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00:00Tonight, Daniel Lubitsky, the founder of groundbreaking snack company Kind, returns to the tank.
00:06With each ring, our customers are literally helping to solve one of the most pressing problems in the world today.
00:11This year, we'll do over $10 million in revenue.
00:14This is going to be a $100 million-plus business.
00:17It's always a scary response to a simple question.
00:19I'm having fun with it because I love to squeeze Barbara's head once in a while.
00:23Oh, what a bastard.
00:30First in the tank is a modern revamp of a stale product.
00:47Hi, Sharks. I'm Leslie, and this is my husband, Greg.
00:50We're from Short Hills, New Jersey, and we're seeking $1 million for 6% equity in our business.
00:56Hello.
00:57Wow.
00:58Guys, picture this. It's the perfect beach day, and you can't wait to dig your toes into the sand.
01:02You put on your favorite beach outfit, you go to dig out your beach gear, and then...
01:09Oh, no!
01:10Oh, no!
01:12Clunky.
01:14Outdated.
01:15Uninspired.
01:18Beach gear hasn't changed for a hundred years.
01:21True.
01:22Until now.
01:23Introducing...
01:28Sunflow.
01:29A completely reimagined premium beach chair that opens big and comfortable, but closes small with just the push of a button.
01:39Wow.
01:40With both fashion and function in mind, we also created thoughtful accessories like...
01:43Our water-resistant dry bag to protect your precious mobile phone.
01:47Smart.
01:48A drink holder that rotates and adjusts to fit all different sized beverages.
01:52And Leslie's favorite accessory.
01:54A double-paneled canopy that protects your skin from 98% of the sun's harmful rays.
01:58So clever.
01:59You just recline, and you're all set.
02:02Ready to pack up?
02:03Just push the top button and collapse it.
02:07Nice.
02:08Voila.
02:09You're good to go.
02:10Very impressive.
02:11So, Sharks, who wants to swim to shore and help Sunflow make every day a beach day?
02:17I'd like to buy a dozen.
02:19How did you come up with the idea that let's make a great beach chair?
02:23Did you have backgrounds in the new beach?
02:24Are you an engineer?
02:25No, but I'm a handbag designer, so we started a fashion line of handbags right after we got married.
02:32We were partners in that business for many years.
02:35We actually had to learn the process of sketching something.
02:38Right.
02:39Finding the factory, finding the materials.
02:41Now would be the time to tell us the phenomenal sales numbers, which I'm sure is going to blow all of us away.
02:46Because there is a 60 million pound elephant in the room.
02:49Yeah.
02:50That's your evaluation.
02:52We launched 13 and a half months ago.
02:55We have 2.9 million.
02:57Wow.
02:58We're on track to grow 409% this year.
03:01Talk us through the distribution.
03:03Where did you sell that?
03:04Direct?
03:05100% direct to consumer.
03:06Wow.
03:07We haven't even touched any wholesale yet.
03:08Oh, I like that.
03:09That's great.
03:10Congratulations.
03:11What do you sell them for?
03:12What's your cost?
03:13We are selling the product.
03:14The chair itself is 198.
03:17It's you.
03:18That chair retails for 198?
03:20198 without the accessories.
03:22It seems high.
03:2360% of our customers buy every single chair accessory.
03:28Let's break down the numbers.
03:29198 for the chair.
03:3148 for the sunshade.
03:3325 for the drink holder.
03:3425 for the dry bag.
03:35What's your margin on this piece of plastic when you sell it for 25 bucks?
03:38That is 78% margin.
03:40Wow.
03:41What does it cost for you to make one chair that you're selling?
03:43Landed.
03:44Sure.
03:45$70 to make a chair landed.
03:46But we sell three accessories for every chair we sell.
03:49So we have sold 11,000 chairs, but 44,000 units have sold.
03:54Your numbers blow me away.
03:56Amazing.
03:57Leslie, what drove you to become entrepreneurs?
04:00So my parents immigrated from Taiwan 50 years ago.
04:04They're very proud of the fact that they came here with nothing but a little piece of gold in the bottom of their toothpaste tube.
04:10So I watched them both work really hard.
04:12And my father actually was an entrepreneur.
04:15He started a business in the basement of our house.
04:18He started a construction company and he built it to be a multi-million dollar company.
04:23Wow.
04:24And we're so proud of him.
04:26And he actually passed away a little over a week ago.
04:29Oh, no.
04:30I'm sorry.
04:31So to be here is very special.
04:33Sorry to hear that.
04:35That's too bad.
04:36Yeah, I'm sorry.
04:37No, but he'd be so proud.
04:38Back to our reality here.
04:40Let's talk about these numbers here.
04:42I give you a million dollars for 6%.
04:45I'd have to see 32 million valuation on this company, let's say in the next 24 months, 36 months, to even get a chance to double my money.
04:53Well, if you only double your money, I'd be really disappointed.
04:56This is an enormous market.
04:58The outdoor market.
04:59Just on a beach chair.
05:00No.
05:01I have so many products in the pipeline.
05:02I'm already developing a higher chair that's, you know, a lot of people requested it.
05:06I started developing that three years ago.
05:07I was going to ask you about a longer chair.
05:09Yes.
05:10It's going to...
05:11We were talking about a lounger and I have an amazing table that's coming.
05:14We've expanded beyond just chairs.
05:16We are building a beach brand.
05:18I love your relationship.
05:20Very good energy.
