From magical forts to smart light bulbs, the latest episode of Shark Tank had a little bit of everything. Here’s the skinny on how it all went down in the tank, in case you missed the action:
First into the Shark Tank were Corey and Swapnil, representing their smarter spin on lightbulbs, Ilumi. The men asked the Sharks for a $350,000 investment in exchange for 15% equity in the company. Ilumi lights are smartphone-controlled lighting that allows users to simulate a sunrise, schedule lights to turn on/off, and even change the colors of the bluetooth-enabled bulbs. At present, Ilumi is in the final stages of development and is hoping that a Shark’s investment will help them begin the tooling process to get the bulbs in consumers’ hands by the end of the year. But these smart bulbs come at a steep price: $289 for a three-pack that the men say can last up to 20 years. Ever the licensing play-maker, Kevin informs the men that if ever there was a licensing deal in the tank, they’re it. The Sharks are impressed with the technology and the design, but less so with the price point. Still, Robert begins the negotiations with an offer of $350,000 for 35%. Then men respond that they appreciate the offer, which, as Shark Tank fans know, is code for “thanks but no thanks.” Mark comes in next at $350,000 for 25%. Finally, Kevin makes an offer of $350,000, contingent on securing patents, and he hopes to license the technology and then take 15% of the royalty stream. Before any back and forth even happens, Robert goes out. The men counter Mark at 20%, but he’s standing strong at 25% because he thinks he brings more value to the team. After asking Cuban who would be his live-changing phone call to change the course of the company, the men are won over and they take the deal with Mark!
After securing the rarely-seen five-Shark deal at $1 million for 30%, Breathometer Smartphone Breathalyzer is back with an update on business after the show. Pre-Shark Tank, the company had done $140,000 in sales, and they’ve now closed $1 million in sales in just three months since the show. Production has multiplied to keep up, from producing just 1,000 units a week to now over 15,000. And don’t think Breathalyzer is a one-trick pony; they hope to soon expand the company’s capabilities to handle other health-related issues like halitosis and diabetes. Congrats to all!
Next into the Shark Tank is Zoobean, a company dedicated to book curation for little ones. Husband/Wife duo Jordan and Brandon Bookey entered the Shark Tank seeking a $250,000 investment in exchange for 15% equity in their company. Zoobean is a book discovery and subscription service, essentially a Netflix-style company for bookworms. As is typical for subscription-style companies, the Sharks are curious about the customer acquisition cost, which the Bookeys say is $6.03. After launching their beta service only two months ago, they currently have 85 subscribers. The couple certainly hasn’t built this business blindly; she’s a former Google employee and he was a DC Teacher of the Year. While the Sharks have some concerns about whether or not this business already exists through companies like Amazon, Mark sees a spark in them and makes an offer of $250,000 for 30%. After a quick counter at 20%, they’re able to settle in the middle at 25% and the deal is done!
For the oenophiles in the Shark Tank (Mr. Wonderful, of course), the next into the tank was Chase Hoyt with a product he says will save the wine. Chase asked the Sharks for a $250,000 investment in exchange for 10% equity in his company, Wine Doctor. The company’s product is simple: Intelli-stopper allows users to pump the air out of a wine bottle to preserve open bottles of wine for up to two weeks, versus the 2-3 days they would last otherwise. Chase says sales last year were $150,000, and he’s on pace to hit $300,000 in sales this year, thanks, in part, to a recently inked deal with Bed Bath & Beyond. He’s even hopeful that his two design patents and potential extension to olive oil and coffee will lure in the Sharks, but Mr. Wondeful puts it best: “There’s so much we could be doing together if you weren’t such greedy pigs.” Looks like this pitch has gone sour, because Intelli-stopper leaves the Tank without an offer.
Last into the Shark Tank is a company that aims to grant the secret fort wishes and dreams of children everywhere: Fort Magic. Owner Erika Pope-Gusev entered the tank looking for a $75,000 investment in exchange for 15% equity in her company. Fort Magic produces kits that allow kids to build virtually unlimited forts at home, from castles to race cars. In 18 months, Fort Magic has hit $150,000 in sales of their $199 kits, mostly through Amazon. The kits cost $50/unit to produce (including shipping), which is a profit of about $100/kit, but the Sharks are concerned that both the cost and the size of the kits will be an obstacle to merchandising them in stores. Adding to their concerns is the fact that Erika has invested about $50,000 of her own money, in addition to $200,000 invested by her mom and another $200,000 from another investor who owns 35% of the company. Erika fails Barbara’s “smell test” when she waffles on answering the company’s top 3 priorities, and Lori’s main concern is that the kit lacks certain elements (like fabric) needed to produce the forts Erika showcases in the tank. Still, Robert makes an offer of $75,000 for 50%, which Erika counters at 25% and with the question of what Robert will contribute in terms of distribution and sales. Robert’s firm in his offer, and there’s no happy ending for Fort Magic in this Shark Tank fairy tale. Erika leaves the tank without a deal.
What did you think of tonight’s negotiations Shark Tank fans? Let’s hear it!