Corner Booth Holdings
Brown Bag Sandwich Co.
Deal Structure Proposal
Working document for internal discussion. March 11, 2026.
Kured Inc. (DBA Brown Bag Sandwich Co.) -- Delaware C-Corp, 2 locations (Greenwich Village + Flatiron).
This document walks through: the current cap table, why the $3M vs. $6M valuation gap exists and what drives it, what a healthy post-deal cap table should look like, the structures to get us there, the management fee and path to majority control, and the investment return profile.
Where We Are Today
Pre-conversion cap table as of March 2026. Source: Pulley export + signed SAFE agreements.
Common Stock (3,810,333 shares)
| Stockholder |
Shares |
% Common |
Vested |
Role |
| Gillian Rozynek | 2,000,000 | 52.5% | 100% | Founder / CEO |
| Antonio Barbieri | 1,639,333 | 43.0% | 37.5% | Founder / Chef |
| Morgan Biles | 75,000 | 2.0% | 100% | Former employee |
| Len Nannarone | 48,000 | 1.3% | 100% | Investor / LP |
| Richard Kim | 48,000 | 1.3% | 92% | 380 Cap GP |
| Total | 3,810,333 | 100% | | |
Outstanding SAFEs ($1,495,125 total)
| SAFE |
Investor |
Principal |
Cap |
Discount |
Date |
| SAFE-9 | SSC Venture III | $5,000 | $250K | -- | Jun 2020 |
| SAFE-1 | 380 Cap LLC | $140,000 | $1M | 80% | Oct 2020 |
| SAFE-2 | SSC Venture III | $10,000 | $1M | 80% | Oct 2020 |
| Early SAFEs subtotal | $155,000 | $250K-$1M caps, aggressive discounts |
| SAFE-4 | Beech Plum LLC | $50,000 | $6M | 20% | Mar 2022 |
| SAFE-6 | SSC Venture III | $50,000 | $6M | 20% | Mar 2022 |
| SAFE-3 | 380 Cap LLC | $111,000 | $6M | 20% | Jul 2024 |
| SAFE-5 | 380 Cap LLC | $589,500 | $6M | 20% | Jul 2024 |
| SAFE-7 | 380 Cap LLC | $512,000 | $6M | 20% | Jul 2024 |
| SAFE-8 | Rozynek Family | $27,625 | $6M | 20% | Jul 2024 |
| $6M cap SAFEs subtotal | $1,340,125 | Bulk of capital, 20% discount |
| Total SAFEs | $1,495,125 | |
380 Cap LLC holds 90.5% of all SAFE capital ($1,352,500).
Rich Kim and Justin Robinson are co-GPs. ~25 individual LPs invested through 380 Cap as a pass-through vehicle. Justin is Gilli's boyfriend. Rich sits on the 3-person board (Gilli, Tony, Rich).
Other equity (not modeled)
119,073 stock options outstanding ($0.01 exercise, 4 holders). 48,000 warrants ($0.01 exercise, 2 service providers). 120,927 shares available in option pool. Immaterial to conversion math but relevant for deal structuring.
The SAFE Conversion Problem
Post-Money SAFEs convert when CBH's investment triggers a priced round. The round valuation determines what everyone owns -- and there's no valuation where a simple round works for all parties.
The SAFEs convert at the better of their cap-based price or discount-based price. At lower valuations, the discount kicks in and SAFEs get dramatically more ownership. This is the core tension: what's good for CBH (lower price) severely dilutes the founders.
This is why Rich Kim anchors at $6M. He's not protecting his own returns (he'd own MORE at $3M). He's protecting the founders from getting crushed by the conversion math. At $3M, the SAFE stack consumes so much of the company that Gilli and Tony own single-digit percentages only. At $6M, the SAFEs convert at their caps and founders keep a workable share. The irony: the investor is arguing for a higher price to protect the entrepreneurs.
What We're Solving For
Target post-deal cap table. $3M pre-money valuation, $1.6M CBH investment, path to majority control within 2-3 years.
