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Shark Tank Season 11

Bekit

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Their fear is very appropriate. They haven't built a brand yet. So, the only thing they have that's proprietary is their recipe. If a company like Impossible Foods or Beyond Meat gets their recipe, they're done.

I'm sure Coke was secretive about their recipe early on as well. Now, that they have a strong brand it doesn't matter.



Your skepticism is baseless.
Cool, fair points.
 

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Real Deal Denver

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I always liked Shark Tank, however I have learned so much more from The Profit! I love Marcus. That said, they are complete different approaches. You get to see the investment part on ST and learn on their reasons to invest in something or pass, with TP you also get to see what he does to flip the business, and I love that they explain stuff like why he decides to eliminate certain products, why he invests in branding the business, and stuff like that.
I agree 110%! Marcus is a genius. And the show gets so much into the nitty-gritty - it's a required course in business!

I just read that the last Farrell's ice cream parlor just closed though! You might remember that episode. Marcus owns the brand and is sitting with it on the sidelines for now. Here is an article with the details; The last Farrell’s Ice Cream Parlour, in Brea, has shut down

But I study The Profit for what it is - which is the greatest resource to really learn about a business that I have ever seen!

Shark Tank is good too - but I can't believe the stupid products that are pitched there. It kind of kills brain cells watching the needless products they encounter. The worst one I've ever seen; little booties that go on the spikes of high heels so the high heels would not sink into a lawn. Idiots...
 

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This wasn't smart, they don't know what the terms NET and Gross mean and failed to grasp even the most basic questions they were being asked regarding their finances.
“Well we made $12000 in one day from a viral instagram post, so in a year we would make $4.4 million.”

That was so bad that none of the sharks made fun of it and caused Mark to not want to partner with them anymore.
 

Real Deal Denver

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“Well we made $12000 in one day from a viral instagram post, so in a year we would make $4.4 million.”

That was so bad that none of the sharks made fun of it and caused Mark to not want to partner with them anymore.
And the common trait of these business experts is not knowing what a reasonable income multiplier is to value their business. How can you ask for a million dollars and understand so little? At the very least you'd think they would watch a dozen or so episodes to get a feel for what to expect. But. Nope. Send in the clowns.
 

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I love the old episode where they were all laughing at and dismissing the squatty potty (except Barbara?). I was actually surprised at how unbelievably rude they were, in particular to the son.

That thing ended up doing an ungodly amount of sales if I remember correctly.
 

foodiepersecond

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I love the old episode where they were all laughing at and dismissing the squatty potty (except Barbara?). I was actually surprised at how unbelievably rude they were, in particular to the son.

That thing ended up doing an ungodly amount of sales if I remember correctly.
Same with the Copa wine. There are a few pitches that were mocked but turned out successful. Still can't believe the Scrub Daddy is the most successful item from the show.
 
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Rawseed

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But I study The Profit for what it is - which is the greatest resource to really learn about a business that I have ever seen!
Yeah. I'm looking forward to the next season of the Profit. Season premiere is on November 5th. Based on the commercials, Lemonis is investing in CocoTaps:


That guy was on Shark Tank. But, he didn't get a deal.

Shark Tank is good too - but I can't believe the stupid products that are pitched there. It kind of kills brain cells watching the needless products they encounter. The worst one I've ever seen; little booties that go on the spikes of high heels so the high heels would not sink into a lawn. Idiots...
I actually thought that SoleMates was a great idea. A lot of women did too because they have good sales. But, based on their Amazon reviews, it may not work as well as promised.


“Well we made $12000 in one day from a viral instagram post, so in a year we would make $4.4 million.”
And the common trait of these business experts is not knowing what a reasonable income multiplier is to value their business. How can you ask for a million dollars and understand so little? At the very least you'd think they would watch a dozen or so episodes to get a feel for what to expect. But. Nope. Send in the clowns.
Yeah. They were really ignorant in regards to business. I hope they've partnered with someone knowledgeable and trustworthy.

I love the old episode where they were all laughing at and dismissing the squatty potty (except Barbara?). I was actually surprised at how unbelievably rude they were, in particular to the son.
That thing ended up doing an ungodly amount of sales if I remember correctly.
I have two squatty potties at home. Great idea.

