experience, the maturity, the poise, all those different things that come with that you were in higher pressure, bigger exposure corporate environments, MBA, everything. I think you've leveraged that well to your advantage. And I think that's not surprising. Yes, I'm transitioning into talking about the pitch competitions, is why I'm not surprised that that's been a thoughtful focus of a fundraising, but also importantly, how to get your your name and your awareness out there. So would love to talk more a bit about the pitch competitions you've done over time and share with us and share with our viewers and our listeners hey, how are they valuable? How can they work for you? All the different things that you've learned uh with all the ones you've done.

SPEAKER_00 26:49

Yeah,

Pitch Competitions That Actually Move You

SPEAKER_00 26:50

absolutely. So I absolutely love pitch competitions. Almost always you learn something, and then sometimes you even get some cash prizes and or other services prizes that are just like very, very valuable, especially earlier on. Um, so I I and over the course of the year and a half, I've learned which ones are kind of like the biggest pitch competitions, which ones are emerging, what which ones are worthwhile. And I actually, when I first started, I did a pitch competition through NYU. It was through their Berkeley Center of Entrepreneurship. And it was almost like a mini accelerator. It was incredibly um helpful in terms of A, getting your name out there, but then also just getting some of the basics in. I mean, I have a I have a fractional team now that does like finance and accounting because I I really I like I like my books clean. And I I do at this point need need help even with the timing aspect of making sure that someone is strategically looking at our projections and things like that. But back then I didn't have that. So going through that challenge and getting that kind of like accelerator type of attention and creating a high-level model for you to have somewhat of a plan was super helpful. And then with a lot of accelerators, they give you exposure for that one in particular. They actually got me on, I think it was my month three of officially having the product. Wow. Yes, they got me in. So I had like nothing. And they got me on to entrepreneur media, where a real investor kind of evaluated my pitch. Like I didn't even know what an investor was. Like I feel like I'm light years ahead of where I was, and I'm probably going to feel like that five years from now or even a year from now. But they got me so much exposure, so much training to really kind of start creating that strong base, which you really do need as a founder. Now, granted, there was no cat, or there was a cash prize at the end of that one. I didn't make it to the end. I didn't win the prize, but that prepared me for my next one. And my next one, I actually went in. Uh, I did much better. I thought through more questions, I created that strategic plan. I had my financials in order. So I, and the next one was called the Enthuse. It was put up by the Enthuse Foundation. It was their seventh annual pitch competition. And it was very much focused on female entrepreneurs. So it was very competitive. There were 340 people that applied.

SPEAKER_01 29:50

Wow, 340.

SPEAKER_00 29:51

Yes, five finalists, and they were all very impressive women. And with that, there was a cash prize for the first and the second place. And so I ended up winning the grand cash prize. Amazing, right? So completely no strings attached, free, free money. Uh, so highly recommend if you know, even if you don't win, it's a great experience, but highly recommend going after the right pitch competitions to all the founders. So this one was totally like our missions aligned because I'm a obviously female entrepreneur. We also want to create the circular economy where we save a percent of our profit and dedicated to helping other female entrepreneurs in the future. Um, and so they they kind of had obviously the same focus. But even more importantly, I made so many connections through that competition that it propelled me light years beyond that. Like, hey, you're you're doing a hobby. Now I feel like I am building this thing. It's a real business. And yes, like our sales are still, it's still very early on, but I'm building the right team. So I met one of my winnings was also getting getting a bunch of services. And I won Katie Dunn's services, and she is phenomenal and just helps um uh a lot of female entrepreneurs get prepared for their funding, funding raise, whatever stage they're in. And A, she helped me prepare for that. I still work with her even to date. And then she also introduced me, her and actually the judge that was in the pitch competition that was judging me. They both introduced me to Heidi Dillon, who is my advisor, who was the CEO of Distill Ventures, who quite literally pioneered the non-alk movement. And so we're trying to really chocolate. And so, who better to be my advisor? So she's kind of like my key main advisor in the business. But I wouldn't have met her if I didn't do that competition. I had no access to someone like that within a different category. I knew a lot of people in chocolate, but it's almost even more relevant because she did that with a different category. And I know chocolate, like I have a great network in chocolate, but it's kind of nice to get a different lens from a different category that's arguably even more difficult than chocolate. So love anyway, long story short, love pitch competitions. A for the free cash that you get, but then the services are a lot of times priceless. And then the connections that you make, I mean, it's it's it's incredible. So make sure that when you're looking at the pitch competitions, they're the right, like you're they're the right target for you. But that one did phenomenal, phenomenally well for me. And that was like my second or third pitch competition. It might have actually been my third. Um, but it worked out really well and it set me up for success to build a strong team thereafter.

