It appears that simply formatting your USB stick to be FAT32 isn't sufficient. The c64 mini also expects for there to be an MBR (Master Boot Record) within the first 512 bytes of your USB stick. If it's not there, it fails.

I'll provide some step-by-step walkthroughs below on how you'll accomplish this

There are a few ways you can do it, so I'll list them from easiest to hardest:

• Use a 3rd-party formatting tool - the EASIEST way, works for mac or windows
• Use 'Disk Utility' for Mac OSX - a bit fiddly, but manageable
• The painful Windows10 way - yep, I got it working this way, but was it worth all the effort??

…and for those curious to understand the details of the matter:

• What is an MBR
• difference between MBR (Master Boot Record) and GPT (GUID Partition Table)