☕️ Nate Rosen is a Snack

+ El Segundo Next Thursday + more!

Author

Morgan Barrett
April 25, 2025

👋 Hi, Breakfast Club Members!

Thank you Tom @ Citrin Cooperman for sponsoring today’s edition. Tom works with the fastest growing tech companies on tax/advisory

Last week in NYC/SF was amazing - thank you to everyone that makes Tech Breakfast Club such an incredible experience. It was an honor teaming up with Ariana from Slow and Amber Yang from CRV.

Today, I walked around El Segundo and toured some workshops. I’m feeling invigorated and very optimistic about America. I’m excited to get the crew together next Thursday to celebrate some American Exceptionalism.

Then it’s back to New York for a bunch of breakfasts. I’m especially pumped for the DTC/CPG breakfast - if you know any interesting founders building brands, I’d love to have them join.

I also caught up with my favorite CPG guy, Nate Rosen - scroll down to read that interview.

Resources:
-Clerky offers a $100 discount for TBC Members on their formation packet. Reply to the newsletter and I’ll send you an invite
-Fixing the YC SAFE: Reply to the newsletter and I’ll send you a redline for the YC Postmoney SAFE that can save founders millions in dilution
-Ramp is offering a $500 bonus to TBC members when they start using Ramp.
- Free Zendesk for 6 months. Time to scale your customer service? Talk to Zendesk

Tech Breakfast Club Events

El Segundo Tech Breakfast Club May 1st
In celebration of Discipulus Venture’s new cohort of founders

NYC ML Engineering Tech Breakfast Club May 7th
Finally the engineers get some love. With Julien Reiman from Baseten.

NYC Tech Breakfast Club: DTC/CPG Edition May 8th
Teaming up with the legend, Nate Rosen (Express Checkout), to feed the best and brightest DTC/CPG founders

NYC Tech Breakfast Club May 15th
Come congratulate Will McKelvey on Lerer Hippeau’s 9th fund (enough is enough guys, we get it, you like startups!)

Harbinger x Tech Breakfast Club (Factory Tour & Truck Test Drive) May 22nd
Come eat breakfast and see electric delivery trucks. So pumped for this. Harbinger has been quietly executing on a grand scale.

Return the Fun(d) and Sam Altman Lookalike Competition June 8th
Drinks and DPI for NY Tech Week

Tech Breakfast Club 🤝 Citrin Cooperman

Meet Tom Porricelli, Partner and co-leader of the Technology practice at Citrin Cooperman

#Sponsoredpost

Tom - I’m seeing a lot of startups use Citrin from the start. How does Citrin work with early stage startups?
We offer a fixed-fee program for early-stage companies that includes business tax return preparation, outsourced bookkeeping, and access to advisory services like the R&D credit and QSBS. The goal of the program is to provide guidance on issues that many early-stage companies may not have the answers to or know how to handle. In other words, we’re here to help them get their “house” in order. We've found that there are often key missteps at this stage that can lead to costly and time-consuming clean-up if not addressed properly from the start.

We’ve designed it to be as simple as possible, bring us in at the beginning so you can focus on running your business or - “focus on what makes your beer taste better”

Hah, I like the Jeff Bezos AWS reference and there’s definitely some similarities. Basically, it’s like infrastructure for running your company. 
You’re trying to build an incredible company. Any part of your brain that’s worried about tax compliance or how to maximize tax credits in multiple jurisdictions or company structure, or should we be recording this as a debit or a credit, that’s taking away from your core mission.

If people want to chat with you or learn more about Citrin Cooperman, what should they do?
Feel free to connect on LinkedIn or email me at [email protected]

Nate Rosen

Thoughts on the state of CPG/DTC

Nate Rosen (Professional Snack Sommelier) and I caught up earlier this week to get to the bottom of whether CPG/DTC is going to make it. Good news - you can still make a lot a money.

We’ve seen some big exits recently -
Poppi for almost $2b. Siete for over a billion. Both by Pepsi. Simple Mills for almost $800m.

But I’m not really saying anything controversial when I state that raising money as a CPG or DTC brand is very different now than it was a couple years ago - 
It’s nowhere like it was during Covid times in 2020 and 2021. It felt like everyone was getting money and sometimes for nothing. Maybe all you needed was a name and a great studio, like Red Antler, doing some work for you. 

I do think pocketbooks are opening up again. I’m seeing some funding flowing through. Investors are certainly more timid - they want to make sure there’s some real traction, some retail distribution. 