Keith Kohler 33:19

I really love that um arc. When I think about pitch competitions, what what I hear in the broader ecosystem. Yeah, yeah, there's a lot of focus on what the cash prize is, right? Because that's I think what's advertised. I really am excited about what you shared about the services, the advisory opportunities, because I think sometimes people might not take advantage of them enough or might not think that they're valuable in some way. Um, at least that's my impression of sometimes the noise I hear out there, or that, oh, you know, I got this from this person, I'll never be able to work with it, or it won't be relevant to me. And yet I'm really happy to hear that in your case, because you chose wisely, right? You chose the competitions that you knew could be useful to you. Yeah, that had the potential of those people. And I'm really excited about the two advisors you mentioned, because here you are, you knew industry, you knew the brand building, and they brought in the aspect of, as you said, fundraising and other functional areas that, is it fair to say, perfectly complemented your knowledge, expertise, and and desires and strategies and everything, right?

SPEAKER_00 34:40

Exactly. And it like it snowballs too. That's where you start. So now, Heidi, I I'm realizing I have uh I'm realizing I'm human and I can't do it all myself. And the things that I'm really good at, I'm really, really good at. But then there are things that I'm I just haven't done like in my career professional career. And I thought I could just do it all. And like even time is becoming a limitation. And people think that we're bigger than we are. Um, so I get like vendors reaching out to me um on a daily basis, like hundreds of vendors. And um it's it's it's becoming a lot. And so with Heidi, for example, she actually like I realized operations, like I've never done an operations role. It's all been sales like very demand focused. And Heidi has worked with someone in her past life that scaled from an operations standpoint from zero to a hundred. Uh to zero, zero to a hundred, but zero to a hundred million dollars sales to sale to Diageo actually. And then the guy quite literally wrote a book about operations. And I I'm trying to build this best in class team. So I got to a point where I was like, I can't do it by myself, but I I don't want to just hire anyone. I want to hire best in class. Like I want someone that's as good at ops as I am at marketing. And so Heidi introduced me to this individual and just timing seemed to work out just right where he was looking for a new challenge. And then he's going to uh eventually exit his situation because they they have like KPIs and kickers. And so it's a potential full-time employee/slash co-founder in the future, but initially we work on like fractional basis, which is just exactly what I was looking for. So I say that like it starts out small, but once you have that baseline, it just kind of snowballs into these additional things. So, and that that was all just based on one pitch competition. So um that like networking is huge, but then also these pitch competitions, as long as you select the right ones that are targeted for your industry, I mean it, it's it's it's a it's a great opportunity to just be a part of, you know, a part a part of something that where we're like other people are building in the same direction as you are.

Keith Kohler 37:14

Couple things I wanted to revisit on that too. Yeah, I love your comment about, and I've heard this in other settings. People think we're bigger than we actually are. Now I'm not surprised, right? Because you're out there.

SPEAKER_00 37:27

Yeah.

Keith Kohler 37:28

Right? You're visible, you've chosen to be visible.

SPEAKER_00 37:30

Yeah.

