Fun episode tonight…..two entrepreneurs gave excellent presentations and were in competition for my weekly Sharky Award. Randy from Extreme Sandbox was excellent, but didn’t have a very good plan for scaling his business.
And so this week’s award goes to Peter from Fire Avert. Peter is a firefighter and an entrepreneur. His product prevents the number one cause of house fires……fires that start from unattended electric ovens. This device shuts off the oven after the smoke alarm goes off. I immediately wondered why this product didn’t already exist. It solves a real problem, and the business has great upside potential.
Peter is knowledgeable and passionate about his product. His challenge was to overcome the fact that a friend owned 60% of the company and he only owned 30%. This was a red flag for the Sharks. Mr. Wonderful made a proposal to buyout the 60% owner for $300K (he had only invested $50K so this would have been a 6X return), but he wanted to stay involved and not sell his shares directly to the Sharks.
Shark Lori ended up with a deal that called for her to make a $300K loan, receive a 10% royalty until she received $400K back, and end up with a 10% equity stake in the company. Lori can help sell lots of this device on QVC if it can be cost-reduced. Peter now has two great partners…..his original partner is involved in building and operating residential buildings, and the Queen of QVC can help sell the device directly to consumers.
Back to Randy from Extreme Sandbox……he had started a fun business that allows people to operate heavy equipment (tractors, backhoes, etc.) on a large lot which he purchased. He even gives people an opportunity to smash old cars!
Randy’s sales have increased steadily over the last four years. He has leased most of the equipment to reduce the upfront investment required to start the business. His plan to scale the business wasn’t clear, but he did such a good job with the rest of his presentation that he got Mark Cuban to invest along side Mr. Wonderful…..something that’s never happened in the history of Shark Tank!
Best of the Rest……Ashley and Josh from ABS Protein Pancakes make gluten-free pancake mix that they sell for $42.95 a bag! The taste of the pancakes got mixed reviews from the Sharks, but they got a deal from Daymond John for 42% of their company. Daymond will attempt to leverage the contacts made thru his previous Shark Tank investment in NRG, another health oriented company.
Dwight from The Total Tie Keep is a nice man with a very professional appearance. His product keeps men’s ties straight and neat. The problem is that Dwight has virtually no sales. He was in Men’s Wearhouse, but they are too big to get excited about a small accessory. Daymond suggested he start with a smaller men’s specialty shop that would put more time and effort into selling his product. Good advice, but no deal here.