Shark Tank episode aired March 10, 2017

The episode originally aired on November 11, 2016 was re-broadcast on March 10, 2017.

Click  Shark Tank episode aired November 11, 2016 to read my analysis. (It was rated A+).

Posted in Uncategorized | Leave a comment

Shark Tank episode aired March 3, 2017

For me, the highlight of this episode was the Update segment about Robert Herjavec’s journey from Croatia (formerly Yugoslavia) to Canada. He came to North America on a ship with his parents when he was a young child. He later got into the computer industry and has become a very successful entrepreneur.

As Robert pointed out, “Entrepreneurship is the great equalizer. Business doesn’t care about your sex, race, religion, or where you came from. Business only cares about the value you add”. Well said!

The most impressive entrepreneur/contestant on this episode was Tara from The Sleep Styler. Shark Lori absolutely loved her hair styling product which can be worn to bed to minimize hair prep time in the morning. Lori made a preemptive offer and made it clear she wanted a fast response. Tara negotiated a bit (just the right amount) and ended up getting $75K for 25% of her business.

Shark Tank

Tara’s time management skills are amazing. She’s a practicing ophthalmologist, a mom, a wife, and she started her new business about a year ago. I forgot to mention that with all of this  going on, she somehow found the time to go to hair styling school. She will really be able to use Lori’s help and QVC connections to get her business to the next level.

Next up was Billy from Blendtique Wine Company. He has created a wine kit which allows people to make  customized wine formulations. Shark Barbara and Mr Wonderful had a contest to see who could make the better tasting wine. It was a fun experience, but it seemed like all the Sharks were getting buzzed (except wine expert Mr. W of course!).

In fact, he pointed out that 97% of all wines sold in the US are less than $13 per bottle. Billy was attempting to sell his wine at over $40 a bottle and this has limited his sales to about $100K per year. Shark Lori ended up agreeing to loan him $250K at 8% interest for a 10% equity stake with the hope that he could significantly cost reduce his product and increase sales.

Mark from MealEnders created a chocolate candy that contained ingredients that helps you curb your appetite and lose weight. He didn’t get a deal because his re-order rate was too low (21%), he couldn’t offer quantitative scientific proof that his product actually works, and the Sharks didn’t like the after-taste of the candy.

Aric and Alec from Rareform make backpacks, bags, and wallets from the vinyl used in old billboard advertisements. The Sharks liked the fact that this material was free and that they were keeping it out of landfills, but they aren’t able to make the same bag twice. This eliminates any hope of getting re-orders and puts them in the custom bag business.The business is not profitable and  they had previously sold off lots of equity in order to stay afloat.

Aric and Alec admitted they need the cash and ended up making a deal with Mr. W that was a $300K loan for 10% equity. I’d be surprised if this makes it thru due diligence.

                                 OVERALL RATING OF THIS EPISODE………C+

Posted in barbara corcoran, business startup, Entrepreneur, Kevin O'Leary, Lori Greiner, Mark Cuban, Mr. Wonderful, Robert Herjavec, Shark Tank, Sharky Award, start-up, Uncategorized | Tagged , , , , , , , , , | Leave a comment

Shark Tank episode aired February 24, 2017

This episode featured four millennials with great businesses. I never realized that many millennials have a social cause that they feel passionately about, and in many cases, donate up to 10% of their profits on an annual basis.

(Note….I hope it’s 10% of their after tax profits and not 10% of their revenue. For example, if a young business has $500K in annual sales with $50K in profits, 10% of the top line is $50K, and 10% of the bottom line is only $5K……big difference! Donating 10% of sales is probably not sustainable in the long run.)

I’m giving two Sharky Awards for entrepreneurial excellence this week. The first recipient is Bruno, Brandon, and Steven from Sand Cloud. They have developed a line of very creative beach blankets and towels. With a cost of $10 and an average price of $47, they have nearly 80% margins. They have demonstrated nice growth too.Their sales history……$30K two years ago, $430K one year ago, and $1.6 million in Year-to-Date sales with a forecast of $3 million for the full year. These sales were mostly generated by advertisements on Facebook.

Sharky Award

Sharky Award-Sand Cloud

The Sharks liked what they heard, and a bidding process ensued with Shark Robert getting the deal with a $200K investment for 15% equity. Robert said they reminded him of another company in his portfolio, Tipsy Elves who make “ugly Christmas sweaters”.

It’s interesting to note that when Sand Cloud started their business, the first beach towel they designed was not well received by potential customers. They then walked up and down the beach to ask real live beach-goers what they wanted in a beach towel. This “Focus Group” led them to start over with an entirely different product line. Customer feedback is a good thing.