Keith Kohler 37:31

You're you you therefore I think when visibility comes the impression of not surprised, hey, she's maybe further down the field, or both in size of company or other different things like that, right? And I think that's not a bad thing because uh that invites in, I think logically, and gives you the opportunity to bring in these other people. And I think um one other aspect I wanted to explore with you is I think a lot of our founders, when you talked about Heidi, or was it Katie was the other one?

SPEAKER_00 38:07

Heidi, Katie, yeah.

Keith Kohler 38:09

Yeah, those

Advisors, Equity, And Keeping It Standard

Keith Kohler 38:10

two, and now this other person. A question I get from time to time is hey, wait a minute, here are these industry folks who are well established, and now I think I'm gonna work with them in some way. How do I even think about how do I work with them? What could compensation look like? What are the deliverables? And without asking anything, of course, confidential, could you give us a bit of an understanding of how you kind of approach that?

SPEAKER_00 38:41

Yeah, so it was actually a journey for me, and I'm still on that journey because on the one hand, you want to make sure that someone feels like you're they're fairly compensated for their time. But then on the other hand, I am still family funded, right? Like we're opening up our rounds to bring in external funding for the first time ever. But in no way, shape, or form am I going to be pro taking cash out of the business. I don't pay myself, and I'm not paying myself this year. I've made that decision. Uh uh making making an argument to pay, you know, pay pay an advisor or something like that is really hard for me. So I think what the first thing that you have to do is really look for someone that believes in your business as much as you and really is willing to kind of, I mean, put some put some put put you know, put some of their belief in in that business and be willing to kind of not necessarily get a salary out of it the the first, you know, whatever couple of months. And so with Heidi, it just so I mean, uh some of it is luck too, right? She was interested in um doing everything that we are, like her experience is kind of perfectly aligned with what she loved, like what she loved to do, perfectly aligned with what DeFi was. So there was a better for you aspect. There's that aspect of breaking through the category and just like building, building a category. Um, she also liked me as a founder and we got along and I liked her as a as a person. I thought she was going to be a really good steward of the business. Um, so that all of that has to work. Now, granted, and she was very flexible, right? So, like um as much as possible, I I tried to ensure that it's, you know, it's um the percentage of the business or the the equity is is what's kind of like in question. Um, but if it's beyond above and beyond what the advisorship is, then there could potentially be, you know, uh an SOW down the road with with someone of her caliber, right? Um, and then also like what I what I've been told is right, like everyone has a slide with their advisors. And sometimes I the feedback that I've heard from the advisors, like sometimes they don't even know who like who the who the founder or that they don't know the founder really well. So anyone that I ever put on my slide is someone that I'm actually really working with and like have a contract with. So um we're having said this, we're still in the process of finalizing our contract contracts with everyone because it does take some time. But I wanted to make sure that it was like really someone that was like kind of believed in the business as much as me and even was interested in because right, I put in all of my savings into the business. It was someone that was actually a like look looking to potentially do the same, maybe not at the level that I have. Um, so I do feel strongly that everyone that I've kind of recruited to the team is does feel strongly about the business A, and then B is also able to put in some of their own cash um in order to help us grow, right? Because you don't want to take cash out of the business, especially when it's like or this early on, you're cash, you're you're starving for cash, you're cash deprived. Um, so I look for that. And then if it wasn't necessarily cash, like for example, my other advisor, Kyle, who I also met through a pitch competition, he happened to be good friends with another friend of mine. So there were multiple connections, but instead of cash, he is putting in his time. So he's putting in 15 to uh 10 to 15 hours a week and he's going to come in and run RDTC. But like the level of belief that he, Heidi, and then now even the new operations um lead that's coming in, the level of belief that they have for the business is actually like in a way, it's surprising to me. Like it's it's not surprising, but it's surprising because it's so amazing to see someone kind of geek out and love your brand as much as you when it's not you and you've just built it. So, or you're building it, you're about to build it. Um, so I look for that. That's like first and foremost, the level of excitement. Like they're talking, they're coming in and they're talking in we already. Like it's not just you or brand, it's a we. Um and so we're still just in the beginning stages, but I really like I didn't want to do anything non standard because you don't want to throw off a your later investors and be like, hey, this person just wasn't experienced. Then they did this weird thing and weird agreement. So, so everything, anything non-standard is always a red flag. And I always say the only time you do non-standard stuff is really when you go on Shark Tank. And like there's nothing associated with that. So that was a consideration. And then the cash thing is a consideration. Taking cash out of a starving business, uh a business that's starving for cash, not a generally a great idea unless you have to. But then also like look for look for people that are like die hard, your brand want to build it with you, and they're there to do that with you. And then realistically, the upside is at the end of the tunnel there. It's not usually on the front end.

