CORNER BOOTH HOLDINGS
A Deal That Works for Everyone
Brown Bag Sandwich Co. / Investment & Partnership Structure
Current Cap Table
Common stock outstanding before SAFE conversion. Tony is only 37.5% vested with 25% acceleration on change of control.
3,810,333
Common shares outstanding
4,098,333
Fully diluted (pre-SAFE)
$1,495,125
SAFE capital outstanding
| Stockholder |
Shares |
% Common |
Vested |
Notes |
| Gillian Rozynek |
2,000,000 |
52.5% |
2,000,000 |
Founder / CEO. Fully vested. |
| Antonio Barbieri |
1,639,333 |
43.0% |
614,749 |
4-year vest from Jan 2025, 6-month cliff. 25% acceleration. |
| Morgan Biles |
75,000 |
2.0% |
75,000 |
Former employee. 125K shares cancelled. |
| Len Nannarone |
48,000 |
1.3% |
48,000 |
Also $25K 380 Cap LP. |
| Richard Kim |
48,000 |
1.3% |
44,000 |
380 Cap GP. Vesting from Jul 2022. |
| Total common |
3,810,333 |
100% |
2,781,749 |
|
Options Outstanding (119,073)
| Grantee | Shares | Vested |
|---|
| Leah Dubois | 60,000 | 60,000 |
| Meredith Mahoney | 50,000 | 44,791 |
| Charlie Pino | 6,000 | 6,000 |
| Faith VanDusen | 3,073 | 3,073 |
Warrants (48,000) & Pool
| Holder | Shares | Status |
|---|
| Joe the Architect LLC | 24,000 | Fully vested |
| Boston Showcase Co. | 24,000 | Vested, exp. Mar 2031 |
| Available pool | 120,927 | Unissued |
SAFE Instruments
9 outstanding post-money SAFEs. 380 Cap holds 90.5% of capital ($1.35M). All convert on equity financing or liquidity event.
| SAFE |
Investor |
Date |
Principal |
Cap |
Discount |
| SAFE-9 |
SSC Venture Partners III |
Jun 2020 |
$5,000 |
$250K |
None |
| SAFE-1 |
380 Cap LLC |
Oct 2020 |
$140,000 |
$1M |
80% |
| SAFE-2 |
SSC Venture Partners III |
Oct 2020 |
$10,000 |
$1M |
80% |
| SAFE-4 |
Beech Plum LLC |
Mar 2022 |
$50,000 |
$6M |
20% |
| SAFE-6 |
SSC Venture Partners III |
Mar 2022 |
$50,000 |
$6M |
20% |
| SAFE-3 |
380 Cap LLC |
Jul 2024 |
$111,000 |
$6M |
20% |
| SAFE-5 |
380 Cap LLC |
Jul 2024 |
$589,500 |
$6M |
20% |
| SAFE-7 |
380 Cap LLC |
Jul 2024 |
$512,000 |
$6M |
20% |
| SAFE-8 |
Gary & Cathy Rozynek |
Jul 2024 |
$27,625 |
$6M |
20% |
| Total SAFE capital |
$1,495,125 |
|
380 Cap breakdown
GP allocation (Rich/Justin): $881,500 (65.2%). 26 LPs contribute $471,000. Structured as pass-through to keep cap table clean.
Diligence note
SAFE-6 (SSC) signed at $10M cap per original doc but Pulley shows $6M. Gilli says re-struck. Need executed amendment before closing.
The Discount Paradox
Post-money SAFEs convert at the better of cap-based ownership or discount-based price. At lower valuations, the discount gives SAFE holders dramatically more of the company. This creates a perverse incentive unless we address it directly.
SAFE ownership at different round prices
| Round price (pre-money) |
At caps |
At discount |
Difference |
Which applies |
| $3M |
39.3% |
~83% |
+44 pts |
Discount dominates. Founders crushed. |
| $6M |
39.3% |
~39% |
~0 pts |
Roughly equal. Cap and discount converge. |
| $7.5M |
39.3% |
~31% |
-8 pts |
Cap dominates. SAFEs prefer cap. |
| $10M |
39.3% |
~23% |
-16 pts |
Cap dominates. |
The problem at $3M
At $3M pre-money, SAFE discounts give holders ~83% of the company. Founders are left with single digits. No deal is possible on those terms.