Target ownership (post-deal)
| Party |
Target % |
Rationale |
| Corner Booth Holdings | 35% | Largest single block, operational control, path to 51%+ via second trigger |
| Gillian Rozynek | ~22% | CEO, brand, customer acquisition. ~Half vested (earned), remainder on new 4-year vest. |
| Antonio Barbieri | ~18% | Chef, product quality, EMP story. Existing unvested shares + new vest. |
| 380 Cap / all SAFEs | 25% | Negotiated conversion cap. Fair return at scale (2-4x on $1.35M). |
| Total | 100% | |
CBH 35%
Gilli 22%
Tony 18%
380 Cap 25%
Vesting asymmetry: Tony has 62% of his common shares unvested, providing built-in retention. Currently Gilli is 100% vested with no retention mechanism. Post-deal, Gilli retains ~half her shares as fully vested (recognizing her work to date) with the remainder on a new 4-year vest. Tony continues his existing vesting schedule. This keeps both founders motivated through the growth phase while respecting what Gilli has already earned.
CBH investment math
$3M pre-money + $1.6M CBH investment = $4.6M post-money. CBH gets $1.6M / $4.6M = 34.8% (~35%). To achieve the 35/40/25 split, 380 Cap's SAFE conversion is capped at ~38.5% of pre-money equity, which becomes ~25% after CBH's dilution. Founders retain the remainder (~61.5% pre-money, ~40% post-deal).
Key constraint: Founders collectively at ~40%. A motivated CEO and chef are worth more than a few percentage points of ownership. Gilli controls customer acquisition, brand, and social. Tony controls product quality. If either checks out, the brand is worth dramatically less.
How We Get There
The raw SAFE conversion math doesn't produce a healthy cap table at any round price. We need 380 Cap to agree to a conversion cap.
Negotiated SAFE Cap
Agree with 380 Cap to cap their total post-deal ownership at 25%, regardless of conversion math.
- Tell Rich/Justin: "We're the partner at the table who can help the company and founders capture the full potential. Here's what a healthy company looks like. Would you cap your conversion at 25%?"
- Justin already said he'd "take a haircut for the right team"
- Rich explicitly acknowledged: "we're past the point where we can add operational value"
- SAFE amendment: 380 Cap is 90.5% of SAFE capital, so Rich/Justin alone constitute majority-in-interest
- Return math still works for 380: ~19% of a $15-25M company at scale (after dilution from CBH triggers) = $2.8-4.7M on $1.35M invested (2-3.5x)
Interactive Model
Adjust the round valuation, investment size, and SAFE ownership cap to see the resulting cap table. Default values reflect the proposed $3M pre-money / $1.6M investment / 25% post-deal SAFE target.
Founders (combined)
47.0%
Raw conversion vs. negotiated cap (at this valuation)
Management Fee
CBH charges a management fee to cover the cost of operational services provided to Brown Bag. This is a cost recovery mechanism, not a profit center.
What the fee covers
Financial management. Accounting, bookkeeping, monthly close, tax coordination with SystematIQ.
Legal and compliance. Lease review, employment law, corporate governance, insurance.
Real estate. Site sourcing, lease negotiation, buildout management for new locations.
Operations. SOP development, training materials, supply chain optimization, vendor management.
Reporting. Monthly and quarterly performance reports, KPI dashboards, investor updates.
HR. Employee handbook, benefits administration, recruiting support, management coaching.
Technology. Building out a data warehouse to power insights and analytics.
Fee structure
~6%
of net restaurant revenue, paid monthly to CBH
At current ~$4.5M revenue: ~$270K/year
At 6 locations / $16M revenue: ~$960K/year
Standard in restaurant holding company and franchise structures. Covers actual CBH overhead, not a profit generator.
Negotiation lever: If 380 Cap pushes for a higher initial valuation, CBH can accept the higher price while charging a higher management fee (e.g., 10-12% instead of 6%). This effectively recoups the valuation premium through operating cash flow over time. The fee is also a signal of seriousness -- CBH is providing real services, not passive capital.
Path to Majority Control
A pre-negotiated mechanism for CBH to increase ownership from 35% to 51%+ as the business scales and CBH funds expansion beyond what the initial investment covers.
