The $5M PO Problem and How Retail Can Break Your Brand

The $5M PO Problem: An Introduction to Retail Challenges Investors are telling emerging brands they must be Omni channel. At the same time big box retailers are fighting negative comps and need new brands to drive traffic. TikTok brands are going from zero to 10 million seemingly overnight. And somewhere in the middle of all that hype is a little less glamorous question who pays for the inventory? My guess today is Aaron Wall, founder of Lunar, a retail focused capital partner built specifically for the moment when a brand lands the PO and realizes that selling in is the easy part. Aaron spent nearly a decade as a buyer target, then worked as a broker at Bluebird and what she kept seeing was the same pattern. Incredible brands landing massive retail opportunities and then panicking when the $5,000,000 purchase order hits. In this episode we break down why selling is not success. Sell through is the biggest mistakes brand make walking into their first buyer meeting. Why you should build digitally first but not wait too long to build retail relationships. How retailers are aggressively courting TikTok native brands earlier than ever. When to use a broker and when to go direct to a buyer. The financial traps brands underestimate, including slotting promos, chargebacks, carrying costs, why debt is not a commodity and why your Capital Partners behavior matters when forecasts miss. A case study on scaling into Target, Whole Foods, Walmart and Costco without blowing out the balance sheet and why we'll fix your margins later is a dangerous assumption in retail. This is one of the most tactical conversations we've had on retail. If you're thinking about entering Target, Walmart, Sephora, Whole Foods, or you've just landed your first big PO, this episode will likely save you real money. Welcome to In the Money, an exploration of whether you can still make money in D to C and CPG. We talked to some of the most interesting 5 million to $50 million founders, operators, investors and acquires in the space to ultimately answer the question, is D to C and CPG still a good business? Hope you'll enjoy the show. Navigating Omnichannel and Engaging Retailers Early Aaron, I'm so excited to have you on. I think emerging brands are at such an interesting point. Even the investors that I've talked to on this pod have pushed for Omni channel, saying that they're only writing checks to Omni channel brands. Some people have quoted the death of DDC. That's on the one hand. On the other hand, you have large retailers, Target especially, but even Walmart experiencing real pressure. Negative sales comps naturally has downstream consequences for brands. So are we bullish or bearish on emerging brands entering? Speaker 3 Retail, great question. This industry is evolving so quickly and there's no question that what I would have told you two years ago about building your best direct to consumer presence and getting to know that you know individual consumers so well before you even talk to retail and having a really compelling UGC marketing story is now for sure evolving. And I think there are a lot of reasons for that. I think we could use retail as a more broad term right now. So what we're seeing in our best case scenarios, our brands have already gone to sell on sell digitally, right? And so that could be you built a really solid direct consumer business or it could be that you kicked off your brand through a mixture of TikTok and Amazon and you've driven somewhere between 2:00 to $4 million digitally alone. You're still getting to know that consumer pretty closely and intimately and directly. You're still figuring out how to drive sales directly, but now you know what your best sellers are, you know the right pricing strategy, and the next move is obviously going to be OK, how do I take this brand and I sell it off a shelf in a Target or a Walmart or all Whole Foods or Ulta or Sephora? So I think that's where I go right now is I'd say, you know, start build a digital footprint, build the following and then start taking it to these retailers. What I didn't address was kind of what's happening in retail. And I know, you know, a lot of people are wondering right now, where are we at? You know, what are the retailers that are worth going to 1st? What we're seeing is all the retailers want you first. They want you to, you know, drive in store traffic for them. They want you to be a exclusive potentially partner could be by skew like David Barr just did, where they launched individual flavors at each retailer or what could be by brand. Just saying we want your entire brand to be exclusive to that from multiple, you know, years potentially depending on the retailer. But they all need you and they need you pretty quickly. And so we're seeing a much faster transition specifically from TikTok typically where retailers are just reaching out directly and getting after these brands when they're pretty small. Speaker 1 And if you were a brand? Speaker 2 Doing you've got velocity. Speaker 1 Maybe you've even hit. Speaker 2 5 million and either D2C or TikTok and Amazon in your first year. Should you be spending energy to meet buyers or should you focus on D2C and let them come to you? And to your DMS, it sounds like even sometimes. Speaker 3 Yeah. So the retail cycle is incredibly long. I think brands underestimate that. And if they wait too long, they're waiting for the next transition cycle, which sometimes could be a year from when you