STUDIO NOIR · Capital Stack
Where the money comes from at each phase.
“Capital stack” means the different sources of money layered together to fund a business. Phase 1 uses three, and none of them are debt to Taj or member money before the doors open.
Phase 1 capital stack
| Source | Amount | Type |
|---|---|---|
| Taj Hines cash | $85,000 | Founder equity |
| Landlord tenant improvement allowance | $30,000 to $80,000 | Landlord-funded buildout, amortized in rent |
| Equipment financing (poles, sound, lighting) | $10,000 to $15,000 | Equipment lease, 36 months |
| Total effective Phase 1 capital pool | $125,000 to $180,000 |
Base case for planning: $146,000 ($85K cash + $50K TI + $11K equipment lease).
No SBA loan. No merchant cash advance. No outside investors. No prepaid Founders’ dues.
What each lever actually is
1. Taj’s $85,000 cash
Straight founder equity. No repayment. She keeps ownership.
2. Landlord tenant improvement allowance (TI)
In plain English: the landlord pays for some of the buildout in exchange for a longer lease and slightly higher monthly rent.
If a 1,800 square foot space carries $28 per square foot in TI, that is $50,000 of buildout money the landlord funds directly. It shows up as roughly $1,000 more in monthly rent for a 5-year term (the landlord amortizes their spend at about 8% into rent). It does NOT show up as debt on Taj’s balance sheet and does NOT require a personal guarantee.
RDU second-generation retail and fitness space at North Hills, Fenton, Waverly Place, Village District, and Brightleaf typically carries $40 to $80 per square foot in TI for a stabilized wellness tenant (wellness is a preferred category post-2022). First-time boutique operators sit at the lower end of that range. Base case: $50,000 on a 1,800 sqft space.
What TI covers well: sprung floor + marley, mirror wall, HVAC upgrade, restroom refresh, paint, signage, base electrical, base lighting. Anything that stays attached to the building when the lease ends.
What TI does not cover: things that walk out the door with the tenant. That is where equipment financing picks up.
3. Equipment financing (specialty lender)
In plain English: a specialty lender owns the poles, sound gear, and lighting rigs, and STUDIO NOIR pays them roughly $400 per month for 36 months.
Leasable equipment (goes here): pole rigs and rigging hardware ($6K), sound system amp + speakers + subwoofer ($3.5K), lighting fixtures ($2K). Roughly $11K total.
Not leasable (stays cash or TI): floor systems, mirror walls, HVAC, plumbing, millwork built into walls, paint, signage. Anything that gets affixed to the building.
Personal guarantee reality check: most specialty equipment lessors DO ask for a personal guarantee on a new-business lease. The exposure is capped at the equipment value (roughly $11K here), not full recourse against Taj’s assets. Some lessors waive PG in exchange for a bigger deposit (10 to 15% down). This is a very different animal than an SBA loan PG that puts her whole balance sheet on the line.
Effective interest rate: roughly 10 to 12% APR on a 36-month term for equipment of this size. Roughly $360 to $400 per month.
The tradeoff (honest version)
TI and equipment financing are not free. They add to monthly costs.
| Metric | $85K cash only (old plan) | Two-lever stack ($85K + TI + equipment lease) |
|---|---|---|
| Effective Phase 1 build capital | $40,000 | $76,000 (base) to $106,000 (upper range) |
| Monthly rent | $4,000 | $5,000 (includes ~$1,000 TI amortization) |
| Monthly equipment lease | $0 | $400 |
| Monthly fixed opex | $7,500 | $8,900 |
| Monthly break-even members | 40 | 46 |
| Taj’s cash at risk if business fails | Up to $60,000 | Up to $40,000 (equipment returns to lessor, buildout stays with landlord) |
| Buildout quality at open | Compromised, forced tradeoffs | Full spec, Aman/Peninsula frame intact from day 1 |
| Lease term required | Any length | Typically 5 years minimum (landlords amortize TI over lease term) |
The six extra members to hit break-even is real. So is the $20,000 less cash at risk, and the fuller spec that makes the room actually deliver on the 5-star frame. So is the 5-year lease commitment, which limits flexibility if Phase 2 activates faster than planned.
Recommendation: two-lever stack. Full landlord TI ask, full equipment financing on the truly leasable line items.
When to walk away from TI: if the landlord tries to bake TI into rent at more than 10% amortization, or asks for a 7-year lease, or ties TI to personal guarantees on the lease itself. Robinson Bradshaw reviews the TI language before signing.
Why not a bank loan or SBA loan
- SBA 7(a) loans require a personal guarantee, 3 to 6 months of underwriting, and a demonstrated operating history STUDIO NOIR does not have Phase 1.
- Traditional bank commercial loans are worse: full personal guarantee, collateral pledge, and covenants that trigger default on missed member numbers.
- Merchant cash advances and quick-close loans are predatory (30 to 60% effective APR).
- Any of the above adds monthly debt service of roughly $6,000 to $10,000 exactly when member revenue is fragile.
- The $85,000 was chosen because it is what Taj can absorb losing without ruining her life. Adding real debt breaks that safety.
Why not Founders’ pre-sales
Off-brand for the luxury frame (“offered not sold”), puts sales work on Taj that violates the operator-shield rule, triggers NC’s Prepaid Membership Contract Act, and takes members’ money before there is a building to walk into. See [[feedback-no-prepaid-memberships]]. This lever is off the table permanently for Taj’s luxury service ventures.
