# VerdictTank Demo Case: HarvestLink (Revised)

Revised after panel feedback. Same fictional company; changes are real responses to the
first review's fatal flaws: corrected market sizing, added pilot unit economics, a worked
pricing waterfall, a compliance plan, and a reframed Sacramento-only ask.

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## HarvestLink: Direct Farm-to-Restaurant Sourcing

### The Problem
Independent restaurants lose roughly 30% of their produce spend to spoilage and distributor
markup. Small and mid-size farms have no efficient channel to reach restaurants directly, so
they sell through aggregators that take the margin.

### The Solution
HarvestLink is a marketplace and logistics platform connecting local farms directly to
independent restaurants. Restaurants order through a mobile app; farms fulfill through a shared
cold-chain delivery network. Built-in demand forecasting tells farms what to plant and
restaurants what to order, cutting waste on both sides.

### Market (corrected)
US independent restaurants spend an estimated $28 billion a year on fresh produce. Our three
launch metros (Sacramento, Austin, Portland) hold roughly 7.3 million people, about 2.2% of the
US population, which implies a served market near $620 million, not the $1.9 billion we
previously stated. Bottom-up check: about 4,800 independent restaurants across the three metros
at an average $130,000 a year in produce spend lands on the same ~$620 million figure.

### Business Model (with pricing waterfall)
8% take rate on marketplace transactions plus a $99/month restaurant subscription after a
60-day free trial. Farms sell at a 12-18% premium over their farm-gate wholesale price, while
restaurants still pay less than distributor pricing.

Worked waterfall on a $3,000/month produce basket:
- Distributor today: $2,308 wholesale x 30% markup = $3,000.
- HarvestLink: $2,308 wholesale x 12% farm premium = $2,585, plus 8% take = $2,792.
- Restaurant pays $2,792, saving $208/month before the $99 subscription; net ~$109/month after.

### Traction and Unit Economics (Sacramento pilot, actual)
12 farms and 9 restaurants live. $18,400 GMV in three months, 71% repeat order rate. Two
restaurants churned over delivery windows.
- Average order value: $240.
- Order frequency: 2.8 orders per restaurant per month.
- GMV per restaurant: $681/month.
- Take revenue: 8% x $18,400 = $1,472 for the quarter; subscription is $0 during trials.
- Delivery: shared cold-chain routes at $28/stop today. Take revenue alone ($19/stop) does not
  cover delivery; the $99 subscription is what makes a route contribution-positive. Route
  break-even is roughly 45-60 restaurants per route at current AOV and frequency. We are at 9,
  so the plan is Sacramento-only density before any expansion.

### Compliance Plan
PACA license, FSMA/cold-chain HACCP food-safety procedures, cargo and liability insurance,
written supplier and restaurant terms, and a recall procedure before scaling beyond the pilot.
Multistate compliance is deferred: we are Sacramento-only for this round, so California-only
compliance applies.

### Team and Hiring
Founder with seven years in restaurant operations and supply chain at a regional chain, plus one
contract engineer. This round funds a full-time logistics/operations lead and a sales hire;
both are prerequisites before any second-city launch.

### The Ask
$250,000 to run a 12-month Sacramento-only proof: grow 9 to 60 restaurants, hire the
logistics and sales leads, lock in a cold-chain partner, and reach route-level contribution
breakeven. Austin and Portland are deferred until Sacramento breakeven is proven.

### Use of Funds
45% logistics and delivery network, 30% sales and onboarding, 15% engineering, 10% compliance
and operations.