had your first interaction. So I always think you want to show up where these retailers are early. They would need to know you exist, they need to know why they would want you, and you may even want to start a relationship well before you're ready for an on shelf experience. But then you'll know, right? You'll know where you fit. And this is coming as AI was a buyer at Target for nine years. So as a former merchant, I want people to come to me and know exactly where they fit my pricing strategy. I don't want to have to tell them that their price is too high and we're going to be promoting it every day. Those are the kind of things that you want to figure out very quickly. I know Sephora does a great job of kind of cultivating these relationships early, and they do that through all of these events. And you know, I mean, every retailer has their own strategy for this, which we've been tracking closely as well, just because they even vacillate on how much they invest in these kind of incubator models and how early and when to bring them in and what information do they need to have to be successful as a part of like our retail ecosystem. Speaker 2 Yeah, interesting. When to Use a Broker or Go Direct to a Retail Buyer And then for a brand? Speaker 2 Interested in getting into retail. I know it would depend on retailers, so feel free to be general or specific, but should they, you know, should step one be in a broker? Should step one be directly to the buyer? I know that we're talking about Expo West and pre recording should be a trade show. Like what's kind of step one? Or is it all of the above? Speaker 3 I think it depends by retailer for sure. I think finding a direct path to communication with the buyer is always probably a great first step, if you can get really direct feedback from the buyer on where you sit. Often times I see people asking the buyer directly which broker reps they want to work with, especially in the bigger ecosystems like Bentonville and Minneapolis where there's a lot of options and what you need and want might look different depending on who you are. So I get asked all the time, you know, I want a one man shop. I want somebody who's going to treat my brand like gold and I'm going to be a top priority for them versus a huge Rep firm where I know I'm never going to be their top priority. They've got huge fish to fry. They just got athletic greens and you know, whatever David Barr into target, like that's not I'm never going to be important to them. So I think it's finding that right person and I think finding people you trust to help you and guide you and even that partnership. But I was just down in Bentonville and I used to think Walmart was a not a big Rep from city. Now it's gone the other way where they're grown so much and they've kept their team so lean that they continue to need that support behind the scenes. And these buyers want you to have somebody helping them because they don't have time to answer all of your early stage questions that aren't necessarily important to their day-to-day business driving initiatives, right? They need to stay focused on that stuff. And you're going to use your broker for all of those dumb questions, everything you need to do to get the item set up. What are the right promo strategies? How do I test, you know, what is my fulfillment strategy across each channel? All that kind of stuff is really the role of the broker and then getting you paid ultimately. Speaker 1 If you are serious about the economics of every order, this one's worth paying attention to. 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Go to aftersell.com/exclusive to claim your exclusive offer and start unlocking incremental revenue on every order. Speaker 2 The brand gets the coveted pitch meeting. What Founders Get Wrong in Their First Buyer Meeting What is maybe saying that's not quite appreciated for an emerging brand that's in that pitch meeting for the first time that they really should be getting across? Speaker 3 It's a really good question. Kind of going back to my buyer and broker days, I feel like I can tell immediately how well researched a founder is on the existing assortment, both digitally and physically, right? So my number one by far is if you walk into that meeting and you don't know every single one of your competitors, all of the different store formats, how they sit on the shelf, what their typical pricing and promo strategies are, you haven't done enough research and you shouldn't have. A retailer meeting is generally how I feel. And I think that goes way beyond, I mean, even down to, you know, you answer the question for them of buy Oz, are you a better value? They're not going to run the math in their head and they might not know, but you're the expert and you're the only expert in your product. I think another thing people forget about is making sure they answer any potential concerns in that meeting, right? So if it's like regulatory and you have a product that has mixed claims, know exactly which claims you're making and that you've done your work from a regulatory perspective, right? Don't let the retailers try to figure that out. Or even worse, don't want to get to shelf and then get a cold because you didn't do the work, right? So those are the type of things that I think the earlier point of coming in too early and not having an answer for all of those things is what I see sometimes happening. And it's like at that point, you should just step back, head down on the digital