The risk without this mechanism: CBH is wildly successful at helping Brown Bag build a great company, and every year of growth makes it more expensive for CBH to buy the rest. The value CBH creates accrues entirely to other shareholders.
The solution: At closing, lock in a pre-agreed exercise multiple (4x trailing EBITDA) at which CBH can purchase additional equity. The initial $1.6M investment funds the first 2-3 new buildouts. The right to purchase additional shares is triggered when CBH commits capital for expansion into new markets or accelerated buildouts beyond the initial investment scope.
How it works
Day 1
35%
$1.6M invested (funds first 2-3 buildouts)
First Trigger
~43%
Fund expansion into new market
Second Trigger
51%+
Accelerated buildout / majority control
Cost to reach majority at different EBITDA levels
| Y3 Trailing EBITDA |
Enterprise Value (4x) |
Cost of Additional 16% |
Total CBH Deployed |
| $1.5M | $6.0M | $960K | $2.6M |
| $2.5M | $10.0M | $1.6M | $3.2M |
| $4.0M | $16.0M | $2.6M | $4.2M |
Negotiation lever: "Either I own more now, or because I take less now, the future exercise price has to be lower. If you want $5M instead of $3M now, the future multiple has to come down because I'm taking more risk upfront." This framing can force the other side to realize they're better off taking less now and keeping more upside later. The exercise multiple is the key variable -- trade initial price against future exercise terms.
Exercise multiple shown at 4x trailing EBITDA. If 380 Cap pushes initial valuation higher, CBH should demand a lower exercise multiple (2-3x) as compensation for the increased upfront risk. Conversely, a $3M pre-money justifies a 4x exercise multiple since CBH is already getting a fair initial price.
Investment Return Scenarios
Projected returns on CBH equity investment. Management fee excluded (pass-through covering CBH operating costs, not a return generator).
New store unit economics (at maturity)
4-Wall EBITDA
$500K
20% margin
Portfolio build scenarios (3-year horizon)
Conservative
New locations+2 (4 total)
Y3 Revenue~$9M
Y3 EBITDA$1.2M
Enterprise value (4x)$4.8M
CBH 35% equity value$1.7M
Return on $1.6M1.1x
First trigger (+8%)$384K
Second trigger (+8%)$384K
Total deployed$2.4M
51% stake value$2.4M
3% 3-year ROIC
Base Case
New locations+4 (6 total)
Y3 Revenue~$13M
Y3 EBITDA$2.0M
Enterprise value (4x)$8.0M
CBH 35% equity value$2.8M
Return on $1.6M1.8x
First trigger (+8%)$640K
Second trigger (+8%)$640K
Total deployed$2.9M
51% stake value$4.1M
42% 3-year ROIC
Aggressive
New locations+7 (9 total)
Y3 Revenue~$19M
Y3 EBITDA$3.2M
Enterprise value (4x)$12.8M
CBH 35% equity value$4.5M
Return on $1.6M2.8x
First trigger (+8%)$1.0M
Second trigger (+8%)$1.0M
Total deployed$3.6M
51% stake value$6.5M
81% 3-year ROIC
All scenarios assume 4x trailing EBITDA for both enterprise valuation and trigger pricing. Actual exit multiples for scaled multi-unit restaurant concepts are typically 6-8x, creating additional upside. New store AUV based on 1,000-1,200 sq ft footprint with expanded dayparts (breakfast + lunch + dinner). Initial $1.6M investment funds first 2-3 buildouts; triggers activate when CBH funds expansion into new markets or accelerated growth beyond initial scope.
Negotiation Sequence
How to present this to get the deal done.
1. Align with Gilli first. She controls the board (2-1 with Tony over Rich). Present the target cap table and the vesting refresh. She needs to understand that at ANY valuation, she's better off with CBH + a negotiated structure than without. The new vesting ensures she's the largest individual holder and motivated through the growth phase.
