Yesterday the kids sold Lemonade.
But not just any lemonade.
They sold “upgraded” lemonade…and before I tell you what that even means, I’ll tell you where this all started and why this matters to you.
Every venture starts with a plan…and it was no different with these kids.
Since our dishwasher is currently broke, we hand wash our dishes like savages.
And while washing the dishes, I heard the kids come up with a genius plan:
Atlas (11, my second child): Look, every time we sell lemonade, people buy it, it always works.
Sage (6, the baby girl): Yeah and I can earn enough for some pink roller blades.
Asa (12, my oldest): Why don’t we just borrow money from Dad so we can buy all the ingredients we need?
All of them: YES! Dad can buy it all and we will pay him back!
The Pitch
The next day, the kids approached me with an offer and Sage (6, mind you…) made a deck to raise funds for their lemonade stand:
Cute yes, but hardly ready for an investment.
I still needed to know:
How they will do it
Why $50? How did they come up with that number?
What does “We’ll pay you back with “intrisst”” mean and ultimately how much am I really getting back?
What happens if I don’t get paid back?
Do we have an expense list?
Price?
Anything else?
LOL
They kinda looked at me blankly and Atlas said, “Dad, it’s not hard…it’s just lemonade. Everyone loves lemonade and they will buy it…guaranteed.”
I started laughing.
Me:
First off, I LOVE your hustle and determination. I’m proud of all of you. Second, never guarantee anything unless you can back it up. Third, I’m in, but I need details. Mind going back to the deck and sharing how you will ensure I get my money back, then bring it back to me?
Atlas: Yep!
I’m too lax as a father because I didn’t make them rewrite the deck (I should’ve), so they just penciled a deal on paper.
The offer: “$50 with 10% interest paid by Saturday or we do chores to pay off whatever we didn’t pay back.”
My response: How about instead of $50, we just go buy what we need and we will say that you need to pay me back that amount with 10% interest? If that’s reasonable, we have a done deal.
The kids: We’re in!
We then went to Costco to get lemons, sugar, and a secret ingredient to turn it into “upgraded” lemonade.
Funny enough it only turned out to be ~$23.00, so my return plus principle would be around $25…
But then, I made them a counter offer.
Me: How about this? What if I became a partner instead, and we eliminate the debt, of which you won't have to pay me back? I’ll just get an equal portion of the proceeds.
They huddled.
They HATED the idea of failing to pay back a debt and having to do chores if they failed.
But they also weren't in love with making less money.
After arguing with each other for about 30 minutes, they decided to make me a partner because they didn't want to pay back the “Dad bank”.
But they still had a deadline…
They had a whole week to create the strategy and the plan and execute so that when Saturday morning came around, they would start slinging lemonade.
But then Atlas said something genius:
Dad, why should we wait for Saturday? Let's test it and see if we can get some sold this week!
I told them I think that would be a great idea and that would actually put a lot more faith in their investor.
The Test
So they put the secret ingredient in the cooler and they set up the table and the umbrella on the corner and on Wednesday they sold two lemonades in less than five minutes.
Asa, my oldest, then learned a super valuable lesson.
Asa: If we're selling so many of these, our price is too low. Let's raise it to five bucks a pop.
Nobody argued 😄.
They decided to raise the price to $5 a pop, but they were still flying off the shelf.
That day they made $40 bucks in 15 minutes.
They ran out of sugar, of which they were using simple syrup.
But it was enough for them to feel confident that when Saturday came, they would sell out.
They were pumped!
Saturday
Saturday came and sure enough, the kids crushed it.
They were only supposed to make $150.
They made over $200 with tips.
And although they had a tip jar, they really didn't need it.
Folks were paying extra, even double or quadruple the cost of a $5 “Upgraded” lemonade.
The “Upgraded” lemonade is just lemon and lime flavored seltzer water…and that did most of the flavor work so they didn’t have to buy a ton of lemons and sugar.
Smart kids.
And honestly, we know what buyers are buying…and it’s not lemonade.
They're buying the American dream.
They're buying their childhood.
They're buying nostalgia and a date with themselves…decades back.
They bought what they believe is a culturally acceptable expense on a June Saturday in sweltering Arizona.
The buyers are contributing to an identity that they have accepted, one that resonates…buy the kid’s lemonade and support their dream.
Great job, kids!
Why This Matters To You
If you're raising capital, you can have a great pitch, a great product, and a home run offer. But if it's too strange and not familiar with the end user or investor, you wont raise the capital easily…or at all.
Sometimes you just get lucky with an investor. But most of the time you won't.
If you sell a product, security, or a vision similar to a “unique and Upgraded lemonade” test it on Wednesday before your actual GTM push, even if your investor is skeptical due to the new and different ingredient or model, you’ll raise more capital next time.
Be open to test the market with your previous investors and collect the data necessary to make changes or drop the offering altogether.
Secure an anchor investor. Without an anchor investor, it will be exponentially harder to raise the needed capital.
Secure an anchor operator. In my kid’s example, there was no anchor operator unless I committed to go out there and help them while they sit back and learn, thus leaning on my previous experience selling lemonade hundreds of times as a kid.
My Offer To You
Want a fresh list of 10,000 accredited investors help your raise? On me. It’s right here (check your spam folder after I send it).
And don’t worry, I included a guide to properly reach these investors step by step.
Hoping this helps,
Andrew LeBaron
P.S. If you’d like to build a newsletter like this one to attract and raise capital, book a call with me here.
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