Doughp: Changing the dessert game with edible cookie dough

Within its first two years, DOUGHP has amassed a passionate and loyal following among San Francisco foodies and is now leveraging its momentum by aggressively expanding into new markets outside the Bay Area. Each existing DOUGHP location is highly profitable, and as the company expands its retail presence, word-of-mouth interest continues to spread. DOUGHP was early-to-market with a compelling new consumer concept, and its aggressive growth has catapulted DOUGHP ahead of the competition. I am grateful to have partnered with Kelsey as an early investor. She is building a truly mission-driven brand, and in my humble opinion, has developed the best-tasting cookie dough on the market!

Dennis Phelps

DOUGHP Investor. Led investments in Snap, Casper, Giphy, and The Honest Company. General Partner at IVP.

Consumers want indulgent foods that give them moments of joy in a stressful world, clean ingredients, and brands with a good story and social mission. With a nostalgic product, only seven ingredients, and advocacy around addiction and mental health, DOUGHP checks every box. As a business with both food service and CPG potential, DOUGHP can deliver these three trends at multiple points along a consumer's journey. That is a recipe for success.

Ryan Pintado-Vertner,

12-year CPG veteran

DOUGHP has generated considerable interest from wanna-be investors, and for good reason. The branding exudes fresh and edgy enthusiasm that mirrors the founder. DOUGHP has gone from a food cart to premier locations, all while turning a profit in the first year and continuing profitability in year two. The founder thinks big and has a top team of employees and an advisory board with a proven track record to back her up. This will be a brand to watch!

Diana Halenz

CEO, Deep Dive Financial

Investor Q&A

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What does your company do?

We take cookie dough to the next level by ditching the eggs and heat-treating the flour, so your spoon (or face) can dive right into this cookie dough. DOUGHP unites cookie dough lovers in a guilt-free, nostalgic, and crazy fun experience. We sell happiness by the scoop in our Pier 39 & AT&T Park storefronts, a killer catering business, and our recent entry into the CPG landscape. We’re over $730k in revenue in a little more than a year since our launch…Now, that’s DOUGHP.

Where will your company be in 5 years?

Like cupcakes before us, edible cookie dough is being touted as the next big dessert trend. It's a nostalgic dessert that hasn't yet been made for the mass market. As the first cookie dough company in San Francisco, we have first-mover advantage on the West Coast and are planning to expand to LA and Vegas later this year. By focusing our expansion on high-traffic tourist locations, we maximize our brand recognition to crush it on retail shelves nationwide.

What is DOUGHP?

DOUGHP is a safe-to-eat cookie dough bar. It's taking the childhood dream of eating cookie dough in the kitchen and making it safe to consume and enjoy with friends, on a date, with your family. We have a storefront that looks just like an ice cream shop! You walk up and there are six different flavors. We've got eight toppings and four sauces. It's kind of like your dream as a kid – this crazy candy store, but it's all cookie dough. We have made more than 35 flavors since we started, and we also sell it in cups and flavored waffle cones. We have six different flavors and colors of waffle cones in the store as well. We’ve got a smaller version of this in a mobile kiosk at the SF Giants’ AT&T Park! We also have a catering business. We do “dough-it-yourself” cookie dough bars, like an ice cream sundae bar, where we bring the bulk dough with cups and spoons. We’ve done events as small as 50 people and as large as 1,500. We can also do full-service catering and have our employees there to scoop and serve. Finally, we sell wholesale to ice cream shops, restaurants, and retailers. There are lots of ways to incorporate our products in their stores. We sell pre-packaged four-ounce containers of the dough to fulfill that retail grocer side, and then we see milkshake or ice cream flavors incorporating our cookie dough.

How did you start DOUGHP?