What does timid mean?
Hah, well for example, there’s a venture group I’ve come across that is excited to write checks (mid six figure checks) but only if the founder has a lead. People are looking for more validation now than in the past. They want someone to do some due diligence. 

Brands have needed to be more focused on their margins and profitability. Sustainable scaling is now paramount. A lot of the arbitrage that existed (with paid growth) has faded. Scaling in CPG is expensive. There are some exceptions, though. David, the new protein bar, cofounded by Peter Rahal (founder of Rx bar) and Zach Ranen, could raise capital easily based on their track record. They’re able to move a lot faster. 

So if you didn’t sell your previous company for $600m, what does scaling in CPG look like now? 
It’s bootstrapping, it’s friends and family, it’s getting your business fundamentals dialed. Once you get the product right and are working towards a good margin, it’s easier to reinvest or invest in new channels. There are creative ways to leverage some of the debt tools out there. Settle, Lunar, even Shopify Capital - those tools can be quite useful. Investors want the business de-risked as much as possible before they back up the truck and dump capital into your business. 

Is there a CPG founder you feel really embraces this new reality?
Yeah, when I think of people who will thrive in this era, I think of someone like Lex from Lexington Bakes or my friend Alexander from ZestyZ

For those who aren’t familiar with Lexington Bakes and ZestyZ - how would you describe their products?
A lot of people are leaning into better for you products, Lex is just straight up making a better product. It’s a little 2 oz brownie. Everything about it, the ingredients, the branding, the packaging - the whole experience - is luxury though.

ZestyZ sells the next generation of pita chips, they’re taking on Stacy's and I think will easily crush it. They’re lower net carb, twice baked, and a son and mother co-founder pair which is always fun. 

I remember seeing Lexington Bakes on the shelf at Erewhon. I don’t want to hype it up too much, but it’s definitely an experience. The packaging and the price - it commands attention. Why do you think Lex has gotten traction and is going to succeed? 
Strategically he’s well positioned but I think he has an edge too, regarding his skill stack - 

First, there’s not much competition in the luxury packaged baked goods market. The sizing of the brownie offers some advantages - it’s easy to add to the shelf for a retailer and generates a lot of revenue for the space it occupies. It’s an easy sell when talking to buyers at retailers like Erewhon or Foxtrot. The ethos of Lexington Bakes fits really well with luxury grocers. 

But also, when you talk about being efficient with capital, Lex is the poster child -

I jokingly called him the Balenciaga of brownies. The way Balenciaga, the designer, could do everything - cut, sew, design, fit, and finish, I feel Lex has all the tools to start and scale a brand. 
He makes an incredible product, but that’s table stakes. Because of his time at J&J, he’s an expert at branding and packaging. He knows how to work with retailers and talk to buyers. He also knows how to code and can write marketing copy very well. Eventually he’ll outsource some of the tasks or bring on team members, but every aspect of the business he can basically do himself. That’s allowed him, like what I was saying early, to really nail all the business fundamentals without raising capital. 

I actually spoke with him recently and to your point, it’s such an advantage when you don’t have to raise capital to survive. Even if you do raise from investors, which I think he has taken some money, it allows you to be very strategic in who you take capital from.
Venture money is expensive now so you want to be careful and make sure you’re actually getting something in addition to just capital. 

What else are you excited about in CPG?
Ahhh, so much. I’m ready for the next wave in sauces and condiments. We had the big Rao’s acquisition a couple of years ago so I think the market is ready for some innovation. I’m also paying a lot of attention to the frozen food market. Trader Joe’s over the last decade got a lot of higher end consumers comfortable with frozen meals and now they’re happy to purchase other brands. I also think THC beverages have really hit their stride. We’re going to see even more now that the branding and dosing has evolved. Retailers are more comfortable with it now. 

What’s in store for Express Checkout? 
We got a lot in the pipeline and we’re pumped for it. My business partner, Jenna, and I are working on 2 big things that should be live soon if they’re not already. So we got a 2nd weekly send for the newsletter and a podcast! All those will run out of Substack which we just moved to the other week! Plus deep dives, more editorial content, and events of course. 

About Morgan Barrett:
Morgan is the creator of Tech Breakfast Club. He hosts breakfast meetups in NYC, LA, SF, (and occasionally Austin, Miami, Boston) that bring together the best founders and investors.

Morgan is also a Startup Lawyer at Optimal, an elite lean boutique startup law firm repping clients funded by a16z, Sequoia, Kleiner, Accel, and countless other VCs. He works with clients from formation to exit, in collaboration with Optimal’s partners.