2. Group meeting with Rich and Justin. Present the full package: the 35/40/25 cap table, the 6% management fee, and the path to majority. Justin has already signaled willingness to take a haircut. Show the return math at scale: even after dilution from CBH's triggers, 380 Cap's ~19% of a $15-25M company = $2.8-4.7M on $1.35M invested. That's still a 2-3.5x return for a passive investor who contributed no operational value.
3. The leverage. SAFE holders have no governance rights (standard YC post-money SAFEs, confirmed in the documents). No voting rights, no board seat, no consent rights. Gilli and Tony can approve this deal without 380 Cap's permission. The negotiation with Rich/Justin is a courtesy driven by the personal relationship, not a legal requirement.
Part II
Alan's Counter-Proposal
An alternative deal structure that reduces the initial investment, increases management fees, and creates a staged path to majority through fixed-price options.
Alan's Deal Terms
Counter-proposal received March 2026. Shifts risk allocation: smaller initial check, higher fee income, staged follow-on at pre-set valuations.
Initial Investment
$1M
$3M pre-money valuation. 25% initial ownership. Preferred shareholder protections as lead investor.
Management Fee Schedule
| Year | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|
| Fee % | 10% | 8% | 6% | 4% | 3% |
Declining scale. Front-loaded to cover CBH direct costs in year 1, stepping down as portfolio EBITDA scales.
Follow-On Option 1 (End of Y1)
- Up to $1M additional investment
- $4M pre-money valuation
- Brings ownership to 40-45%
Follow-On Option 2 (End of Y2)
- Up to $1M additional investment
- $5M pre-money valuation
- Brings ownership to 53-65%
Alan's rationale: Moving the investment down to $1M and increasing management fees covers CBH direct costs in year 1. Downside protection if margins stay below 11% (3x improvement on GV Q4 2025 result needed). Two follow-on tranches build conviction as each new location proves the model, while increasing valuations average to a reasonable price paid.
Ownership Progression
Three-tranche structure with pre-set valuations. Total potential deployment: $3M across 2+ years. Each tranche is an option, not a commitment.
Tranche 1 -- Day 1
25%
$1M at $3M pre-money
Tranche 2 -- End of Y1
40-45%
+$1M at $4M pre-money
Tranche 3 -- End of Y2
53-65%
+$1M at $5M pre-money
Ownership at each stage
After Tranche 1 -- $1M deployed
CBH 25%
Other shareholders 75%
After Tranche 2 -- $2M deployed
CBH 40-45%
Other shareholders 55-60%
After Tranche 3 -- $3M deployed
CBH 53-65%
Other shareholders 35-47%
Key difference from Matt's proposal: Matt's path to majority uses a floating exercise price (4x trailing EBITDA), meaning the cost scales with success. Alan's structure locks in fixed valuations ($3M / $4M / $5M) regardless of performance, giving CBH more upside if the business outperforms but less downside protection if it underperforms.
Alan's Financial Model
Five-year projections from Alan's spreadsheet. Two fee scenarios shown: flat 6% baseline and the proposed scaling schedule (10% down to 3%). Assumes $2.2M AUV, 11% 4-wall margin, 0% new store margin in year 1, $450K buildout per store.
