Zara tries to explain them away by explaining that they’re growing 20% every month, but she falters after revealing that she’s raised $2.8 million to date for the company. Although her degree is probably not a legitimate reason to have so much seeming aggression towards the company, the numbers coupled with the valuation understandably do not inspire confidence in investors. It is with this apprehension that the panel begins interrogating Zara. As is typical of the sharks, her pedigree is a source of skepticism and ire, rather than an endorsement of her skill and knowledge. The Negotiation: Zara is an articulate entrepreneur with two Harvard degrees in developmental psychology. The Cost Breakdown: Costs $120 to make the content and toys for each three-month cycle, retails for $297 per cycle. The Profits: $550k in sales over the past 14 months The subscription service sends 6 toys every three months along with the parental content. The learning program is for parents as well with weekly lesson plan type explainers to help them maximize the learning potential of the toys they send. The Pitch: A learning subscription box for children ages 0-6 to aid with development.
The Deal: Daymond and Mark split $225k for 25% of the company, Daymond’s involvement contingent on a licensing deal.
Shark tank twistit up full#
Daymond and Mark will give him $225k for 25% so if Daymond can’t get it licensed, Mark will help with the manufacturing problems in China and take the product and full equity. They interrupt Lori’s pitch to make a new one of their own. Lori begins to pitch herself, but as she does we see Mark quietly consulting with Daymond. Pending acceptance of those terms, he’s willing to offer $225k for 25%. He says up front that he’s interested in licensing the product and therefore any deal would be contingent upon a securing a licensing deal. Daymond decides he’s going to make an offer after learning that Noel is in talks with Sally’s and CVS to take to shelves. Robert drops out because he doesn’t understand the product. Mark is given pause, however, when he can’t answer simple questions about how much profit he made or specific numbers because he only very recently hired an accountant. After explaining the issues he’s had with his manufacturer and specifying that this is where he needs the most help, the sharks all realize that they could help him with their manufacturing relationships. The Negotiation: All the sharks are enamored of the presentation and you can tell right off the bat someone is going to give him an offer. The Cost Breakdown: It costs $3.50 to make and retails for $29.95. The Profits: First year he did $95k and then after a change in marketing he made $101k from January-April of the new year and is projecting over $500k in revenue this year. The tool looks like a miniature tennis racket with no handle and fits in your pocket. The Pitch: A hair styling tool for people with afro-centric hair to style their hair with no chemicals or pick. The Deal: Lori gives $160k for 12.5% of the business It’s rare that they adjusted the amount of money instead of the equity in the negotiation, but it works with Lori lowering him to $160k for 12.5% of the business. He recognizes this and adjusts his counter to $170k for 12.5%. He counters with $150k for 7.5% to maintain his valuation that he raised other rounds on, but she won’t take that little.
She offers $150k for 12.5% which all the sharks think is an “automatic yes” deal. Lori meanwhile wants to invest because she thinks her target demo is perfectly suited for the product. Mark pulls out for reasons unknown, but he claims it’s because he won’t invest in a company that uses a mime in the pitch (strange). Kevin pulls out because he’d be competing with his own businesses, Daymond is next to fall because he doesn’t want to take on the challenge of building a brand in the wine business. He intends to hire salespeople to help get him into larger scale retailers. Robert wants to know what Brice will use the money for, and luckily he has a plan ready to go. The sharks are distracted by Kevin and spend more of the pitch roasting him than they do asking questions. His notorious snobbery about wine is of no use to him, however, as this brand of wine is specifically aimed at the casual consumer, and is not looking to be associated with “luxury” brands of wine. The Negotiation: The sharks all love the wines and Kevin, in particular, is pleasantly surprised by the taste. The Cost Breakdown: The bottles retail for $16 direct to consumer and wholesales at $11 The Profits: We didn’t get clear numbers, but he has made $100k in wholesale to date over the past six months. The Pitch: Wine for the casual consumer with labels that explain the flavor notes and more about the wine.
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