Same with the Copa wine. There are a few pitches that were mocked but turned out successful. Still can't believe the Scrub Daddy is the most successful item from the show.
That Copa Wine guy was on there twice. He was annoying.
 

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Business #4
  • Atlas Monroe
  • Offered $500K for 10% => $5M valuation
  • Product: Fried Chicken
  • Differentiator: Vegan. Made from organic non-GMO wheat. No soy. Taste better than real fried chicken
  • Entrepreneurs have an awesome product
  • Entrepreneurs have a great 'WHY' and story for their product
  • Have a large fast food chain interested in selling their product
  • They can't keep up with demand
  • Make the product for $2.67
  • Sell the product for $22.99
  • Great gross profit margins (~87%) on the six-piece chicken
  • Unfortunately, they didn't present the rest of their numbers well
  • Their total revenue in the past year is somewhere between $60K and $76K
  • They fear using a co-packer because they don't want to reveal their recipe
  • They didn't seem to be good operators
  • They didn't seem to know their numbers
  • Cuban offered them a contingency deal: $500K for 30% => $1.7M valuation
  • They should have taken that deal
  • The other Sharks bowed out
  • Cuban and Oza then offered them $1M for 100% of the business with a 10% royalty in perpetuity
  • They smartly declined that deal
  • They wanted Cuban's original deal, but he took it off the table
  • They left with no deal
  • Both Impossible Foods and Beyond Meat have multi-billion dollar valuations
  • If they hire a CEO or COO, they could really grow this business
  • They just need help from a seasoned, but honest business person
This deal made me see RED.

I’m not one to judge people, but wow. Both of the people in this couple looked vacant as hell. This would be the deal of a LIFETIME given the huge explosion of plant based proteins going on in the food industry right now.

I have ZERO confidence they’ll succeed with this company.

Watching them on TV, the lost expressions in their faces all I could think was “The lights are on but no ones home”
 

Scot

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Yeah. They were really ignorant in regards to business. I hope they've partnered with someone knowledgeable and trustworthy.
Like Rohan? This guy is a living God in my industry (Food and Beverage)

Anyone turning down a 10% royalty from a company he builds should be shot.

If I got that exact same offer, right now? I’d sell in a heartbeat.
 
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Rawseed

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Also, a 10% royalty from a company built by Rohan?

No one should turn that down.
I can admit when I'm wrong.

You're right. They should have taken the deal.

Oza could turn their product into a billion dollar brand. And Cuban being a new vegetarian would have also been a great and free spokesperson for the brand.

Their royalties would be completely passive.

My concern with taking the deal is losing control.

I've read about licensing horror stories where the license purchaser does nothing with the licensed product. 10% of nothing is nothing.

But, after a week of thinking about it, I think they Oza would definitely 10X any success they could do on their own.

So, a 10% royalty would equate to the best they could do on their own. And it would be completely passive.
 
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I just finished watching the first part of Shark Tank Season 11 Episode 3.

Business #1
  • Eternava
  • They asked for $600K for 5% => $12M valuation
  • They take the ashes or hair of dead loved ones and grow diamonds out of them
  • Interesting concept. An innovative way to eternalize a loved one
  • Average revenue per order is $8K
  • Average cost per order is $3K - $5K
  • So, ~50% gross margins. Not horrible
  • Their first year revenue was $913K
  • This year they're going to do $2.7M
  • The diamond creating process isn't proprietary
  • But, the grief changing journey process is proprietary
  • They're really focused on customer service, which is important because it takes 10 months to get the product
  • One of the founders had a great personal why for starting the company. Great story
  • Their pitch was going well until they mentioned that they had already raised $1.2M at a $10M valuation
  • That previous valuation really limited what they could and couldn't offer to the sharks
  • Cuban offered $600K for 15% => $4M
  • Herjavec offered $600 for 10% => $6M
  • O'Leary offered $600 for 12% => $5M
  • They countered for a Cuban/Herjavec team-up $1M for 10% => $10M
  • Cuban/Herjavec rejected it
  • They countered for a Cuban/Herjavec team-up $1M for 12% (including 2% advisory shares) => $8.3M
  • Cuban/Herjavec rejected it
  • They countered to Cuban $600K for 7.5% => $8M
  • Cuban countered $600K for 9% => $6.66M
  • They accepted it
  • Cuban got it at 2.5X this year's revenue
  • Not a bad deal for him
  • Though they never mentioned their customer acquisition costs or if they were profitable
  • I can't see myself spending $8K for a keepsake for a dead person
  • But, their sales prove that many people are more sentimental than me
  • Cuban had some great ideas for product extensions including dead pets and newborn children
 