The journey of this idea began when I got sober. I’d faced this longtime battle with alcohol, and in 2015 I decided to stop drinking. I spent close to 10 years going down the wrong path with alcohol, but keeping this apparently perfect life during the day at Intel and getting great grades made me pass it off and convince myself I was doing ok. But I wasn’t. When I accepted that and got sober, I really rediscovered all of my passions, including baking – that was one of the things I used to love as a kid, but I’d let it go during the years when my free time was just drinking. My nickname growing up was “Monster Baby” because I was such a messy eater. When I was living in Oregon, right after I got sober and was getting deeply into baking, I was making stuff all the time and bringing it into work and my coworkers were like, “You should start selling this.” In Oregon, you can run an at-home kitchen business. So I got my kitchen license and started Monster Baby Bakery. I did delivery of event cakes and cupcakes for kids. It was awesome. It was just that fire inside you, of building something and seeing people's’ faces when you deliver it, and it just never felt like work. I was doing all of that on the side while I was still full-time at Intel. From 6 p.m. until 11 p.m. I was working on the marketing stuff and building the website and making business cards, and I just loved it. I loved building a company. It was so much fun. Then Intel moved me within the company, down to the Santa Clara office & I moved to San Francisco. I was doing a little online business, shipping nationwide, but it wasn’t great for perishables. I can't compete with pastry chefs from all over the world here in the Bay Area on fine French pastries, or epic cupcakes. So I kind of let the side bakery business slow down. I don’t know if I knew that when I was shutting down Monster Baby, but now it seems inevitable that I would end up doing something else – I was just waiting for something unique to strike me. I have that entrepreneurial spirit. I move quick and I love coming up with new ideas, and it just wasn't happening at Intel. So I decided to build my own thing, make my own deals, and do something different. Being sober, I'm always looking for something new to try in the city. Convincing my friends to go grab dessert before we go to the bar. And there wasn't much creativity going on in the dessert space. All the pieces were lining up. In February of 2017, I decided I should do it. After 10 years at Intel, I had 10 weeks of paid vacation coming up in April, and I decided to use that as the launching ground and see if DOUGHP could work. April 20, 2017 was day one. I went to Dolores Park on 4/20 – with lots of willing participants to try my dough - and sold out in three hours. Spark Social (a food park in Mission Bay) took me in as a food cart, and that became sort of our permanent spot over those 10 weeks. It just got so busy and catering picked up – so the day I was supposed to turn my laptop in or go back to Intel, I had to call and say, “I literally can't come in to turn in my laptop today. I’ve got 2 events today. I’ll have to bring you my laptop on Friday.” It’s kind of funny - most people travel the world during sabbatical, and I decided, “I think I'll work my ass off and start a company.”

When did you open your storefront?

When we were at Spark Social, I started looking for a more permanent location, and I found this place called The Myriad on Market Street. It was a collection of different kiosks. I got in there in September 2017. That was awesome. We spent about two months there, and then in November Pier 39 called and said they loved the concept and asked if I would be interested in a storefront on the pier. I had to mute the phone so I wouldn't scream in their ear with excitement. It turned out to be perfect – and within two weeks I got an investor, got $100,000, and got the keys to that storefront! Now I hope to do the same thing with the space in Vegas. We had a soft opening in mid-December, and February 17, 2018 was our grand opening.

What makes DOUGHP distinct from other dessert products?

DOUGHP stands out from the crowd for a few reasons: an unconventional dessert brand, built-in nostalgia, and a mission-driven company. DOUGHP is built for the millennial with a Bay Area twist. We finally built a dessert brand that didn’t need to be bright pink. Win! It’s a bit edgy, slightly sarcastic, and uses some adult humor without alienating youth — bottom line: we’re not your average dessert company.We’ve got nostalgia baked into our product (pun intended) – it’s not a crazy trend that everyone is trying for the first time. It’s a product you know & love, we’re just serving it in a new way.We’re on a mission to change the game with mental health and addiction. Our relatable brand lets us speak on a personal level to our customers and followers alike – and with my personal journey into sobriety, I want to remind people it’s okay to not be okay.

What’s your favorite flavor?

Oooh. It's called Lavender Dreamz. It's got lavender extract, oatmeal, and white chocolate chips – just enough lavender, not like swimming-in-a-bathtub lavender. I really, really love herbs and sweet flavors.

What are your revenues and profit margins?

In our third month at Spark Social, we were profitable at about $2,000 per month. It quickly grew to $7,000 to $10,000 per month. At the Myriad, we were $1,800 under, but that’s the only space that’s ever been under. Now, we’re doing more than $30,000 in net income every month Sales at the pier are very seasonal. Spring is much slower than summer, and as we approached June, pier employees kept coming by saying, "I hope you're ready! I hope you're ready for summer! Prepare yourselves! It's going to be insane!" We had a glimpse of the summer rush on Memorial Day weekend. We had a 50-person line all day, all three days. We made $18,000 in three days. We had $38,700 in net income in May, up from $37,000 in April, $28,000 in March and $31,000 in February. People in the beginning encouraged me to stay mobile – that the overhead of a storefront would kill us. But we’re in this big tourist area. Getting a scoop into a cup is about 81 cents for ingredients and four cents for the cup, and it sells for $6.50 before tax. That gives us really great margins at the storefront even with significant overhead. Catering and wholesale account for ~25% of our sales, and the storefront is about 75%.