business, continue to drive a consumer and continue to learn if you're not ready for those type of questions at a, you know, initial meeting. Yeah, and I've seen it all. I've seen every error possible. And I mean, I can even speak to, you know, now from a lunar perspective, we're taking an enormous amount of risk, right? We're bringing in capital at the time of commitment from these retailers. So we want to know that you've actually made the product, shipped it and proven consumer demand before we will ever advance you a dollar, right. And every single time we've advanced the dollar before those things happen, it doesn't work. There's a issue in production, there's an issue in shipping, there's an issue upon delivery or there's an issue once it hits shelf with pricing and sell through. So it's a really like, those are the type of things that I think people just underestimate. They're like, I'll figure it out when I get there. And it's like, you know what details I'm on. Bridging the Capital Gap for Retail Purchase Orders What are perfect segue to track to lunar and where it sits in the ecosystem? So like you mentioned, really decade experience as a buyer and merchant at Target, you're seeing founders come in, grow almost overnight from a million to 10 million in revenue. They're trying to figure out the kind of working capital mechanisms on the fly. You're now running a team at Lunar. Speaker 1 Just maybe. Speaker 2 Tell us a little bit about the positioning of lunar. I know you mentioned kind of at that PO commitment, but you know, where does lunar fit in in that cycle? Speaker 3 Sure, sure. Yeah. So a little in the back story, I was a broker after I left Target at the Bluebird Group, and I was seeing these incredible brands come to me and they were going from 1 to $20 million in revenue at Target overnight. A lot of them had celebrity backing. I mean, they were like hitting all the marks at the time of the things you'd want to see. And as soon as I would come to them and I'd go, hey, Congrats, I got you an end cap for Q4. So it's going to be $6 million. You need to start production today. That was sort of when I would see their eyes like glaze over and there'd be like a look of panic instead of excitement. That's always when I'm like, what was going on? Why? So started to dig in. Obviously now I understand it better from a, you know, back end looking at their PNL perspective, but these brands might be doing $5,000,000 in revenue over the last 12 months. They might have raised a million or $2,000,000 in equity Even so you know it all signs are really going well. But then when you get a $5,000,000 order, where does that cash come from? There aren't a lot of equity investors that are interested in investing in dollars just to buy inventory. At the time there was maybe a little, you could maybe go get a little venture debt from SVB which obviously doesn't exist anymore. And so there was just this really big gap. It was really early kind of early stage financing when you're just doing direct to consumer kind of revenue based financing, kind of give and go model and then a huge gap before your able to go to a bank. And the other like incredible positive about filling this gap from a lunar perspective is we're actually like trying. We're putting more equity dollars and equity shares back into the founders pockets because instead of fundraising at a time when you're pre retail, now you can fundraise when you've actually seen sell through and you've had that end cap. And it's a much better time just in terms of your longevity and your ability to utilize that capital more effectively too. How Lunar Underwrites: Beyond the PO to True Margins You mentioned earlier that Lunar only wants to deploy when there are some proof points and customer affinity. Maybe let's click into that a bit more like. Speaker 1 What does? Speaker 2 Luna's underwriting look like, and I presume that the founders didn't actually get a lot out of this in terms of like what will success ultimately look like? They come to you with APO in hand from a big box retailer. Is that enough? It sounds like maybe not. Speaker 1 Like what else are you looking for? Speaker 3 Yeah. So our entire team is former retail founders and retail investment bankers. So having a retailer behind you and give you APO is, is like just the beginning of opening up a box about all of the things that it needs to be successful. So the number one message I want to tell founders is sell in is not success. Sell in is is actually the easiest part of the entire journey. It's a sell through that determines the real success. So our team takes such a hard look at what the sell through could mean. So we start with we have to have the samples we touch, we feel we use, we bring them home, we trial all the food, all the beverages was just sampling a beverage break before. This is like a really unique mouse feel and we make sure that as a consumer and everyday consumer who's actively out there shopping that it kind of checks all the boxes. We also check on the price point, the packaging, like we've been burned before where we didn't ask to see it. We maybe tried it in like a sample form, but we didn't actually get to see what's the weight of this? You know, how is it going to sit really in the protein section against these huge containers from Vital Proteins? You know, I mean those are the kind of questions you have to ask to like validate a sell through. But we also built technology between our seed and our Series A where we now connect