The second Sharky Award goes to Nathan and Jim from Elephant Pants. These two young men from Brooklyn put on quite a show. After walking into the tank with an elephant wearing pants, they confessed that it wasn’t a good representation of their company. They then ran behind a wall and changed into very baggy, colorful pants and tops and danced to “You Can’t Touch This” by M.C. Hammer. The Sharks were hysterical.

Sharky Award

Sharky Award- Elephant Pants

But don’t be confused by the showmanship. These guys are the real deal. They have sold over $7 million of their products in just two years! Their unit cost averages $6 with a selling price of $24…..great margins. They sell only online and advertise on Facebook and Instagram.

Another bidding war broke out and Shark Daymond got the deal by investing $500K for 17.5% equity (2.5% of that will be Advisory Shares which vest over time).  Daymond had to admit when they danced to Hammer, they had him. Daymond and the guys danced one more time to celebrate their deal.

Best of the Rest……..Abby from DARTdrones runs a national drone training business that has had sales of $520K in 18 months of operation. She got a $300K investment for 10% equity from Mark Cuban to help build additional curriculum. This will be needed as Abby’s business is now focused more on commercial customers rather than private customers.

Abby graduated from Babson College outside of Boston. They are well-known for their focus on entrepreneurship.

Will and Ron from Ora did a nice job presenting their nutritional supplements that are made from “real foods” rather than chemicals. They have had sales of $415K in their first 10 months. They had received $150K in the form of a convertible note at a $2.2 million valuation, but were asking the Sharks to invest at a $7 million company valuation. As you might expect, this did not go over well with the Sharks and there was no deal made.

PS….This episode brought the Sharks total investments to over $100 million since Shark Tank  started eight years ago.

                      OVERALL RATING OF THIS EPISODE………..A

 

 

Posted in business startup, Daymond John, Entrepreneur, Kevin O'Leary, Lori Greiner, Mark Cuban, Mr. Wonderful, Robert Herjavec, Shark Tank, Sharky Award, Tim McEneny | Tagged , , , , , , , | Leave a comment

Shark Tank episode aired February 17, 2017

This was the best Shark Tank episode so far in Season 8. It featured four technology-based companies with great potential.  There was a lot to absorb and several big lessons learned.

Chris Sacca re-joined the Sharks, which was only appropriate considering he has been a big investor in many successful technology companies such as Instagram, Uber, and Twitter. Chris’s net worth is reported to be over $1 billion.

First into the tank was Guari from Toymail. Her plush toys allow young children to send and receive voice mails to and from family members . She gave a flawless presentation, answered all of the Sharks’ questions with ease, and remained very calm thru a solid negotiation. She is the winner of this week’s Sharky Award given for entrepreneurial excellence.

Sharky Award

Sharky Award-Toymail

Guari gained instant credibility with the Sharks when she talked about the first product she created when attending MIT graduate school. She had sold $10 million of them out of her dorm room! Investors love successful serial entrepreneurs and she was no exception. She also impressed the Sharks when she said her early investors included Verizon and Amazon. Once again, investors are impressed when seed and early stage investments come from big-name sources.

Guari can add two more big names to her list of investors…..Lori Greiner and Chris Sacca teamed up to invest $600K for a 5% stake in Toymail. They will make a great team!

Ryan from EDN Wallgarden has created software to help grow house plants with minimal human intervention. He sold the wall “flower boxes” for $499….a price way too high for the masses. The consensus was that the product had to be cost and price reduced by at least 50% to gain traction in the marketplace.

Ryan had two offers on the table but lost them both when he took too long to make a decision. Mr. Wonderful increased his equity requirements from 15% to 25% for a $150K investment and Ryan declined the offer. He later said he would have taken Kevin’s original offer of 15% if he would have been willing to put it back on the table….of course Mr. W. refused.

Brian and Yannis from Hotels by Day have a great concept…..renting hotel rooms during the day in 6 hour blocks at an average price of $90. This would increase room utilization at hotels and provide a place for business travelers to freshen up, rest up, etc. prior to meetings. Brian and Yannis receive a 14% commission with every booking. With only 6500 bookings, this wasn’t  generating enough revenue to get the Sharks excited.

The Sharks also thought the big hotel chains could start offering a similar product if the idea proved profitable. Brian and Yannis couldn’t effectively articulate how their technology worked and what made it so unique that the big boys couldn’t do the same. No deal here.

 Scott and Aidan from Bitsbox had a product that helps teach kids ages 6 to 14 how to write computer code. They gave a very entertaining presentation and this is a very important cause. According to Mr. Wonderful, the United States graduates only 50,000 engineers per year while China graduates 260,000 per year.

I’ve got to give a shoutout to 10 year old Grace, who uses the Bitsbox product. She came into the tank to help demonstrate how it works. She was so impressive, Chris Sacca said he wanted to hire her. She was a great spokesperson for Bitsbox, although she admitted she had done a little C++  coding prior to ordering the product!