05:21Your dad's immigrant story resonated a lot with me.
05:24With your father.
05:25My dad only went third grade in school because after that he was sent to a concentration camp.
05:30And he had so much joy with my mom of seeing me go to the first person in our generation to go to college and graduate school.
05:38And I feel that your dad is here with us and so is my dad.
05:41And so I like all of that.
05:43Here's my offer.
05:44I would give you the million dollars.
05:46I was going to say 25%, but I'm going to say 22 and a half percent.
05:54I want to go back to something Kevin asked.
05:56How do you make money?
05:57This will be one of the most successful businesses from Shark Tank.
06:00I'm not saying that because I'm arrogant and I hope you can see we're humble.
06:04You seem humble.
06:06I wouldn't go that far, but okay, go ahead.
06:07No, he's pretty humble.
06:09This is going to be a hundred million dollar plus business.
06:13Okay, let's stop there because that's a great talking point.
06:15Yeah.
06:16But the number that matters as it relates to valuation based off of what you've offered us.
06:20Yes.
06:21It's $16 million in distributable cash.
06:23When will you have $16 million in distributable cash?
06:26Because 6% of that is $1 million.
06:29Of course.
06:30That's how we only, not even a return.
06:32Of course.
06:33That's just to get our money back.
06:34When I talk about scaling a company, it really has to scale.
06:38Leslie and Greg, I gave you an offer.
06:40Do you guys want to accept it or counter?
06:43We will respond to both.
06:46We hope that if any or all of you invest, that you're along for the ride.
06:51This isn't a goal to distribute money a year from now.
06:54I didn't say when.
06:55I just said it all.
06:56Well...
06:57I'm getting a little bit impatient, though.
06:58I might go hang out at the beach if you don't respond to my offer.
07:00Daniel, I don't want to make you wait.
07:01We're not even close, so I don't want to...
07:03Do you want a counter?
07:04Just...
07:05Because it's not just a million dollars.
07:06I think what you're...
07:07It's millions of dollars in time from my team and from myself.
07:10I've seen what it takes.
07:11I'd like to invest in this business, but it's so far stretched.
07:15A million bucks is still a million bucks.
07:17Go ahead and counter, Greg.
07:18This year, we're going to do close to $4 million.
07:20Next year, our goal is to do $10 million, and we're estimating a 20% net income.
07:25So $2 million.
07:27Multiples in this industry are 22 times right now.
07:30So we believe our business will be worth $44 million unrealized.
07:34Hey, Greg and Leslie, you're answering a lot of questions.
07:38I ran out of patience.
07:39I waited for you to give me a counter.
07:41You could have given me a counter.
07:42You know I want to give me a counter.
07:44I'm out.
07:45Okay.
07:46Hey, guys, I'll clear the deck, too.
07:49It's a great business for you, but it's not something I want to invest in.
07:53I'm out.
07:54Okay.
07:55I think you're overconfident, and I wish I would share that confidence with you,
07:58but because I don't...
08:00I don't believe it, I'm out.
08:04You did come in at a very high valuation.
08:07You did rocket sales fast, which is great, but also sometimes that can slow.
08:13So unfortunately, I'm out.
08:17Okay.
08:18We understand.
08:19All roads lead to...
08:20All roads lead back to Mr. Wonderful, as usual.
08:34Four sharks are out.
08:36Kevin is Leslie and Greg's last hope for a deal for their beach chair company, Sunflow.
08:41I'm struggling like all the other sharks are in the valuation and just the returns.
08:45I understand.
08:46Okay?
08:47And you are in the shark tank.
08:48So, here's my offer.
08:50I'll do the million bucks, okay?
08:53I'll take a 4% equity position, all right?
08:57Less than you're offering me.
08:58But I want five bucks a chair on a royalty until I recoup $2 million, all right?
09:04Then the royalty goes away and I stay your partner at 4%.
09:08I need that one.
09:09Yeah, well...
09:10I would say ouch on that one.
09:11No, that's not as bad as it sounds.
09:12I think it's too aggressive, though, to...
09:13How? How so?
09:14How so?
09:15Uh, $2 million returned to you, um, after investing...
09:17All I wanted, Everett, was to double my money.
09:21Yeah, so can I count?
09:22Sure.
09:23Yeah.
09:24The 4% equity, but instead of $5 per chair up to $2 million, up to $1 million so that you're
09:31no longer at risk, but then when we've paid you back, you're our ongoing partner.
09:35Kevin, if you say no to that, you're crazy.
09:37Kevin, if you say no to that, you're crazy.
09:38...with no chance of a return other than one day getting an exit with a 4% position.
09:43That's basically what you're offering me.
09:45Kevin, it's actually not a bad offer.
09:48It's pretty bad.
09:49It's 6%?
09:50He has...
09:51No, it's not bad at all.
09:52He has half of his equity for this.
09:53It's not bad at all.
09:54I'm shocked that he offered it.
09:55I'm willing to be flexible.
09:57I'll do your deal if you get me back to the 6%.
09:59I give you my $1 million.
10:01I'm your 6% partner, but I get nothing back in my cash except the return of it on the royalty
10:06at $5 a chair.
10:07I'll do that deal.
10:09Okay.
10:10Okay.
10:11Okay.
10:12Five percent.
10:13And we pay you back the $5 per chair until we get to a million and we have a deal.
10:26Done.
10:27There you go, Kevin.
10:28Good job.
