The entrepreneurs appearing on this episode of Shark Tank were all passionate about their products. Two received investments from the Sharks and two were sent packing. This week’s Sharky Awards for entrepreneurial excellence go to:
Platinum Sharky……Shelly Ehler, Show No (Pancho like “changing towels”)
Shelly’s product was a towel for kids. The towel can be worn like a pancho while changing bathing suits, clothing, etc. There were two things I loved about Shelly…..her passion/commitment to her product was obvious. Second, her ability to make things happen without having the money. She told a story about meeting a neighbor who was a patent attorney who had been admiring the drapes in Shelly’s home. Shelly knew she wanted to patent her towels so she cut a deal to make her friend drapes in exchange for the cost of a patent. This is the type of creativity is needed by new entrepreneurs who are just starting out. BTW, Shark Lori (the new Shark) gave her $75K for 25% of her company. Lori actually wrote a check on the spot without due dilligence (this is a fantasty!).
Gold Sharky…….Eric Corti, Wine Balloon
Being a wine drinker, I personally thought this was a goofy idea, but the Sharks saw something they loved in this gadget. The Wine Balloon keeps red wine from going bad after the bottle is opened (my solution is to just finish the wine!). Eric did have actual sales history selling 700 units for $22. He had spent $65K of his own money to get this off the ground.
Suddenly, and without warning, the Sharks started circling and wanted to buy Eric’s entire company. He was offered $600K by the Shark team of Mark and Lori . Based on Eric’s original request of only $40K for 30% equity, this seemed absurdly high. He started to dicker over the deal. This spooked the Sharks and they rescinded their offer, eventually reducing their offer to $400K which Eric accepted.
This was “made for TV” negotiating at its finest. Eric did walk away with $400K but should have taken the higher deal when offered. He out-smarted himself to the tune of $200K. The Moral: Take a great deal when you get it. Say yes and move along. Stop talking!
Shark Chum …. Kelly Chaney of PuppyCake made a very good presentation. I liked her. She was poised and professional but lacked the passion/commitment to do whatever was necessary to ramp up her business. After four years of being in business, she had sold only $23K of her product in Year 4. She told the Sharks that “Being in Sales is not my strong suit”. She needs a partner who is a killer sales and marketing pro. This business might work if she does.
Ivory Tenelle from Swilt was asked “How many shirts/robes have you sold?” Her answer was 100. This turned off the Sharks. Entrepreneurs….You need significant sales history before any investor will become interested in your company. This is the Shark’s favorite question!