An Austin DTC pet accessories brand generating $2.8M wanted to launch a supplement line and raise $1.2M. Our 5-year model showed supplements would outperform accessories by year 3.
01The Situation
The founder had built a profitable DTC pet accessories business over six years. She identified a clear white space in premium pet supplements, 62% gross margin versus 28% for accessories. She needed $1.2M to fund the launch, and investors wanted a 5-year model showing how the supplement line would grow relative to the existing business.
She had good product instincts and a loyal customer base. What she did not have was a financial model that could tell the story of both businesses together.
02What We Did
We modeled accessories on its historical trajectory, steady 14% annual growth. The supplement model was built from the customer data up: existing email list as seed audience, repurchase rate assumptions from comparable supplement categories, and a digital advertising model showing CAC at different spend levels.
The model showed supplement revenue exceeding accessories by year 3. Blended gross margin improving from 34% to 42%. At year 5: $10.2M revenue and 46% gross margin. The $1.2M raise closed within eight weeks.
03Client Impact
The model got the raise done and made the founder take the supplement launch seriously as a business in its own right, with its own metrics. Thinking about the two businesses separately, then together, changed how she allocates resources.
Breakdown
| Year | Accessories Rev. | Supplement Rev. | Total Revenue | Blended Margin | Net Income |
|---|---|---|---|---|---|
| Year 1 | $2.8M | $420K | $3.22M | 34% | $386K |
| Year 2 | $3.2M | $1.26M | $4.46M | 38% | $624K |
| Year 3 | $3.6M | $2.84M | $6.44M | 42% | $966K |
| Year 4 | $4.0M | $4.20M | $8.20M | 44% | $1.37M |
| Year 5 | $4.4M | $5.80M | $10.20M | 46% | $2.04M |
What changed
5-Year Dual-Business Model Built
Accessories on historical trajectory. Supplements modeled from customer data, repurchase rates, digital CAC.
$1.2M Capital Raise Completed
Closed within 8 weeks. Investors cited detailed supplement growth assumptions as key confidence factor.
Supplements Confirmed as Primary Opportunity
Year 3 supplement revenue exceeds accessories. Blended margin improves 8 points.
Now Used as Operating Plan
Founder tracks actuals vs forecast monthly. Currently running 12% ahead of base case.
The model got the raise done and made the founder take the supplement launch seriously as a business in its own right, with its own metrics. Thinking about the two businesses separately, then together, changed how she allocates resources.
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