It’s the holiday season and the Sharks are back for another episode of holiday-themed businesses. From Mensches on benches to reindeer track stamps, these hopeful holiday entrepreneurs are looking for an early holiday gift from the Sharks. Will the Sharks be naughty or nice this year? In case you missed it, here’s how it all went down.
First into the Shark Tank was Neal Hoffman with his Jewish answer to the Christian Elf on a Shelf: the Mensch on a Bench. Neal asked the Sharks for a $150,000 investment in exchange for 10% equity in his company. Mensch on a Bench was born when Neal was looking for a Jewish alternative to the ever-popular Elf on a Shelf that his kids kept asking about. A former Hasbro toy executive, Neal knows what it takes to run a successful toy business… but could he build one himself? Neal started the company by raising $22,000 on Kickstarter to make 1,000 Mensches. The toys cost $7.45 to make, and retailers sell them from $29.99 to $34.99. From sales, Neal projects $250,000 in profit this year, and $500,000 next year. The Sharks like the growth rate, but Mark sees red flags all over the place when Neal mentions wanting to build an app similar to Jib Jab’s “Elf Yourself.” Still, Neal thinks there’s a great opportunity in expanding the IP, given the prominence of Christian holiday characters, and the lack of Jewish ones. Lori and Robert see the value too, and they’re first to make an offer of $150,000 for 30%. Neal counters at 5 % equity, along with a promise that they’ll be repaid within 3 years. Barbara sneaks in next with an offer of $150,000 for 20%, and she doesn’t need his payback guarantee, but her offer is contingent on redrawing the Mensch’s face and editing the book to remove the rules. But Barbara’s offer may be too little too late, because Robert and Lori are happy to take Neal’s 15% counter-offer and the deal is done!
Last season fans met Morri Chowalki, owner of the Hanukkah Tree Topper. After a deal with Daymond, the duo went on to sign a huge licensing deal with Kurt S Adler, who is helping the company with product design. Now, thanks in part to deals with Toys ‘R Us and Bed Bath and Beyond, Hanukkah Tree Topper has doubled business to $300,000 in sales in just one year. Congrats!
Next into the Shark Tank is Nathan Schaffer with a company he says will help everyone with a tedious problem they encounter exactly once a year. Nathan asked the Sharks for $75,000 in exchange for 20% equity in his Christmas light hanging helper, Eve Drop. Eve Drop is a light installation system that allows lights to be easily raise and lowered, eliminating the annual need to climb tall ladders and toil over installing lights that will only be used for a few weeks. Nathan has about $3,500 in POs for a few stores, and about $30,000 in inventory he’s looking to move. He has $4,500 in sales to date, largely via Kickstarter. But, then Nathan mentions that he turned down an offer to get into SkyMall because he plans to sell the product at a higher margin elsewhere. Despite Kevin’s mention of Lori’s “history of taking real crap and turning it into gold” the Sharks take issue with Nathan’s growth plan. That lights are out on this opportunity, and Nathan leaves the tank without an offer.
If the last negotiation left the Sharks feeling stressed and tense, perhaps the next business could alleviate some of that tension. Next into the Shark Tank are 13-year-old Andrea, and her mom, Hong Cao. The mother/daughter duo are representing their company Q Flex, and seeking a $20,000 investment in exchange for 20% equity. The Q Flex is a curved pole, designed for a user to give themselves an acupressure massage. To date, the Caos have sold 800 units, primarily via door-to-door sales and word of mouth referrals. Each Q Flex costs about $4.50 to make, and retails for $25-36. They’ve invested $20,000 to date, and Andrea says that a Shark’s investment would go towards buying a mold to increase their production. The Sharks are clearly impressed with Andrea’s poise and commitment to the company, especially at such a young age. It doesn’t hurt that the Sharks seem especially relaxed thanks to personal massages throughout the negotiations. Barbara and Mark make an offer of $25,000 for 25%, under the contingency that Andrea be available to take sales calls. Without a second thought, the deal is done!
Last into the Shark Tank is Trina Barkouras, looking for a $50,000 investment in exchange for her company, Hoppy Paws. Hoppy Paws offers a variety of stamping kits that allow parents to re-create the look of little reindeer, Tooth Fairy, and Easter Bunny footprints around the house. The Sharks are shocked to learn that Trina started the business just 90 days ago, and in that time (and with $105,000 of her own money) she’s gone from an idea to a fully branded company with a prototype, and even has a trademark and patent pending. Trina credits her focus and determination to moving out on her own and getting her first job at Taco Bell at age 16. Now, Trina makes Hoppy Paws for $2 a unit, and plans to sell them for $7.99. With a Shark’s investment, she would increase production in order to bring down manufacturing costs to just $1 a box. While Trina’s business history is anything but ordinary, the Sharks are interested in striking up a deal with someone they nicknamed “The Beast,” and who describes herself as a “creative mind on crack.” Kevin jokingly offers $5,000 because he says he wants a woman with horns in her portfolio (Trina wore reindeer antlers in the tank). But Barbara follows up with a real offer: she’s in $100,000 for 50% equity, and asks if Trina would limit her SKUs to just three. Trina is interested, but she counters back at 49% equity, and is hoping Barbara will help her in securing a line of credit. Doing her one better, Barbara offers to be the line of credit herself, but that she wants a 50/50 partnership on any of Trina’s future business ventures. It’s a Hoppily ever after for this negotiation, because Trina eagerly accepts!
So the Sharks were both naughty AND nice this year. What did you think of this year’s holiday-themed Shark Tank episode? Let us know in the comments!