Cameron and Junea from Brazi Bites gave a great presentation and are the winner of this week’s Sharky Award for entrepreneurial excellence. Their Brazilian Cheese Bread tasted great and was gluten-free.
Cameron and Junea showed steadily increasing revenues, something that appeals to all investors. Revenues grew from $60K to $200K to $600K per year. They expect to hit $1 million in sales this year.
They received multiple offers from the Sharks with Lori ending up with 16.5% equity for $200K. Lori was particularly interested because of her Season 6 investment in Bantam Bagels. Brazi Bites are very similar to Bantam Bagels EXCEPT Brazi Bites are gluten-free. Lori will try to leverage her experience and retail placement and try to get Brazi Bites into the same sales channels as Bantam Bagels. A recent Shark Tank Update segment revealed that they were now in Starbucks and Delta Airlines among others. This is why Lori fought so hard for this deal (I think she sweetened her offer three times).
Lori made this deal despite the fact that Brazi Bites had already sold 50% of the company to a co-packer. This may have been a good deal, but giving up this much equity can make it more difficult to raise money from a third partner. For example, Mark Cuban said that it increased his potential risk and reduced his potential reward to the point where it wasn’t worth it for him to make an offer.
The Best of the Rest……..Jonathan and Alex from umano got a deal from Mark and Lori for a 20% equity stake in their tee-shirt company. What makes them unique is that each tee-shirt features a drawing done by a boy or girl from one of their international school partners. Umano donates a $4 backpack to the school for each tee-shirt sold. Jonathan and Alex need the money to build more inventory so they can fulfill all possible customer orders.
John from the National Association of Bubble Soccer gave one of the funniest product demonstrations ever seen on Shark Tank. The Sharks inserted themselves into huge plastic bubbles and proceeded to intentionally collide with each other (not too much soccer was played!). They were literally rolling on the floor in laughter.
Despite all the fun, John did not get a deal because his Business Model was too complex. He rattled on about lead generation revenue, soccer leagues in 39 cities, insurance policy revenue, kids parties, Australian Bubble Soccer, and other businesses he ran. If the Sharks couldn’t understand his Business Model, who can?
Glen and Tracie from Sock Tabs are very accomplished people. Glen’s a Doctor and Tracie is a high energy, well paid Pharma Sales Rep. Sock Tabs prevent “lost sock syndrome”. By my calculation, in order for Tracie to replace her current income, she will have to sell over $2 million a year of these “cuff links for your socks”. Not gonna happen.
Update Segment…. Mensch on a Bench sold over $1 million last year. They’re developing a female character to expand their product line. Congrats!