10:29Congratulations, guys.
10:31Congratulations.
10:32Good luck.
10:37I know my dad's watching right now.
10:38And just knowing that you can take a dream and make it into something, you know, a reality.
10:51It's something I watched him do.
10:54And now we're doing it.
10:58In season five, Pat Crowley made a deal with Mark Cuban for his cricket protein bars, Chapul.
11:03Let's go make some chirping money.
11:05Let's see what he's up to now.
11:07After closing a deal with Mark, Chapul Cricket Bars hopped into 500 retail locations nationwide.
11:12But what we learned was that most of our sales were first-time purchases and we had a hard time getting people to buy again.
11:19Some of the national retailers ended up dropping us.
11:21And in 2018, our manufacturer out of the blue went out of business.
11:26We had no product whatsoever.
11:28The future of Chapul was really unclear at that point.
11:30We had to come to the realization that maybe bars weren't the answer.
11:34People weren't ready, but things have changed.
11:36Now we're set up to be one of the global leaders in insect agriculture.
11:40In nature, plant matter falls to the ground, insects eat it, and they create a healthy soil.
11:44What we do, we take food waste, feed it to the insects, and we're left with two products.
11:48The insects themselves, and a healthy soil amendment.
11:51It plumps up the insects, which turns into fertile soil.
11:54So these farms can be far more efficient, far better for the environment.
11:58The first mission did pan out the way you expect, and you have to tip.
12:01And you've been able to turn it into something special.
12:05Mark is with us every step along the way.
12:07And we were fortunate enough to meet a massive name in entrepreneurship in the food world.
12:11Daniel Lubetsky.
12:12This was years before he was even a shark, and he invested in us at a critical point when our company did it most.
12:18I was so taken by his energy that I told him, here's my business card.
12:22If you ever need anything, give me a call.
12:24He's pivoted and learned a lot on how to actually scale, and we've been very happy to continue to invest in him.
12:292021 has turned out to be our best sales year ever, with $400,000 in sales, totaling $2 million in lifetime sales.
12:36But the real success lies ahead.
12:38Chapul is paving the path to our $50 million insect farm.
12:42It's a robotic farm that will divert 10 truckloads of food waste every single day and create 50 to 75 new jobs.
12:49Chapul is expected to be operational by next year for a farm that will produce $20 million in revenue every single year.
12:58I have three kids, and when I look into their eyes, it's the driving force behind everything I do to keep going when it gets hard.
13:07Because they need us now more than ever.
13:10With everything we're doing at Chapul, I know I can sleep at night knowing that I'm giving my family and the planet a brighter future.
13:18Next up is a way to stay organized in the kitchen.
13:32Hi Sharks, my name's Alexander Eburn.
13:45I live in Los Angeles, California, and I'm here today seeking a $750,000 investment in exchange for a 7.5% equity position in my company, PrepDeck.
13:55Sharks, we all know that cooking at home can be rewarding.
13:59But the reality is, most of us are no chef wonderful.
14:03Mealtimes can be stressful, time consuming, and really feel like a chore.
14:08There's stuff everywhere as you're trying to prep, measure, and cook all in one go.
14:14The right tool is never where you need it.
14:16The food is burning on the stove, and then there's the dreaded clean-up.
14:21There has to be a better way.
14:23Oh my god.
14:30Well now, there is.
14:32Meet PrepDeck.
14:33The world's first all-in-one recipe preparation system.
14:37Loaded with everything you need to easily prepare chaos-free meals.
14:42PrepDeck comes with 15 ingredient containers that not only keep you organized,
14:46they double as measuring cups and measuring spoons.
14:49A range of prepping tools, like a zester, grater, juicer, peeler, and more.
14:54And they clip directly onto the containers, so you can finally prep, measure, and store without making a mess.
15:01The stylish exterior doubles as a large cutting board, and it's detachable for easy cleaning.
15:06There's a removable compartment for collecting your scraps,
15:09and there's even a place for your phone or tablet, so you can follow along your favorite recipes.
15:14PrepDeck is on a mission to bring back the joy of cooking.
15:17So which shark is ready to prep their checkbooks and get to cooking up some profits with PrepDeck?
15:23Each of you have a PrepDeck in front of you and some veggies.
15:26Please feel free to check it out.
15:28I mean, when I first looked at it, I thought it was, besides the name, which is great, it's intuitive, PrepDeck.
15:34But I thought that it might have been like, you know, for a taco bar.
15:39Actually, the original idea for PrepDeck and the problem that I was experiencing
15:43was that when I cook, I make a mess.
15:45My wife, Christine, would come behind me and clean up after me.
15:48But when she was pregnant with our first daughter, she didn't want to have anything to do with that.
15:52So as I started to do all of these things myself, you know, right there in my kitchen,
15:56I thought there was nothing to keep you organized while you cook.
15:59Alexander, what does this sell for and how many have you sold?
16:02The product retails for between $99 and $119, depending on the configurations.
16:07I first launched the product through a crowdfunding campaign on Indiegogo.
16:11I had a $25,000 goal and we sold $350,000 during the campaign.
16:16So take us your sales from there.
16:18For the full year of 2019, we did $1 million in revenue.
16:21And in 2020, we did $6.2 million in revenue in 2020.
16:26Thank you very much.
16:27And this year, we'll do over $10 million in revenue.
16:31How do you generate those sales?
16:33So 99% of our business is direct to consumer through our own website or through Amazon.
