Shark Tank Season 5 -Week 1 Recap
First up in the Shark Tank Season 5 Premiere was Josh Brooks and the Postcard on the Run Business. Josh came into the Tank looking for a $300k investment in exchange for 5% of his instant postcard sending business. For only $2.49 you can take any photo taken on your smartphone and turn it into a postcard set to anyone in the world. It's a great idea that's already had two successful rounds of investing raising $1.6 million in startup capital.
Celebrity Teen Star Selina Gomez has invested in both rounds with a valuation of $6 million, the same valuation being offered to the Sharks. With only $186k left in the bank, Mark Cuban says "your screwed" while going out. Brooks needs the investment from the Sharks to keep the business afloat even though they have $450k in sales, but is not willing to negotiate the $6 million valuation.
Robert Herjevic who has a few teenagers of his own sees the same value in this business that I did in their featured article. After an extremely impressive set of negotiations, Herjevic invests $300k for 7.5% of the Postcard on the Run Business settling on a $4 million dollar valuation.
Before the Shark Tank appearance, sales for the cupcakes in a jar were $150k in sales in 9 months. Within the first week, after Shark Tank Episode aired, sales exploded to over $230k which was easily enough to repay Kevin's initial $75k investment and put him into profit in record time. The Wicked Good Cupcakes are now on track to do $2 million in sales this year alone. It's a Super Success Story that I'm sure we haven't seen the last of.
The Lynnae's Gourmet Pickle entrepreneur's Lynnae Schneller and Aly Cullinane came into the Shark Tank featuring Grandma Toots 100-year-old Family recipe. They came into the Shark Tank looking for $125k investment for 20% equity in their gourmet pickle business. In the past year alone, the two have sold $144k worth of their specialty food which equates to 36,000 jars of pickles.
The suggested retail price for a jar of Lynnae's Gourmet Pickle's is $6.99 with a wholesale price of $4. It cost Lynnae and Aly $1.93 to produce each jar of pickles. They're already with the largest distributor of specialty foods in the U.S. available in 26 States, and another deal in the works with Target which would greatly expand their exposure.
All the numbers seemed to be in line with a lot of potential growth in the future, but surprisingly none of the Sharks were interested in investing in the Gourmet Pickle Business. Look for Lynnae's to be on a Featured Shark Tank Update in the near future as I believe the Sharks may have made a mistake in letting this business get away.
The two Doctors Brother's did an exceptional job hiding the fact they were going to be on the Shark Tank Show. You can run but you cannot hide from appearing on the Best Reality Show in front of 7+ million viewers. Richard and Albert Amini appeared on last night's season premiere opener seeking a $50k investment for 20% equity in the Rolodoc App for Doctors and Patients to keep in contact.
The main concept behind Rolo Doc is to bring social media and social networking to the medical profession. In 3 words the Sharks "tore them apart" about as bad as anyone that's ever been on the Shark Tank Show. Mark Cuban even gets up from his seat, walks over to the Brother's, shakes their hands and then says "this was the worst presentation Ever". It always makes you wonder how Entrepreneur's that get beat up so bad from the Sharks even make it on the Show in the first place, but as they say 'It's Show Business".
If there was a clear winner in the premiere show of Shark Tank, the Sweet Ballz Business has to be the one. Jame's McDonald and Cole Edgar came to the Sharks seeking a $250k investment for 10% of the Sweet Balls Business. The product is like cake balls without the stick and professionally wrapped in 4 packs for a quick impulse buy. Sales for the Sweet Ballz just within in the last 90 days exceeded $700k that has all the Sharks saying "WOW" at the same time. We already knew they are available at 7-11 Stores, but wow those are some very impressive numbers, to say the least.
The Sweet Ballz retail for $1.99 - $2.49 which adds to a great impulse buy to go along with a cup of coffee. With a cost to produce a 4 pack of Sweet Ballz currently at 86 cents, the margins look impressive enough to get the Sharks to bite. Barbara Corcoran is the first Shark to make a $250k offer, but she wants 40% equity in the business. Kevin O'Leary is next that makes the same offer but only wants a 30% equity stake. Lori Greiner then makes the required $250k offer and wants 36% of the Sweet Ballz Business because of Her QVC connection that could expand the market even further. Robert Herjevic says He'll do the deal for only 25% equity selling cake balls. Barbara decides to adjust Her offer to 25% and bring Mark Cuban in the deal.
With two of the Sharks partnering up, the other 3 decide to do the same thing with a 30% offer giving them each a 10% stake. Is having an additional Shark involved in the deal worth an extra 5% of the company? According to Jame's & Cole, no it is not worth more equity when they accept Mark and Barbara's deal for 25% of the Sweet Balls Business. Look for the Cake Balls from Shark Tank in a store near you soon.