The preview of Shark Tank Season Four, Episode 3 featured favorites from Dancing with the Stars, and we saw Mark Cuban Tweeting about how one of the pitches even caused him to sweat. Needless to say, we were excited about what this episode had in store, and it certainly did not disappoint. Didn’t get to see the latest episode of Shark Tank? Here’s what you missed:
Liz Lovely’s vegan cookies seek $200,000 for 10% of company
The episode’s first entrepreneurs were Dan and Liz Holtz, cofounders of the gluten free and vegan cookie line, Liz Lovely. Dan and Liz asked the Sharks for a $200,000 investment, in exchange for a 10% share in their company. Last year, Liz Lovely’s sales were just under $1M, but the company is currently only at about a 10% profit margin. It costs roughly $1 to make 2 cookies, which are sold for $3.99-$4.99. While some Sharks were impressed with Liz’s flavors and “artisan techniques,” Kevin “Mr. Wonderful” O’Leary was quick to point out that he “wouldn’t eat these unless he had to.” While Dan’s salesman skills were impressive to all the Sharks, the only Shark who seemed interested in a piece of the company was Mark Cuban. To keep things interesting, Mark hoped to solve his issues with Liz Lovely’s valuation by asking them for a different offer, and then he’d use his infamous “shot clock.” Dan and Liz made a counter offer on their own initial offer, this time asking Mark for $200,000 in exchange for 20% equity. Mark dismisses them with a quick “no thanks,” and as Liz and Dan exit, he tells the other Sharks he wasn’t taking less than 33%.
Shark Tank Success Story: Tower Paddle Boards
Shark Tank gave fans an update from one of last season’s biggest deals, Stephan Aarstol’s Tower Paddle Boards. After making a $150,000 deal with Mark Cuban, Stephan reports that Tower Paddle Boards went from $100,000 in lifetime sales to over $800,000 in lifetime sales. In fact, the company is on track to do $1.5M in online sales this year. Congrats Stephan and Mark!
Rock Bands bracelets put the bling in the Shark’s portfolio with a $100,000 investment
Next into the tank was Lee Dahlberg, representing his company Rock Bands, which sells “healing” rock studded bracelets. Lee entered the Shark Tank seeking a $100,000 investment, in exchange for 20% of his company. Initially, it appeared that Lee had a lot of things working in his favor: celebrity clients like Lindsey Lohan and Britney Spears, $300,000 in sales, deals with some of the countries top retailers, and licensing deals with designers thanks to his trademark of the Rock Bands name. However, some less-than-flattering details then came to light: a retailer recently cancelled a $150,000 P.O. (purchase order), and it took Lee 5.5 years to hit that sales number. Still, with huge profit margins ($15 to product and Rock Bands sell for $50 wholesale), the Sharks are hungry for a deal. Kevin and Barbara joined forces and offered $100,000 for the entire company, with a 7% royalty to Lee for life. Daymond and Mark also made a joint offer of $100,000 for 40%, which Lee accepted!
Reusable cloth diaper company, FuzziBunz, requests $500,000 for 50%
Third up was Tereson Dupuy, founder and owner of FuzziBunz, who asked the Sharks for a $500,000 investment in exchange for 50% of her business. Tereson created FuzziBunz reusable cloth diapers as a way to combat her son’s constant diaper rash. FuzziBunz saw $3.9M in sales last year, and $12M in the last 12 years. However of that $3.9M, there was only $20,000 in profit. The Sharks wanted answers about Tereson’s low profitability. She explained to them that a weak patent allowed her Chinese manufacturer to sell her product design to a Hong Kong distributor, who is now her main competitor. Tereson estimates that her international patent squatters are selling about $30-40M in product each year. While the Sharks loved her business and concept, they just weren’t interested in entering a longstanding messy patent war. Unfortunately for Tereson, they all bowed out.
PostureNow brace owner seeks $100,000 with help from Dancing With The Stars dancers
Last into the Shark Tank were PostureNOW founders Matt Franklin and Mike Lane, who were asking for a $100,000 investment in exchange for 15% equity in their company. Mike explained that PostureNOW was born when he was seeking a way to get rid of his beer belly, without actually having to stop drinking beer. He realized that having better posture made him look trimmer, and the PostureNOW brace was created. Matt and Mike even had Jonathan and Ana from Dancing with the Stars demonstrate the benefits of better posture. The Sharks, as usual, jumped into the sales questions where they learned that PostureNOW costs just $5 to manufacture, sells for $19.95 wholesale, and $39.95 retail. Now the Sharks are definitely interested in making a deal. Kevin offers $100,000 for 50% and wants a 10% royalty on every unit sold. The offer isn’t even out of his mouth before Mike rejects him. Daymond, annoyed with the cockiness of Mike and Matt, gives them a lecture about how they shouldn’t come in the tank if they don’t need the Sharks’ help. He’s out. Robert is still interested though, and he throws in an offer of $100,000 for 40%. Mike and Matt asked if any other Sharks had offers, and Robert felt insulted by their behavior so he pulled his offer. As the last one standing, the odds are in Mark’s favor when he makes an offer of $100,000 for 30% with a $5/unit royalty until he recoups his investment. He wants an answer right away and PosterNOW says yes!