Excellent Shark Tank Season 8 premiere! The show featured two food/beverage companies, one footwear company, and one technology company. Also, for the first time ever, the show included all six Sharks (normally there are five).
Philip and David from Fizzics walked away with this week’s Sharky Award for entrepreneurial excellence.
They also walked away with a $2 million deal with Mark and Lori for 16.7% of their company. Fizzics allows consumers and bars to add flavors to beer. The Sharks all agreed their product greatly enhanced the taste of beer.
Their $12.5 valuation was reasonable at about 1.3X this year’s forecasted sales. These two Jersey boys were in the process of raising $2 million at a $10 million pre-money valuation. They had a commitment from a lead investor (this is a HUGE factor…..one of the first questions from any serious potential investor is “Do you have a lead investor. If so, who is it?”. Other investors will then come on-board knowing they aren’t the first to take a risk on you).
Shark Barbara then stunned everyone when she said to Philip and David, “I am wildly enthusiastic about your product but I’m not wildly enthusiastic about you. I feel like you’re too slick and have an answer for everything”. Barbara normally has a great gut feel about most entrepreneurs, and she relies heavily on it when deciding whether to invest in an entrepreneur. Barbara’s gut feel shouldn’t be ignored, but it didn’t stop three of the five remaining Sharks from circling.
Fizzics ended up getting $2 million from Mark and Lori. These four will make a strong team, assuming Barbara’s gut feel was wrong.
Best of the Rest…….16 year old Trish from ReThink was amazing! She has created a smart phone app that can minimize cyber-bullying, a big problem that schools and parents are trying to monitor and eliminate. Trisha actually wrote the code that makes up the app, and she has a very bright future. Unfortunately, some of the Sharks didn’t like her business model because it relies on the bullies to download the app and soften their words…..something they’re not likely to do.
Mark and Lori saw the potential, however, and teamed up again with a $100K deal for 20% of Trisha’s company. Mark’s vision is to license the app to a large mobile phone carrier that can use the app as a competitive advantage by pre-loading it on devices to provide a kid-friendly experience for their users.
Justin from ISlide has created a business that customizes flip-flops with names and logos. You might wonder why this would be a great business, but not me. Virtually every young athlete wears flip-flops before and after competing in basketball, baseball, football games, etc. I’ll definitely buy a pair for my grandson. However, Justin came into the tank with an absurd valuation for his company…..$10 million for a company averaging $500K in sales per year. There was no deal here with Shark Robert saying, “Justin, you don’t don’t know what you don’t know”.
Marti and Scott from Spoonful of Comfort allow people to send “get well” packages including soups, cookies, etc. to sick people. Scott had funded the company with $500K plus a $800K loan. Marti and Scott have been selling their product for five years. There was no deal here. It was Marti’s deceased mother that motivated her to start this business. This may have been a case where emotion and passion couldn’t overcome business realities.