What are your plans for expansion?

Expanding the number of storefronts in high-traffic tourist areas is kind of my main focus right now. I want to get the maximum number of people to experience our brand so they recognize us on store shelves as we hit the grocery store world. It’s also our big differentiator. You can already find some cookie dough in the store, but we really differentiate ourselves on the experiential side of visiting a cookie dough bar. So that’s why I’m focusing on tourist locations, like the Vegas strip and Universal CityWalk in LA, or ballparks or stadiums. We just received our Processed Food Registration to open up the CPG world with pre-packaged sales. It’s going to be a huge revenue booster as we hit scale with a few big name grocers & distributors.

Where do you hope to be at the end of 2018?

By the end of 2018, I'd like to have three functioning storefronts (right now we have two – Pier 39 and AT&T Park). Next up is Las Vegas - we’re in lease negotiations for a space at Miracle Mile Shops right now. It sees over 72,000 visitors each day. That’s about double the traffic we see at Pier 39 - AND we’re on the second level of the pier, vs. first floor real estate at Miracle Mile. Following that, I hope to open in Los Angeles. We decided to do the ballpark for our second store because it's a little less overhead, and it supplements a city we're already operating in, versus trying to start three completely new hubs in one year.

Why are you expanding so quickly?

Like cupcakes before us, cookie dough is already proving to be the next dessert trend. It’s going to take speed and this extra focus on high-traffic locations to make sure the maximum number of people associate us with THE cookie dough brand they know & love. We have to move quickly and be the first mover in new markets that haven’t seen anything like us just yet!

Who are your customers?

The best part about cookie dough is what a broad audience we can relate to. Kids love it and adults reminisce about childhood memories enjoying it. Teens & millenials are in the full swing of cookie dough obsessions and our instagram-friendly brand makes it a slam dunk for that target audience. I’d say our brand was built for the 18-30 year old – but our fans/audience ranges from 5 year olds to 50 year olds.

How do you promote DOUGHP?

I used to run a lot of social media stuff for Intel and was a social media / community manager for four years there. I know the power of social media and how important it is in food especially. Instagram is our main following and we’re nearing 4000 followers at this point. That’s been a really great audience for people who are looking for that food-porn kind of style. Cookie dough on a cone is pretty shocking and gets the wow-factor people want on their social feeds. We had two media preview nights with Instagram, including one where instagram influencers & food bloggers came out. We give them free product and try to build relationships with them - in turn, they authentically share how rad DOUGHP is with their followers! Engagement is EVERYTHING for us online. We’re really active on all our social platforms so people get quick responses and feel like there’s a real human behind the screen on our accounts! (Cause there is!) No bots, no outsourcing - just our awesome team, eager & excited to engage with you.

What defines DOUGHP’s brand?

I’m focused on developing the most relatable, connectable brand. We respond to every single person who posts a picture of us on their Instagram. We're always engaging. We're really quick to answer fans’ questions, we do giveaways – we’re really focused on making personal connections, not just being some company out there. We’ve got a unique millennial vibe with our brand and, after growing up near the Bay Area, I incorporated some NorCal in the brand as well - with flavor names like “Nut-Hella Oreo” and “Cold Brew Is Bae”. It’s fun to finally see a dessert brand out there that doesn’t need to be all girly with pink & white - nor does it need to be targeted at kids. We’re all big kids at heart - DOUGHP’s brand was built to provide a really chill, and really dope dessert experience. The other thing that matters a lot to the brand is the philanthropy we try to incorporate. All of our dough is produced at a nonprofit in Berkeley called The Bread Project. They employ low-income individuals and they teach them skills for self-efficiency. They do a training program for a month and they help them get careers going, often in food service. It’s a really awesome program. When I started needing 400 pounds of cookie dough per week, it was really cool to find The Bread Project as something that could help us scale our operation but not require me to sell out to some big scary manufacturing company. It’s a really community-oriented thing, not just some big closed-off warehouse. It's nice to be giving back to the community. We're one of their largest customers now, so we've helped them grow their training program and hire on new staff. We've made over 50,000 lbs of dough together. AND - the new flavor we’re about to release is called DOUGHP for Hope. DOUGHP for Hope will be a birthday cake cookie dough flavor, and 100% of the proceeds will go to a different nonprofit which the customers get to choose. So when they buy a scoop of DOUGHP for Hope, they get a ticket, and on their way out the door they can vote for one of four nonprofits. There are so many organizations doing really cool stuff who just need more funding, and we've been able to build this crazy cookie dough empire. I didn't quit Intel to just make a bunch of money. I just wanted to be happy and make other people happy with my dessert, so I'm doing that and if I can give back to the community while I'm doing it, I’d love that.

