Two great entrepreneur teams stole the show tonite. Many lessons can be learned by budding entrepreneurs from this episode. Tonite’s two Sharky Award winners are…..
Platinum Sharky Award……Matt and Pat from Grinds
These two former baseball players created a substitute for chewing tobacco. Surprisingly, this is over a $4 Billion industry so they have a large addressable market to penetrate. Their annual sales have increased to over $300K since they started the company in 2010.
They impressed the Sharks and received a number of offers. It came down to one offer for 15% equity from Robert and Daymond and a royalty only deal proposed by Mr. Wonderful. They took the equity deal and will receive Shark expertise as well as $75K. This was a great choice as every growing business needs to maximize their cash flow and not pay royalties as they grow.
Matt and Pat came in with a reasonable valuation (less than 2X Sales), gave great presentation, and displayed a good understanding of the market. I know they will succeed….btw, former Catchers make great managers (no kidding)!
Gold Sharky…..Rebecca and Chris from Hoodie Pillow
Rebecca returned to Shark Tank as a minority owner of Hoodie Pillow. She had received an investment from a Shark in her first company (Citi Kitty) in Season 2. This time she helped Chris receive a $90K investment from Shark Robert. Investors love to invest in entrepreneurs with a strong track record. Rebecca built her first company from nothing to $5 million in Sales with a $100K investment from the Sharks.
Robert summarized his desire to invest in the new company when he said he didn’t want to miss out on this deal like he did on Citi Kitty. Successful “Serial Entrepreneurs” have a distinct advantage when seeking another investment…. it helps minimize the investor’s risk.
Shark Chum Awards……..Jennie from The Green Garmento had nearly $900K in debt and had no idea how much money her company lost last year! Her poor grasp of financial data led to negative interest from the Sharks. On her way out of the Shark Tank, she looked in the camera and gave budding entrepreneurs the following advice, “Know thy numbers!”. I would add ” inside and out” to that advice.
Scott and Carlos from myColdSnap will be nominated for my Worst Presentation by an Entrepreneur in Season 4 Award. They were re-launching a company that had been inactive for over 5 years. They wanted the Sharks to buy the entire company, sell their old inventory, and pay them a royalty. Train wreck!