Shark Tank Live Recap: Portable Unicycle Makes Waves in the Tank (10/26/12)
Sentiments are on the rise in the Shark Tank tonight as one entrepreneur relives a personal journey towards undertaking her enterprise. Lori Greiner checks in tonight with Daymond John, Kevin O’Leary, Mark Cuban and Robert Herjavec. Before we proceed with this particular entrepreneur, let’s take a look at the other hopefuls.
Aaron Krause owns Scrub Daddy, a business that produces cleaning scrubs which he claims are high-end cleaning sponges. He needs $100,000 in exchange for 10% equity in his enterprise. He’s currently selling the product online and in 5 Philadelphia stores. His sales have already reached $100,000 in the past 4 months alone. Since Aaron owns a patent for Scrub Daddy, he is now venturing into manufacturing the product on a large scale. As such, he needs the funds to set up his own manufacturing facility as he anticipates an in increase in demand from other supermarkets
Robert doesn’t see Aaron’s retail vision especially since each unit sells at $2.80, quite high for a cleaning product. Mark isn’t optimistic either especially since this is just a one-product company. Robert and Mark pull out of the negotiation table. Kevin offers $100,000 for 50% equity while Daymond offers $50,000 for 15% equity if he can raise the remaining amount from Lori. The female shark, however, isn’t keen on partnering with Daymond. Instead, she offers $100,000 in exchange for 30% equity plus a commitment of getting the product in retail stores within weeks.
This sparks a bidding war among the three remaining sharks. Kevin is now offering the same amount; instead of equity, he wants a royalty of $0.50 per unit sold until the fund is repaid. Once the fund is paid, royalty is reduced to $0.10 in perpetuity. Lori is adamant about what she can give Aaron vis-à-vis Kevin’s offer; she has also increased her fund infusion to $200,000. Kevin reduces his initial royalty to $0.25 cents. The bidding is intense!
Aaron asks Lori is she’s willing to reduce her stake to 20%. She agrees and Aaron’s got a deal.
Matt and Megg Meyer own The Bear and The Rat, an enterprise that manufactures ice cream dog treats. The couple claims that these treats are fun and beneficial to canines’ digestion and immune system. They need $125,000 fund infusion in exchange for 25% equity. They currently have a regional distribution network. Sales in the past 4 months have reached $30,000.
Kevin questions why the couple is valuing their enterprise at 21 times more than their sales; he doesn’t think it’s worth investing now. The rest of the sharks agree with Kevin: they’re all out.
David Martschinske and Daniel Wood are the owners of SBU, an enterprise that produces an electric unicycle. This portable product runs between 10 to 15 miles per hour. Retail price is $1,800 and costs $350 to produce it. The partners’ manufacturing plant is located overseas. The product’s patent is still being processed. They need $300,000 in exchange for 10% equity in their business.
Mark questions how the business will prosper considering that the product is manufactured abroad. Lori and Daymond aren’t too keen on doing business with the partners. However, Kevin and Robert are offering the needed fund infusion in exchange for 33% equity. The two sharks like the fact that David and Daniel have infused a lot of technology in the product. The entrepreneurs take the deal.
Shelton Wilder owns the Shemie, an enterprise that produces female slips. Her product is a foundation piece as opposed to fashion clothing; the slips are designed to be worn underneath clothes. Shelton needs $60,000 in exchange for 20% equity. She needs the capital to produce her inventory especially since she’s six weeks into her endeavor. Shelton claims to have 10 stores interested in her product but has yet to make a sale.
Kevin questions why Shelton values her enterprise at $300,000 when she still hasn’t sold anything. The entrepreneur reveals that her product has been sold by a different company where she was once connected; in 18 months, sales reached $150,000. This company has shut down after her business partner moved to a different state.
The sharks are left wondering why Shelton didn’t continue the business considering that it already has created a client base. She eventually reveals that she personally went bankrupt after a long period of inebriation; she wants to start anew with a new brand now that she’s sober.
This disclosure doesn’t deter the sharks; however, they think it’s too soon to be investing in her young enterprise. Shelton goes home without any investment.
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