Why $6M resolves this
At $6M, caps and discounts converge (~39% either way). Pricing at $6M eliminates the discount paradox entirely. SAFE holders keep their marks, and the cap table stays clean for new investment.
The pitch to SAFE holders
"We're accepting your $6M valuation. Your marks stay intact. You keep ~25% of a company with $3M in staged growth capital, professional operations, and a path to 10+ locations. 25% of $20M is $5M. Without this capital, there's no liquidity path at all."
The Aligned Solution
Accept the $6M headline. Convert SAFEs at caps. Create a 20% option pool. Use equity grants and staged tranches to achieve our target economics.
Step 1: SAFE conversion at caps
Post-money SAFE ownership is fixed: Investment / Cap = ownership %. At $6M, caps and discounts converge, so this is a clean negotiation. Option pool expansion dilutes common holders only, not SAFEs (YC post-money SAFE feature).
| SAFE group |
Capital |
Cap |
Ownership at conversion |
| $250K cap (SSC, Jun 2020) |
$5,000 |
$250K |
2.00% |
| $1M cap (380 Cap + SSC, Oct 2020) |
$150,000 |
$1M |
15.00% |
| $6M cap (all 2022 + 2024 SAFEs) |
$1,340,125 |
$6M |
22.34% |
| Total SAFE ownership |
$1,495,125 |
|
39.33% |
Step 2: 20% option pool (fully allocated)
Create a 20% option pool pre-money. The entire pool is allocated at closing: 10% to CBH as an equity grant for services (operational support, bookkeeping, real estate, hiring) earned between now and Location 3 opening. 10% to founders as retention grants, partially offsetting their dilution from pool creation.
Why 20% works
10% to CBH for services replaces the need for a lower headline valuation. 10% to founders as retention grants keeps Gilli and Tony aligned with meaningful ownership. The pool is fully allocated at closing with no overhang.
Pre-money ownership (after conversion + grants)
| Holder | % | Notes |
|---|
| SAFEs (at caps) | 39.33% | Fixed per SAFE terms |
| Gilli Rozynek | 26.70% | 21.70% common + 5% retention grant |
| Tony Barbieri | 20.55% | 15.55% common + 5% retention grant |
| CBH (services grant) | 10.00% | From 20% pool, earned through Loc. 3 |
| Others (Biles, Nannarone, Kim, options, warrants) | 3.42% | |
| Total | 100.00% | Pool fully allocated |
Deal Structure: Tranche 1
$1M cash at $6M pre-money. 10% equity grant for services. Founders receive 10% retention grants. CBH starts at 23% with a locked-in path to majority through two additional tranches.
$6.0M
Pre-money valuation
$7.0M
Post-money (after Tranche 1)
22.9%
CBH day-one ownership
CBH ownership sources
| Component |
Ownership |
Mechanism |
| Cash investment ($1M at $6M pre) |
14.3% |
$1M / $7M post-money. Growth capital for Location 3. |
| Services equity grant |
8.6% |
10% pre-money, diluted to 8.6% by Tranche 1 investment. |
| CBH total (day one) |
22.9% |
|
Day-one cap table (post Tranche 1 + all grants)
| Holder |
Ownership |
Value at $7M |
| CBH (cash + services grant) |
22.9% |
$1,603,000 |
| SAFEs (at caps) |
33.7% |
$2,359,000 |
| Gilli Rozynek (common + retention) |
22.9% |
$1,603,000 |
| Tony Barbieri (common + retention) |
17.6% |
$1,232,000 |
| Others |
2.9% |
$203,000 |
| Total |
100.0% |
$7,000,000 |
Ownership bar
CBH 23%
SAFEs 34%
Gilli 23%
Tony 18%
3%
Effective economics
$1M cash gets 14%. Add the 10% services grant (8.6% post-dilution) and CBH is at 23% for $1M plus services. Effective post-money: ~$4.3M, close to our original $3-3.5M target economics without fighting the $6M headline.
