Shark Tank Season 11 Episode 12 aired January 19, 2020

A trend has been developing on Shark Tank. The most successful products/presentations tend to be in the healthy food and beverage category..  Clothing, beauty products, household items, recreational products, and technology are secondary.

Best Deal of the Episode…………..Alex from Genius Juice began his presentation with a very entertaining song and dance (see below). His competitive advantage in the healthy beverage category is there is a full coconut in every bottle. His product can best be described as a coconut smoothie. The Sharks loved the taste of Genius Juice.

Genius Juice

Alex sells his product for $5-$6 per bottle. His cost is $1.87 per bottle. He’s in 1100 stores and has estimated sales of $1 million this year. Interestingly, he was one of the few entrepreneurs that knew his Break-Even point (sales of $2.5 million per year when his company becomes profitable). This is a number that helps determine how much funding is required prior to reaching the B/E point.

Industry guru and Guest Shark Rohan Oza thought it would take longer to get to that point than Alex did. He also was concerned about the refrigeration requirements and the associated expenses. “That scares me”, he said.

In the end, Mark Cuban and Shark Barbara went in on the deal together. Each put in $250K for $500K total for 25% equity. This should be a great partnership.

Best of the rest……Chris and Geanie from Rapid Rope have developed an easy-to-use rope dispenser. Their product has had limited sales due to family issues ($172K sales in two years). They have 4 kids and recently adopted a boy from Africa who has needed a lot of medical attention. Chris and Geanie came across as high integrity people who believed in giving back to society.

Shark Barbara offered $200K for 30% equity and they accepted. Barbara is the Shark that relies the most on gut feel as a guide to doing a deal, and this was no exception. She said that her best decisions on Shark Tank have been “made from the heart”.

Daniel, Andy, and Dr. Katie from Ready Set Food hope to eliminate food allergies. Their product is mixed with baby’s milk to prevent allergies to peanuts, eggs, and milk.  This represents 80% of all food allergies. Prior to Shark Tank, they had raised $2.4 million.

Although they had little proof that their product actually works, they got a deal from Mark Cuban for $350K for 10% equity. Mark has a particular interest in anything that can prevent food allergies as one of his children had food allergies.

Dustin from Ka Pop! has developed a popped chip made of ancient grains (sorghum) that tastes good and is good for you. The Sharks loved the product but the “valuation gap” was just too high and no deal could be reached.

                        OVERALL RATING OF THIS EPISODE………………………C+ 

 

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Shark Tank Season 11 Episode 11 aired January 12, 2020

The stars of this episode were two young ladies who had recently started their own companies…..each gave a great presentation and both handled themselves well under some tough questioning by the Sharks.

Best Deal of the Episode……Melissa from Wanna Date? The name is catchy but is a bit misleading. It is a product line of various flavors of date-spreads (food). It is a very healthy food with very few calories. It satisfies sweet cravings in a healthy way.

wanna

Melissa sells the product online for $12 a jar and her cost is $2.40 per jar. She has limited sales history……$31K over the first 10 months.

Melissa just graduated from NYU and was still receiving some financial support from her Dad. Shark Barbara unloaded on her by telling her about all the business failures she has seen when an entrepreneur is supported by his or her parents. A bit unfair I thought. It depends on the situation, For example, is there an agreement to pay the money back, is there a time or money limitation, is there an equity consideration, etc.

Melissa was not born with a silver spoon in her mouth. She will be paying her Dad back at some point. She fired back at the Sharks and defended herself quite well.

Mark Cuban has recently become a vegetarian and was very interested in Melissa’s product. He offered $100K for 33% equity which she accepted. Mark has several changes he would like her to implement…..eliminate the flavors and focus on just date-spread, modify the packaging, and change the pricing. These two will make a good team.

Best of the Rest……Sofi from WisePocket makes socks that are designed in such a way they can hold a cell phone. If you don’t have any pockets available where would you put your phone? Hold it in your hand or stuff it in your sock. It could also be used for money, keys, etc.

Sofi is only 13 years old and will be nominated for the Year-End Best Presentation -Youth Division Award.  She ended up negotiating a deal with Sharks Lori and Daymond calling for an investment of $35K for 25% equity.

Yve and Stephane from Kreyol Essence make and market Haitian Castor Oil which has multiple uses such as skin softening and even helping to grow hair. They were seeking $400K for 10% equity.

For some reason they went back 5 years when answering the Sharks questions about revenue. 3 years of sales history would have been adequate, especially in light of their first two years revenue….. $135K in year one and $40K in year two. This dramatic decrease just raised red flags and generated doubt about their business and their ability to be successful entrepreneurs.  Year 3’s sales were $327K,  Year 4’s $1 million,  and Year 5’s $2 million. Just discussing these three years would have been better. It shows traction and growth.

