Texas Zebo Pitch Deck Teardown: A Revenue-Share Model

Texas Zebo: A Hospitality Expansion Case Study

The Texas Zebo deck, dated December 2016, serves as a fundraising tool for the expansion of two distinct but complementary hospitality concepts: Halcyon and Stella Public House. The presentation is structured to appeal to both institutional and smaller-scale investors by highlighting a proven track record and a structured repayment model.

Slide 1: Title and Branding

The cover slide establishes the dual-brand nature of the investment. It features the logos for Halcyon (Coffee + Bar + Lounge) and Stella Public House (Artisan Wood Fired Pizzeria) . The imagery focuses on the atmosphere: a cozy lounge area, a latte, a wood-fired oven, and a modern dining room. The slide clearly states the purpose: "2017 Expansion Investment Opportunity."

Slide 2: Summary of Opportunity

This slide acts as the executive summary. It defines the "What," "How," and "Details" of the raise. The company describes Halcyon as an "Austin iconic coffeehouse & bar" and Stella Public House as an "award winning artisan wood fired pizzeria." Crucially, it outlines the investment terms: a $250 minimum investment in a revenue share promissory note . The return profile is specified as 1% of Gross Revenue paid to investors until 150% of capital is returned . This indicates a debt-like instrument designed to provide cash flow to investors rather than long-term equity upside.

Slide 3: Concept Visualization - Halcyon

Slide 3 is a collage of photographs intended to convey the "vibe" of Halcyon. It shows a high-traffic, industrial-chic interior filled with patrons, alongside product shots of coffee, cocktails, panini, and their signature tableside s'mores. The goal here is to demonstrate that the concept is active, populated, and possesses a diverse product mix that spans from morning coffee to evening drinks.

Slide 4: Concept Validation and Press

To mitigate perceived risk, Slide 4 focuses on "Replicating Concept Success." It features clippings from the San Antonio Express-News , Current , and San Antonio Magazine . Specific dishes are highlighted, such as the "Wild mushroom mac & cheese" and "Lamb meatballs." By showcasing third-party accolades from 2013 and 2014, the founders argue that the brand equity is already established in existing markets.

Slide 5: The Founding Team

This is arguably the strongest slide in the deck. The leadership team possesses credentials typically seen in high-growth tech startups or top-tier private equity firms. John Long is a Wharton MBA and former McKinsey consultant. Kris Hardy is also a Wharton MBA with experience at BCG and a decade-long tenure as a Director at Dell. Hanson Li , a Stanford MBA and Siebel Scholar, brings investment banking and food/beverage investment experience via Salt Partners. This slide is designed to build immense trust in the operational and financial management of the company.

Slide 6: 2015 Sales Performance

Slide 6 provides data-driven evidence of growth. The left chart shows "Rolling 12-months Net Sales" for Austin, categorized by daypart (Night, HH/Dinner, Lunch, Morning). The "Night" category is the clear leader, hovering near the $900,000 mark. The right chart, "Food % of Sales by Daypart," shows a positive trend in the "Morning" category, which climbed from roughly 24% to 30% over the tracked period. This suggests the company is successfully upselling food in traditionally drink-heavy periods.

Slide 7: Brand and Product Mix

This slide breaks down revenue by category (Coffee + Bevs, Bar, Food) across three entities: Austin, San Antonio Halcyon, and San Antonio Stella. In Austin, "Coffee + Bevs" and "Bar" are the primary drivers, both trending upward toward the $420,000 and $400,000 range respectively. At San Antonio Stella, "Food" is the dominant revenue source, starting at $800,000 and growing toward $1,000,000 . This data proves the complementary nature of the two brands: one leads with beverages, the other with food.

Slide 8: The Flagship Expansion - Austin Mueller

Slide 8 details a specific use of funds: a new site in the Mueller development on Aldrich Street. The slide lists key specs: 5,600 sq ft , located in the "Anchor corner of Entertainment District," adjacent to the Dell Children’s Museum. It notes that the lease is executed, design is complete, and construction was scheduled to start in January 2017. This provides a tangible, "shovel-ready" project for investors to visualize.

Slide 9: 2016-2020 Location Growth Summary

The final slide in the provided set outlines the long-term roadmap. Key highlights include:

San Antonio producing 15% net operating income from $3M+ in sales . · Negotiations for a 10-20 year renewal of the Austin Halcyon lease. · The launch of a Dallas-Greenville location in January 2017. · Discussions for a Rice Village (Houston) location.

This summary suggests a transition from a local operator to a regional powerhouse with presence in all major Texas metros.

What Works in the Texas Zebo Deck

1. Professional Pedigree: The team slide is exceptional. In the hospitality industry, which often suffers from high failure rates due to poor management, having McKinsey and BCG alumni with Wharton and Stanford MBAs provides a significant layer of professional comfort to investors.

2. Clear Investment Structure: Many small-scale hospitality raises are vague about how investors get paid back. Texas Zebo is explicit: a revenue-share note with a 1.5x cap. This is an attractive structure for investors who want yield rather than a speculative exit ten years down the line.

3. Granular Data: The use of rolling 12-month sales charts broken down by daypart and product category (Slides 6 and 7) shows that the management has a deep handle on their analytics. They aren't just reporting top-line numbers; they are showing where the growth is coming from.

What is Missing from the Texas Zebo Deck

1. Total Capital Requirement: While the deck mentions a $250 minimum, it never states the total amount being raised. Is the goal $500,000 or $5,000,000? Without a total "Ask" figure, it is difficult to calculate the dilution or the total revenue percentage being committed to the investor pool.

2. Specific Unit Economics: While Slide 9 mentions a 15% NOI for San Antonio, the deck lacks a detailed breakdown of Prime Costs (COGS + Labor). Investors in the restaurant space typically want to see these percentages to understand how efficiently the stores are being run.

3. Risk Factors: The deck claims that replicating success "eliminates concept risk" (Slide 4). This is a bold claim. Every new market has unique labor costs, real estate hurdles, and local competition. A slide addressing these specific challenges would have added balance to the presentation.

What a Founder Should Copy

1. The Revenue-Share Model: For founders in industries where a traditional "exit" (IPO or acquisition) is unlikely, the revenue-share promissory note is a fantastic way to attract capital. It aligns the interests of the founder and the investor around top-line growth.

2. Daypart Analysis: If you are running a multi-use space (like a coffee shop that turns into a bar), use Slide 6 as a template. Showing how you maximize the utility of your square footage across 24 hours is a powerful way to demonstrate operational efficiency.

3. Location-Specific Visuals: Slide 8’s use of a site map and specific square footage details makes the expansion feel real. It moves the conversation from "we want to grow" to "we are building this specific building in this specific neighborhood."