Who are your competitors?

There are some others popping up - like the cupcake trend, it appears everyone may try to get in on this! But it’s great to see how much we stand out from the crowd so far. There’s DO in New York City that opened a couple of months before me. She’s had an insane pickup after a lot of media attention - and geographically, there’s such a dense population that can visit NYC within an hour’s train ride. We’re just not nearly as dense as New York City... Luckily, everyone that has come to try DOUGHP and said that they tried DO in New York City said that ours tastes more like real cookie dough (cause it is!) - creamy and not crumbly. Amongst all the feedback of us vs. competing brands, we most often hear praise that DOUGHP isn’t too overly sweet. It’s a dessert, no doubt, but it has more of that buttery quality, which is what I aim for. I hate stuff that's too sweet – I love sugar, but I don't want my teeth to sting from it. All of the other brands in a lineup are a myriad of pinks, whites, rainbows… They’ve got no creativity in the brand space and I also haven’t been able to find a competitor focused on supporting the local community like we are. Maybe it’s a San Francisco thing :)

Why are you raising money on Wefunder?

I just used Pieshell for this campaign called Kindness is DOUGHP, and it was a pretty small amount of money. We're taking a food trailer down the West Coast to addiction centers and rehab centers to share my story and hand out some cookie dough. That DOUGHP For Hope tour was funded on Pieshell. But when I did the calculations on opening these storefronts, I was seeking a pretty significant investment. I need to cover buyout and renovation and money for additional full-time staff – GMs, marketing managers, we need to fill up a whole crew. I needed something more like Wefunder. It’s a really cool platform where people can really get invested in your business at a greater level - not just looking for small handouts, but a true financial investment. I’d love to welcome some new folks to the DOUGHP squad!

Who’s on your team?

We have 10 hourly employees between the Pier 39 store, Off The Grid, AT&T Park, and all of our catering events. It's so tough when you start a company to realize that you can't be the one to greet every customer. So the best thing you can do is try to get people that can do what you would do. I managed the shop by myself until about four months ago. Now I've got a sweet management staff to help run the show! Cahner Olson is a graduate from University of Nebraska-Lincoln. She's my marketing manager and executive sidekick, so she does a lot of our administrative work and also runs our marketing campaigns & social media activity. Cole Mayer was actually my Uber driver two years ago! He seemed pretty cool and I was new-ish to the city, so we became friends! Cole had been helping me out here and there with DOUGHP and so it made sense to bring him onto the team after his startup went on stand-by. He’s the head of operations for DOUGHP - keeping the ship running smoothly across all of our SF operations. Our newest addition is Chris Ciszewski! He’s head of Business Doughvelopment. He’s working to ramp up our CPG sales and really hit grocery stores and other restaurant-wholesale opportunities hard!

How do you retain workers?

San Francisco's not an easy market to get cheap labor in. When minimum wage was still $14 per hour, we paid $15, and then we started giving raises every three months. I think the biggest thing you can do when there's an economy like this, where they can get a job anywhere because people are hiring all over, is show millennial employees that they can be part of something bigger. You want to be a part of something that’s more than just a job. One of them came up to me the other week to say, “We all stuck through this because we love you. We love your vision and the dream that you're building and we want to help your dream come true, so we're staying. We stayed for that.” That was so special. If you keep them on board with your big goals and your big dreams, why you're doing it and the philanthropic work, that really makes people care about staying with you. They’re super team players because they love what we’re doing.

What has been your greatest challenge so far?