They didn’t want to give up the 37% equity required by Mr. Wonderful’s $400K offer so they suggested a royalty deal in order to give up just 5% equity. However, they agreed to pay a 25 cents royalty on every unit sold in perpetuity. It’s always better to put a cap on royalties so you’re not paying them the rest of your life.

Jen and Ryan  from LoveSync had a silly product that was intended to increase the frequency of love making. If both partners hit their button on their night stand, a light flashes and then you know both parties are interested. They are developing a phone app so, in the future, you’ll have to bring your phone to bed. Dumb idea. No offers.

The Sharks thought Ryan wasn’t a good listener and didn’t communicate effectively (I think Ryan said his full time job was in robotics……makes sense that he would try to apply robotic principles in the bedroom!).

                          OVERALL RATING OF THIS EPISODE…………………….B-

 

 

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Shark Tank Season 11 Episode 10 aired January 5, 2020

Best Deal of the Episode….Joe from Flexscreen had invented flexible window screens. Not only did this provide homeowners with a better view (much thinner frame), but they were easier to maintain, install, and remove.

flexscreen

Shark Robert with the Flexscreen product

Joe had great Revenue numbers……$400K in year one, $2 million in year two, $3.5 million in year three, and $5.1 million in year four. However, his gross margins were too thin for the Sharks……only 15 %.

Joe’s market was home builders and window manufacturers. They required every window to be custom-made and weren’t willing to pay a premium price for a premium product. Joe thought he should continue to grow his volume but not increase his margins or pricing. Sales growth for the sake of growth (without increasing profitability) is not attractive to investors unless there is a clear “path to (increased) profitability”.

Despite these facts, Joe got three offers. Shark Barbara had a great idea that was part of her offer. Let Joe continue his commercial business while starting a separate company that would concentrate on business-to-consumer sales. This would allow them to make more standard size screens and fewer custom screens. This would substantially increase margins and lead to greater profitability  Barbara would take 50% equity in the retail/online business in return for an $800K investment ($400K for equity and a Line of Credit of $400K).

However, Lori made an offer for 10% equity of the entire business (both commercial and consumer sales). When Lori learned that Joe was more interested in Barbara’s offer, she quickly matched Barbara’s offer and got the deal. I have a good feeling about this deal.

Best of the Rest……Katy and Lou from Slumberpod make little “pup tents” for babies to sleep in so they have total darkness. This allows them to sleep better. Based on their baby’s reaction during their demo (loud crying), I thought this looked more like a Saturday Night Live sketch than a serious Shark Tank pitch.

Surprisingly, they has sold over $500K in their first year of operation and were profitable after 6 months. The majority of the Sharks thought they shouldn’t sell equity in their company and should continue to own 100% of the company (debt free).

Alas, they were determined to get an offer from the Sharks. They accepted Shark Barbara’s offer of $400K for 20% equity. Ironically, Barbara had told them not to sell stock in their company but she wanted to “take advantage of them” and their desire to get a deal.

Dale from Fortress Clothing was an interesting guy. He had experienced multiple business failures before selling his telecom company for $30 million. He started Fortress Clothing and invented a line of light weight jackets that can keep people warm when the temperature dips below zero degrees F. His market had been people that work in oil fields and other commercial industries that work outdoors in cold weather.

Dale had an amazing product but only had sales of $407K after being in business for five years. He had too many SKU’s and was trying to do too much without focusing on a great target market with large potential growth and profitability. No deal here.

Chico and Mason from Zuum were selling “electric rideables” (think Segways for the feet). It was a cool product but they didn’t have intellectual property rights or even exclusive rights to sell the product……anyone could sell the same product.

They had no sales/marketing expertise for a product anyone could sell…..not a great combination. No deal.

                   OVERALL RATING FOR THIS EPISODE……………………………….B

 

 

 

 

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Shark Tank Season 11 Episode 9 aired December 1, 2019

This was the annual Christmas episode of Shark Tank. Each of the entrepreneurs had businesses that had products or services that were highly seasonal. This increased the risk for the Sharks and that lowered the valuations of the companies.

BEST DEAL OF THE EPISODE………Bryan from Little Elf has invented a gift wrap cutter that had Shark Lori Greiner and QVC written all over it. Bryan had dyslexia in High School but overcame this learning disability and was accepted at Stanford University.

Along the way, he perfected a device that cut wrapping paper very easily and accurately. Lori and Mr. Wonderful got into a heated bidding war to win the right to invest in Little Elf. Mr. Wonderful also had dyslexia as a child and he used this to try and convince Bryan that they would make a great team. Bryan, however, knew he and Lori would be a fantastic partnership and accepted her offer of $150K for 20% equity.

