Raising money with Copper Cow Coffee's founder

Debbie Wei Mullin is an accomplished professional and entrepreneur: After a career in international development at the World Bank, Mullin — who holds a bachelor’s degree from Berkley and a master’s degree from MIT — founded Copper Cow Coffee, a brand of Vietnamese pour-over coffee that is flying off the shelf at retailers like Walmart and Nordstrom.

But in some ways, running the rapidly growing business has Mullin feeling like a teenager again, she tells the Rho team.

“It’s awkward when you grow so fast,” Mullin says with a laugh. “Even when your numbers are looking good, you can feel like you’re doing everything wrong.”

Her company is no longer in its infancy: Copper Cow Coffee raised a $2 million seed round in December 2018 from Silverton partners, Montage Ventures, CRCM, Social Starts and AmplifyHer Ventures, with a follow on earlier this year. In total, the company has raised about $3 million, Mullin says, including funding from 500 Startups, which Copper Cow graduated from in June 2018.

But growing into adulthood hasn’t been easy.

“It’s become a completely different company in the last six months,” Mullin says. “People love to talk about the super bootstrapped early days, and they don’t talk about how painful it is to go through that puberty.”

So what’s been her strategy for operating a business at scale? Mullin shares four lessons she learned while building her brand, raising venture funding, and tackling expansion head on.

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1. Create a differentiated product in a broad category

Mullin founded Copper Cow Coffee — which sells one-cup packages of organic, Vietnamese, pour-over coffee — in January of 2017, drawing on her love of Vietnamese cuisine and culture.

“My mom is from Vietnam, so even though I grew up in California, we only ate Vietnamese food growing up,” she says. “It wasn’t until I was older I realized that basically no one was familiar with the kind of food that I grew up eating. I always thought that was such a shame, that people were not aware of the awesomeness of Vietnamese cuisine.”

Mullin first started selling Vietnamese products in 2014, experimenting with a line of traditional cooking ingredients. “Even though those products are really near and dear to my heart because cooking was such a big part of my upbringing and my culture, I realized it wasn’t a big enough business idea,” she says. “Not that many Americans cook. If you’re looking to have a scalable business you really have to ask yourself: ‘What is a big business idea? What is the addressable market?’”

She soon landed on a product with an $83 billion market: Coffee.

“Vietnamese coffee was something I’d always thought about doing, and then when I began to look into the coffee market, it got really exciting,” Mullin says. “Especially because Vietnam is the second largest coffee producer in the world.”

Mullin bootstrapped the company with money raised from family and friends, but pitched it to anyone who would listen.

“I had a family friend who had put in a little money, and he would send me random introductions, saying, ‘You should talk to this guy, you should talk to this guy,’” she remembers. “I would pitch all of them.”

One of those introductions was to Binh Tran, a venture partner at 500 Startups, who has an expertise in Vietnamese businesses. Mullin first met Tran while working on the line of cooking ingredients, but mentioned her idea for a coffee product. Although he didn’t invest in the ingredients business, Tran made introductions for Mullin with a few coffee industry veterans, and encouraged her to keep researching the category.

“When I started to get the coffee off the ground, that’s when I went back and pitched him again,” she says.

This time, the pitch for a unique product within a well established market for specialty coffee stood out. Tran’s response? “I think this is totally venture backable, let’s get you into [500 Startups,]” Mullin says.

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2. De-risk your business for investors

When Mullin started the 500 Startups program in March of 2018, she had a product in the market, and was driving 90 percent of her revenue through wholesale, with 10 percent of sales online.

By then, two factors had convinced her it was time to raise venture capital: 1) In order to price her product affordably, she needed to scale production. 2) She read about a competing coffee startup that had raised a few million dollars from reputable venture firms, and went to try their product.

“It was terrible,” she says. Mullin realized, “I do have a product, there is a market for this in venture capital, and I should be able to find it.”

500 Startups provided a crash course into the world of VCs. “It’s a pretty intense program, but I really did learn a lot about venture capital markets,” Mullin says. “It was really helpful. But most of all, Binh Tran was, and remains, one of my biggest champions. He really taught me how to do this, and coached me through all of it.”

Mullin began pitching investors during the 500 Startups program — which itself invests $150,000 for a 6 percent equity stake in the companies in its accelerator.