16:38What was your ad spend to generate that interest?
16:41In 2020, we spent about 25% of our revenue acquiring customers.
16:45So you must be making a boatload of money.
16:47What are your margins on each unit?
16:49So the product cost us $31.
16:51We have a landed gross margin of 69%.
16:54We had a net profit of $525,000.
16:56What would you use our money for?
16:58So $250,000 is going to be allocated exclusively to inventory and an inventory buffer.
17:03$250,000 is going to be used in ongoing product development.
17:07And the other one-third of the funds are going to be used to actually build a team.
17:11We have a tiny, tiny team right now.
17:13But if we're going to get to 30, 40, and $50 million, which I know for a fact we will,
17:18I need some support.
17:19I'm stunned that this thing is selling.
17:22I'm a cook.
17:23I'm a chopper.
17:24I like wood.
17:25Yep.
17:26Ceramic.
17:27All the textures that I cherish and love about the cooking experience.
17:31It makes it all delicious for me.
17:33I'm just not a plastic chopping type board girl.
17:36Okay?
17:37I understand.
17:38I'm out.
17:39Nothing tells the truth like sales.
17:42Right.
17:43And you've got them.
17:44I'll give you a loan, venture debt loan for $750,000, 36 months, 9.5%.
17:49And I want 5% equity, not 7.5%.
17:52And I'll put my full, you know, Chef Wonderful behind this thing.
17:55All right.
17:56And my social media teams.
17:57If you've been tracking Chef Wonderful, I've got a pretty big business now.
18:00Yeah.
18:01I'm aware.
18:02I sell a lot of sous vide.
18:03I've got cheesecakes.
18:04Yep.
18:05I've got a massive wine business.
18:06Gonna ship 2 million cases.
18:07Do you want to get on the carpet and start pitching us?
18:08No, but I mean, I'm just looking at it saying, does it fit into my world?
18:11And it does.
18:12Alex, I really like you.
18:14I think you've got those numbers that Mr. Wonderful says.
18:16I just, this is not something that I understand enough.
18:18So for those reasons, I'm out.
18:20All right.
18:21Good luck.
18:22Thank you for you, Tom.
18:23I really appreciate it.
18:24Yeah, Alex, I'm kind of in the same boat.
18:26The only thing I think is genius is that you've got these shot glasses in there.
18:27I just don't even know the competitive landscape.
18:30So for those reasons, I'm out.
18:32Thanks a lot, Mark.
18:33Appreciate your time.
18:34I've been listening.
18:35You know, you have the same kind of trajectory I had years ago when I started with my very
18:39first product.
18:40But for that kind of money and that small of a percentage, I have to be excited about what's
18:45next.
18:46Well, Laurie, I can assure you that the reason I didn't just go with a venture capital company
18:50is I don't want to sit in a room with a bunch of suits and be told how to run my business.
18:54I want to work with someone who understands the path that I've gone on.
18:57You have obviously been down that path.
18:59And I think that together we could grow the business.
19:00You said that this was going to be a $50 million business.
19:02That's right.
19:03What do you think is going to make it that?
19:05We haven't opened any extra markets yet.
19:07We're just D to C in the United States.
19:10We're about to open Canada.
19:11We get asked all the time to take it to Australia, the UK, Germany, Japan.
19:15You are really wonderful.
19:16Excuse me?
19:17There's no royalty associated with calling anybody wonderful.
19:21Trademark.
19:22$750 is just such a big ask for 7.5%.
19:26If you have an offer in mind that you think would make you comfortable?
19:29Honestly, I would want 25%.
19:32Oh.
19:33I want to be the best shark I could be to you.
19:36And sometimes that means saying I'm out.
19:38All right.
19:39Well, I appreciate it anyway.
19:41Thank you, Laurie.
19:44All roads.
19:45All roads lead back to Mr. Wonderful.
19:47In this case, Chef Wonderful.
19:49Let's talk, Chef.
19:50I think I made you very fair offer.
19:52So $750,000, 36 months, 9.5% interest.
19:57Are those interest-only payments in the venture structure?
19:59No, it's principal and interest.
20:00It's a standard venture debt deal.
20:02And 5% essentially warrants, which is equity.
20:05I mean, I've heard from venture debt opportunities before.
20:09And here's the difference.
20:10Here's the difference.
20:11There are thousands of venture debt funds.
20:13Right.
20:14There's only one Chef Wonderful.
20:16And I'll probably accelerate your growth by about 15% to 20%.
20:19I'm a big deal as a chef.
20:21Sorry, it's true.
20:22We're sorry, too.
20:23But listen, you've got to pay for that.
20:25It's not free.
20:26I'm a shark.
20:27Alex, you can counter.
20:28You can reduce the equity.
20:29I am going to counter.
20:30With 36 months, 9% interest, interest-only payments,
20:34so that we can actually use the capital without repaying the capital
20:38out of that original line for 3%.
20:40No, I wouldn't do that.
20:41Oh, and that's the right offer to make.
20:43That is the exact right offer to make.
20:44It is.
20:45Well, except I'm not going to take it.
20:47Look, I like my original deal.
20:49What I do for all of my food deals is reduce customer acquisition costs
20:53because I go back to the people who already bought my products from me.
20:56Right.
20:57Nobody sells like Chef Wonderful.
21:01Is there a structure where you can release the pressure on the loan repayment?
21:06But, Alex, it's not pressure.
21:07Look at your numbers.
