April showers bring May flowers— at least, they do in the Shark Tank! From flower delivery companies to compostable and disposable party decor, the latest episode of Shark Tank seemed to have a little of everything. But the question always remains, do the Sharks become nicer or even more brutal as we near the end of the season. Only time will tell! In case you missed this latest episode in the tank, here’s how it all went down:
First into the Shark Tank was John Tabis, owner and founder of Bouqs fresh flower delivery service, seeing a $258,000 investment in exchange for 3% of this company. Bouqs prides itself on being a straightforward flower delivery company that delivers exactly what’s shown on the order page, rather than using the bait and switch method that John says most flower deliveries employ. Bouqs flowers are shipped straight from an eco-friendly farm on the side of a volcano, but there’s a catch. It takes 6 days from order to delivery— a major stumbling block for the Sharks who say most people don’t remember to send flowers until the day before. Still, Bouqs’ $700,000 in sales in the year to date is persuasive, and John says they’re planning to introduce a similar sourcing method from California to decrease shipping time. He’s projecting $1.2 million by year’s end, for about a $150,000 profit pre-tax. The plot thickens when John reveals that his seed investment round was only at a $5.2 million valuation (this round is at an $8.6 million valuation), and that he’s looking to raise $1 million total in this investment round. The Sharks like the idea, but they’re bothered by the exit risk that the company poses— it needs to be acquired, or else it’s a risky investment. Barbara really lays it out, though, when she tells John she hates the company’s name and that it’s not memorable or easy to spell. Sadly, for John, this spells disaster, and he leaves the Shark Tank without a deal.
Next into the Shark Tank was Aaron Bruce, with a company he says will give all women a heavenly “lift.” Aaron asked the Sharks for a $500,000 investment in exchange for 10% equity in his company, Angel Lift. Angel Lift sells under-the-skin facial lifting strips that, when worn inside the mouth under the upper lip, reduce smile lines over time. According to Aaron, “the most difficult thing about wearing it is for women to be quiet for a few minutes.” Terrible sales pitch aside, the pressure of the Angel Lift reduces fine lines and wrinkles around the mouth through a cumulative uplifting effect. The unfinished product was sold in a test market and did $3 million in sales for a profit of $1.2 million. The Sharks think this product would do well on QVC, but Aaron says they haven’t gone that route because “the want the public to come to them.” Mark doesn’t beat around the bush when he tells Aaron that he knows they came into the Shark Tank for the wrong reasons, and he’s annoyed that Aaron won’t just fess up. Still, Lori is intrigued enough to make an offer: she wants proof of the patent, their retail sales and clinical trials, and then she’ll invest $500,000 for 25%. Aaron counters at 15%, and Mark calls him a gold digger, which he admits to. Lori counters again at 15%, but the investment will be used solely to find POs from QVC. Deal!
Earlier this season, Shark Tank fans met Groovebook, the company that makes printed books from smartphone photos. After making a deal with Kevin and Mark, Groovebook gained 50,000 new customers in just one week. The spike in customers equates to about $3 million in sales. Congrats guys!
Third into the Shark Tank is Ryan Landis, representing his collapsable hanger system, HangEase. Ryan asked the Sharks for a $80,000 investment in exchange for 30% equity in his company. Ryan actually founded HangEase when he was in third grade, and was even able to get the product sold in Walmart, but he just couldn’t keep up with $400,000 in sales, so he put the company on the back burner. Now, at 19, Ryan wants to revive HangEase with the help from a Shark. While Kevin says the idea “bores the crap out of him,” Mark senses an opportunity with Ryan. Mark makes an offer of $80,000 for 30%, continent on Ryan’s utility patent’s legitimacy. Mark also welcomes Lori to join the offer, which she does. With a great deal on the table, Ryan quickly accepts!
Last into the Shark Tank were Emily Doubilet and Jessica Hosely, looking for a $250,000 investment in exchange for 10% equity in their company. The women invented SustyParty, a compostable and disposable partyware company. SustyParty is a full line of eco-friendly servingware made from recycled wood and paper. While these sustainable products cost roughly double that of their cheapest competitors, a deal with Whole Foods has helped the company toward a projected $1.5 million in sales for the year. But, while they’ve been profitable for 3 months, they’ll net an $80,000 loss with their future expansion efforts. Currently, SustyParty has about $30,000 in the bank, and $125,000 in inventory, with an angel investor signed on who will fund them through their loss at a 4-10% interest rate. While the Sharks have concerns about the high valuation, Kevin’s first to make an offer of $250,000 for 10% interest on the debt in addition to 30% equity. Not wanting to give up so much of the company, Emily and Jessica counter at $250,000 in debt, and $250,000 at a discount when they enter their next round of fundraising, but Kevin’s not having it. With no option for compromise and no other offers on the table, the ladies leave the tank without a deal.
Definitely some interesting negotiations and companies in the Shark Tank tonight! Let us know what you thought in the comments!