First into the Tank was Sara and her mom Marilyn. Their company, Soupergirl, makes all natural soups. They were seeking $500K for 10% equity which placed the company valuation at $5 million….a big ask.
On the positive side, Soupergirl has steadily increasing sales. Starting in 2016, their annual sales were $1.4 million followed by $2.4 million in 2017. Their estimated sales revenue for 2018 is $3.4 million. On the negative side, their costs are too high and their net profit is only about 5% of sales. More bad news….they have racked up debts of $640K. As Mark Cuban put it, “You’re at risk of going out of business”.
They refused to use a co-packer because they wanted their soups to be perfect and they thought only they could make them perfect. Mark reminded them, ” Perfection is the enemy of profitability”. No deal here.
Dmitri from Bundil has created a mobile app that automatically rounds up purchases and automatically invests the “spare change” in several crypto currencies such as bitcoin. It looked a lot like other apps that basically do the same thing, but invest in other assets such as stocks. Mr. Wonderful took a flyer and agreed to invest $100K for 50% of the company. Dmitri jumped at the offer.
Best Deal of the Episode
Guy from Beyond Sushi owns and operates restaurants in New York and L.A. that serve plant-based sushi (no fish!). Guest Shark Matt Higgins knows the restaurant business and he did most of the questioning of Guy, who handled the questions flawlessly. Guy knew “the numbers” and explained how he was going to expand his L.A. footprint and increase his sales to $5.6 million and generate a profit of $300K, not bad in a time of hyper growth.
Note: Matt Higgins incubates and invests in companies across sports and entertainment, food and lifestyle, media and marketing, and technology (he’ll be a great Guest Shark!).
Matt and Shark Lori agreed to invest $1.5 million for a 30% share of L.A. and a 15% share of New York. These three will make a great team and I’m predicting a “Homerun” right here and now! I think this will be a great national business in the very near future.
In the most emotional presentation in Shark Tank history, the three children of Keith Young gave a great presentation about their Dad’s patented cutting board, Cup Board Pro. The oldest child, Kaley (age 24) was rock solid as she explained their mother’s passing several years ago (breast cancer) followed by their father’s recent passing (9/11 related cancer). Meanwhile, the Sharks (and I) were in tears during the presentation.
Each of the five Sharks agreed to invest $20K for 4% equity for a total of $100K for 20% equity. They also will donate all of their profits to a charity that helps 9/11 Firefighters. I can only remember one other case where all five Sharks went in on a deal together. A special Sharky Award is being given to the three siblings for their composure, strength, and dedication to the legacy of their Mom and Dad.
PS….They received orders for 26,000 cutting boards (over $1 million) within 18 hours after the show’s conclusion!
OVERALL RATING OF THIS EPISODE………………………………….A