21:08It is.
21:09It's using the initial loan money to pay back the loan.
21:11It doesn't make sense.
21:12No, I can actually change your world by reducing your customer acquisition costs.
21:16Look, you can take that deal and we'll be working together,
21:20or you can turn around and walk out of the shark tank,
21:23and that's okay, too.
21:24I respect your business.
21:27I unfortunately, Kevin, I'm disappointed, but I need to decline.
21:31I need to find the right deal for my business.
21:32I understand, and I completely appreciate that.
21:34There's nothing wrong with that.
21:35All right.
21:36Kudos.
21:37You won my respect.
21:38Alex, you're going to kill it.
21:39Thank you very much for your time, guys.
21:40Congrats.
21:41You did a great job.
21:42Congrats, guys.
21:46I've had sharks on my vision board for a long time.
21:49It's a dream come true to be here.
21:51And, you know, the response I got from the sharks and the confidence in them telling me to keep at it,
21:56and that I'm enough to continue doing this alone, is amazing.
22:01I'll never forget it.
22:12Next in the tank is a little space when you need it the most.
22:27Hey, sharks.
22:28I'm Robbie.
22:29And I'm Allison.
22:30And we're neighbors from Columbus, Ohio, here seeking $300,000 for 5% of our company.
22:36When you think back to the past year, what is the one thing in the world that people crave?
22:41What?
22:42More space.
22:43So that's exactly what we did.
22:45We've created more space for everyone.
22:48So let us introduce you to OopBox, an outdoor plug-and-play experience.
22:56It could be a backyard office.
22:58Or, as this model shows, it can be a pop-up shop.
23:03It could even be an outdoor conference room.
23:07It's a convenient space that's temperature-controlled, soundproof, flexible, and can be set outside in any environment.
23:16At 80 square feet, an OopBox is a beautiful, bright, eco-friendly space made from an up-cycled shipping container.
23:25It can be delivered anywhere and used for anything.
23:29We make it so simple for our customers.
23:33An OopBox rolls off the back of a truck, plugs into any outlet, and it is ready to go.
23:40Sharks, OopBox is the future.
23:44Demand has been increasing ever since our recent launch, and now we need your help to keep up with that demand.
23:51So who here is an out-of-the-box thinker and wants to step inside this box and join us on our journey?
23:58So you are taking old shipping containers, recycling them, cleaning them up, and putting on doors?
24:05We actually cut them in half. They're 20-foot duocons.
24:08And we infill the sides to make these beautiful spaces that we can put anywhere.
24:13Robbie and Allison, I don't understand the need for this product. Can you please tell me?
24:18I can come up with a thousand reasons for it, but the question is how much?
24:23So let me tell you about our business model first.
24:25That's always a scary response to a simple question.
24:28Well, so we lease them and we sell them.
24:31Okay. For when you sell them?
24:33They start at $20,500.
24:35Ouch! Ouch!
24:36I agree with you now, Daniel.
24:38What does the market think? How many of you sold?
24:41Our revenue to this point is $950,000 this year.
24:45Good for you.
24:46And how long have you been in business?
24:47Since June 2020.
24:48Are there zoning ordinances in place that would forbid you in certain towns?
24:52For dropping them off in their backyard?
24:55They can go anywhere.
24:56Technically, we're considered a tool shed.
24:59Ah.
25:00This is for a temporary use.
25:02This is for somebody who is spending his or her time working on the toilet to get away from their kids.
25:08Which, again, is not going away.
25:11Right?
25:12Exactly.
25:13That's not going away.
25:14Okay, and how much money have you raised to date?
25:16So we've raised $870,000.
25:18And how much of the company did you give away?
25:2030%.
25:21And what are your margins on this?
25:23When we sell it, it's about 40%.
25:26Each box costs us $12,000 to build.
25:29Most people are leasing them for between $800 and $1,000 a month.
25:33Do many of the people who lease from you do it short-term and convert to a customer who buys?
25:38The average lease term right now is about eight months, and about 60% of our clients have renewed their lease, gotten an additional box, or requested to purchase the box that they have.
25:51To me, it seems like a clever idea, fit with COVID perfectly.
25:56But I don't think that this is the right investment.
26:00It's just not something that I would be excited about.
26:05So I'm sorry I'm out.
26:07You know what I don't get?
26:09You raised $870,000.
26:11Why are you trying to raise $300,000?
26:14Why do you need that money?
26:15Right now, our capacity is about five boxes a month that we're doing.
26:20We need more space.
26:21We see the potential to grow exponentially, and that's what we need this money for.
26:26But that's a challenge, guys, right?
26:28You're constrained by your capital and your time and the availability of the boxes.
26:33What I look to invest in are hockey stick businesses, where they kind of feed on themselves and grow themselves,
26:39and they're not necessarily fully capital-constrained and time-constrained.
26:43It's not the right kind of business for me to invest in, so for those reasons, I'm out.
26:48I feel like a significant portion of the momentum that you have is connected to COVID.
26:56It's not clear to me that it's not connected to COVID, and the valuation seems to not factor that in.
27:05So I wish you the best, but for those reasons, I'm out.
27:08I mean, I get it. Sales say everything.
27:10The problem with this business is due to its capital requirements.
27:13The capital goes in. The more successful you are, it's impossible to get it back out.
27:18I hate doing deals where I kiss my money goodbye, and then I never see it again.
27:23I like it where there's a way for me to get it back.