At first, pitching didn’t go well. “I couldn’t find anybody who was moderately interested,” Mullin says. “The feedback was always, ‘Your product is too niche.’ They would kind of mistake it as coffee for Vietnamese people. I was like, ‘No, it’s about the taste, there is nothing niche about the taste.’ Ethiopian, Guatemalan, Brazilian coffee, this is just another profile that has not really been introduced, and it’s a new way to drink it.”

That feedback changed overnight when Mullin got a call from Walmart.

“High end Asian products are trending so well in Walmart that they approached us,” Mullin explains. “We were only a year-and-a-half old, we wouldn’t normally try to go into Walmart at that stage. But they came to us, and they were like, ‘We’d like to do a 300 store pilot.’”

“That’s when things really changed for us,” Mullin says. “You can’t argue that it’s niche when it’s carried at Walmart.”

Since then, Mullin says Copper Cow has tripled its presence within Walmart. With that evidence in hand, she was ready to raise her seed round: “I went out in September and then closed the $2 million quite quickly,” she says.

The lesson? Find the biggest risk in your business, and offer investors proof that you’ve eliminated it.

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3. Close your seed round as quickly as possible

When it comes to raising, “the biggest thing I would say is to do it as quickly as possible,” Mullin says. “That’s something I’ve seen hold back the most founders, and particularly female founders.”

“What’s hard about a true fundraising process — which is what 500 Startups really taught me — is that is has to be a full time job,” she explains.

Mullin’s advice? Approach fundraising within a set time period, and knock it out.

“It’s like creating a market for yourself,” she says. “If someone feels like they can write you a check anytime, they’ll never write you a check. But if you’re like ‘I’m going to raise $2 million, and you can decide in the next month if you want in,’ they’ll take out their checkbooks.”

Creating a sense of urgency is key, she adds: “They all talk to each other, they all get a sense of whether you’re going to close it or not. So the quicker you can talk to everybody, the more likely it will close, the more urgent it will feel.”

And that means spending 90 percent of your time in pitch meetings.

“I was doing on average five pitches a day every day, for two months,” she adds. “For me, it was really hard as a solo founder. It meant that I was operating my business at night, and then fundraising all day. I wouldn’t recommend that for anybody, I think you really need a co-founder so that one person can run the business while the other person raises the money.”

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4. Hire early, and hire often

‍Since raising, Mullin says one of her biggest challenges has been hiring a team.

The first lesson she learned: start looking for candidates even before the round closes.

“I wish that I’d had more confidence,” she says. “I was so scared of, ‘What if I don’t close the money?’ that I didn’t hire anybody. I was so scared of that overhead, of hiring somebody and then not being able to pay them.”

“I closed in December, so I didn’t really start looking to hire until January,” she continues. “I spent three months trying to continue my puppet show — running this business that was growing every month — and trying to hire all these people. It would have been so great if I had at least been interviewing people, so that as the funding came in, they came in.”

By March, Mullin had made her first hires, and eventually grew the team to 11 people.

“Hiring is really hard,” she says. “I’m very intentional about what kind of culture I want. And that means you have to let people go if they’re not fitting into that. We want a place where people aren’t afraid to talk about the problems they’re having, we want people to take risks, we want people to work hard, we want people to be problem solvers. If you hire 11 people, that also means you’re firing people along the way to find that great group of 11.”

The process isn’t easy, she adds: “Making your winners feel secure in their jobs while other people are being let go, all of that has been really hard. But now, looking back, it’s like ‘Ah this feels so good now.’”

Mullin says she’s learning to take bigger risks for bigger rewards.

“That’s something my investors are coaching me a lot through right now. They’re like, ‘The money is not going to run out. You can get more money. Don’t be afraid to spend at the level of the opportunity,’’ she says. “Of course you have to be aware of what’s in the bank account, but there is going to be more money out there if your company is performing.”

It’s even a lesson Copper Cow is passing along to its coffee suppliers in Vietnam.

“A lot of Vietnamese coffee has been produced for instant coffee or lower grade coffee, so we pay our farmers twice market rate to hold much higher standards to teach them that if you invest in your process, you will actually make more money,” she says. “You don’t have to always worry about having the cheapest agricultural process. If you spend more on it, you’ll actually make more.”

For Mullin, building Copper Cow — which sources its packaging from a woman-owned factory in Vietnam and uses a woman-owned fulfillment center in the US — has been an opportunity to continue her work in international development, on her own terms.

Looking back on her three years building the company, she says, “There are great things I’m able to continue to do with the same mission I started off with, but now in a totally different capacity.”