Why no outside investors Phase 1
- Raising outside capital before the model is proven means giving up equity at the lowest possible valuation.
- Outside investors want more control and reporting than $85,000 supports.
- Taj retaining 100% of Phase 1 equity in OpCo puts her in the strongest possible position for Phase 2 fundraising against real numbers.
Phase 1 equity split
STUDIO NOIR OpCo LLC (the operating company that runs the boutique studio):
| Owner | Ownership % | Contribution |
|---|---|---|
| Taj Hines | 90% | $85,000 cash |
| Trill Walker | 10% | Strategic + brand + production capacity |
| Total | 100% |
TI and equipment leases do NOT dilute anyone. The landlord is not an equity partner (they get amortized rent). The equipment lessor is not an equity partner (they get monthly payments).
Alternative for discussion: Taj 100% Phase 1, Trill compensated through advisory fee. Recommendation stays at 90/10 because it aligns Trill’s long-term upside with Phase 2 and 3, and doesn’t require a monthly advisory fee draw from Phase 1 cash.
STUDIO NOIR IP LLC (holds trademarks, licenses to OpCo, positioned for franchise Phase 3):
| Owner | Ownership % |
|---|---|
| Taj Hines | 80% |
| Trill Walker | 20% |
| Total | 100% |
IP LLC gets a slightly higher Trill share because THE NOIR INVITATIONAL (which will drive IP LLC value in Phase 2 and 3) is TWG-produced and Trill’s leadership. Reflects future contribution.
Both splits are proposals for Trill + Taj to confirm.
Phase 2 capital stack (draft, rebuilt in 2028)
Total need: $3.5M to $5M for an RDU flagship (8K to 15K sqft, full amenities, broadcast floor).
Draft sources:
| Source | Amount range | Type |
|---|---|---|
| Phase 1 retained earnings, reinvested by Taj | $120K to $250K | Founder equity |
| Trill cash contribution (if any) | $0 to $500K | Founder equity |
| SBA 7(a) loan | $750K to $1.5M | Debt |
| Landlord TI allowance (flagship scale) | $500K to $1.2M | Landlord-funded buildout |
| Equipment financing (broadcast + recovery + fitness gear) | $150K to $300K | Equipment lease |
| HNW angel round (5 to 10 accredited investors) | $1.5M to $2.5M | Preferred equity or convertible note |
| Total Phase 2 target | $3.5M to $5M |
Phase 2 raise timeline: - Q3 2028: SBA lender conversations begin, financial package prepared - Q4 2028: HNW angel target list identified through Taj + Trill’s network - Q1 2029: Term sheets and commitment letters begin - Q2 2029: LOI on Phase 2 flagship property - Q3 2029: Capital fully committed, close on debt and equity - Q3 2029: Buildout kickoff
Phase 2 cap table (draft) maintains Taj’s majority ownership in OpCo. HNW angels take a small preferred equity stake with a 2 to 3x liquidation preference and modest dividend. SBA debt sits on top of equity, not diluting ownership.
Phase 3 capital stack (Franchise, 2032+)
Two paths.
Organic franchise growth
STUDIO NOIR IP LLC receives franchise fees ($40K to $75K per franchisee at signing) and royalty payments (6 to 8% of franchisee revenue). No additional capital raise required if we fund franchisor infrastructure (VP Franchise Development, Director of Brand Standards, FDD legal) from franchise fees plus flagship distributions.
Institutional franchise acceleration
If we want to accelerate to 20+ units in 5 years, we raise a Series A round ($5M to $15M) from private equity or family office capital specifically for franchisor buildout (marketing, training, systems, brand standards audits). Not required, but option preserved.
Full Phase 3 capital plan drafted in 2031, not 2026.
Rules for capital discipline
- Never dilute Taj below 60% OpCo ownership Phase 1 or Phase 2. Founder control matters for long-term brand integrity.
- Never sign a personal guarantee larger than what STUDIO NOIR can absorb from cash flow. Equipment lease PG of $11K is fine. SBA loan PG of $500K+ is not, until Phase 2 with real numbers underneath it.
- Never take capital that requires giving up creative director authority to Taj. No investor overrides brand or hospitality decisions.
- Never raise capital when we don’t need it. Raising when you don’t need to means bad terms. Raise when you have leverage.
- Never treat retained earnings as free money. Every dollar retained in the business is a dollar not distributed to Taj. Only reinvest when the return is clearly better than distributing.
- Never take member money before the doors open. No Founders’ pre-sales, no prepaid dues, no “reserve your spot” deposits.
What Phase 1 capital does NOT include
- A salary for Taj Phase 1. She draws distributions after 6 months, not salary. Distributions are pass-through equity income, taxed as ordinary income on her personal return but not subject to payroll tax overhead.
- A salary for Trill Phase 1. He is CSO, not a W-2 employee. Compensated through Phase 1 equity plus later TWG production fees on THE NOIR INVITATIONAL (Phase 2).
- A salary for Tia Phase 1. Compensated through cross-brand Marketing Director arrangement with Taj + Trill’s ventures.
- Any capital call. Once Taj puts in $85K, no more required. TI and equipment lease payments carry themselves through member revenue. If we need more capital, we cut scope or wait until member revenue supports it.