27:25And I'm not greedy, and I'm very creative, and I am Mr. Wonderful.
27:28So here's what I'm thinking.
27:30I give you the $300,000. I take the 5% just so I'm a partner in the business.
27:35But this is a royalty deal for sure. And so the way it works is...
27:39What a surprise.
27:40Silence, Barbara, because you don't have any creativity on the deal.
27:45I'm sure you're right, yeah.
27:46Okay, so I give you the $300,000. Every time you sell a box, you give me back $1,000.
27:53But what happens if they lease it?
27:55Yeah.
27:56Right.
27:57I've got a samortized payback on the lease. I'm getting a portion of the lease.
28:00It's a way for me to get my capital back, but I want to make back $600,000 before the royalty goes to zero.
28:06And I think what's going to happen is half your people will buy themselves out at some point.
28:10Well, royalty is kind of hard to understand on this type of product, at least for me.
28:15I'm going to tell you why I think your model is so ingenious.
28:19It's identical to a business I invested in, Boho Vans.
28:22They were renting camper vans, retrofitted camper vans that look cool.
28:27I think they had maybe $250,000 in revenue, and one year later they had $5 million.
28:34It blew up.
28:35You're doing the identical thing.
28:37I'd like to make you an offer of $300,000 for 20%.
28:41Let me defend the 20%.
28:42Whoa, 20%.
28:44You could say that, all right?
28:45That's a lot.
28:46But I'll tell you something.
28:47I'll tell you...
28:48Versus 5%, that's a really big difference.
28:50The difference is one's understandable, one's less.
28:53Well, I can explain mine very simply.
28:55You've got to give me back my capital times two.
28:57That's easy.
28:58I think it's a great offer.
28:59What are you going to do?
29:0120% might sound rich to you, but you will never get someone with my skill set to explode
29:08your business like I will do.
29:11I don't sell product.
29:12I build businesses.
29:13That's what I'm good at.
29:14I did it for myself.
29:15I believe it.
29:16I love words too, but 20% is 20%.
29:1920% is 20%.
29:20I'll tell you what I'll do.
29:21Just to have fun.
29:22Just to have fun and to make Barbara's night more interesting.
29:25Forget the whole royalty thing.
29:26I'll do it for 15%.
29:28I'll give you $300,000 for 15% right now.
29:31Wow.
29:32Barbara, could you do $300,000 for 7%?
29:36No.
29:37How much?
29:387%.
29:39I thought I heard 17%.
29:40I was insulted.
29:41Were you, Kevin?
29:42I'm more insulted by seven.
29:43Well, what about if we did seven plus some loan aspect?
29:48No, but I'll do it for 10 if you say yes right now.
29:52It's not a fair question.
29:54Pardon me?
29:55It's not a fair question to make us commit to that without talking.
29:58So, we would like to...
29:59Of course it is.
30:00The biggest mistake entrepreneurs make standing on that carpet is having a line in the sand
30:05at a certain valuation.
30:06That is the biggest mistake they always make.
30:09I'm just saying that we should discuss before answering without discussing.
30:13But may I say something to...
30:14That's a lawyer talking, not an entrepreneur.
30:16It's a cautious...
30:17Two hats.
30:18Okay, just to have fun, I'll do it for 9%.
30:21Oh, what a bastard.
30:22You're not just having fun.
30:24You know, we're both Canadians, so there's a little bit of kinship there.
30:26I'm having fun with it because I actually think there's value here, and I love to squeeze Barbara's head once in a while.
30:30You know what?
30:31There's something about that 10% number that makes you feel like something's worthwhile.
30:37That all your effort and all your energy and all your intelligence is put into something, and it's acknowledged as worthwhile.
30:45I'll do it for 9, no problem.
30:48It's up to you.
30:53Barbara, we accept your offer.
30:55Smart people.
30:56There you go.
30:57Great!
30:58Kevin, we like yours too.
30:59I'm just happy to have saved you basically 10%.
31:01Yeah, we appreciate it.
31:02We appreciate it.
31:03We very much appreciated your support.
31:04No problem.
31:06Congratulations, guys.
31:07You got a goldmine.
31:08Congrats to all the analysis.
31:10Very excited to work with you.
31:11And you've managed it so well, you know?
31:13Okay.
31:16Going into this, we are hoping to get a deal with Barbara.
31:18This is really a dream come true for us.
31:20And what's even better, Kevin did all the negotiation for us, and that was amazing.
31:25Thank you, Kevin.
31:26You can thank you, Barbara.
31:27Well done.
31:28You weren't out to help me.
31:29Who are you kidding?
31:30You weren't out to help me.
31:43Next up is a business that adds more meaning to one of the most meaningful purchases someone
31:48can make.
31:49You weren't out to help me.
31:50You weren't out to help me.
31:51You weren't out to help me.
31:52You weren't out to help me.
31:53You weren't out to help me.
31:54Hi, Sharks.
31:55My name is Christian Matromka, and I'm from Houston, Texas.
31:58My company, Do Amore, is improving one of the oldest traditions in the world.
32:03Sharks, many of you have shopped for engagement or wedding rings before.
32:07But looking back, what do you remember about that ring?
32:10Maybe the store it was from?
32:11The carat weight?
32:12Maybe how much you spent?
32:14But what if your life-changing day could have changed another life forever?
32:19That's exactly what Do Amore does.
