Fun episode tonite. The Sharky Award for entrepreneurial excellence goes to a company that sells fun……
Justin, Brad, and Amy from Beatbox Beverages were on fire! They exuded energy and fun. Their product was similar to boxed wine but could best be described as “spirits in a box”. The box looked like a beatbox and the spirits came in a variety of flavors. They had sales of $235K in a little over a year.
All of the Sharks were interested in investing, but Mark Cuban gave them an offer they couldn’t refuse……$1 million for 33% of the business. This exceeded their original valuation and left the other Sharks gasping. I think Mark could rationalize a big offer based on the fact that he can sell the product at Mav’s games in Dallas and even in his movie theaters. Beatbox Beverages is also a Texas-based company which makes them conveniently located (to Mark) with has no state income tax.
Best of the Rest……Josh and Sara from Honeyfund run a website in the “crowd-gifting” category which allows people to give cash gifts to a bride and groom that can be used for their honeymoon. They have helped newly married couples “raise” over $67 million in the past year! Their company got to keep $987K of this amount thru a deal with PayPal.
They received three offers from the Sharks and ended up taking a deal with Mr. Wonderful that required them to pay hefty royalties. They will get $400K for zero equity but have to pay one-third of their profits to Shark Kevin until they have paid him $1.2 million. I would have loved to know what their thinking was and why they took this deal. I would have taken Robert Herjavec’s offer of $400K for 30% equity….he can help them grow the business and would be a better strategic fit…..and they could preserve cash during their planned hyper-growth phase.
Phil and Jason from EmergenSee had developed a mobile phone app that helps people maintain personal security when they’re on the go. They have a nice product and I love their name…..very clever. Unfortunately, neither of them had a technology background and they had to spend over $2 million to develop the product (so far). The Sharks were afraid this lack of technical expertise would prevent them from dealing with the fast changing world of technology in the future. No deal here.
Curt from Oilerie USA had franchised his olive oil business to seven locations in small markets. Although he had generated over $3 million in revenue last year, the Sharks questioned his ability to scale the business and move into larger markets. Curt admitted he had felt the stress of running a self-funded business. He will be happier and healthier staying in smaller markets and getting someone to help him run the business. Curt is a good guy and I wish him and his wife well.