Founder retention grants
Gilli and Tony each receive 5% from the pool as retention grants, partially offsetting their dilution. Gilli ends up at 23% (vs. 27% pre-pool), Tony at 18% (vs. 21% pre-pool). Both keep meaningful ownership with new vesting tied to growth.
Tranche Structure: Path to 44%+
Three $1M tranches over 3 years, all at $6M pre-money. The locked valuation is the key lever: as BBS grows, each tranche buys more effective value because the price stays flat.
$3M
Total capital over 3 years
$6M
Locked valuation (all tranches)
43.3%
CBH after all tranches
Ownership build by tranche
| Stage |
Cash in |
CBH % |
SAFEs % |
Gilli % |
Tony % |
Others % |
Cumulative capital |
| After Tranche 1 + all grants |
$1M |
22.9% |
33.7% |
22.9% |
17.6% |
2.9% |
$1M |
| After Tranche 2 (Year 2) |
$1M |
33.9% |
28.9% |
19.6% |
15.1% |
2.5% |
$2M |
| After Tranche 3 (Year 3) |
$1M |
43.3% |
24.8% |
16.8% |
12.9% |
2.2% |
$3M |
Why locked valuation works
De-risks CBH capital. We deploy $1M now, not $3M. Tranches 2 and 3 are a right, not an obligation. If the business underperforms, we can walk away after $1M.
Rewards conviction. If BBS is doing $15M revenue by Year 3, the $6M pre-money price is a significant discount. Our third $1M buys the most valuable 14% of the three.
Simple and clean. Same price, same mechanics, three times. No renegotiation, no complex formulas. Founders and investors can plan around it.
Path to majority control
43.3% + governance = effective control
After all three tranches, CBH holds 43.3%. Combined with management fee governance rights and board representation, CBH has effective operational control. CBH is also the largest single holder; SAFEs at 24.8% are fragmented across 9 instruments.
Founders' dilution context
Gilli goes from 27% pre-deal to 17% after all tranches. Tony from 21% to 13%. But with retention grants offsetting pool dilution, and dollar value growing, this is their best outcome: 17% of a $20M company ($3.4M) beats 27% of a $6M company ($1.6M).
Management Fees & Return on Invested Capital
Equity grant covers services through Location 3. Management fees begin after that, providing ongoing cash flow to CBH while the tranches build ownership.
Now
23%
$1M cash + 10% grant
Services for equity
Location 3
23%
Grant fully earned
Mgmt fees begin
Year 2
34%
Tranche 2: $1M
at $6M pre
Year 3
43%+
Tranche 3: $1M
Effective control
Compensation phases
Phase 1: Equity for services (now through Location 3). CBH earns the 10% equity grant by providing operational support: financial management, real estate sourcing, hiring, marketing infrastructure. No cash fee during this period.
Phase 2: Management fees (Location 3 onward). CBH transitions to a management fee structure for ongoing operational support. Fee covers the same services plus technology/data systems and compliance.
Pro-rata rights on any future round. If BBS raises additional capital beyond the three tranches, CBH has the right to invest pro-rata to maintain ownership percentage.
Management fee schedule
| Period | Revenue est. | Fee (% rev) | Annual fee |
|---|
| Year 1-2 (pre-Location 3) | $4-6M | n/a | Equity only |
| Year 2-3 | $10M | 6% | $600K |
| Year 4 | $12M | 6% | $720K |
| Year 5 | $18M | 5% | $900K |
Return on invested capital (~43% ownership)
| Scenario | Locations | Revenue | EBITDA | CBH share | ROIC | MOIC |
|---|
| Conservative |
5 |
$12.5M |
$1.9M |
$817K |
27% |
2.2x |
| Base |
8 |
$24M |
$4.3M |
$1.85M |
62% |
4.9x |
| Bull |
12 |
$42M |
$8.4M |
$3.61M |
120% |
12.1x |
Downside protection
Only $1M at risk in Year 1. Tranches 2 and 3 are a right, not obligation. If the business underperforms, CBH walks away with 23% and $1M deployed. Management fee income provides additional downside cushion once Location 3 opens.
Everyone Wins
Use the slider to see how each party's outcome changes at different future company valuations. Assumes all three tranches exercised.
