Funding for Hot Sauce Brands: A $20K Offer Repaid at 1.2x or 1.5x, Accepted on Camera

Savir Foods is a business that sells hot sauce. This chef watched his grandma make it when he was young. He's now doing it himself. And after a viral hit online, sales spiked.

Three months after I opened, I got the call from Hot Ones. That was insane. With that, I had to produce 36,000 within

six, seven weeks. 36,000 individual Yes. That first year in 2020, what were total sales all in? Do you remember?

Around $1.50. That was expected to make maybe $5,000 a year. So you crushed it.

Now the question is how do they grow the business? So how do you get 10,000 eyeballs on your website?

Direct advertising to put people in in in those... To look at the ads and look at the product. There isn't enough right now to put towards that.

That's where I come in. If they've got a big idea where my cash can help them grow, I'll offer to invest on the spot. You know? So here's where I'm struggling. The the capital ask us for 200 k but the whole business does a 150 k per year annually right now. If I did a pure equity deal of 50 k into a valuation of 150 k, need to own 35% of the business.

Hey, how are you?

Hey Nathan.

I'm Nathan. Jose, good to meet you.

Nathan. Rebecca.

Rebecca, so nice to meet you. Yeah. What's the relationship? Co founder or...

This is my wife.

Ah, that's the relation. What came first? The hot sauce or the marriage?

The hot sauce. Hot sauce.

I was a fan of the hot sauce first.

So the hot sauce made the marriage happen. What year did the hot sauce business launch?

It officially launched at the end of twenty twenty. You know, pandemic, I was bored. Well, I always like to cook, but then I became an official chef back in 2002. My brother was opening a little cafe. He said, Move to Florida with us. That little cafe turned into a full blown restaurant.

What's the name of the cafe?

The restaurant is called Terre Sur Cafe in Tampa, and that's still open. Okay. It's been open for over twenty three years now.

So what were you? Were you cooking? Were you doing sauces there?

I was the executive chef for them. Okay. Wow. My mom was visiting, and so we developed all the recipes between her and I. After that, I decided to open my own restaurant in Tampa, and that failed. Oh, that's a big...

I mean, you competing with your brother?

He wasn't happy.

Yeah. Yeah. Do you talk to him today, is this like...

Oh, yeah. We're... We have a really good relationship. Okay. Yes. Yes. Okay. I ended up moving to Texas for a job for Dell. And when I moved here, that's when I... The whole thing started again. Mhmm. I'm like, I I love to make products. I love to connect with people and give them a little bit of a story so they can try it at home. I designed this sauce that it was based on my grandmother's dish

that she used to make when I was little, originally from Peru. And my grandmother's amazing cook. All my, from my mom's side, amazing cooks. But I remember her just cooking slow foods and and the smell all over the house. A few months after that, I'm like, I'm gonna make this into a company. Started sending little product out there a little bit at a time. And then three months after I opened, I got the call from Hot

Ones. That was insane. Tell me what happened. I had to produce about thirty six thirty six thousand within six, seven weeks.

36,000 individual Yes. So how did you scale up so quickly in such a short amount of time?

So I worked for Dell from six in the morning until three in the afternoon. And then after that, I would just start pick up, pick up and start cooking until midnight every day.

In that first year in 2020, what were total sales all in? Do you remember?

Around 150,000 I was expected to make maybe $5,000 a year.

So you crushed it. What year did you quit Dell?

It was two years ago.

So 2024.

I still have a contract with them.

Why'd you wait so long? If the business was doing $150,000 its first year, you were expecting $5,000 you did $150,000 Why not quit immediately?

Yes. That's a great question. I would say the short answer is fear.

So $150,000 of first year sales, how... What percent of that, those sales came from the show?

I would say 95.

Okay.

They buy the product from me and then they resell it through their website. They have subscribers. So, Heatness curates the show for the... I mean, curates the hot dogs. I see. They basically come up with all the line up.

What was the first sauce you came up with and what did you sell it for? What was the retail price?

So the first sauce was called Jalapeno. The price was around $7.08 dollars And how big was the bottle? Like... They're typical five ounce.

Okay. If you're retailing seven direct to consumer, what will you sell in bulk the heat and this at?

The wholesale costs are usually under $4

Is that still profitable for you?

So it depends on the volume. The margins are not that high.

Yeah.

But the marketing value. Whenever you have a viral moment or a success like that, it's not forever. So you better take that, use it, and then use it to grow because that's not gonna sustain.

Mhmm.

Year two, it was more of a reality check. Okay. Because now it's like, okay. You had your shot. Now you went to a show. Now year two is like, okay. What do we do now?

