A very exciting episode tonite. All four contestants were passionate, but only one impressed me enough to win a Sharky Award.
Platinum Sharky Award…….Mary Beth from Kazam
Mary Beth nailed her presentation. She confidently asked for $300K for 20% equity stake in her company that makes kids’ bicycles with no pedals (these are already popular in Europe). Her valuation of $1.5 million was very realistic. She had sales of $611K last year and was forecasting $1.5 million in Sales this year.
Mary Beth knew her costs, pricing, and margin data inside and out. She was actually so calm and composed in her presentation that Barbara questioned her passion and killer instinct.
Mark Cuban made Mary Beth an offer contingent on her being able to convince Barbara to participate in the deal. Mary Beth quickly convinced Barbara that she was focused, dedicated, and wanted to dominate her market segment. She then got Mark and Barbara to reduce their equity stake proposal from 40% to 32% for their $300K investment by confidently stating, “We valued our company correctly.” The Sharks knew she was right and agreed to her counter offer.
Shark Chum…….James and Brian from Track Days set a Shark Tank record by getting the fastest “I’m Out” of all time (from Mark Cuban). They had barely introduced themselves when Mark repeated his lack of interest in the deal. These two asked for $5 million to make a movie about motorcycle racing. Their logic was absurd. They wanted to have $5 million in the bank without having a script, producer, or actors signed. That way they could attract good talent and other investors. To use another show biz analogy….Nice work if you can get it!
Lance and Tom from Pink Shutter Photo Booths somehow managed to get a $300K investment from Barbara despite not having anything proprietary or unique about their business. They took a deal that required them to pay Barbara a salary of $100K a year. So after three years Barbara gets all her money back and still owns 33% of their business! Barbara arguably has the best track record for helping entrepreneurs, but this deal was too one-sided for me.
Baby’s Bad Ass Burgers wanted to open a brick and mortar restaurant instead of expanding their successful fleet of burger trucks. Every Shark disagreed with their strategy and no offers were made. Lesson learned…..if you carve out a niche with little competition, and you’ve been successful, continue to concentrate your resources on that niche and make every penny you can before moving into another market…..especially one with lots of large competitors.