Chris was very interested in Bitsbox, but the deal fell apart when Scott and Aiden quibbled over 1/4% of a percent of equity (they wanted to give 4.75% vs.the 5% offered). This turned Chris off and he took his offer off the table. No deal.

                               OVERALL RATING OF THIS EPISODE………………..A+

Posted in Kevin O'Leary, Lori Greiner, Mark Cuban, Robert Herjavec, Shark Tank, Sharky Award, Tim McEneny | Tagged , , , , , , , , | Leave a comment

Shark Tank episode aired February 10, 2017

My favorite Shark Tank episodes are the ones that are “theme-based”. This episode featured America’s (Unsung) Heroes. It included a nurse, a veteran, and a Peace Corp volunteer. But my favorite was a firefighter and his wife who made bags from firefighter’s old “Turnout Coats and Pants”.

Niki and Matt from FFTOB were so impressive, I am awarding them a Sharky Award for entrepreneurial excellence.

Sharky Award winner

Niki and Matt from FFTOB

They have formed a company that has very low material costs (old Turnout Coats from Fire Departments), that has very low marketing costs (extensive use of social media), that has excellent profit margins (over 50%), that leverages Niki’s love of sewing (she’s been sewing since she was 13), that recycles coats that would have gone into landfills, and that gives a share of their profits to charity. WOW!

During the presentation, Niki made a couple of profound statements. When asked about a decision made some time ago, she responded, “I didn’t know what I didn’t know back then”. Being an entrepreneur requires constant (daily) learning, and it’s critical to know what you don’t know, so you can get help in those areas and avoid making big mistakes.

The other statement is that “Banks only lend money to people that don’t need it”. So true! It’s important to build a track record with banks. Start by borrowing a small amount and paying it back early to build a relationship with a banker. They only like sure things!

Niki and Matt were faced with a tough decision. Shark Lori offered them $250K for 50% equity and Shark Robert offered to buy the whole company for $500K. At this point, selling the whole company would be like selling your first born. There’s too much emotional attachment and too much growth potential to cash out now. Lori will be a great partner.

My only criticism of FFTOB is the company name is too hard to remember…..I would have preferred something like Firefighters’ Turnout Bags. Also, the company will be a challenge to scale because of the high labor content required to make the bags.

Sharky Award

Sharky Award-FFTOB

A close second for the Sharky Award was Melissa from Tranquilo. This pediatric nurse has created a patented vibrating mat that comforts babies. Melissa has sold $65K of them in 7 months of operation. She had invested $198K of her own money (inheritance from her Grandfather) and sold her house to fund Tranquilo. She’s all in!

She got a very nice deal from Shark Robert (who has been very quiet recently) that called for a $250K investment for 15% of the company. Nicely done.

Shark Robert made another deal (he’s on fire!) with veterans Rene and Dale of Doc Spartan. They have created healing ointment that can be used as a first aid product. It is made in America (Portsmouth, Ohio) and although they have limited sales history, Robert invested $75K.

Evan from Peaceful Fruits is a former Peace Corp Volunteer. In his travels, he came across a fruit called Acai which is a great anti-oxidant. This has become the prime ingredient in his line of his organic snacks.

Even though Mark Cuban believes ” Social Enterprise is the future of capitalism”, Evan did not get an investment from the Sharks because the risk-reward profile was not compelling. Evan did a great job presenting his products!

                          OVERALL RATING OF THIS EPISODE………….A

 

 

 

Posted in Lori Greiner, Mark Cuban, patents, Robert Herjavec, Shark Tank, Sharky Award, start-up, Tim McEneny | Tagged , , , , , , , , | Leave a comment

Shark Tank episode aired February 3, 2017

Highly entertaining Shark Tank episode this week! Highlights included a guy nicknamed “The White Rhino” who dead-lifted 600 pounds, and Mr. Wonderful who baby sat a contestant’s kid while she made her pitch.

As far as entrepreneurial “lessons learned”,  there were some very creative deals reached. I’ve always said, when it comes to financing, you’re only limited by your imagination (and risk tolerance).

First into the Tank was the aforementioned Stan “The White Rhino” from The Kooler. After his 200 pound one-hand dumbbell press got the Shark’s attention, Stan showed off his “cooler within a cooler”. Since the addressable market is small (mostly bodybuilders), and Stan has to get involved personally with every sale, there wasn’t much interest from the Sharks. Stan ended up getting a small deal with Shark Daymond for $50K for 33% equity in his company.

Elizabeth from Little Nomad made attractive play mats for kids. Because of her high price point (over $100 for six), the Sharks thought there was a limited market for her product. Despite booking $114K in orders in her first three months, Elizabeth had not shipped a single product to customers. She was way too early for an investment from the Sharks. At least Mr. Wonderful made a few bucks babysitting her kid.

