- A beer enthusiast duo from Pittsburgh, PA presents a new way of keeping beer chilled for a longer amount of time; an entrepreneur and a former aerospace engineer from New York City aim to reinvent the vending machine; and two animal lovers from Austin, TX pitch natural and organic bug repellents for pets.
- Sharks attending are Mark, Daymond, Kevin, Lori and Robert In this episode of Shark Tank, a number of entrepreneurs pitched their innovative products to the sharks. Let's take a closer look at each of the businesses and the deals that were made.
First up was "Beer Blizzard" presented by Tom 'Ozzy' Osborne and Mike Robb. Beer Blizzard is a reusable device that attaches to the bottom of canned beverages, keeping them cold for a longer period of time. The ask if $100,000 for a 20% stake. Independent testing showed that it increased the time to consume a beer from 6 minutes to 21 minutes. The blizzard was always tested with an insulator and no testing was done with just the insulator. The product works with soft drinks as well and has two patents pending. The entrepreneurs raised $43,000 on Kickstarter and sold 66,000 units, generating $166,000 in revenue within 12 months after the campaign. The net profit was $135,000, mostly through online sales. Both guys have full time jobs. Robert is out as this is a promotional give-away and not a business. Daymond is out as he doesn't have the time to do all the work as the guys are part time.Mark offered $100,000 for 25% equity, and Lori matched the offer with $100,000 for 20% equity. The entrepreneurs accepted Mark's offer.
Next was "Vengo" presented by Steven Bofill and Brian Shimmerlik. Ask is $2 million for 12.5% equity stake. Vengo is a slim digital vending machine designed for small items. It operates on a cashless system and has a sleek design. The cost of each machine is $2,500, which is also the wholesale price. The entrepreneurs charge a monthly fee of $20 per machine, which covers the software that manages the hardware. The corporate entity controls the advertisements and product placements. The product company pays $200 per SKU per month to get their product into Vengo. Vengo achieved $1 million in sales the previous year but is currently losing $300,000. Raised $3.4 million in funding already. However, they expect to break even next year. Mark declined to invest due to having a competing product. Daymond is out on valuation. Robert is out as the business has multiple dimensions and none of them is making money currently (ads, vending, machines etc etc). Kevin offers $2 million @7% for 3 yrs and 6% equity. Lori is out as the product is confusing. Want to go after the betting industry after that. Steven counters for 1% equity on the debt deal. Kevin & Lori join $2 million @7% for 3 yrs, 4% equity. Steven haggles and they shake hands at 3% equity.
Karen Posada presented "The Good Promise," a line of fruit and vegetable smoothies and sauces. Ask is $100,000 for 20%. Despite having sales of $260,000 in 18 months, the sharks did not enjoy the taste of the products. The line of pasta sauce sells for $5 and had a low margin of 23%, while the smoothies, although not tasting as good, offered a 40% margin selling for $2. Lori, Robert, Kevin, and Daymond all declined to invest due to the taste issue. Mark was the last to opt-out, expressing concerns about Karen trying to solve too many things simultaneously.
Lastly, Stephanie Boone and Laura Alter presented "Wondercide," a natural and organic pesticide. Ask is $500,000 for a 5% equity stake.The product has been lab tested, uses food-grade ingredients, and contains no water. Wondercide achieved $4 million in sales, with an expected range of $3-3.5 million for the current year. Approximately 80% of the sales were made online, and the product boasted a gross margin of 70%. The entrepreneurs needed funds to hire a dedicated sales representative to secure 600 new wholesale accounts. The sharks advised against going into retail. Daymond offered $500,000 for a 15% equity stake, while Kevin proposed a $500,000 investment with a 6.75% royalty until $1.5 million was paid back, along with 3% equity. Mark opted out due to perceived lack of focus from the entrepreneurs, and Lori offered a $500,000 investment with a 50-cent royalty per unit until $500,000 was repaid, along with 3% equity. Stephanie and Laura chose Lori's deal.
In an update on a previous deal, Wombi Rose and John Wise, who had made a deal with Kevin for their 3D printed origami cards (Lovepop) in episode 711, experienced a significant boost in sales. Their revenue increased from $300,000 before appearing on Shark Tank to $1 million just two months after the show. They now aim to grow their sales to $5-8 million within a year.
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