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“Well we made $12000 in one day from a viral instagram post, so in a year we would make $4.4 million.”

That was so bad that none of the sharks made fun of it and caused Mark to not want to partner with them anymore.
This. I was shocked no one said anything about this on the show. Or maybe they edited it out because the sharks flew off the handle or something at this ridiculous statement from those idiots
 

foodiepersecond

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Like Rohan? This guy is a living God in my industry (Food and Beverage)

Anyone turning down a 10% royalty from a company he builds should be shot.

If I got that exact same offer, right now? I’d sell in a heartbeat.
What's that saying? I'd rather get 30% of $10 rather than 100% of $1. I really do question most people who are equity hungry but they don't see the greater result at the end if a Shark can catapult their product and possibly do most of the work for them.
 

MattR82

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I've read about licensing horror stories where the license purchaser does nothing with the licensed product. 10% of nothing is nothing.
That's a pretty standard part of licensing contracts now though. If they sit on it, it reverts, as well as minimums etc.
 
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Rawseed

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If I could find somebody to do my work, I'd have more time to catch up on Shark Tank.

Season 11 Episode #3 Business #2
  • Baobab
  • Offered $150K for 10% => $1.5M valuation
  • Their product is billed as the perfect polo shirt.
  • It's wrinkle-resistant, stain-resistant, shrink-resistant, fade-resistant, odor-resistant, and anti-microbial.
  • They make the shirt resistant through a proprietary treatment that they call Baotech.
  • It also prevents bacon-collar using collar stays.
  • It also has a zipper and a hidden micro-fiber cloth.
  • Great product and a great pitch.
  • But, their sales were non-existent.
  • $85K in total revenue, which included $32K raise on Indiegogo.
  • The polos cost $98.
  • They never mentioned the cost of goods.
  • Their acquisition costs were $38.
  • They billed themselves as expert digital marketers using Facebook and IG ads.
  • They didn't get a deal.
  • The sharks criticized their 18 times lifetime sales valuation.
  • They also criticized their difficult to say brand name.
  • They were also concerned that the product wasn't differentiated enough.
  • I agree that the valuation was crazy, but the product looked great.
  • I just bought two of their polos for myself.
Business #3
  • Aira
  • They offered 500K for 7% => $7.14M valuation.
  • Their product was a wireless charger based on Nikola Tesla's Tesla Coil technology.
  • Unlike most wireless chargers, their charger works with many different devices and in many different orientations.
  • One of the founders was a world expert in Tesla Coils.
  • They recently began production of their charger.
  • They were planning to license their wireless chargers to other companies.
  • They had one purchase order for 33K units which equates to somewhere between $130K to $330K in revenue.
  • They didn't mention any patents or any intellectual property.
  • Then Cuban mentioned that he had already invested in a company with better wireless tech than theirs.
  • Despite all of this, the sharks still made offers.
  • Herjavec offered $500K for 10% => $5M
  • O'Leary and Greiner offered venture debt of a $500K loan at 9% with a 15% equity kicker
  • Then they switched the venture debt deal to a pure equity deal.
  • The two entrepreneurs countered with $500K for 15% to Greiner, O'Leary, and Herjavec.
  • The three sharks agreed.
  • I don't understand how they gave a $3.3M valuation to an unproven company with an unproven product.
  • Seemed less like a Shark Tank deal and more like a Silicon Valley VC deal.
 

foodiepersecond

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If I could find somebody to do my work, I'd have more time to catch up on Shark Tank.