32:21Not only do we create some of the most sustainable rings in the world using recycled precious metals
32:27and ethically sourced stones, but we take it one step further.
32:31Every Do Amore ring gives a person in a developing country access to clean water.
32:36This way, a couple can change another life forever on their special day.
32:41With each ring, our customers are literally helping to solve one of the most pressing problems in the world today.
32:47So how does it work, Sharks?
32:49It's simple.
32:50Just visit our website and design the perfect ring for your loved one.
32:54And when you're ready, just check out and we'll begin making your ring right here in the USA.
33:00And when you receive your ring, you and your partner can see the specific impact that your ring made.
33:05You can pull up a photo and the GPS coordinates of the actual water well you helped build,
33:10along with information on the community that now has access to clean water.
33:14Clean water changes everything.
33:17We've already built water projects in nine countries, and the list keeps growing.
33:21So Sharks, for $600,000 in exchange for 6% of my company,
33:27which one of you would like to be my partner and say yes to my proposal?
33:33Lovely presentation.
33:35Is this simply a situation where you would take a percentage of your profits,
33:38target a community that needs fresh water, and send the money there to do the work?
33:42So the way it works is whether you're buying a $250 wedding band or a $25,000 engagement ring,
33:48every ring gives one person access to water.
33:51Over the last few years, 20.5% of our net profits have gone towards it.
33:55On average, it's about $50 per ring.
33:58You're burdening your business with a 20% tax, basically, but there must be a reason you're doing that.
34:04Yeah, I mean, the reason is my story.
34:07Like, when I was younger, my family and I moved to India, and we were walking to school one day,
34:13and we saw a large crowd gathered around a lady that was crying.
34:16The little boy was laying in his mom's arms, and he had died from the bad bani or the bad water
34:22that he and his family had to drink every single day.
34:25And this image has stayed in my head for a really long time.
34:28Later, as an engineer, I went to work in the middle of nowhere to help drill oil wells.
34:34And very quickly, I learned it takes weeks and weeks to get to oil, but you hit water within minutes.
34:40This bothered me because there are literally people and children dying from not having clean water
34:45when the clean water is 100 yards beneath their feet.
34:49Around the same time, I was shopping for engagement rings, and I was really troubled
34:54that these symbols of love came with questions of ethics.
34:57So I thought when I proposed, what if I could do it with a ring that didn't just not hurt the world,
35:02but actually helped the world?
35:04How do you source the diamonds ethically?
35:06So all of our natural diamonds, we're only sourcing them if we're 100% sure they're from an ethical mine.
35:13And by that, you mean that the labor is treated well, that the conditions of mining are good?
35:19Correct. Or we do lab-created diamonds.
35:21The lab-created market is booming.
35:23Even the rings you're seeing, they're made from recycled precious metal, recycled gold, recycled platinum.
35:28So how long ago was this? When did you start the company?
35:31So I left my job in 2013. I had saved up $18,000. I put every single dollar into starting the company.
35:382014 was my first year working on this full-time.
35:42You must have a wonderful sale.
35:44So let's talk about your business.
35:45Yeah, let's do it. So last year we did $8.3 million in sales.
35:48This year we'll be doing $11.5 million in sales.
35:52Wow.
35:53What did you make on the $8.3? What are you going to make this year on the $11?
35:56So we've already done $5.2 this year so far to date.
35:59And we've netted $460,000 cash flow positive on the...
36:03Okay, what about it? Did you make money on the $8.3 last year?
36:05We did. It was a little bit less than $100,000.
36:08What do you charge for, let's say, a two-carat solitaire?
36:11Sure. So yours is very close to two-carat. It's about two and a half.
36:15Right.
36:16Your engagement ring was $10,800.
36:18That is a carbon-created diamond?
36:19$10,000?
36:20That is a lab-created diamond. Every single ring here is lab-created except for yours, Mr. Wonderful.
36:24What's your average sale? What's the amount?
36:26So our average order value is $3,900.
36:28Okay.
36:29So Barbara also has a beautiful lab-created engagement ring.
36:32Yours is $3,400.
36:34And what did you give Lori?
36:37$10,000.
36:38I'm not here to get in trouble, but...
36:40Well, I'm out. I'll tell you that, buddy.
36:42So our gross margins are 41%.
36:45They are.
36:46Yeah.
36:47And 41% for an e-commerce jewelry company is definitely above average.
36:51I think you're a very impressive business person.
36:53And you're a person that from your heart is pursuing this.
36:56But this is not my world.
36:59Okay.
37:00Congratulations.
37:02I'm a huge fan.
37:03I'm a huge fan.
37:04But can I tell you all how much capital...
37:05Chris, can I get back to the numbers just for a second?
37:06Can I talk to you all how much capital we've raised?
37:07I invested $18,000 in 2013, right?
37:10That's every single dollar I had when I quit my job.
37:13We have not raised a single dollar more.
37:15So cumulatively, we've done $26 million.
37:17Amazing.
37:18What?
37:19$26 million plus in sales.
37:20Wow.
37:21I always thought I would have to, of course, invest more money.
37:23Amazing.
37:24I would have to raise money.
37:25I'm going back in.
37:26I'm literally standing here.
37:27We've only invested $18,000.
37:28This is the first time...
37:29Look, it's a fantastic story.
37:30...I've ever pitched anyone.
37:31It's no small feat to be able to go from $18,000 to $11 million in sales and 9% margins.
37:37You deserve a lot of credit for that.