directly. It's a really, really easy underwriting in terms of the founder side of things. We connect directly through our app to their bank accounts and QuickBooks. And I think what people don't think through is like, we're looking at every transaction. We're going back and culling the past to make sure that the story they're telling matches what we see. And it's easy to get caught up in. Like the future is so bright. But in this business, we're really looking for like, you know, do you really understand what your true margin is and your contribution margin? Like have you, you know, have you dug into the components of that and what it will really look like when you're doing it at scale? And a lot of people don't really think through, you know, carrying costs, like how expensive does it going to be when you need to have it sit at your three PL. with multiple weeks of supply for Walmart over time or when you're buying raw materials at bulk because Walmart wants you to keep six months of supply because you're a private label supplier. These are like real financial scenario planning that we're doing behind the scenes. And I mean, at the end of the day, the amount of underwriting we do, a lot of it too is about like are like, does this business make financial sense over time? And I mean, you know, fan, you've looked at some of these businesses, it's like it might not be a Direct Line to profitability in the next 6 months like everyone dreams of, but do you understand how it's going to operate and run on the current cash constraints it's set with? And I think those are two, two different answers that everyone should be constantly thinking about. That doesn't require equity over time because equity is a nice to have. It's not a guarantee. You know, I mean, like these equity investors are, so they're getting so tight, they're being so picky. They see thousand, thousand of risk. And so we don't necessarily fund a company going like there's no question you're going to raise a Series A, you know, we, we fund a company going, could this business survive if they did it? Speaker 2 It sounds like you're almost a consulting practice wrapped around the lender. It sounds like you're thinking about this kind of as thoroughly is no more thoroughly than the founder and sometimes even the investor is. Speaker 3 Yeah, absolutely. There is a part of our business that's probably the. Really where you know, Robert hits the road, which is these founders Get full access to all the things we're saying. So when we do analysis on our founders business, we handed over to that, we show them like this is what you're paying. And This is why we see in the next three months, your margins are going to start deteriorating if you don't do something or this is how we're looking at your. Another huge 1 is looking at vendor terms. Like I think people don't spend enough time looking at these retailer terms and really understanding them and every component of them and how they affect the margin over time. So we spend a lot of time with that and a lot of times we're just answering, you know, questions for these founders, helping them dig in and go, all right, so if Costco says they're going to pay me early and it's I said I'd pay 1%, what does that actually cost in dollars? And these are just, you know, big picture kind of questions that I think it's easy in the moment. You're super excited about a retailer, you're signing on the, you're like, whatever it takes. I'm getting into Cosco making it big today. But the reality is there's a lot of other little detailed questions that are great to ask, and we're always happy to help with it. Speaker 1 Most founders treat subscriptions as a marketing tactic. Subscription Platform for Serious eCommerce Operators The best ones treat it as a capital structure decision. Here's why that matters. Recurring revenue changes your multiple It changes how lenders look at you and how acquirers underwrite you and how much run will you actually have when things get tight. Predictable cash is the asset, not the size of your customer. File recharge is the subscription platform serious ecommerce operators actually use. It gives you the visibility and control to run subscriptions like a business unit, subscriber behavior, churn management, retention flows. Built for operators who think in contribution margin, not conversion rate. Recharge runs on Shopify and with it you can launch and optimize subscriptions fast and convert 1 time buys into recurring revenue. Brands like Butcher Box, Harry's, and Ritual are built on it. If you're building something worth acquiring or worth keeping, subscriptions aren't optional today. Your defensibility go to get recharge.com. That's GET recharge.com. Why Your Debt Partner's Behavior Matters When Forecasts Miss Most founders, I think, treat. Speaker 2 Debt as somewhat of a commodity. Show me the volume. Show me the rate. Speaker 1 You have a strong. Speaker 2 View that founders should be as selective about their debt partners as the equity investors. Tell us more about that. Speaker 3 Yeah. I think in this question, I think I'd love to give an example because we have had so many amazing founders where things don't work out exactly as they planned. And one of our companies was going into Walmart, they're going to do private label bars kind of competing against some pretty big players. Walmart had put together a formulation that was incredibly clean and didn't taste as good. So guess what happened, the forecast did not pan out the way they