Season 11 Episode #3 Business #2
  • Baobab
  • They also criticized their difficult to say brand name.
Listening to the How I Built This of Chipotle, its amazing to think people didn't even know how to pronounce that when it first came out. I don't see that as an issue but its kinda the Shark Tank thing to make some bullshit excuse to be out. I loved this product. For those that didn't watch, they literally poured wine and ketchup on the shirt and it repelled beautifully. It kinda sucked seeing them not get a deal but I hope they can pull through and maybe get the price down a bit or find their niche market.
 
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Rawseed

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Season 11 Episode #3 Business #4
  • Squid Socks
  • Offered $125K for 20% => $625K
  • Good and simple presentation with a great product/invention.
  • They add suction cups to the inside of kids' socks to keep the kids' from taking them off.
  • This essentially eliminates lost socks and sock-less kids.
  • They have a utility patent on the product.
  • They had been in operation for 18 months, but had minimal sales because they had production and quality issues with their manufacturing.
  • Revenue: $40K
  • Retail ($24) => Wholesale ($12) => Production ($6)
  • Good gross margins at 75%
  • O'Leary thought it was a great product, but bowed out because he thought that it would be too hard to educate the customer.
  • O'Leary also thought that it would be too hard to get distribution.
  • Cuban and Grenier both thought it was a great product, but bowed out because it wasn't the right investment for them.
  • Herjavec offered $125K for 40% => $312.5K
  • John offered $125K for 33% => $375K
  • Herjavec then offered $250K for 40% => $625K
  • Herjavec then added a second option of $125K for 30% => $417K
  • John stayed firm.
  • The entrepreneurs went with John.
  • Smart decision.
  • John is a fashion icon with distribution where they need it. He's also a licensing expert.
  • John is also an investor in BomBas, a hugely successful sock company.
  • John ended up paying 9.4 times revenue for a kid's sock company.
  • But, it seems like he was paying for the intellectual property.
  • What's interesting is that he bought 17% of BomBas for $200K => $1.18M valuation.
  • At the time Bombas had over $400,000 in revenue. That's 10 times as much revenue as Squid Socks.
  • Now Bombas is the best selling product in Shark Tank history. Recently passing Scrub Daddy.
  • It just goes to show that their valuations have little predictive value.
 
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I'm finally getting around to this week's episode.

Business 1
  • Knife Aid
  • Offered $400K for 15% => $2.7M valuation
  • A knife sharpening business
  • You mail your knives, scissors, or blades to them. They sharpen them. Then they mail them back
  • A very demonstrable benefit
  • Entrepreneurs are from Sweden
  • One of the entrepreneurs is one of the two founders of Happy Socks. He was also the former CEO prior to the company being acquired
  • The entrepreneurs got the idea from a Swedish company that sharpens the knives of commercial businesses in Sweden
  • Their sales numbers are hard to grasp because we don't know when the show was filmed
  • But, as of the shooting of the show, they had grossed $120K in 2019
  • In the month prior to the shooting of the show, they grossed $37K
  • Extrapolating $37K a month => $444K annual revenue
  • They never discussed operation costs or acquisition costs
  • They marketed with PPC ads, Facebook, Instagram, Google, etc...
  • Greiner opened the bid with a $200K loan and $200K cash for 20% equity
  • O'Leary offered $400K cash for 20% equity => $2M
  • Greiner and Oza combined to offer $400K cash for 20% equity => $2M
  • O'Leary and Corcoran combined to offer $500K for 20% equity => $2.5M
  • The sharks were fighting over the deal
  • Even Cuban commented how they were groveling
  • The entrepreneurs stepped into the hall to discuss the options, which is typically a horrible idea
  • But, the four sharks followed them into the hall to convince them
  • Greiner and Oza eventually got them to agree to $500K for 20% => $2.5M
  • The was a great deal for the entrepreneurs
  • They came in with a $2.7M valuation and let with a $2.5M valuation
  • Best case scenario is a 6X of revenue
  • I have no idea what the gross or net margins are
  • They have no track record with this business
  • They have no intellectual property
  • It's not a known brand
  • This business can be easily duplicated
  • My only guess is that the sharks offered this value because of the founder's previous success with Happy Socks or there was some other valuable info that was edited out
  • It was very weird. I've never seen O'Leary do anything like this
 

MitchM

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I'm finally getting around to this week's episode.