Chris and Eric from RinseKit generated lots of interest in their Pressurized Portable Shower product. It’s ideal for cleaning off things (and people) when no conventional shower is available. Sales are projected to be $2.1 million this year and $5 million next year. If it wasn’t for their debt level coming into the tank ($550K) and their lackluster presentation, I would have given them a Sharky Award, but they did get the Best Deal of the Episode when Daymond offered $250K for 7 1/2% equity plus his own sales commissions on everything he sells. Full disclosure…..Shark Lori had offered a similar hybrid deal and Daymond “stole” her deal structure and got the deal.

This deal was brilliant! Chris and Eric came into the tank asking for $250K for 5% equity and they didn’t want to take on additional debt. Now 5% equity isn’t enough to get any Shark excited, but add in a commission of 5-10%, and the $250K can get paid back quickly and still leave Daymond with a nice equity stake with increasing value. This was a true win-win.

Richard from DBest Products was a real hustler. He claimed his Smart Carts would sell $7-8 million next year. He had been in business 15 years and he had created a number of clever products that took advantage of California’s law that forbids stores to use plastic bags. Shark Robert bowed out early when Richard’s frenetic presentation pace got to him. “I can’t follow the bouncing ball”, quipped Robert.

Mark Cuban and Lori Greiner made a deal with Richard for $350K for 20% equity and a $2 million line of credit. If this deal ever gets done, it will give Richard the funding he needs to finance his growth and fill big orders, while giving Mark and Lori enough equity to keep them interested.

In the Update segment, Tom + Chee was featured. This company has grown from $1.5 million in sales and two locations to 31 locations and $47 million in sales! They won my Season 4 Sharky Award for Best Presentation of the year (2013). The night of their original appearance on Shark Tank I wrote, “These two are on their way to fame and fortune”. I’m sure Shark Barbara is thrilled with her investment in Tom + Chee. Congrats!

                       OVERALL RATING OF THIS EPISODE…………………A- 

Posted in barbara corcoran, Daymond John, Kevin O'Leary, Lori Greiner, Mark Cuban, Mr. Wonderful, Robert Herjavec, Shark Tank, Sharky Award, start-up, Tim McEneny | Tagged , , , , , , , , , | Leave a comment

Shark Tank episode aired January 27, 2017

There were four very good presentations this week. All contestants had sub-million dollar (sales) companies, but had lots of growth potential……and that’s what investors like.

Rose and Laura from Chirps were classmates at Harvard. They were motivated to create a high protein snack that consumed minimal water to manufacture. They created Chirps chips which are gluten free and contain crickets as one of their main ingredients (70 crickets per bag)! Rose and Laura gave a very polished and professional pitch  (they had won over $200K in various pitch contests prior to the show). They ended up getting a deal with Mark Cuban for $100K for 15% equity.

Jackson from Vibes created clear ear plugs that can’t be seen once inserted in the ear. This patent pending product filters sound waves in such a way that you hear the music’s true sound, but at a lower volume. To prove his point, he had the Sharks insert the ear plugs and had a Brass Marching Band come on stage playing music at over 100 decibels. The Sharks agreed the product worked, but thought there is currently too much competition, and not a large enough potential market to interest a potential investor. No deal.

Bryan and Amelia from Popup Play had built software that allows kids to design and  build “play scenery” and custom toys online. They charged $99 plus $10 for shipping. The Sharks thought this was a bit high and may have been responsible for slow consumer sales. In fact, Bryan and Amelia had annual sales of $330K, but $300K of that came from one large customer. It’s a red flag to investors when a large percentage of sales come from one customer. They would rather see 100 customers generate $500K in sales than one customer generating $500K in sales. In the event one customer leaves, having more customers ensures lower risk for both the entrepreneur and the investor.  Despite the risk of having over 90% of sales coming from one customer, Shark Chris Sacca made an offer of $250K with the same terms as their previous investors. The upside is that this technology can be used for other, entirely different purposes (architecture, building, etc.). Also, I think Chris could envision this software as a part of the Minecraft game.

John and Pete from Getaway have built 10 tiny houses two hours outside of New York City. The idea here is that people want to totally disconnect from their jobs and become hermits for a week or so. With a cost to build a tiny house of $30K, this will be a tough business to scale.  John and Pete also came into the tank with an extremely high company valuation ($7 million). Shark Kevin made a  debt offer, but it was rejected. No deal.

  OVERALL RATING OF THIS EPISODE………….B

Posted in Chris Sacca, Entrepreneur, Kevin O'Leary, Lori Greiner, Mark Cuban, Mr. Wonderful, patents, Shark Tank, Sharky Award, Tim McEneny | Tagged , , , , | Leave a comment