Lots of good entrepreneurial nuggets can be taken from this Shark Tank episode. Two of the entrepreneurs earned Sharky Awards for excellent presentations.
Christmas Tree Sharky Award……Scott from The Living Christmas Company
Scott’s high-end “rent-a-real-Xmas-tree” received a $150K investment from Mark Cuban. Scott rented 100 trees two years ago and 1300 trees last year. He was passionate and knowledgeable about his business and had a track record to back it up.
I had to agree with the four other Sharks that the rental fee was too high ($100-$200), the business was not profitable enough, the season was only 4-6 weeks a year, and the business would be difficult to scale.
That said, Mark often invests in the entrepreneur rather than the business (remember the guy who draws cats for you?). Scott was so strong and so passionate that Mark couldn’t resist. I have a funny feeling this might work for Scott and Mark. Maybe money does grow on trees after all.
The Mrs. Claus Sharky Award……. Juliet and Lucinda from The Coop
These two L.A. Mom’s created a great alternative to the McDonald’s playground for special occasions. The Coop charges $600-$3000 for one kids’ party with 15 kids. Upscale to be sure.
Daymond and Kevin passed on the opportunity and made a great point when they said Juliet and Lucinda should open 4 or 5 Coop’s in the L.A. area before franchising their concept. They could use their positive cash flow to finance their expansion. This is the normal route for businesses like this.
Barbara Corcoran ended up investing $150K for a 15% stake in The Coop…..but she required a guaranteed payback of her investment in two years. These terms are tough for any entrepreneur to accept, but the ladies believed in their product and signed up for the deal.
Shark Chum Awards….Donna from Fat Ass Fudge was hilarious one minute and scary the next. Her fudge tasted great but she was nuttier than an Almond Joy. Mr. Wonderful had it right when he said that she needed a partner to concentrate on growing the business while she made the fudge.
Jillian and Connor from Partie Poche are two students from Loyola Marymount. Mr. Wonderful called them “insane” and “crazy” for placing a value of $500K on their pre-revenue company. He was definitely in a holiday mood.
Jillian talked too much and didn’t listen enough. As my partner says,” A good sales person listens more than she talks”. Barbara recommended they go into the real world to learn how business is really done. This was the best Christmas present they could receive. BTW, despite all of this, I think they will be successful one day. They have lots of potential.