Business 1
  • Knife Aid
  • Offered $400K for 15% => $2.7M valuation
  • A knife sharpening business
  • You mail your knives, scissors, or blades to them. They sharpen them. Then they mail them back
  • A very demonstrable benefit
  • Entrepreneurs are from Sweden
  • One of the entrepreneurs is one of the two founders of Happy Socks. He was also the former CEO prior to the company being acquired
  • The entrepreneurs got the idea from a Swedish company that sharpens the knives of commercial businesses in Sweden
  • Their sales numbers are hard to grasp because we don't know when the show was filmed
  • But, as of the shooting of the show, they had grossed $120K in 2019
  • In the month prior to the shooting of the show, they grossed $37K
  • Extrapolating $37K a month => $444K annual revenue
  • They never discussed operation costs or acquisition costs
  • They marketed with PPC ads, Facebook, Instagram, Google, etc...
  • Greiner opened the bid with a $200K loan and $200K cash for 20% equity
  • O'Leary offered $400K cash for 20% equity => $2M
  • Greiner and Oza combined to offer $400K cash for 20% equity => $2M
  • O'Leary and Corcoran combined to offer $500K for 20% equity => $2.5M
  • The sharks were fighting over the deal
  • Even Cuban commented how they were groveling
  • The entrepreneurs stepped into the hall to discuss the options, which is typically a horrible idea
  • But, the four sharks followed them into the hall to convince them
  • Greiner and Oza eventually got them to agree to $500K for 20% => $2.5M
  • The was a great deal for the entrepreneurs
  • They came in with a $2.7M valuation and let with a $2.5M valuation
  • Best case scenario is a 6X of revenue
  • I have no idea what the gross or net margins are
  • They have no track record with this business
  • They have no intellectual property
  • It's not a known brand
  • This business can be easily duplicated
  • My only guess is that the sharks offered this value because of the founder's previous success with Happy Socks or there was some other valuable info that was edited out
  • It was very weird. I've never seen O'Leary do anything like this
I thought it was weird too but I think they saw huge potential with the service being sold through established retailers.

It’s a speed to market risk and it definitely has a huge potential if successful. To me, it seems that they simply saw a huge opportunity and were willing to part with their money if it didn’t work out.
 

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I can admit when I'm wrong.

You're right. They should have taken the deal.

Oza could turn their product into a billion dollar brand. And Cuban being a new vegetarian would have also been a great and free spokesperson for the brand.

Their royalties would be completely passive.

My concern with taking the deal is losing control.

I've read about licensing horror stories where the license purchaser does nothing with the licensed product. 10% of nothing is nothing.

But, after a week of thinking about it, I think they Oza would definitely 10X any success they could do on their own.

So, a 10% royalty would equate to the best they could do on their own. And it would be completely passive.
Yeah when I first watched that is seemed like a no brainer. Especially because they made it obvious that they didn't understand the economics of running a business.

$1,000,000 plus 10% royalty from a company run by Oza & Cuban? That's an incredible offer for a company that was so young. I would of taken it and ran my a$$ all the way to the Fastlane.
 
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It’s a speed to market risk and it definitely has a huge potential if successful. To me, it seems that they simply saw a huge opportunity and were willing to part with their money if it didn’t work out.
That's where I'm confused. I don't see the huge opportunity.

Knife Aid's cheapest package is $50 for 4 knives. One-time sharpening.

You can buy a knife sharpener on Amazon for $6. Multiple uses.

$1,000,000 plus 10% royalty from a company run by Oza & Cuban? That's an incredible offer for a company that was so young. I would of taken it and ran my a$$ all the way to the Fastlane.
Agreed.
 

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That's where I'm confused. I don't see the huge opportunity.

Knife Aid's cheapest package is $50 for 4 knives. One-time sharpening.

You can buy a knife sharpener on Amazon for $6. Multiple uses.



Agreed.
True, but people can also clean their own homes - that’s a billion dollar industry.