Keith Kohler 44:50

Yeah, Tatiana. Thank you for allowing us to spend some time on this subject. Um, I've not ever covered this in any of my how I finance it podcasts. So this was extremely valuable, I think, because a lot of our founders either struggle or at least question how do I work with these people? What do I set up? How because I have you mentioned the slide. I've seen presentations where I see advisory slides and I'm looking at no, you're like, there's 20 people on there. They don't even work with any of them. And in fact, I've been asked a couple of times, oh, can I put your name? I said, Well, we don't even work. What I've talked to you twice, right? But I really appreciate that you've done it in a way where you can say, No, I'm really working with these people.

SPEAKER_00 45:38

These are my people, yep.

Keith Kohler 45:39

Yeah, we have engagement, we have real things that we're working on. That's really fantastic, and I think it's a testimony to your feeling like, hey, I'm gonna do this in a way that, hey, it it propels my business forward and it stands up to any scrutiny if someone might have a doubt of how are these people really contributing or moving the business forward, right?

SPEAKER_00 46:04

That's right, that's right, exactly. Um, I I think it's always very important if someone's an informal advisor, A, you always ask the person, can can I put your can I put you in my deck? Um, because if they randomly get past a deck and they see that too. That's that's kind of weird, right? So um, but even if you do do that and it's an informal advisorship, disclose that. That's fine. I have plenty of informal advisors and they've agreed to be in my deck also. They're usually in the backup somewhere, but you like by the time you're you're you're you're you're me or you're you, you have a great network, and that's awesome. That is there's definitely a huge positive associated with that, but they're not they're not being compensated for it. They're informal because they're they they just like you and they're doing you a favor.

Keith Kohler 47:02

Brilliant. Um, again, thank you for this extended discussion on this topic, which I think is incredibly valuable.

SPEAKER_00 47:10

Of course. And I'm by no means an expert, I'm still figuring it out.

Keith Kohler 47:14

Well, and that too, right? And I think you appreciate that, that you've gotten to this point, it's something that's worked for you, you've gotten value out of it, and you'll continue to figure out what's the best mix. Exactly. How that could change over time as you grow. And I want to come back to now you're in the capital

Raising A $1M SAFE Round

Keith Kohler 47:30

raise, right? You've gone as far as probably you wanted to, or logically it made sense based on your own resources going in.

SPEAKER_01 47:38

That's right.

Keith Kohler 47:38

Tell us a bit about what you have in mind for the capital raise and how you came about how the process you uh worked on for that.