Okay. Wait. Before you say anything else, YouTube, I'm testing how smart you are. We all see these videos go viral on TikTok and Instagram, and we wonder, is that product gonna be a one hit wonder or does the viral video actually make it be a sustainable long term business? So we have a one hit wonder, but maybe it's not. Maybe it actually is the base of something big. What's your prediction? Does the show lead to long consistent lifetime sales or not? Leave a comment below. That a good one. What was the reality check?

We made around the same amount of money. K. But that was on me. Now people start listening to you. Instead of going to a store and say, hey. I have a hot sauce. Now you're like, I've been on Hot Ones. Oh, let me try that. Mhmm. So the door opens up a little more.

So you were just cold calling new stores to get more distribution.

Yes. Yes.

Yes. And your reply rate was much higher because of the show. Yes. So your second year sales, what you said was about a $150,000. What percent of those were not related? Like, it wasn't the show buying it. It wasn't he and this.

Right. So now I moved to about maybe 80 being mine and 20 being them.

Well, that's a huge shift. So the show went from being rep... Representing 90% of revenue down to 20% of revenue.

Yeah.

Okay. So Jose, what are we looking at here?

Okay. So this is my full lineup. So this is the original bottle.

This was your first seller? First bottle.

K. No logo. Jalapeno. Yes. Try it. You tell me what this is. And this made it to hot ones.

Is that spicy?

Yes. I could drink that. No problem. Yeah. They must have put this as, not hot at all. Right?

Number two.

You know, lifetime sales of just this this mixture.

Well, I can tell you the amount of bottles we have sold.

Of this? Yeah. Life to date, how many?

Close to a 160,000. And one thing I noticed is that I've I've been creating a tasting menu without knowing. Mhmm. They all actually tie together.

How how how do they tie together?

So it goes, like, from from sweet, it goes from savory and a little bit of of tangy, and it goes to creamy, and it goes to a little bit of, Italy and and tomatoey, and then we move to, a dessert sauce.

K. So it has nothing to do with this is not hot, this is the most hot. No. Okay. What is the hottest one here?

Suga di pepper, which is the Italian one.

Should I try it?

I'll try

Now you guys have to remember watching on YouTube. I really am not like... Even, like, Indian food with spice... I I try to never really eat spicy food. So Here. Try to see what happens here. Right?

The scorpion pepper is very interesting because it's like... Yeah. What do you think of that?

Yeah. Yeah.

Well, there's a water there.

Yeah. I don't wanna do it yet. I don't wanna... I feel like, you know

That's the reason why I leave those things for the end because it's... It doesn't go

It doesn't go away as easy. Yeah. It's it's still getting stronger.

No. But When

does it stop getting stronger?

It doesn't stop.

It keeps going? What are your best sellers today in 2026?

Jalapeno, the crema matcha, and then the elotes loco, the fire edition with ghost pepper. And you should try this one. It's really good. It's really good.

I just feel like everything's gonna be influenced by me trying to survive this. My body's in fight or flight mode right now.

Try a bit of this. This is a dessert one. Okay. With a little tiny scoop. Okay.

That tastes so good.

Yeah. It's also very soothing.

Tastes like a cinnamon.

It's churro. You can put it in ice cream, pancakes, waffles.

Yeah. This tastes very good. This is very good. Yeah. Besides being obviously married, right? So there's a nice romantic story there. How do you guys split the business roles and tasks up? You're obviously cooking, you're testing, but what about sort of sales, marketing, product distribution?

Rebecca has a full time job. She works, you know, regular. So I try not to bug Rebecca a lot. So, but whenever I need help with anything, you know, I can count on her.

Rebecca, what's the full time gig? Is it like accounting or something?

No, sir. I work in HR. Then I will do food demos. I will pop into a shop or two here and there, bring in some product or try to get some samples sent out.

So I do about 90% of it. Mhmm. You know, she helps me do about 10% of it when need And then I contract people if I need in the kitchen, we do bigger productions. And you mentioned something very important about the job.

You

know, why keep the job? Because it did get in the way in 2022 and 2023, the worst sales I've had. How bad? How bad? Well, it was under 100. 2023 was the lowest. Okay. 2024, we increased about 25%.

So what was 2024 total sales?

Around 170 something. Okay, so you're back to a growth story now.

This In is

2025 they brought us back to Hot Ones twice.

So what was 2025 total Over a 250,000. Wow, okay. And and you think this year you'll be more or less than that?

