After a month-long mid-season break, Shark Tank was back with a bang for the start of the New Year. Fans were eagerly anticipating a new episode, especially with previews that teased a possible $1 million deal. From face paint to fly tents, the first Shark Tank of 2013 certainly did not disappoint. In case you missed it, here’s what went down in the tank:
The GameFace Company seeks $450,000 investment for 25%
First into the Shark Tank was Doug Marshall, founder and owner of The GameFace Company, which creates full-face masks for sports games, costumes, and more. Doug asked the Sharks for a $450,000 investment in exchange for 25% stake in the company. GameFace makes full-face masks that, similar to temporary tattoos, easily apply to the face for one-time use and can be removed later. At a manufacturing cost of only $0.25-$0.60, a wholesale cost of $2.50, and retail cost of $5, the Sharks love the margins. More importantly, the company has grown in five years from $7,000 in sales to a projected $105,000 in sales last year. Doug says the $450,000 investment will guarantee him a $100,000 salary for the next 3 years, along with money to get him started in bigger licensing contracts. Both Daymond and Robert are annoyed at Doug’s large salary request, and they drop out. Kevin is first to make an offer of $150,000 for 30%, combined with a $300,000 loan and $0.25/mask royalty until investment is recouped. Lori’s in next with an offer of $450,000 for 40%, with an option for Mark Cuban to join her on the deal. Rather than join Lori, Mark makes his own offer (that Lori joins in on): $1 million for 100% of the company, including an $80,000 salary for five years. After a quick pow-wow with his wife, Doug tells the Sharks that he doesn’t want to give away the entire company. He counter-offers and goes back and forth with Lori and Mark, but they eventually strike a deal: $450,000 for 35%, $80,000/year salary for 3 years, and 10% royalty until the investment is recouped. Deal!
Childhood friends ask $100,000 for Arkeg beer arcade
Second into the tank are childhood friends Dan Grimm and Brant Myers, representing their company Arkeg, and seeking a $100,000 investment in exchange for a 33% stake in the company. The Arkeg was born from the duo’s love of arcade games and beer, and it combines the two into a unique arcade game that doubles as a kegerator. The Arkeg can be used for beer, wine, rootbeer, or a number of other beverages. While the Sharks are all amused by the novelty concept, they just can’t see the value of an investment in the company. With that, they’re all out, but not before Kevin remarks, “Only on Shark Tank would you see that kind of insanity.”
Dura-Tent table tent company requests $50,000 for 30%
Next into the Shark Tank is Dan Rothwell, representing the Dura-Tent, a tabletop tent that can cover food to prevent insects from getting in during picnics. Dan asked the Sharks for a $50,000 investment in exchange for 30% of his company. Although the Sharks like the concept, Dan quickly gets himself into trouble by claiming sales of 50,000 units, before backtracking and admitting he made a mistake on the math, and that he’s actually closer to 40,000 units. None of the Sharks seem impressed enough by the company to make an offer, until Kevins offers $50,000 for no equity, but instead for a $2-$2.50 royalty on every unit sold. Because Dan claims to be looking for a Shark partnership—not just money—he declines Kevin’s offer and leaves the Shark Tank without a deal.
Shark Tank Success Story: Wild Squirrel Nut Butter
Season three viewers will remember college students Keeley Tillotson and Erika Welsh, who entered the tank seeking an investment in their company, Wild Squirrel Nut Butter. After making a deal with Barbara, Keeley and Erika made the tough decision to put college on hold in favor of working on the company full-time… and they haven’t looked back since. Pre-Shark Tank the girls were at $16,000 in sales, but now they’ve sold over $300,000 and are projecting $1.2 million in the next 12 months. Congrats!
Hot Tot child hair cair line seeks $50,000 for 15%
Last into the tank was Megan Gage, founder and owner of Hot Tot Haircare, seeking a $50,000 investment in exchange for 15% equity in her company. Hot Tot Haircare creates professional hair products free of harmful chemicals, designed for toddlers and children. In 15 months, Megan has about $20,000 in sales, but she’s also gotten $7,000 in purchase orders (POs) in just the last 12 days, which have mainly come from flash sale sites. After an adorable demonstration with Megan’s own son, the Sharks are starting to like the company, and their interest piques when Megan explains that her average margins are 142% wholesale, 284% retail. Mark is first to put in an offer of $75,000 for 40%, and he even sets aside his normal shot clock antics in favor of letting her hear other offers. But before any other offers are on the table, Megan accepts Mark’s offer and the deal is made!