SPEAKER_00 47:46

Yeah, so we uh we we built a few different scenarios to see how much cash um I actually uh I actually need for the for the course of the next year to year and a half, and really what when you want to raise, you want to raise for at least a year and a half so that you're not, you know, as a founder, you're not taken away from the business and just constantly raising. Um, and so, or raising, you know, more often than a year. Um, that's probably not the best scenario. So my I'm trying to raise a million dollars, um, which which is the the least um scenario or the lower scenario of the ones that we came up with. It still will require very minimal marketing. Um, so I am concerned that I I I don't have enough marketing allocated on my on my on my PL. Um, but uh it's it's going to give me what I like the the basics of what I need. And majority of it will be allocated towards retail. Some of it will be allocated towards DTC. Um, and we're doing it very simply. So even though we're we're not a pre-revenue company, I felt like last year was really a test for me. It was even the product, it wasn't totally finalized. And based based on what I briefed the chef and the the co-man of what I needed to be, the process was so manual. The product is gen one. So to get to gen two, I need to A, have higher, higher volumes, which we will now have, but then two, just move into someone that's a little bit more automated. So part of the race will go towards fine-tuning and developing that gen two of product. So even though we weren't pre-revenue, I felt like, you know, the concept was validated, but we were almost always out of product and didn't really have a total final supply solution, which we're working through now. Um, and then we're so early. So we're raising via a safe.

Keith Kohler 50:04

Okay. I was about to ask you about the structure.

SPEAKER_00 50:07

Exactly. I I actually so talk this, this could be a learning for some of the founders that are listening, listening to this, because I knew nothing. Like you, you know, you go, you go to school, you get your MBA, you you work for a large corporation. Never have I ever raised money or even understood the terminology behind it. So I knew zero coming into it. So my first people beyond myself that gave me any sort of funding were my dad and my stepdad. And there I had no idea what I was doing. So, you know, you weren't you watch Shark Tank and you give equity four percent of your business. Um, so I essentially agreed to do that. And then once I actually learned more about fundraising and just this world, I realized actually that that's really, that's really not the way to go. And it's not the, you know, it's it was a little bit more naive on my part. I did know about safes, but my stepdad didn't really understand them. So um I long story short, over the last course of the year and a half, I I've I spent talking him into and explaining what a safe is and the benefits of a safe for myself and for him, and then for future investors. And so I finally was able to convert the the equity that we we talked about, that was there wasn't an actual contract, to a safe agreement. So now he signed his his safe and he's my my first my first safe investment. Um but major, major win because anytime you do something non-standard, A, you look naive to investors, but then B, it's just hard, you know, it's hard to get out of the uncle agreement that your uncle thinks they should be 20% of the business and then they're your co-founder, but they're truly not. They're not they're not doing the sleepless nights. They're not, they're not actually, you know, work uh some maybe maybe some of them are working on the business. But in my case, my my stepdad is amazing, very strategic mind. He was a tuck school professor of strategy. Um in in his time, he's he's retired now. But like he's not he's not putting in like a lot of it is just putting in the hours. So anyway, really, really think that through, even though it might be attractive because you need the money and cat cash is kind of the lifeline of the business and you need it at that time, but spend the time to kind of make sure that you have the right vehicle. So, generally, this early on, safe or a convertible note is the way to go. I've also heard of a kiss, but I I don't entirely understand the difference between a kiss or a safe. Maybe you can educate educate us on that.

Keith Kohler 52:57

That's new for me. I have to go learn a bit more about that.

SPEAKER_00 53:01

Yeah, yeah. Uh I um uh actually the last competition that I did, they were the the terms were via a kiss, um, and I ended up not winning, so it ended up not being not being relevant. Um, but most of the deals at this stage are done via safe. I think it's over over 80%. So I would highly recommend safe and then just have a a discount or or a cap, um, or both.

Keith Kohler 53:27

Brilliant. Um may the next time we speak it be when we are talking about hey, I filled out the round, it all sorted out. May that happen. Because we know it's still a challenging environment, and yet you've done so many things, Tatiana, with I would say with structure and crossing your T's and dotting your I's.

SPEAKER_01 53:50

Yeah.

Keith Kohler 53:51

And I think that's really a really terrific use of your background. And that's a benefit of someone with corporate experience, is having those structural elements and executional elements really well thought out and complete.

SPEAKER_00 54:09

Yeah.

