Tonite’s episode featured four niche businesses with very little revenue. No Sharky Awards tonite!
The one that came closest to winning a Sharky Award for entrepreneurial excellence was Alvin and Ray from Soapsox. Their product made it easier for parents to give their kids baths by replacing a wash cloth with a “plush-like” cartoon character or action figure.
Alvin and Ray gave a nice presentation and knew their numbers (cost to produce, profit margins, etc.). They had a very aggressive Sales forecast (going from $300K actual sales to $2.4 million next year) and a very rich valuation of $2.6 million.
They ended up getting two offers….one from Daymond and one from Lori/Robert for $1 million to buy the entire company. They turned down both offers. Since Alvin and Ray are early in their company’s life cycle, I can understand why they turned down the million dollar buy out, but I think they made a mistake turning down Daymond’s offer of $260K for 33% equity. It was a lower valuation, but Daymond could have helped them get to the next level quickly, before competitors jumped in.
Anastasia from Heart Pup made a small dog carrier (kind of like a baby sling for really small dogs). With sales of $135K , she jumped at the one offer she received (from Daymond again) that valued her company at 1X Revenue. A mistake she made was when trying to describe why she wanted a deal from the Sharks (“so when someone asks me a question, I can “push a button” and get the answer). This was somewhat insulting to the Sharks, and did not help her cause.
Dustin and Ken from Ninja Cards had a cool Ninja warrior game the Sharks loved playing. When Dustin and Ken first went into business, they were promised a licensing deal that never came to fruition. Their product never reached production. Dustin and Ken were thought to “not enough hustle” by the Sharks and received no offers.
Tyler and Lei from Drum Pants had a “pre-revenue company”. Their product allows a person to “play the drums” by slapping their body as if it were a drum. How big could this market possibly be? Despite the miniscule potential market size, Robert and Daymond showed some interest and made offers.
Turns out the two partners couldn’t agree on their direction and they ended up with nothing. Partners have to be on the same page when it comes to something of this magnitude. As Mark Cuban pointed out, these two probably disagree every day on almost every subject (including what to have for lunch). These two clearly were not decisive enough to get a deal done with the Sharks.