Shark Tank episode aired December 4, 2015

Two Sharky’s are being awarded to the entrepreneurs appearing on this week’s episode. One business was a low risk-low reward business and one was a high risk-high reward business. First, Sarah Oliver from Sarah Oliver Handbags gave a winning presentation and answered (with confidence) the Sharks’ toughest question……”Is this a business or a charity?”

Sarah employs Senior Citizens at Assisted Living facilities to knit her handbags. The Seniors love it and Sarah sold $360K of her handbags  last year, and has the ability to produce $900K when she gets up to 30 knitters. Sarah knew her numbers and knew what she had to do to scale the business (it’s not a charity!). I loved the nickname she gave her team……”The Purlettes + 1″. The +1 was the only man on her team……he was also one of the youngest at 79 years old!

Sarah ended up getting an investment from Lori, Robert, and Mr. W. Each took a 10% equity stake and they invested a total of $250K.

The second Sharky goes to Jesse and Gaston from Trunkster. They have developed a new type of luggage dubbed “smart luggage”. I’m giving Jesse and Gaston a Sharky because of their confidence and swagger…..and because they think REALLY BIG!!!!!!! They valued their business at $28 million dollars after starting  their company with just $5,000 of their own money. Their rationale and justification for this outrageous valuation was that they had raised $1.4 million on Kickstarter, a popular crowd-funding service.

Somehow they got a deal from Mark and Lori despite the fact that they had never shipped a single suitcase to an actual customer.  In some ways I felt like there were more questions than answers from Jesse and Gaston.

With many big name competitors (including Samsonite) , how will they protect their IP? Do they have any patents? How will they compete with a competitor like Samsonite? Do they have the infrastructure to deal with customer support and service issues? How do they know customers will like their products? Will customers pay a premium for their product? As Shark Barbara pointed out, their product is hard, too heavy, and is very masculine.

They basically ended up getting a $1.4 million line of credit to finance customer Purchase Orders. In return, they gave up 5 to 10% equity (depends on how fast they repay the loan).  I should have called their award the “big brass ones award”.  This is a very high risk-high reward investment.

Best of the Rest……Sarah and Christine from Grow Recipe gave a nice presentation and got a deal from Robert. They had started a United States distributorship for a Korean skin-care products company.  They were forecasting sales of $3 million next year and their company is growing nicely. For me the highlight of this segment was when Mark Cuban dropped out and said it was because “he didn’t know what he didn’t know” about this industry. Smart man.

Tyler from Racing Trikes was a sophomore in college. He also funded his company thru Kickstarter. Tyler gave a good presentation, but didn’t have an answer to Mark Cuban’s question about what products come next. Mark would have been willing to invest in Tyler if he had a vision or a plan to go beyond bikes.

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About Shark Tank Ratings

Author of "Unlocking Your Entrpreneurial Potential: Marketing, Money, and Management Strategies for the Self-Funded Entrepreneur"
This entry was posted in barbara corcoran, business startup, Crowd Funding, Entrepreneur, Kevin O'Leary, Lori Greiner, Mark Cuban, Mr. Wonderful, patents, Robert Herjavec, Shark Tank, Sharky Award, Tim McEneny, Uncategorized and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

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