This episode featured four start-up businesses with little revenue but lots of heart. I was impressed by two of them and each will receive a Sharky Award for entrepreneurial excellence.
Platinum Sharky Award……Neil, Peter, and Dennis from Nuts’n More
These three created a peanut butter that had twice as much protein as traditional peanut butter. Although they had limited sales history (five months), they landed a deal with Mark Cuban and Robert Herjavec for $250K for a 35% equity stake.
What set them apart was great packaging and a great name. Although they compete in a crowded market, they have targeted health clubs and fitness centers as their primary market. The high protein content differentiates them and will help them succeed in this market.
Gold Sharky Award……..Jessica from Jeska Shoe Company
Jessica created women’s shoes with interchangeable heels and bows. With her product, one pair of shoes can be made to look like many different shoes. This would be especially useful when traveling.
I couldn’t help but like Jessica. It was obvious she was passionate and totally committed to her business. She told a wonderful story about her Grandpa funding her college education, but not needing it because she received academic scholarships. She later used Grandpa’s funding (with his blessing) to help start her business. She had also received money from her parents who took a second mortgage on their house.
She connected with Daymond. He had been turned down by 27 banks when he first started his business and was funded by his Mom.
Daymond was touched and agreed to give her $70K for 70% of her company. His rationale was “he was going to have to do all the work” to get the company beyond the prototype phase.
Daymond had invested in a similar company called OneSole in Season 2 of Shark Tank. All I could think of during his offer was that I wouldn’t be surprised if he somehow combined the two companies to leverage the existing supply chain and sell to the same customer base.
Shark Chum Awards……I really liked Romy from Psi Bands but the Sharks didn’t bite. She made one strategic error by including her “unpaid salary” since starting the business in her valuation of $2.5 million. This is sweat equity and should not be included in any company valuation. Investors are not going to make an investment and watch the founder turn around and pay him or herself a significant portion of it.
Nick and Kevin from NEO Innovations had created a tattoo removal product for home use. This product relied on light treatment to remove a tat. This could create a potential liability for the Sharks who would instantly become targets for a lawsuit by someone in our litigious society. Why not just sell the product to the zillion tattoo parlors throughout the world?