Tony Barbieri
$2.6M
13% of $20M. Retention grant offsets pool dilution. Ongoing vesting keeps him in the kitchen building the brand.
Gilli Rozynek
$3.4M
17% of $20M. Retention grant preserves meaningful ownership. Operator-partner with capital, systems, and real estate expertise.
380 Cap / SAFE Holders
$5.0M
24.8% of $20M. 3.3x on $1.5M invested. $6M headline preserved. Growth capital and professional operations create a real liquidity path.
Corner Booth Holdings
$8.7M
43.3% of $20M (after all tranches). Largest single holder with management fee governance. $3M total invested.
CBH 43%
SAFEs 25%
Gilli 17%
Tony 13%
2%
Why every party is better off
Founders: smaller slice, bigger pie. Gilli goes from 27% of a $6M company ($1.6M) to 17% of a $20M+ company ($3.4M+). Retention grants preserve meaningful ownership. Without capital and operational support, BBS stays at 2 locations doing $4M.
SAFE holders: marks preserved. The $6M headline is exactly what they need. Rich keeps his LP relationship intact. At $20M, their 25% is worth $5M, a 3.3x return on $1.5M invested.
CBH: staged risk, compounding value. Only $1M at risk in Year 1. Each subsequent tranche at the locked $6M price buys increasingly undervalued equity as BBS grows. Management fee income covers operational costs starting at Location 3. Largest single holder after all tranches.
The tranche structure protects everyone. CBH doesn't deploy $3M upfront. Additional capital is conditional on performance. If BBS underperforms, CBH stops at Tranche 1 with 23% and $1M deployed.
Negotiation Playbook
Sequencing and talking points for each stakeholder. Lead with alignment, not terms.
Sequence
1. Gilli first. She's the decision-maker and the bridge to everyone else. Align on the vision: 10 locations, professional operations, founder wealth creation. Don't lead with numbers.
2. Tony second. The $250K secondary is his incentive. Frame it as "you've earned this" not "we're buying you out." He keeps meaningful equity and stays as the culinary anchor.
3. Rich / Justin (380 Cap) third. Rich already said they're "outside of their scope operationally." Position CBH as the solution to their problem. The discount paradox argument is for them: at-cap conversion is better than discount conversion if the company actually grows.
4. SSC / other SAFEs last. Small checks, no leverage. They follow 380 Cap's lead. Amendment requires majority-in-interest consent at each cap level.
Key arguments by audience
To Gilli & Tony
"We're not buying your company. We're investing in your company and giving you the tools to build a real business. You keep meaningful equity, you get an operational partner, and Tony gets cash now. The alternative is staying at 2 locations forever."
To 380 Cap (Rich & Justin)
"Converting at caps gives you 25% of a company with $2M in growth capital and professional operations. Converting at discounts gives you 83% of a company with no capital and no operator. Your $1.35M investment becomes worth $5M+ in the growth scenario. That's 3.3x. In the status quo, there's no liquidity path at all."
If they push back on the equity grant or pool size
"The 10% grant compensates CBH for operational services that would otherwise cost $500K+ per year if hired externally. We're taking equity instead of cash, which means we're betting on the same outcome you are. The 20% pool is standard for a company at this stage, and half of it (10%) is reserved for employee retention, which benefits everyone."
Walk-away position
"We believe in this brand and these founders. We're accepting the $6M valuation you want. But the tranche structure, equity grant, and management fees are how we make the economics work on our side. If those terms don't work, we'll step back. The alternative is scaling without capital or operational support."
Diligence items before term sheet
SSC SAFE-6 amendment. Need executed written doc confirming $6M cap (currently papered at $10M).
Tony acceleration scope. Single trigger vs double trigger on change of control. Determines how many shares vest on deal close.
Beech Plum LLC identity. $50K SAFE, no signatory info on file.
380 Cap LP approval mechanics. 26 pass-through LPs. Need to understand what consent is required from individual LPs for SAFE amendment.
Governing law blanks. At least two SAFEs have "[Governing Law Jurisdiction]" as placeholder. Low risk but needs cleanup.
Warrant holder confirmation. Joe the Architect + Boston Showcase: confirm services rendered, no disputes.