Shark Tank Thursday Night

by Laura Thieme

Slawsa wants $150k for 15%, a combination between cabbage and salsa.  Over 4,200 stores have her products, Year 1 $212k, Year 2 $500k.  They are in Kroger’s and other stores.  She has an old family recipe, and a partner that she bought out.  She calls on the stores herself.  Cost is $1.25, sells for $2.25.  She is paying a royalty of .66 (?) to her partner out of her money, not the company’s money (Impressive).  She is not paying herself for a salary.  Two sharks are out despite their compliments on the condiments.  Come on, Lori!  Even she is out – most of these sharks are out because they are not interested in getting into the slawsa business.  How could they turn that woman down?  Some companies and their products may not be as sexy as others, but that woman is a winner!

MagicMoments wants $500k for 15% equity.  Difference with their cell phone to image product, you can put your image on a product and sell it on their marketplace.  They have secured an exclusive arrangement with CafePress, who can put this through their legal process to ensure.  They became CafePress’s exclusive mobile app.  Pre-revenue – straight royalty deal with CafePress.  But why not any revenue yet?  CafePress, Zazzle and Shutterfly.  They’ve done a family & friends raise, 33% equity.  This means that the value of this company is $3M.  The sharks are out.  The biggest problem for them is lack of sales, and some concern about the selling of other people’s images on a mug.

Here’s the problem with MagicMoments, they’re so busy building the product, doing the partnership deals, and raising money, they’re not selling.  They need to be selling.  I’ve been through fundraising – and understand that problem.

Surprise Ride raising $110k for 10%.  These two girls, who are Lebanon war refugees, have grown into smart business women & entrepreneurs.  They sell a monthly subscription for moms and their children to a kids surprise box, which is a hands-on play for kids product.  They put a lot of thought and preparation into the Sharks Surprise Boxes.  Robert received a Car Racing Surprise Box, Lori gets to make chocolate from scratch, Kevin has a solar charging photo kit, Daymond will be designing a Barcelona styled mosaic, and Mark received a basketball theme ride & some popcorn.  All of these were well done surprise boxes with great packaging.  The girls have M&A background on Wall Street, a Harvard MBA, and marketing background for these two young women.

Recommendation for Surprise Ride:
Show 12 months of products as examples.  We get it – it’s a surprise, But, you only show 4 products on your website.  My kid would love this, but I think parents want to know more of your product offerings, especially because we aren’t able to choose what comes, and have no idea of the upcoming theme.  There are too many unknowns and we’re locking in potentially on a recurring monthly purchase.

I think people would be more likely to buy in if they could see 6-12 months of products, and actually have age range box subscriptions.  It wasn’t until I went to your Facebook page, that I realized it was 6-11.  I missed that.  Your Facebook presence is awesome.  Integrate what people are saying on Facebook on every single page on your website, because the engagement is incredible.  You could feature This Month’s Surprise? Email to see what this month’s surprise was, and order it by 1/31, and get $5 off February’s order.  It’s not clear that you have to order February’s surprise by 1/31.  So execution could be better, but the product looks awesome!

Let’s do the numbers (as NPR’s Marketplace would say):
$24.99 for 6-month subscription.
Sales 800 boxes, 225 active members.
What is customer acquisition cost? $5.30.  Value for 12-month is $130 customer.  50% margin goes to buying merchandise.  Fulfillment center in Florida.  How much investment.  Raised $100k Irwin Jacobs convertible note.  Subscription based business.  Projection for next year is about $500k.  3500 subscribers.  She’s driving traffic to the website.  Partnered with a great agency for $40k for 12 months.  O’Leary was actually tempted but said no because they are still proof of concept.  Offer from Robert of $110k for 25%. The girls made the mistake that many entrepreneurs make in the Tank … Lori is talking about how hard it is to be a woman in business but she’s out. (Mark called that right).  The girls took too long to decide, debated with the other sharks, and and as a result, Robert rescinded his offer.

I missed the beginning of the show, but saw something about Doorbot asking for $700k, who walked away from the Mr. Wonderful’s offer.

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