# Tubby Todd raised private equity to fund its Target expansion, co-founder tells Modern Retail

By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC.
Published 2026-08-17.

Canonical: https://www.pops4.com/stash/articles/tubby-todd-via-modern-retail-podcast-2026-08-17t03-5
Subject: Tubby Todd (via Modern Retail Podcast)
Tags: private equity, wholesale, target, working capital, distribution, dtc

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Tubby Todd, a direct-to-consumer baby skincare brand, secured private equity investment specifically to fund its transition into Target stores, according to co-founder Andrea Faulkner Williams on the Modern Retail Podcast. The brand needed external capital to cover the working capital gap that wholesale retail creates—namely, producing and shipping inventory months before receiving payment from the retailer.

The move represents a documented pattern in physical product brands: retail expansion requires cash up front, often more than a profitable DTC operation generates. Faulkner Williams explained that the PE partner enabled Tubby Todd to manufacture at the scale Target required and float the receivables period without starving the DTC channel. The brand now sits on Target shelves while maintaining its owned website, a dual-channel model that PE funding made feasible.

The mechanism is inventory financing dressed as growth capital. When a brand sells direct, it collects payment at checkout and ships from existing stock. When Target places a purchase order, the brand must produce finished goods, ship to distribution centers, wait for the product to sell through, then wait thirty to ninety days for payment. A DTC brand generating **$2 million** annually might need **$500,000** in working capital to support a single Target order cycle—cash most small brands do not have idle. Private equity provides that float in exchange for equity and, often, board influence.

Faulkner Williams noted trade-offs on the podcast. PE partners bring operational expertise and retail relationships, but founders cede control and must hit growth targets that satisfy the fund's return timeline. For Tubby Todd, the calculus favored expansion: the brand wanted national distribution, and the capital allowed them to say yes when Target called.

The steal for a smaller physical product brand starts with reverse-engineering the capital need before approaching any investor. Calculate the purchase order size, multiply by your landed cost per unit, add **20 percent** for buffer, and that is the cash you need in the bank before you ship. If you cannot self-fund that amount, you have three levers: invoice factoring, a line of credit, or equity. Invoice factoring costs **2 to 5 percent** of the receivable and requires no equity dilution. A bank line of credit costs less—often prime plus **2 percent**—but requires personal guarantees and a clean balance sheet. Equity is the most expensive over time but the only option that does not require repayment or personal liability.

If you take the equity path, pitch the investor with the signed purchase order in hand. Show the unit economics: your landed cost, the wholesale price, the retailer's sell-through velocity if available, and the cash conversion cycle. PE and growth equity firms evaluate physical product deals on inventory turn and payback period, not software metrics. A credible pitch includes a twelve-month cash flow forecast showing when you break even on the capital deployed.

The broader pattern is that wholesale distribution is a financing game as much as a marketing one. Brands that treat retail expansion as a visibility play often fail because they undercapitalize the inventory float. Tubby Todd's route—secure the capital before signing the retailer agreement—remains the disciplined sequence. The brand built for the cash demand, not the revenue headline.

## The takeaway

Retail expansion demands upfront capital for inventory and receivables; secure financing before signing the purchase order.

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## Publisher

**Hako Shikin LLC** — Virginia Beach, Virginia. Founded 1997. ASI 217876 · DUNS 18-204-6339.
Principal and author: **Jenny Huang Goodman MPA MSc MHSA**.

- Author: https://www.huanggoodman.com/about
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