thought and they had supplied, they had gone in and gotten all in on six months of raw materials, right. And this is super common. It's not retailers are not they're not expertise or that you think they're forecasting mechanisms are so good there. There is a certain amount of constant balance when you're on the retailer side of trying to use the information you have and give these brands a best forecast possible. But it's a forecast and that's exactly what it is. And even once APO is written, it can be cancelled because things change, right? And so in this case, this partner of ours ended up incredibly long. We had paid for all that inventory. So guess what happens, comes back to me and you know, I was like, OK, I don't even know how we could possibly pay you guys at this point because we're sitting on 6 months of raw materials for Walmart on a formulation that isn't working. And this is just where I think if you're going to go and partner with anyone who supplies you the capital to grow, you should know, you should have talked to three or four other brands who've used them to know if they're ever going to pull that capital, if they're ever going to not be your partner going forward. If things go poorly, how do they behave? Because we've heard the stories of other capital providers in this debt space that they don't treat people like partners. They're the first ones to yank the capital. And your growth strategy is gone. You don't have any capital buy anymore inventory. You can't go expand your account. You can't expand into other retailers and they don't really understand retail enough to know why or they can't even ask the right questions to help you get through these tough times, right? So in this case, what we ended up doing was we ended up working with them really closely. We were like, OK, we're going to use all these other retailer opportunities you have. We're going to put together a payment plan. We're going to continue to work through the inventory. We're going to kind of focus on what we can drive at Walmart just from like a weeks of supply and an ownership. And we helped them with thinking of negotiation tactics, even around payment strategies with Walmart. And it was a almost a probably a year long over from start to finish situation. But guess what? He's great continuing to grow, able to go and find another debt partner at the end of all of this that fits the new model. And I think, you know, that's just kind of the way this business is, is, is you, you know, you can't predict where it's going to go. And in everyone's best in even in Walmart's best case scenario of coming up with a cleaner option, that probably was the right thing to do on paper. But on shelf and in a consumer's mind, when they're rebuying, it doesn't taste as good. Guess what? So yeah, that's just one example. Lean Operations and Efficient Capital: The Chia Smash Story Yeah, fascinating. Are there one or two brands in the Lunar portfolio that the audience might know? And are there any attributes that you can tease out of why they've done well? Speaker 3 Yeah, yeah, yeah. Well, the one that I know we've published some case studies on is Chia Smash. And I don't know if you've heard of them, but they're a chia based jam or Jelly product that you can use that's much lower in sugar for your, you know, peanut butter and Jelly for your kids. They've come out with some incredible tasting snacks and almost like a toastable pop tart like version that is all like low sugar, much better for you. And I think what made this brand so special and what, you know, what made our partnership so special is they were operating really lean. These founders were husband and wife duo. They're probably the smartest people I've ever worked with, and they were figuring it out every day. But when you're operating lean in those early days and you're, you know, heading toward profitability, what do you need? You need incredible partners who helped, like, support this lean team. So it could be, you know, people with financial knowledge, It could be the retail knowledge, It could be a marketing team. Like you have to be thinking about every person that you're bringing into your small group as a value add. And so in the time we worked with them, they expanded into almost all Whole Foods. They got into Costco. They were a Target 1 Walmart, and it was just an incredible gross story of like very, very efficient capital, really smart founders and a clear white space in the assortment, right? I mean, who's touched the jam assortment for 20 years? And no one thought we needed something new and better. But this is a good example where it's like when you have a really clear differentiation in the assortment every retailer want you and you just have to figure out how you're going to lay the groundwork for each, be tailored, what the right strategy is. So, yeah, so they grew significantly and then when they got to a certain point of scale, they went to a more proper ABL bank facility, which is 100%. Our goal for people is like we're a bridge, right? We're here for you in that, you know, 1 to 25,000,000. And when you get past that, that's when you want to start to go after a more and you're also more mature and you're more team to do all the recording that's required for those type of facilities. So yeah. Financial and Operational Warning Signs Before Retail Expansion Just to go back to something you said earlier, you said off of the full journey, getting the PO written is the easy part, you know, selling through