THE MOST DELICIOUS
CASE STUDY
YOU’LL EVER READ

How a Brooklyn-based ice cream maker made it from the
trunk of a car onto the shelves of major retailers across the U.S.
(with a little help from P2Binvestor)

The beginning of an ice cream empire…


After months of creating ice cream in their kitchen and using personal savings to maintain operations, Phin & Phebes were ready to scale their business. They had tested and validated their product in local markets, acquired relationships with a few distributors, and were beginning to attract new opportunities to grow, but they didn’t have enough cash to keep up with their plans to expand. Much of their existing capital was tied up in accounts receivable and they were hesitant to make the investments that would allow them to scale for fear of depleting their working capital and failing to meet operating costs while waiting for slow-paying customers. Using a line of credit from P2Binvestor, they were able to purchase the materials—and later, hire staff—they needed to increase their production and get on the shelves of 1,200 retail locations without diluting their equity.


About Phin & Phebes


Phin & Phebes is an ice cream company based in Brooklyn, New York, that creates unique and interesting flavors with a little something for everyone. Their ice cream is made from real, organic and non gmo ingredients and hormone-free milk that is locally sourced from family-owned farms just twenty miles away from where they manufacture. They are wholly committed to making ice cream that is fun for both kids and adults, delicious, and surprising in the best way possible. Their goal is to recreate tasting ice cream again for the first time.

The founders, Crista and Jess, were bored with the flavors available in the ice cream aisles of their local grocery stores and in 2010 they began making ice cream in a home kitchen and experimenting with flavor combinations. They applied—on a whim—to the Brooklyn Lyceum Fair, were accepted as vendors, and debuted six of their first flavors at the fair. The response was incredible and allowed the pair to do quite a bit of market research with hundreds of tasters who completed surveys in exchange for ice cream samples. After the fair, they began receiving inquiries from a few well-known Brooklyn specialty markets and soon thereafter, Whole Foods Market. In 2011, the founders went to Ice Cream University at Penn State University to deepen their understanding of the chemistry behind ice cream development, production and quality control, and business fundamentals and management techniques unique to the highly competitive ice cream market.


Bumps in the road…


When the founders of Phin & Phebes secured relationships with several specialty stores, they started experiencing serious growing pains. In addition to watching their product fly off store shelves sometimes almost immediately, their operation had outgrown the confines of their small workspace. They also began working with a copacker around this time, which really cut into their profit margin. They were starting to feel the weight of a complicated ice cream supply chain.

Since founding the company, Crista and Jess had primarily bootstrapped through a combination of income from their day jobs and personal savings. Soon, Phin & Phebes became busy enough they needed to leave their day jobs to keep up with the company’s growth. They secured a small SBA loan initially, which took about six months to get. They then secured some equity financing from a few investors when they conducted a small fundraising round using CircleUp, an equity crowdfunding platform. However, their new copacking relationship, a necessary next step toward scale, required advance purchase of all raw materials needed to create their ice cream. This created an additional strain on their already limited resources.

Phin & Phebes had more and more purchase orders coming in, but once they shipped the product, their customers, distributors and retailers, would take up to 90 days to pay their invoices. This substantially limited the company’s working capital and ability to keep up with order growth. They continued to raise some money from investors, but came to a point at which they didn’t want to give up more equity in their business and could not invest additional personal savings. Because they were a young company, they could not yet qualify for help from their bank. They were stuck without clear options or access to the capital they needed to continue growing quickly.

“Before P2Bi I was ruled by my business and feared having a staff on payroll—I was never sure when I would be paid by distributors, so I wasn’t optimistic that I could consistently pay employees.” Crista Freeman, CEO, Phin & Phebes Ice Cream

And finally…. relief

While the founders of Phin & Phebes had basic knowledge about alternative finance and online lenders, they weren’t comfortable with the high cost of capital. When they met P2Binvestor and learned about the Ex-Factor line of credit, Crista and Jess were impressed with how easy the product was, the reasonable cost of funds, the flexibility, and the fact that they could draw on their line as needed.

“Because of P2Bi I have been able to scale my business and team, and I no longer feel limited by cash flow. I can now confidently focus on growing my brand instead of being restrained and running my business understaffed.”Crista Freeman, CEO, Phin & Phebes Ice Cream

The results…


Phin & Phebes launched into 1,200 retail locations this Spring, and are positioned to expand nationally. You can find their products in Whole Foods, Safeway, Sam’s Club, and WalMart locations all over the north, southeast, southwest, midwest and California. They were also able to move to a centrally located copacker which will decrease their distribution costs as they grow into new markets.

“I’m definitely a loyal customer. Working with P2Binvestor is super easy. I like that they aren’t like the typical finance companies out there. They’re actually fun to work with; they understand the growing pains we’re going through because they’ve gone through them, too. Working with P2Bi has been an awesome experience, and I love everyone on the team.” Crista Freeman, CEO, Phin & Phebes Ice Cream
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