THE BEST OF THE REST……………..Jason from Beardaments had created a product that allows men with beards to embed Christmas ornaments and lights in their beards. The Sharks couldn’t believe Jason will have sales of $700K this year! They called this a “totally frivolous product”. Jason agreed, but he was making a fortune.

beardaments

One of the interesting facts that Jason told the Sharks is that his promotional videos have had over 130 million views on social media. He has spent almost nothing on advertising.

Despite the frivolous nature of Jason’s product, the profitability of his company attracted Mr. Wonderful. He made an offer of $150K for 25% equity and Jason accepted.

Kurt from Easy Treezy has created Christmas trees that are pre-decorated and easy to set-up and take down.  He sells them for anywhere between $299 and $900 per tree.

Kurt has forecasted sales of $2.2 million for this year…….almost all of it direct to consumer.

Despite these impressive results, the Sharks backed away….except for Robert Herjavec who made an offer of $400K  for 40% equity. The problems the Sharks had were 1) they thought the price of the trees was too high and 2) Kurt had not effectively used social media to promote his product (He had only spent $120K on social media advertising).

Kurt ended up rejecting Robert’s low ball offer after his counter offer of $400K for 25% was rejected by Robert. No deal.

Forrest from Kit Lender has a very good idea that will be hard (expensive) to scale. He rents skiing clothes, goggles, gloves, etc.  He has $705K in sales and $106K in EBITDA (Earnings before Interest, Taxes, Depreciation. and Amortization).

In order to scale his company, it will require lots of inventory of the latest trendy ski gear. Right now Forrest has $550K of inventory. It will take a lot more money to grow this company.

Shark Barbara suggested that Forrest just focus on the kids that are going skiing in order to minimize the required inventory investment. This was a great idea!

Shark Robert summarized this industry very nicely…..”There will be two type of businesses in this space…..the quick and the dead”. They thought Kit Lender would be the latter. No deal.

                        OVERALL RATING OF THIS EPISODE………………….B-

 

 

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Shark Tank Season 11 Episode 8 aired November 20, 2019

This was the best episode of Season 11 thus far. There were four great entrepreneurs who gave great presentations. All four scored a deal with the Sharks.

Best Deal of the Episode…………….Jenny from Unreal Deli featured her vegan pastrami. Plant-based foods are a very hot category at the moment….. Beyond Meat recently went public and the stock price went thru the roof.

unreal deli

Unlike most other Shark Tank contestants, Jenny asked for just $100K for 10% equity…..resulting in a company valuation of just $1 million. The Sharks questioned such a low valuation. In comparison with other companies in the plant-based food category, this was indeed a very low valuation.

Jenny explained her strategy when she said,  “One Shark Tank dollar is worth $5 of regular money”. The Sharks were thrilled! The value the Sharks provide far exceeds the monetary component of their investment. Mark Cuban offered Jenny $250K for 20%. equity and she quickly accepted. Mark has gone Vegan recently, so he will make a great spokesperson for the company.

Jenny unleashed her second great one-liner of the night when she said her company was a cash cow business…..”We’re making cash and saving the cow”.

Best of the Rest……The other three companies also gave excellent presentations.

Aaron from Gallant specializes in stem cell treatment for dogs. The Sharks were concerned that Gallant was losing money with each new customer added. In fact, their “burn rate” (negative cash flow) was $400K per month.

Gallant’s valuation was $25 million based on their latest round of funding. Despite these numbers, Aaron got a deal from Guest Shark Anne (founder of 23 and Me) and Lori calling for $500K for 5% equity. This struck me as a high risk deal but Anne and Lori were passionate and understood this deal may take years to pay off.

Greg from Terra-Core is a fitness professional who has created exercises that strengthen core muscles. He did a deal with Lori who had previously invested in a similar product and had grown sales to $180 million!

Greg was anxious to repeat Lori’s experience and accepted her offer of $300K for 22.5 percent  equity. His annual sales are currently less than $1 million.

Terry Lin and Jiake from Outer have created the “perfect outdoor sofa”.  They came into the tank with a very high company valuation of $18 million. Considering  their sales were $800K in four months, this valuation seemed way too high.  Lori recognized the potential of this product, however, and made an offer that included a $750K loan, a $30 per unit royalty, and a 5% equity stake.

Jiake’s family owns the factory in China that manufactures the sofa and also owns 15% of Outer.

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

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Shark Tank Season 11 episode 7 aired November 10, 2019

First into the Tank was Duc and Lisa from Baubles and Soles, a kids shoe company. They had figured out a way to convert a pair of their own daughters everyday shoes to a party shoe, instead of running out and buying a new pair of shoes only to have them outgrown in a matter of months.