Model inputs
New Store Y1 AUV
30%
of mature
New Overhead
$125K
operator
Model 1 -- Flat 6% Fee (Baseline)
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
| Cash in bank (start) | $1,212,000 | $872,800 | $224,400 | $16,000 | $247,600 |
| Current store revenue | $4,400,000 | $6,600,000 | $11,000,000 | $15,400,000 | $19,800,000 |
| 4-wall margin (current stores) | $484,000 | $726,000 | $1,210,000 | $1,694,000 | $2,178,000 |
| New store openings | 1 | 2 | 2 | 2 | 2 |
| New store revenue | $660,000 | $1,320,000 | $1,320,000 | $1,320,000 | $1,320,000 |
| New store margin | $0 | $0 | $0 | $0 | $0 |
| New store capex | $450,000 | $900,000 | $900,000 | $900,000 | $900,000 |
| Total stores | 3 | 5 | 7 | 9 | 11 |
| Total revenue | $5,060,000 | $7,920,000 | $12,320,000 | $16,720,000 | $21,120,000 |
| Total 4-wall margin | $484,000 | $726,000 | $1,210,000 | $1,694,000 | $2,178,000 |
| Management fees (6%) | $303,600 | $475,200 | $739,200 | $1,003,200 | $1,267,200 |
| Overhead | $125,000 | $125,000 | $125,000 | $125,000 | $125,000 |
| Total EBITDA | $55,400 | $125,800 | $345,800 | $565,800 | $785,800 |
| Ending cash | $817,400 | $98,600 | -$329,800 | -$318,200 | $133,400 |
| Implied valuation (4x EBITDA) + cash | $1,039,000 | $601,800 | $1,053,400 | $1,945,000 | $3,276,600 |
| Implied valuation (4x 4-wall) + cash | $2,753,400 | $3,002,600 | $4,510,200 | $6,457,800 | $8,845,400 |
| ROIC (25% ownership) | 1.4% | 3.1% | 8.6% | 14.1% | 19.6% |
Model 2 -- Scaling Fee (Alan's Proposed Fee Structure: 10% to 3%)
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
| Fee % | 10% | 8% | 6% | 4% | 3% |
| Management fees | $506,000 | $633,600 | $739,200 | $668,800 | $633,600 |
| EBITDA | -$147,000 | -$32,600 | $345,800 | $900,200 | $1,419,400 |
| Ending cash | $817,400 | $98,600 | -$329,800 | -$318,200 | $133,400 |
| ROIC (25% ownership) | -3.7% | -0.8% | 8.6% | 22.5% | 35.5% |
Key observation: Under the scaling fee model, EBITDA is negative in years 1 and 2 because the 10% and 8% management fees consume all of the 4-wall margin (11%). The business only becomes cash-flow positive at the enterprise level in year 3 when fees drop to 6%. Both models show negative ending cash in years 3-4 due to aggressive store openings, meaning additional capital or debt would be required.
Side-by-Side Comparison
Matt's proposal vs. Alan's counter-proposal across key deal dimensions.
Matt's Proposal
Initial Investment
$1.6M at $3M pre-money
Management Fee
~6% flat (pass-through, excluded from EBITDA)
Path to Majority
Floating price at 4x trailing EBITDA. Two triggers for +8% each to reach 51%.
Key Assumptions
$2.5M AUV, 20% 4-wall margin (at maturity), 3-year horizon
Y3 Return (Base Case)
1.8x / 42% 3-year ROIC on 35% equity
Total Capital at Risk
$1.6M upfront + trigger capital (variable)
Alan's Proposal
Initial Investment
$1.0M at $3M pre-money
Management Fee
10% to 3% scaling (deducted from EBITDA)
Path to Majority
Fixed prices: $4M pre (Y1), $5M pre (Y2). Two options at $1M each.
Key Assumptions
$2.2M AUV, 11% 4-wall margin (current), 5-year horizon
Y3 Return (Scaling Fee)
8.6% ROIC on 25% equity ($1M invested)
Total Capital at Risk
$1.0M upfront + up to $2M in options (at CBH's discretion)
Four analytical differences to note:
- Matt's deck assumes 20% 4-wall margin (target at maturity). Alan models current 11%. This is the single largest driver of the return gap -- nearly 2x difference in unit-level profitability.
- Matt's deck treats the management fee as a pass-through (excluded from EBITDA). Alan deducts it, which compresses reported EBITDA significantly -- especially in early years at 10% and 8%.
- Alan models 0% margin on new stores in year 1. Matt's scenarios assume new stores contribute at maturity once opened.
- Matt's deck uses a 3-year horizon. Alan's model runs 5 years, which shows more favorable returns in years 4-5 as the fee steps down and more stores reach maturity.
Investment Return Comparison
Projected returns under both proposals. Matt's scenarios assume 20% margin and 3-year horizon. Alan's model uses 11% margin and 5-year horizon. Direct comparison is illustrative, not apples-to-apples.
