The trend continues….as the stock market goes up (it was going up when this episode was taped), the deals become more generous. When the market is going down, money becomes tighter and fewer deals get done. Call it the Shark Tank Wealth Effect!
A prime example of this trend was on display when Summa, Bill, and Kayla from Pop it Pal entered the tank. Their product is a pimple popping simulator. Seriously?
Well, believe it or not, they got two offers and accepted the deal offered by Mr. Wonderful which called for him to invest $250K for a 5% stake plus he will receive royalty payments that would allow him to recover 3X his investment.
One thing that can be learned from Pop it Pal is how to harness the power of social media. They had produced four “pimple popping videos” that received over 30 million views! As a result, they are expecting sales of $900K this year. Only in America!
Next into the tank were David and Joanna from Yumble. They produce kid’s healthy meals that are sent to the homes of their 3000 customers. They knew their numbers including their customer acquisition costs. They were initially $100 per customer and are now $40 per customer. Their sales were $1.3 million.
Three of the Sharks were interested. Guest Shark Rohan Oza teamed up with Lori Greiner and made an offer of $500K for 12% equity. Guest Shark Bethenny Frankel also offered $500K but for half the equity. This put the company valuation at about $8 million……a very rich valuation. I think Bethenny could have included a royalty component of the deal to reduce her risk ala Mr. Wonderful.
Shahil from BollyX has created The Bollywood workout. He and his troupe put on a great show and even got the Sharks up to do the dancing workout with them (see below).
Unfortunately, their revenue didn’t measure up to their entertainment ability (only $20K per month after five years in business). The dagger came when Shahil told the Sharks he had raised $1.7 million and only had $75K left in the bank. It was very entertaining but no deal here.
Allison and Stephen from Mother make infused apple cider vinegar beverages. Despite its taste, apple cider vinegar offers health benefits including weight reduction, lower blood sugar levels, etc. Forecasted sales are $1 million this year. Guest Shark Rohan Oza has tons of experience working with food and beverage companies so this one was right up his alley. He has a strong track record scaling young beverage companies and getting them acquired.
It was interesting to hear Rohan say that large beverage companies are essentially “subcontracting” their new product development to entrepreneurs. The successful beverage entrepreneurs will eventually get acquired for many millions of dollars. Rohan offered $400K for 25% equity, and Allison and Stephen accepted. I consider this a low risk-high reward deal. It was clearly the BEST DEAL OF THE EPISODE.
Note: Congrats to Sharky Award winner Tipsy Elves who have had sales of $100 million since their appearance on Shark Tank in 2013.
OVERALL RATING OF THIS EPISODE………………..B