I think the biggest, and maybe the most exciting, challenge is people management – moving from doing everything yourself, knowing that to scale you need more than you. I'm reading this book called 15 Commitments of Conscious Leadership. It's a really eye-opening way of looking at people management and how important it is to keep an empowered, knowledgeable, comfortable and playful group on your team. We sell cookie dough every day. If someone's really stressed out, I just look at them like, “Dude. We sell cookie dough for a living. This is great! It should only be fun. We're doing something ridiculous and we should be having a good time doing it.” That's been the biggest leap for me after 10 years of being an individual contributor at Intel. It’s easy to think, “I can do it better and faster. Why wouldn't I do it myself?” And you have to take a step back realize that it is worth sitting with an employee for two hours, walking them through how to do it, in hopes that they can do it better than you one day. I'm a true perfectionist, so I have to loosen up a little bit and realize that no one’s going to die if we turn slightly to the left. We’ve come a long way. I think a lot of the structure and foundation is there, and now I need to focus on applying it and growing it in new ways.

What concerns do you have?

I don’t see any barriers to our growth. If there's an obstacle, then there's a way to go around it. I’m planning to make this into a huge brand and there’s virtually nothing that can stop me. Well except maybe the government issuing a mandate restricting the sale of cookie dough in the United States. That one would be tough to overcome. But that seems unlikely... :)

1	$735K+ in revenue to date with a 27% net income ratio in just 14 months of business.
2	10,000 new customers every month in our Pier 39 storefront, our new AT&T Park kiosk, and other event catering.
3	Filing more than $70k per month with 86% direct margins.
4	Catering and wholesale agreements account for ~25% of our total sales.
5	First to bring cookie dough to San Francisco, but rapidly expanding with lease agreements underway at Miracle Mile Shops (who see over 72,000 visitors per day) on the Las Vegas Strip.
6	We use a non-profit kitchen, The Bread Project, to mix our cookie dough; creating opportunity for low-income individuals.
7	Members of 1% for The Planet (1% of sales to environmental non-profits).
8	Given the founder’s personal struggles, DOUGHP is raising awareness around addiction & mental health with a DOUGHP For Hope road trip taking place this Fall.

1	We hope to continue using a non-profit co-packer in each new city to produce our dough. There are risks with ramping up a new co-packer and training them fully on our recipes. For this reason, there is inherent product quality risk in expanding operations to new cities/states
2	Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
3	There is competition in the cookie dough space. We've think we have a memorable brand, an amazing product, and a stellar team; but we're in a fight for market share / brand recognition amongst competing brands. If we don't move quickly enough, we risk allowing other brands to stake claim in these areas.
4	The cookie dough trend is taking off. There's no guarantee how long the craze will last. We are hoping to capitalize on it quickly, and hope the nostalgia has a longer lasting value-add than the cupcake craze or froyo trends.
5	While we've had success selling cookie dough in San Francisco, we cannot guarantee that same success in the new markets that we hope to launch into - namely L.A. and Las Vegas. If those markets do not purchase our product the way we expect them to we may have difficulty maintaining our operations there.
6	The Company has entered into two revenue sharing agreements with Off the Grid: Fort Mason Center and AT&T Park. Those agreements may impact the Company's overall revenues and distributions to investors.
7	The Company is an early stage company with a limited operating history and limited history of revenues to evaluate seasonality and revenue trends.

Officer	Title	Joined
Cole Mayer	VP Operations	2018
Kelsey Witherow	President CEO	2017
Cahner Olson	Catering Manager & Executive Assistant	2018
Chris Ciszewski	Business Development	2018

Date	Amount	Security
	$0	Revenue Share
11/2017	$100,000	Priced Round

$50,000	$47,500 for inventory to fill purchase orders for distribution in grocery stores nationwide $2,500 for the Wefunder cash fee.
$250,000	$237,500 to open a 24/7 Cookie Dough Bar on the Las Vegas Strip - equipped with milk on tap & milk shots with every dough scoop $12,500 for the Wefunder cash fee
$500,000	$475,000 to acquire storefronts on the Las Vegas Strip AND on LA's Universal City Walk (or similar tourist location), and pay for three full-time employees $25,000 for the Wefunder cash fee.

Class of Security	Securities (or Amount) Authorized	Securities (or Amount) Outstanding	Voting Rights
Class B Units	7	7	No
Class A Units	93	93	Yes

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