Keith Kohler 54:10

Because as you mentioned, and again, in other settings, a lot of founders don't have that, and it's a bit more loosey-goosey, and then they get to this point where you are, and someone's peeling back the onion. I'm like, oh, well, what's that? And oh, we need to clean that up, or yeah, and that's not your case. You're really well prepared, and I think that's exciting, and I think it also is a good look to the outside world because it's not just about your company and your products, about Tatiana as a leader and uh someone who gets the strategy done and executes the strategy. And clearly, I think you stand out above other peers at your level because of the fact that you have it, you have thoughtfully taken the time to get these things, I dare I say your checklist fully checked off, right?

SPEAKER_00 54:59

Thank you, Keith. Yeah, you're you're always my biggest cheerleader. Uh, I don't know that I got all of the things, all of the checks done the the right way right off the bet, but um, now that I'm like fully full force, this I I think this is my fourth month of being a full-time founder. Um anything that I've missed, I'm kind of going backwards and fixing while it's still early on, right? Like I'd like to think brand, of course, but like in reality, we're still we're still at zero. But I'm not gonna be at zero, I promise you, in in a year from now. So um now is the time to fix everything, have a really strong

Pride, Public Speaking, And Better Filtering

SPEAKER_00 55:40

foundation, and then go from there.

Keith Kohler 55:42

Brilliant. So as we conclude our time together, Tatiana, of course, the time always does fly by, right?

SPEAKER_00 55:48

It does, especially when we're we're when we're at chatting, yeah.

Keith Kohler 55:51

And um I always use two questions to end our how I financed it uh discussions. And the first one is what are you most proud of?

SPEAKER_00 56:04

What am I most proud of? And it has to be professional.

Keith Kohler 56:09

It can be anything you want.

SPEAKER_00 56:12

Well, that's really hard. Okay, so I'm gonna do a professional and then I'm going to do a uh a personal personal one. So professionally, we recently won Mintel's most innovative in 2016, and that's how we kind of started our year for DeFi. And I just I could I still can't believe we won. I used to use Mintel during my schoolwork. I used to check out Mintel for trends when I was at Mars, and I would look for hey, what you know, where should we go with our innovation when looking at white spaces or designing a three-year innovation pipeline? It's judged by the biggest minds in innovation in CPG, like companies like PNG, Mondeleys, Racquitt, um, and many, many others that I'm that I'm not men that I'm forgetting. Um Nestle, um, and some of those companies could potentially even be future acquirers of design. But that was just, it was just such a moment where I just geeked out. And again, I I'm not naive to know that I I don't have a total brand yet, but I have a signal that this is going to be something really major. And so that was my signal in the beginning of the year. And it just even now, it just makes me very proud that that we've won that. Um, and then I also did the application. I this is this this actually goes to say, you know, when when when you're thinking something's a long shot, just do it anyway. Because I did the application at 2 a.m. and I was like, what are my chances of actually winning this? Like, am I even gonna is this that is this even gonna happen? Like we're just we're so early. And I, you know what, I submitted it anyway. It was at uh it maybe it wasn't at 2 a.m. because I think it was due at 12 a.m. So maybe it was at 12, like 11.59.

Keith Kohler 58:09

I submitted it at resonating with you on the night shift, Tatiana, for sure.

SPEAKER_00 58:13

Yes, yeah, exactly. And I and I got it in, and then when I got the news that we were finalists, I was super excited, but still there was that disbelief of like, no, we're not gonna win. And then we won. And it was just, it's just such a proud moment, and it's going to continue to be a proud moment this year, and then going into the next years, too. So that was my professional one for Defy. And then my personal one, I always tell my kids, I don't think I'm super polished. Um, I do, I now do a lot of pitches, so I've kind of like honed in on my pitch, but in no way do I ever claim to be perfect. And I actually used to, I used to get like panic attacks when I used to speak on stage or whatever, and it doesn't happen anymore. But I tell my kids, listen, you gotta do it scared anyway. If your voice shakes, it doesn't matter, whatever it is, just do it anyway. And because if the message is good, that's all that people are gonna care about. And so now seeing my daughter and my son just kind of going and and they're only five and seven, but they're kind of living by that. I wish I had a little bit more of that guidance growing up as well. But it it just makes me incredibly proud that they're scared and they do things anyway.