People can wash their cars. Huge industry.

People can do their nails, cook their own food, clean their windows, etc...

Many people just can’t be bothered to go the DIY route for many things.

Even if sharpening a knife is easy, many people probably don’t realize it or would rather a“professional” (I don’t know how much skill it takes honestly) take care of it for them.
 
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True, but people can also clean their own homes - that’s a billion dollar industry.

People can wash their cars. Huge industry.

People can do their nails, cook their own food, clean their windows, etc...

Many people just can’t be bothered to go the DIY route for many things.
Great points.
 
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Finally finished watching Episode 4.

I need to type this up before I let myself watch Episode 5.

Episode 4 Business 2
  • Bug Bite Thing
  • Offered $100K for 10% => $1.5M valuation
  • Product is an insect irritant sucker that sucks out insect venom
  • The two entrepreneurs presented well
  • They purchased the US rights to the product from it's Denmark producer
  • Each unit sells for $9.95
  • Each unit cost $2.00 => 80% gross margins
  • Revenue in 2018 was $500K
  • On pace for $2M in revenue for 2019
  • Oza offered $150K for 10% => $1.5M valuation
  • Corcoran offered $200K for 10% => $2M valuation
  • O'Leary offered $150K for 6% => $2.5M valuation. He also wanted a $1 per unit royalty
  • Greiner offered $150K for 10% => $1.5M valuation
  • Cuban and Corcoran were about to join forces, but didn't get their offer out
  • O'Leary and Oza were about to join forces, but didn't get their offer out either
  • They really wanted Greiner so they took her offer despite it being the lowest and despite only getting one shark
  • Greiner got a value of 0.75X this years revenue
  • Great deal for her
  • She'll probably sell a million of these things on QVC
  • So, I guess it's a great deal for the entrepreneurs as well
  • But, I think they should have at least asked for a valuation of 1X revenue
Business #3
  • Plop Star
  • Offered $150K for 10%
  • Great product name and great entrance
  • Product: Discrete and portable individually wrapped tablet that decreases the stench of bowel movement odors
  • A better, more portable, and more discrete version of Poo Pourri
  • Side note: I personally think Poo Pourri is on of the greatest inventions in my lifetime
  • Only $12K in revenue lifetime
  • Oza suggested the entrepreneur target B2B
  • Corcoran wasn't convinced there was demand for the product
  • O'Leary thought it was a horrible idea
  • Greiner thought that there was too much competition. She failed to mention or they edited out the fact that her company Squatty Potty has a competing product
  • Toilet Spray 2oz
  • She seems ethical, but I wouldn't be surprised to see Squatty Potty come out with a one use product
  • Prop Star didn't get a deal
Deal #4
  • Snacklins
  • Offered $250K for 2.5% => $10M valuation
  • Product: Vegan "pork" rinds with very few ingredients. Only 80 calories a bag
  • They have a unique process for creating he "vegan rinds"
  • They do their own production
  • Sharks seemed to like the taste
  • Revenue in 2018: $200K
  • Revenue in 2019: On pace for $2M
  • 30% gross margins
  • 1 year away from being profitable
  • Enough cash on hand to last for 10 months
  • So, they need the $250K to get them through the last two months
  • The entrepreneur only owned 30% of the company and had previously raised $1.5M
  • Corcoran bowed out because retail food products require too much capital
  • Greiner and Oza both thought the valuation was too high
  • Oza also though it was a bad idea that they do their own production
  • Corcoran and Cuban both thought that doing their own production was a good idea
  • Cuban didn't think 2.5% equity was worth his time even if they gave it to him for free
  • The entrepreneur offered 5%. Cuban rejected it
  • Cuban offered $250K for 10% => $2.5M. 10% included 5% advisor shares that would vest over three years
  • He accepted the deal
  • Cuban got the company at a 1.5X revenue valuation
  • The company should be profitable in a year
  • Cuban has had great success with Alyssa's Cookies: Alyssa's Cookies & Healthy Oatmeal Bites
  • If he can replicate that with Snacklins, it will be a win-win
Awesome! Now, I get to watch Episode 5.
 

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