Matt's proposal -- 3-Year scenarios (35% ownership on $1.6M)
Conservative
Locations (Y3)4
Y3 Revenue~$9M
Y3 EBITDA$1.2M
EV (4x)$4.8M
35% equity value$1.7M
Return on $1.6M1.1x
3% 3-year ROIC
Base Case
Locations (Y3)6
Y3 Revenue~$13M
Y3 EBITDA$2.0M
EV (4x)$8.0M
35% equity value$2.8M
Return on $1.6M1.8x
42% 3-year ROIC
Aggressive
Locations (Y3)9
Y3 Revenue~$19M
Y3 EBITDA$3.2M
EV (4x)$12.8M
35% equity value$4.5M
Return on $1.6M2.8x
81% 3-year ROIC
Alan's proposal -- 5-Year projections (25% ownership on $1M)
Flat 6% Fee (Baseline)
11% 4-wall margin, 6% flat management fee
Total stores (Y5)11
Y5 Revenue$21.1M
Y5 EBITDA$785,800
Y5 4-Wall Margin$2,178,000
Y3 ROIC (25%)8.6%
Y5 ROIC (25%)19.6%
Implied value (4x EBITDA + cash, Y5)$3.3M
Implied value (4x 4-wall + cash, Y5)$8.8M
Scaling Fee (Alan's Proposed)
11% 4-wall margin, 10% fee stepping to 3%
Total stores (Y5)11
Y5 Revenue$21.1M
Y5 EBITDA$1,419,400
Y5 4-Wall Margin$2,178,000
Y3 ROIC (25%)8.6%
Y5 ROIC (25%)35.5%
Y1-2 EBITDANegative
Breakeven yearYear 3
How to read this comparison: The proposals are not directly comparable because they use different margin assumptions and time horizons. Matt's base case shows 42% ROIC over 3 years at 20% margin. Alan's scaling model shows 35.5% ROIC over 5 years at 11% margin. If you applied Alan's 11% margin assumption to Matt's model, Matt's returns would be significantly lower. Conversely, if BBS achieves the 20% target margin, Alan's model would show much higher returns than shown here. The real question is which margin assumption is more realistic for the next 3-5 years.
Alan's model ROIC is calculated as: (implied valuation * 25% ownership - $1M invested) / $1M invested, annualized. Uses 4x EBITDA + ending cash for implied valuation. Management fees flow through to CBH as revenue in both models, providing additional return not captured in the equity ROIC figure.
Part III
Apples-to-Apples Comparison
Both deal structures run against the same operating assumptions. Adjust the 4-wall margin to see how each structure performs across the range of realistic outcomes.
Held constant: $2.2M AUV, 2 starting stores, +1/2/2/2/2 new stores, $450K buildout, 30% new store Y1 AUV, 0% new store Y1 margin, $125K overhead, $212K starting cash. The only variable is the 4-wall margin -- the single biggest driver of returns.
Structure Comparison at Equal Margins
Same operating model, different deal terms. Total return to CBH = equity value + cumulative management fee income - capital deployed.
Matt's Structure
$1.6M invested / 35% ownership / 6% flat fee
Alan's Structure
$1.0M invested / 25% ownership / 10-3% scaling fee
Matt's Structure -- 5-Year P&L
Alan's Structure -- 5-Year P&L
CBH Equity Return (Fee Income Excluded -- Break-Even Cost Recovery)
ROIC = (equity value - capital) / capital. Payback = first year where equity value >= capital deployed (interpolated). Enterprise value = 4x trailing EBITDA + ending cash. Management fees shown for reference but excluded from ROIC and payback -- they cover CBH operating costs at approximately break-even and are not investment return.
Margin Sensitivity Matrix
CBH equity return (equity value - capital deployed) at Year 3 and Year 5 across a range of 4-wall margins. Management fees excluded (break-even cost recovery). Green = structure with higher equity return at that margin level.
Year 3 Equity Return to CBH
Year 5 Equity Return to CBH
All scenarios use identical operating assumptions (same AUV, growth pace, buildout cost). The only variable is 4-wall margin. This isolates the question: at what margin level does each deal structure become more attractive for CBH?
Corner Booth Holdings -- Confidential. Prepared March 11, 2026. Updated March 12, 2026.