Although they’ll have sales of $300K this year, they haven’t really figured out how to market their product. Only 20 percent of their sales are direct to the consumer, the rest being wholesale. Damon saw the potential to grow direct sales, thereby increasing profit margins. He made them an offer of $100K for 25% equity. The offer was quickly accepted.

Scott and Gina from Animal Threads make Doggie clothing and matching clothing for their masters. For the past five years they have treated the business like a hobby but are now prepared to fully commit to the business. They estimate sales of $240K this year.

They got a deal for $250K for 25% equity from Mark Cuban. He will introduce them to the Maverick’s and NBA Licensing people who can help them rapidly grow the business.

Andy from the Peanut Butter Pump was a nice guy who had gotten laid off from his job in Financial Services and decided to become an inventor. He ended up inventing a clever little gadget (pump) that spreads peanut butter evenly over a piece of bread.

Instead of looking at his new career as an inventor as a way to help solve real problems, Andy made the classic mistake of inventing something that was a “solution looking for a problem”. The Sharks toyed with him. No deal here.

Chelsea, Ali, and Logan from The Yard made milkshakes that had anywhere from 650 to 1800 calories and sold for up to $20. They had annual sales of $3.4 million at four company owned stores and they were starting to franchise their product/service.

At first they said that the deal would only cover the fledgling franchise business. The Sharks hate when entrepreneurs don’t include the established part of their businesses. They talked them out of that and made them include the entire business. With that, the offers came pouring in and Mark Cuban ended up with a deal of $400k for 22%.

                          OVERALL RATING OF THIS EPISODE…………………………………C+

 

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Shark Tank Season 11 episode 6 aired November 3, 2019

A good episode that ended with fireworks…..more on that later.

13 year old Maddox from The Measuring Shovel was the first to enter the tank. He was  accompanied by his parents and sister. He had combined a shovel with a tape measure as part of a school project. He went on to win two other invention competitions before coming to Shark Tank.

The Measuring Shovel

Lori and Mr. Wonderful teamed up to give Maddox $40K for 30% equity. Maddox will surely be nominated for The Best Presentation (Youth Division) of Season 11.

Jason from Pili Hunters was selling various products made from Pili nuts from the Philippines. Jason was a very likeable guy loaded with enthusiasm.

The Sharks loved the taste of the Pili nut products which were high fat, low carb, and were perfect for the popular Keto and Paleo diets.

Jason had Year-to-Date sales of $1 million!

Jason made the mistake made by many entrepreneurs. He had expanded his product line too fast. Instead of concentrating on his core products, he had expanded to 14 SKU’s which required him to carry much more inventory than if he had limited his product line to 3 or 4 items……he had $400K tied up in inventory.

With the right partner, this would have been a homerun. But as Mark Cuban put it,” Going from a good entrepreneur to a great entrepreneur requires you to know what you’re good at and what you’re not good at”. No deal here.

The husband and wife team of Patrick and Jennifer from Supply got off to a rocky start when they flubbed their first couple of lines. But they handled it well and got back on track quickly. They were asking for $300K for 10% of their high-end single-blade razor company.

With sales of $2.5 million this year, their company valuation of $3 million was justifiable.

The unit price is $129. Shark Lori called it “the cadillac of razors”.

Shark Robert offered to do the deal at $300K for 15% and they accepted. Robert added, “It is very difficult to elevate a high volume, low cost product to a premium price point, but you’ve done it”.

Dr. Sarath from EZC Pak was a general surgeon who has turned his attention to his start-up that makes a product that helps reduce the impact of colds and the flu. He believes antibiotics are over-prescribed and don’t do anything to combat viruses.

His product is comprised of echinacea, zinc,  and vitamin C. He has sold $1.2 million in the last 12 months.

It was a very respectable presentation until the Sharks unloaded on him.

First, Mark Cuban reacted very negatively to Sarath’s statement that consumers often  request drugs they see advertised, even if they aren’t the right one for them. Mark called  B.S. and when Sarath asked him for his perspective, Mark went off on an unrelated tangent and started talking about family medical history.

As Sarath was mulling Mark’s comments, Lori started talking and claimed Sarath wasn’t looking at her. She took it a step further and accused Sarath of being a male chauvinist! I couldn’t believe what I was seeing and hearing. The Sharks needed some snickers bars!

Then Mark got  fired up again when he heard that Sarath was no longer a practicing surgeon so he could devote all of his time to his business. Mark lectured him and said that was a terrible idea because we don’t have enough Doctors in this country. Usually the Sharks want an entrepreneur to go full time. Very confusing!

Mr Wonderful swooped in and got the deal for $125K for 5% and a royalty stream that is capped at $450K. I think this could end up being a BIG deal.

               OVERALL RATING OF THIS EPISODE…………………… C+

 

 

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