Keith Kohler 59:31

That resonates with me a lot too. Um, because we do we do hold ourselves back from time to time, right? Or not surprisingly, we have those voices that can say, oh, it's gonna go wrong, or but it could go right. That's right. There's a little bit of that dance, right?

SPEAKER_00 59:47

That's right. I I think there was a stat that most uh more people are afraid of public speaking than there are people being afraid of death. And it's so true. Like I you know, afraid of being judged. That's right. We don't like to be judged, but what's the worst thing that can happen? And most of the time, people are people that judge you usually are not the people that you want to be. So, like if when you put that in your context, like I've never been jealous of someone that's been in been rude or um been very judgmental to me.

Keith Kohler 1:00:20

Yeah, thank you for that, Tatiana, because putting ourselves out there is can be frightening, risky, all of those things, and yet more than nine times out of ten, people show up to support us, right? Or or they're like maybe not overtly, but at least they're there and they know they're acknowledging that you you put yourself out there, and I think that's great and an important lesson.

SPEAKER_00 1:00:48

That's right.

Keith Kohler 1:00:48

How are you gonna find your people if you don't, you know, if you don't get yourself and that's the opportunity to invite people like you've done by being in competitions? And the second question, first of all, thank you for that. The second question is what would Tatiana today tell Tatiana at the very, very beginning of Defy.

SPEAKER_00 1:01:08

It's funny because it feels like it's been 10 years, but it also feels like it's still the very much beginning. Um, what would I tell Tatiana when she was starting out? Um, this is a really hard one because um I've done I've done a lot in in the two-year, two-year time frame. I would say the biggest thing I would tell myself is make sure that I more strategically filter. So we talked about competitions, we talked about reaching out, like even for fundraise, doing a grand um outreach without knowing someone's thesis, without knowing if they even invest in early stage um or pitch competitions, like if it's mixed in with tech. I'm actually, you know, I'm learning that that's not a good mix. CPG is so specialized. Everyone thinks everyone's a consumer, so everyone has an opinion about a CPG brand, but they don't have the appreciation of how difficult it is to actually take something and put it in a pack and sell it. Um, there are so many intricacies that I'm sorry, a tech person just they they're not gonna get it. So I would my advice to myself, my earlier self, would be filter much better and make sure that you understand that anyone that you're outreaching or even these competitions or anything has a true CPG focus. I think I've made some mistakes there that I'm no longer going to make coming into this half a year.

Keith Kohler 1:02:57

Yeah, brilliant, Tatiana. And really very grateful for you and you sharing all these multiple facets of your story. And it just goes to show you that even at early stage, there's so much dimensionality, there's so many different elements of the story, of the journey, of you fill it in, right? Of your arc that uh involve your choices and how you've shown up and your whether you're visible and how you work with advisors, and yeah, you put in your own money in, and now you know this is the time. So so many great nuggets here that weave together the Defy story to date. And of course, I can't wait to see what's next.

SPEAKER_00 1:03:39

Awesome. Well, it's been so great to be here. It's always such a great conversation with you, Keith. Um, it's it's been a pleasure. Um, but yeah, I'm excited. I'm out of out of out of my entire team. And um, you know, we talked about people being excited about what you're building. I'm I too am excited to to see what's next for DeFi. I think you're gonna hear a lot from us within the next cut uh within the next couple of years at least.

Keith Kohler 1:04:06

Absolutely. And really excited to see you continuing to be out there, continue to make relationships, continue to invite people into the DeFi world, as you've done for me. And I'm very grateful that you've done that. So this is uh the conclusion of this episode of How I Financed It. So this is Tatiana and Keith saying goodbye for now.

SPEAKER_00 1:04:28

Thank you, Keith.

Keith Kohler 1:04:31

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.