Less than that because those those events that happen with the heaviness and stuff, they're they're they're great, but they do take away... If it's such a small team, takes away from the energy of the other channels. Yeah. You know, Central Market is one of our biggest customers.

So you are in Central Market today?

Yeah, 10 stores.

Yeah, 10 stores. What percent of your sales come from that outlet?

About 25%.

Okay, so significant.

It's growing. So we strategically priced it a little lower at Central Market. So it moves. Okay. And it does move way more than other sauces.

So you're taking a short term cut to your profit margin to impress Central Market because you believe the prize is what?

Can I wanna get to at least at least 500 to 700,000 a year for Central Market?

Of bottles or dollar value of Okay. Yeah. I mean, we're we're in this age today where everyone thinks I just need to get that one influencer to post about me. I just need to get on that one TV show and everything's gonna be amazing. Yes, it can lead to like nice one hit sales, but you better have a system built in place to take that demand and turn it into something sustainable because it's not gonna happen automatically.

No, it doesn't happen.

Do you have a strong direct to consumer

No, it's not strong right now. It's about maybe 10%, 15% of sales. Okay. It's not that high.

So it'll be about 25,000 of sales this year will be people buying directly from your website?

Directly from the website, yes.

So how do you get 10,000 eyeballs on your website, on your new chili sauce at a 5% conversion rate to bring in, you know, 50 or 500 new sales?

Direct Google Ads, direct advertising, to put people in those, to look at the ads and look at the product. There isn't enough right now, enough money to put towards that.

Do either of you have direct experience managing return on ad spend, CAC, payback periods, LTV?

I have some experience, but I know people that can handle that. They're just waiting for the, you know, cause it's expensive.

Does that mean? You have an agency ready to help you?

I have, yes, I have one. Yes.

Ads are just so challenging today in the age of AI because there's so much slop. The only way I found for a small business owner to stand out is to, is to capture and document their entire story. I'm talking pictures of your grandma holding you in one arm while she's making sauce on the other. I mean, if I go more on your Instagram, can you go ahead or like, will we see you in your face and your story or do you focus on the product mainly?

I focus on the product and I think it's in a way I'm hiding behind it.

As I just want to say, we're scrolling through here and we're just looking at views. I see four twenty one here, which both of your faces and we start scrolling. These are all food, you know, three sixty, two seventy, three fifty, one seven people want to see your face.

I think it's a combination of creating new content, putting myself out there and then telling the story fully. A lot of the investment that or the money that I'm looking for is for infrastructure. I need to put somebody in the kitchen permanently. I need to give that job away because that's just eating a lot of my time.

So what's the dollar figure that would allow you to go test these things? How much capital are you looking for?

Around 150, maybe 200 that would allow me to grow in the next two, two and a half years.

Rebecca, does that number sound right?

It does sound right if you look at some of the handles that we have, the brokerage fee, or maybe a path to getting into some bigger grocery stores, especially if we're focusing on The States. And then the demos to then back it up once you're in.

I want to make sure I have the numbers right though. This year, you believe that you'll close around $250,000 of sales?

No, no, no, no. This year, I would say close to $150,000

On the $150,000 of sales, will you make any money?

Yeah. Yeah. Last year we were profitable.

Like 10% profit margin?

Last year we were about

about close to 10%. Yeah.

Yeah. So here's where I'm struggling. The the capital ask us for 200 k, but the whole business does 150 k per year annually right now. Have to own the whole dang business if I'm putting in $200. So how do we walk, crawl, run or crawl, walk, run?

It should be, okay, let's test this and see how that work goes. And then if this works, let's move on and see and test it out.

So what's the right amount of capital that still gets you enough capital so you can run a couple of these tests, but not 200,000 because you don't want to sell me 100% equity?

I would say around 75.

The brokerage cost for like a full year, which is just them gunning for it would be around 60 k.

I just spoke with my distributor and I said, what is my cap? What is my limit? How much can I sell here on hot sauce if I do demos, let's say five demos a week?

What would that cost to do five demos a week?

About 1,000 a week. So help me

get dialed in and focus here because if I can't, I'll just walk away because I'll be so confused. Right? So I'm hearing one story like broker, right? A broker path. I'm hearing another story that's like $200 per a demo. Let's do five per week. I hear another one that's like, let's hire someone else in the kitchen. What's if if you only had an extra $20,000, where would you spend it?

The first thing would be, to increase the demo so we can increase the sales. And at the same time, we need to back that up with, the kitchen so we can have maybe somebody part time at the beginning, so we can start producing on a regular basis.

