This episode had one of the strongest entrepreneur line-ups in Shark Tank history. To use a 2018 Boston Red Sox metaphor, there were no easy outs in this group. Each entrepreneur has built a company with real revenues that are gaining traction in their respective markets.
First into the tank were Josh and Steve from Manscaped. Their product helps guys with “grooming and trimming below the waist”. I was shocked to hear that the percentage of men who manscape has grown from 6% to 73% in the last decade. Josh and Steve have built their company using social media and by producing humorous videos. The videos alone have generated over 48 million views!
With Sales of $1.5 million and growing, Sharks Mark and Lori could easily justify investing $500K for 25% equity giving the company a valuation of roughly 1X Sales. Lori will see if women will buy this product as a gift for their men by offering the product on QVC.
Next into the tank was John and Chelsea from boom.boom. Their product is a nasal inhaler that provides a refreshing burst of menthol or peppermint. They had sales of $1.1 million and had great margins when selling their product online for $7.95. Unfortunately, the price point at retail was just $3.99 and their margins were too thin to get a good offer from the Sharks.
Shark Robert made an offer of $300K for 36% equity. John and Chelsea could not convince Robert to reduce his equity requirement to 20%, which was as low as they could go, based on investor deals made prior to their appearance on Shark Tank. They wanted to keep current investors happy by not giving the Sharks a better deal than they had gotten.
Billie and Holly from Cave Shake were next into the tank. The Sharks didn’t love the taste of this Keto, Paleo, Vegan ready-to-drink shake, but they liked Billie and Holly a lot. One of the interesting aspects of their pitch was that they had “given up” 15% of the equity in their company to an incubator used by Coke to identify and assist new and promising beverages grow. Ultimately these companies can be acquired by Coke for inclusion in their product line. I actually love the business model of this incubator. They get a 15% share of their portfolio companies (for free) plus a commission on everything they sell over a certain dollar amount. In return, they provide expertise, connections, and potential sales…..seems like a low risk but a high potential reward! I wonder if Coke also pays them an annual fee as well.
Guest Shark Charles Barkley, the NBA great, ended up investing $250K for 20% equity. Charles has had an on-going struggle with his weight, and is hoping to become part of a company that can help him and others lose weight.
BEST DEAL OF THE EPISODE
I loved the eclectic threesome of Danh, Gary, and Metta World Peace (formerly known as Ron Artest of St. Johns University and L.A. Laker fame). Gary and Metta were there to support Danh, who is the driving force behind Butter Cloth, maker of men’s soft dress shirts.
Danh came to the U.S. from Vietnam. He has a background in sewing and has been a designer of clothing for several U.S. companies. As the Sharks put it, Danh is the “real deal”. Also, he has put $240K in personal savings into the company. He’s “all in”. How can anyone resist investing in a guy who is “the real deal and is all in?”
Butter Cloth has sold over $500K of shirts in less than 6 months. I can’t help but think the Danh can design many other clothing items. Danh got a good offer from Shark Robert for $250K for 25% equity and he took it. Afterward, Danh said he was “living the dream”. This should be a win-win deal.
OVERALL RATING OF THIS EPISODE…………………………..A