This blog reviews each episode of the Shark Tank from an Entrepreneur’s point of view. “Sharky Awards” are given to the Entrepreneurs with the best overall performance.
Platinum “Sharky Award”-Dominique from Onesole
Dominique had a very creative women’s shoe that the investors loved. Even better, she had actual sales of $3.5 million in the last 12 months with profits of over $1 million. Even with a sales multiple of .5X and an EBITDA multiple of 6X, her company was worth at least $1.75 million. Daymond gave her $500K for 35%….just slightly less than my valuation. This could be a homerun for both Onesole and Daymond. Good luck to both!
Gold “Sharky Award”-Rebecca with Citi Kitty
A toilet seat for cats does not excite me. As Rebecca said to Mr. Wonderful, “If you don’t have a cat, you wouldn’t understand”. That said, Rebecca did a fantastic job negotiating with the sharks. She forced Kevin H. to improve his offer by telling him she was leaning toward Barbara because she “liked Barbara and the woman’s touch”. Barbara had offered $100K with no contingencies for 15% of the company. Rebecca knew Kevin H. would be a great partner with his infomercial expertise, but wanted a better offer.
She knew that Kevin would have to improve his offer of $100K for 25% if he wanted to stay in the game. He dropped the 25% to 20% and Rebecca took it. Good job Rebecca….alls fair!
Shark Chum Awards…. Aldo the Jewelry Maker ended up getting an investment but I don’t know how. Investors hate any kind of risk and Aldo was a one man show. Mr. Wonderful kept asking, “But what if you get hit by a bus?”. This is a common concern in the world of investing even if the odds are 1 in 1000.
Kim from Samson Martin made T-shirts for pregnant ladies. She suffered from decreasing Annual Sales (from $400K to $90K). Mr. W said that he thought this business was “all death and destruction”. Nice touch, Mr. Sensitive!
The moral to the story is don’t go to get investment when Sales are decreasing. They’ll eat you alive. They want to know Revenues are increasing before they invest. This is the biggest single value driver for almost every investor.
PS. I think Samson Martin would be a good Internet business with fewer SKU’s…..stay out of the brick and mortar stores if you can!