Another excellent Shark Tank episode! Certainly none of the four entrepreneurs lacked energy, knowledge, or passion. The contestants included a guy who the Sharks proclaimed “the best salesperson in the world”, an entrepreneur who was deemed “a force of nature”, and an entrepreneur who explained his business model with a chalk board and a poem…..all very entertaining!
But the clear winner of this week’s Sharky Award was a father/son duo from Louisiana…..Jeff and Jack from TactiBite. Jack (the son) was called the “smartest 17 year old in the world” by the Sharks. He explained the science behind his “fish call” product in terms everyone could understand. He and his Dad had sold $330K of the product in the first five months of their company’s existence……all online through a website Jack built. He explained their cost to produce one unit was $16 and their selling price was $99 (outstanding margins!).
But the one thing Jack did better than any other entrepreneur ever appearing on Shark Tank was explaining how he arrived at the company’s valuation of $1.5 million. He said that based on $330K in sales in five months, he was forecasting $750K in sales for the year. He then said he expected a net profit of $300K and a with a 5X price to earnings multiple (very reasonable) this translated to a company valuation of $1.5 million. Even the Sharks agreed that his valuation was reasonable and he ended up getting a $150K for 10% deal from Shark Robert…..right in line with Jack’s valuation.
This is potentially a great deal. I would have liked to see more quantitative proof that their device actually works, but their anecdotal evidence was very impressive. Fisherman are very passionate about their sport and will spend money to improve their performance and enjoyment. Also, Shark Lori pointed out that fishing accessories promoted on infomercials do extremely well.
Best of the Rest…….Sebastian and Raul from The Lapel Project make a totally unique product……a lapel accessory that makes a suit jacket look like a tuxedo. Sebastian was “the greatest salesman in the world” according to the Sharks. They got a deal from Mark Cuban who could even envision “wearing these to the White House”.
After Sebastian left the tank he said these prophetic words, “If you work hard every single day you can realize your dream….even with one small step forward every day”.
Nick from Ice Age Meals gave a strong presentation but didn’t get an investment from the Sharks. He had shipped over $1.5 million of his paleo meals (meat,veggies, nuts, seeds, minimum carbs, no sugar) in the last year. He used poetry and a white board to describe his business and had the Sharks hanging on his every word….a very unique and effective presentation technique. Nick combined his culinary school background with his hotel management knowledge to launch his company. His valuation was unrealistic (he based it on an initial meeting with a Crossfit executive) and so the Sharks declined. I think this may be a missed opportunity for the Sharks…..especially if the Crossfit deal comes through..
Leslie from GoodHangups had sold $450K of her re-usable magnetic hangers in the past year. This “force of nature” had more energy than an Oklahoma tornado. She struck a deal with Lori for a $100K loan that would require her to give up 10% of her company if she pays back the loan in one year and 20% if it takes her longer than a year.
It was only fitting that Leslie celebrated by dancing (alone) like Elaine from Seinfeld once she left the tank.
OVERALL RATING OF THIS EPISODE……………..A-