is the hot pot. Are there any operational or financial warning signs that a branch should be thinking about? Maybe there is a brand today that's listening to that. Hey, I've got my first PO. Maybe it's too many doors or is it, hey, maybe there's some chums in it that I don't like. What are some warning signs for a brand that they make and not be ready for retail? Speaker 3 The first one I've seen is they haven't run the full financial model and they're actually losing money with retail. So retail shouldn't necessarily be harmful to your total margin picture. You should be working through a scenario when it comes to terms, promos, slotting fees, all that stuff that actually does make sense for your business because it's not in the best interest of the retailer either. They don't want an unsuccessful brand that just paid them a ton of upfront cash that is going to be gone in six months and they're going to be fighting with anyway. So think about it that way. Think about like using the the power of your innovation and your digital sales and what you built to get to a scenario that makes sense for both parties. That's my number one, right? So that's the beginning. Then you got to sell through and you want to hold back. You want to hold back as much as you can't. So that's one reason you would use a loan or two, right? If all your dollars are sitting in your inventory at the time you set a target, what dollars are you going to use to drive promos, to make sure you're driving content to build up a marketing campaign that actually could be localized around the region in which you're selling? And so I think knowing the cash outlay over time and figuring out how you allocate that properly and and then know that you're going to promote your item, you're going to need to drive trial. What does trial look like in each store? You know, these are the kind of things that people should be really, really, really thinking about. And again, I go back to your merchant or your broker should be helping you with a plant. There is not very many brands I've seen that can set on shelf and sell through with nothing. You know, I mean, I'm, I'm trying to think of one off the top of my head recently like that I've seen, I think like maybe the one category where I've seen them sell is frozen because it's hard to promote. Frozen is an interesting one. You're behind a glass or all these things or you know, you know, it's something comes in really, really hot. But for the most part, even the hottest brands are still doing things to drive their sales at shelf. Speaker 2 Yeah. Navigating Special Situations for Consumer Brands I want to take a second and tell you about what we do at Hedgehog, because if you're a founder or operator listening to this, there's a decent chance this is relevant to you or someone you know. We work with consumer brands doing 5 million to 50 million in revenue who are navigating a special situation that might look like a lender getting aggressive capital stack that's gotten messy. Speaker 2 Revenue based. Speaker 1 Debt or Shopify capital MCA stacking on top of each other. It might be a retail transition that's bleeding cash, a board that's fractured, or a founder who's just exhausted and needs a second. Speaker 2 Set of eyes we buy advice or restructure. Speaker 1 Sometimes that means coming in as a restructuring advisor to stabilize liquidity and run a exit process. Sometimes it means we acquire the business ourselves. We've done this 25 plus. Speaker 2 Times Now brands like. Speaker 1 Baboon to the Moon Felix Gray Rockets of Awesome, The Solo A dozen Cousins Coyo Pet plate across apparel, food, CPG footwear, accessories, personal care. If you're sitting in a situation that feels increasingly hard to manage alone, the cash is tight, the lenders circling, and you're not sure what your options actually are, that's exactly the conversation we exist to have. Reach out directly to me at [email protected] or find me on LinkedIn. The link is also on the show notes. Why 'Hope' is Not a Strategy for Retail Profitability Is there a view? Speaker 2 Just on that point earlier about being profitable and brand making money, merchant making money or retailer making money that there is a Jacob into retail of like, hey, we can maybe lose money the first year or two, but as we get more expansion and that retailer's. Speaker 1 Customer is more familiar. Speaker 2 With us or maybe there's some, some cost reduction with like is there any of that or do you like, no, that's, that's a sign for you're setting your stuff up for a big trap. Speaker 3 So I used to think that, but now I have access to every single client of ours financials and it's not the case. And I think, I think you can't build a business on hope, hope that margins will get better, hope that prices will come down because guess what happens, tariffs or you know, I didn't like you can't see the future. So don't assume that that's going to happen or you're going to need to change the packaging and that's going to be an extensive transition at year 1. And that's going to be what brings your your margins down or there's going to be a new regulation, no more dyes and you're in California. I mean there's so many things you can't see. So I just, I would not build and assume that's ever going to happen. I would get the right financial structure set on day one and then anything from there you can't give up. But anything from their efficiencies from like a supply chain, 3 PL. etcetera, those can be added later and continue