That old saying about not judging a book by its cover certainly applied to the first contestant appearing on Shark Tank tonight.
When I heard Yak milk, Nepal, and Himalayan dog treats, I rolled my eyes as I looked at three young guys in tee shirts getting ready to pitch the Sharks.
Suman, Sujan, and Nishes from Himalayan Dog Chew have developed a hard cheese, 100% natural dog treat. They got everyone’s attention when they told the Sharks they had $5.6 million in sales last year and were forecasting $8 million in sales this year! They netted over $1 million in profits last year. Actual sales numbers like that will get any investor’s attention.
This led to the question, “Why do they need the Sharks?” They were looking for $750K for 5% equity. They ended up getting a couple of debt offers (in return for equity) and turned them down. They didn’t want to give up equity for the “privilege” of borrowing and repaying money. Good decision.
The one mistake they made was telling the Sharks they wanted to use their money to pay themselves. Even though they had never taken any compensation and were certainly entitled to take some compensation, no investor wants entrepreneurs to use their money that way. That may have been the reason they didn’t get any straight equity offers.
Melissa and Rosco from Lip Bar were up next. They made different color lipsticks such as green, blue, and other unique colors. The Sharks all believed there was too much competition in the lipstick market, and their branding (name and logo) did not reflect their desire to empower women. No deal here.
Kevin from Beverage Boy was a hoot! His product (Bev Boy) allows people to bring their cups, cans, and other beverages into the pool. They float and will never spill. Despite not bringing any order forms to a recent trade show, and having only about $10K in sales, Kevin got a deal from Shark Daymond. The reason….Daymond had recently invested in 360 Cup, a complementary product that was selling well in Party City.
Bobbie from FunBites has created several products that cut food into different shapes so that kids will be more likely to try those foods. Shark Lori was really excited about this opportunity and she made a deal for $75K for 25% of the company. She and Bobbie will make great partners.
Frankly, I didn’t really get it. As Shark Robert put it, “I don’t like investing in a product that can be replaced by a knife”.