verdicttank/demo-case-harvestlink-v2.md

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.