to, you know negotiate and grind down. But for the most part it's day one. And that's another thing. I just think another misnomer is people used to think, well, when I sell it to big corporate CPG still get those efficiencies right. I'm going to go sell the General Mills and then they have huge that's not even the case anyway. They're using Co Packers too. They're using the same distribution network. So, you know, again, don't think that someone's going to be interested in even acquiring your company down the road. As we both know, that's a whole nother conversation which is getting ready to acquire. But it's like you got to make money. So just to keep your eye on the ball, right? Speaker 2 Yeah, and Speaking of making money. Leveraging Technology for Better Deduction Management Is there a tactic or piece of tech? Speaker 2 That's working especially well for clients right now. It's a. Speaker 3 Good question. I'm going to go shout out to deduction management right now and the advancements we're seeing in technology around deduction management and what some of these companies like Glimpse have done to aggressively address the, you know, picture between what you used to get paid, especially in these distribution models where there's a middleman between you and Whole Foods and what you're actually need to get paid. And this is me being negative, but I still think this is a place where retailers are getting it wrong. Like I think retailers should set much clearer terms and distribution partners, they should be much clearer upfront. There should be no question of what you're going to get paid. You should enter into a financial relationship with them of one of trust versus not trust. But I think this will continue. This push around deduction management, the utilization of tech making it easier will continue to push retailers to be better partners over time. And I think in the short term, they seem to be making big bucks for these brands. So I wouldn't shy away from them. I think I'd continue to learn and I think AI is only going to make that a better and more interesting Ave. for. Speaker 1 People. Strategic Capital Planning and Stretching Your Runway for 2026 Yeah. Fascinating. Is there a piece of? Speaker 2 Advice that you'd have for founders heading into 2026 in terms of capital planning. Speaker 3 I would say stretch your runway. I still don't think we're quite out of this times of not knowing where the capital is going to come from. I think it's still a weird economy. I don't think these founders always think about where the funds come from, from like an equity perspective and fun perspective. I mean, there, there's a lot of options for them. They don't have to invest in venture. Venture is, you know, very long to pay back these venture funds. Then you know, they've they're not necessarily guaranteed. It's a higher risk, higher reward situation. And so I would be thinking about your capital and be really taking a hard look at where you need to place risks and bets. And I would also be making sure I'm investing over time in the things that I know have a clear payback. So, you know, I think if you can preserve capital and preserved months of the business is pretty critical right now. And you know, frankly, even from my side and from a venture side, you know, cash is king. If companies have a lot of cash, it just gives everyone a little confidence that, you know, they they know how to spend it and they're wise about knowing when to put it aside and how to hold it properly. So. Speaker 2 It's not kind of full 21 exuberance. We're not quite back there yet. Speaker 3 I mean, I wonder if we'll ever be back there. You know, I, I just told the story. But I did like a career day in my 7th grader school and six months ago when I, I always like go around and I have them right on post notes. Like you could invest in one company today. What would it be as a little like market research with these 12 year olds. It was all things that they were doing right. It was Starbucks. It was Nintendo, Roblox, those kind of things. OK, six months later it was there last week handed out the post. Its guess what I got back. 90% of them said AI in some form factor could have been a specific AI. And you know, and I was like, wow, these are 12 year olds. So if that's how they're thinking, I mean, you can only imagine how the market is feeling. They're thinking now like, you know, I'm not going to at all necessarily believe that the future of Nike is, is, as, you know, productive as AI, I assume. Speaker 2 Yeah. Connect with Lunar for Retail Growth Conversations Yeah. Aaron, as we wrap up. Speaker 1 Is there anything that? Speaker 2 You're seeking from listeners types of brands that you want to talk to, maybe operators or collaborators. Speaker 3 I just love to talk to anyone who's having great conversations with retail. That's usually where we can add the most value. And we want to be helpful and we want to help build your right team around you beyond just the capital so you can have success over the next, you know, three to five years. And our our team takes a very kind of consultative approach to even just having conversations. So anyone, anyone in that spot is in a great spot and we'd love to chat with them. Speaker 2 Yeah, it certainly sounds like any brand that's thinking about going into retail for the most time, you're a very valid partner. So, Aaron? Speaker 1 Thanks so much for coming. Speaker 2 On and look forward to next time. Speaker 3 Thanks. Thanks for having me.