So let's just focus on the demos. Let's try and narrow so we can get to maybe some sort of conclusion, right? How many demos, because you're only one person, how many demos can you do in a month? Every weekend, basically. So it's what, three demos per weekend?

I can do four to eight a month.

Okay. So you're doing, like, basically two demos per weekend, basically. One per Saturday, Yeah. One per

And choose that because I'm usually here during the week.

I feel like I'm having to work too hard to figure out, like, what is the check I write today to help you guys grow? Because until I know the dollar value, I can't give you an offer on how we structure the deal. I would say 60,000. Okay. If I was gonna write a $60,000 check today and do a business doing $150,000 if it was gonna be an equity deal, I guess companies like this are probably valued at like 5X EBITDA, 5X profit

or 1X top line. Seven hundred, seven fifty around.

Yeah. You would value your business at about 750,000 today?

Yeah.

Well, I mean, I would not do a deal here at a $750,000 valuation because it's taking $150,000 a year of revenue and multiplying.

I see it right in there. You've been spinning. It's like the little wheels that go in there.

I mean, companies like this are typically valued at one X top line revenue, which is very different from $7.50 ks.

Well, no, yes. But you asked me why they value the company. You know, it does my company.

So, that a hard red line or do you have flexibility on the value

of It is the flexible though, but what are you thinking?

Well, how flexible are you?

If did a pure equity deal of 50 ks into a valuation of 150 ks, need to own 35% of the business. So are you willing to sell 35% of the business?

No, that's too much.

We can structure debt, but I have to believe that you have enough cash flow to service the debt if I give you debt.

I mean, $50,000 let's just say if you do debt, let's say you do it at 11%. How long would it take to pay? How long would you be in your turns? Is it 12/24?

My concern about giving you guys a fixed interest rate on a debt structure is that you would then have equal monthly payments. And where that becomes a problem is my understanding is your sales are very lumpy based off placement on a show or a really good demo weekend. So if you have a bad month, but you still owe me the same amount.

Well, what if we do a percentage?

That's what I was leaning towards is we could sort of do revenue financing, right? So you pay me back a percent of revenues. I just don't want to get stuck in a position where revenues don't grow and it takes me thirty years to get paid back. If we said $50,000 if you pay back within twelve months, you only back 1.2 X. Okay. If you need longer because your revenue is a little slower growth, as long as

you pay me back before month twenty four it'd be a 1.5x. So if I give you 50 ks today, can you invest it quickly enough to grow the business more than 5 ks a month to service for the repayments? If the answer is no, then that structure doesn't work.

No, no, no. That would be too high. Yeah. And if it's two years, what would be? Would be 1.5x. The That's 3,000. Yeah, 3,000 month. $3 sounds reasonable, but when does it kick in though? That's the thing, because I need at least a little buffer so I can run it.

How much buffer do you need?

What do you think?

A couple of years? No, I'm out. I would say, you know, two to three months, you know, just to get that rolling. And an average month,

if you smooth it, what's the average monthly sales? 10, 12. So that's my concern, right? If you're servicing a $3,000 repayment to me on $12,000 of total sales, you're paying like 25% of your monthly revenue back to me. That is a very hard amount of debt to service. Yeah. So we either we either have to say no deal or shrink the amount or change the sizing somehow to make that... I wanna be under like 5%. We'll

do like a thousand dollar a month payment. It would be the max. Right. Right. So if we do a thousand times twenty four months, that's $24. And if I'm looking for a 1.5 x markup, that means my offer would be something like fifth... 17 ish k today and 24 k paid back over twenty four months.

Would there be more opportunities down the road if we get this done? I mean...

My hardest job is to find a great founder with a great story who has a great product. And when I find that and they know how to grow the business with money, I wanna give them as much money as possible.

In a number that would put a dent, not a dent, but it would actually be more, I would say sustainable, I would say 25.

Which should be something like 30,000 divided by twenty four months, 1,250 which to me feels much more reasonable to service into a business doing 13,000 a month of revenue. Yeah. Okay. Here's my offer. The offer would be $20,000 if you pay it for you guys to do more demos. If you pay it back in the first twelve months, you pay me back 1.2 x the 20,000. If you need more time because revenue is slower and you

pay it back in the first twenty four months, it's 1.5 X the 20,000. Do we have a deal? What do you think?

Yeah. Alright.

We have a deal?

We have a deal.

Let's get to work. Alright. Good stuff. That was tough, but we got it done. Rebecca, good Congratulations. If you guys like that deal, remember, new episodes drop every Wednesday. Click here to subscribe so you don't miss out. Also, wanna see more deals like this one? Click here to see the next deal immediately.