37:41You have a better mission than 99.9% of them.
37:43Sure.
37:44You've probably got better marketing than 99.9% of them.
37:47But that's hard to sustain because anybody else can walk in the door and try to do the same thing.
37:52Yeah.
37:53There's no barriers to entry to compete with you.
37:54And that makes it hard to invest in.
37:56So for those reasons, I'm out.
37:57Okay.
37:58Okay, thank you.
37:59I don't think just anyone can add this to what they're doing.
38:02Yes, they can.
38:03I think it's amazing what you've built.
38:06I built it with nothing but great salesmanship and marketing.
38:09But when my first husband proposed to me, I took a new pair of skis instead.
38:13And it was a good decision.
38:15When I proposed to my second husband, I took a Volkswagen instead.
38:20Because I really wanted a Volkswagen Bug.
38:23So I've never had an engagement ring.
38:25I've never had a marriage ring.
38:26And I've never even ever bought anything real in the jewelry area.
38:31So I'm certainly not your gal here, right?
38:33I really wish you the best of luck, but I'm out.
38:39Listen, let me give it to you straight.
38:41I appreciate your enthusiasm and I believe you are a good entrepreneur.
38:44Okay?
38:46Your valuation is insane.
38:47Here's my offer.
38:48I'll take the 6% basically as a tip, but I'm going to put a royalty on this deal.
38:53A hundred bucks a transaction.
38:55That royalty goes away after I get three times on it, okay?
38:59I'll give you the $600,000.
39:00I make three times that on a royalty of $100 a transaction.
39:04And I put you into my network of l'amore.
39:07And we try and sell more of this.
39:09I actually think that that's a good offer from him.
39:13Because he is in that business, I think Kevin has given you an offer far better than I would.
39:19So for those reasons, I'm out.
39:20Okay.
39:22Thank you, Lori.
39:23What do you want to do?
39:24You only have one offer.
39:38Four sharks are out.
39:40Krish has an offer from Kevin for his altruistic engagement ring company, Do Amore.
39:45You're going to have to make a decision.
39:47What do you want to do?
39:48I'm trying to convince others to come back in.
39:50It doesn't happen.
39:51You know what?
39:52You have a bird in hand.
39:53You have Kevin here.
39:54And he is in the wedding arena.
39:55Listen, if you don't want to do the deal, I'm okay with it.
39:57I gave you a realistic...
39:58It's not really that bad.
40:01At the end of the day, we came to make a deal.
40:05But I don't think that we need help with the things that you're indicating.
40:11We need help with more distribution.
40:13We need help with the marketing part of changing Do Amore into a milestone.
40:16What do you think I do with all my companies?
40:18What do you think I do?
40:19I reduce their customer acquisition costs.
40:21That's what Shark Tank's all about.
40:22That's why you have to pay more for a shark.
40:25Any shark.
40:26But one that's in the wedding industry, you have to pay even more for.
40:29I know this space inside out.
40:31I'm not cheap.
40:32Take the offer or not.
40:33Your decision.
40:34Would you do the $600,000 for 10% of the company?
40:38No.
40:39We're a revenue.
40:40We're growing revenues.
40:41Don't even talk anymore.
40:42No.
40:43The answer's no.
40:44Never.
40:45Never.
40:46I'll do it for 15%.
40:47Wow.
40:48I've done so many deals in my life.
40:49I understand valuation.
40:50It's a discipline I have.
40:52So you have a second offer.
40:53You do.
40:54You have a second offer.
40:55I'll do it for 15% in the heat of the moment.
40:57Do you want to do it?
40:58I'll help you with everything you said.
40:59Marketing-wise, I can help you with that.
41:02Do you have a deal?
41:03One second.
41:04One second.
41:05One second.
41:06Don't walk here yet.
41:07One second.
41:08One second.
41:09No, no, no.
41:10Don't do it yet.
41:1112%.
41:12I promise you I will make...
41:13Daniel, I know all of y'all work hard.
41:14I know that y'all work so hard for your money.
41:16I promise you I will work so hard to literally help solve the water.
41:20You're gonna say no for 3%?
41:21I promise you.
41:22I promise you we're gonna keep growing.
41:24I will change the world with you together.
41:26And, like, you are the one that I want.
41:29Okay, Kirsch.
41:30I'm out.
41:3115%?
41:32You're the one that I want.
41:33I appreciate it.
41:34Now you can deal with Daniel.
41:35Okay.
41:38Make it easy.
41:4015%.
41:41I'll donate the other 3% to your cost.
41:44Can you do $700,000 for 15?
41:45Do you hear what I said?
41:46Yeah.
41:4715%, but that 3% equivalent that we're dividing, I will donate it to the cost that we agree on.
41:52That's really nice.
41:53Do we have a deal?
41:55And you...
41:59Oh!
42:00Yes.
42:01Let's do it.
42:02I am so excited.
42:03You are such a great guy.
42:04Can you shake your hand?
42:05Yes, you can shake your hand.
42:07I'm gonna change the world with you.
42:08Congratulations.
42:09We're gonna do a great job.
42:10Thank you guys.
42:11Thank you all so much.
42:12Congratulations, Kirsch.
42:13Terrific.
42:14Thank you all so much.
42:15I'm so excited.
42:16Wow.
42:17Yes.
42:18Daniel understood what we're trying to do.
42:19Daniel's entire life's work has been social impact.
42:20He was the perfect shark.
42:22With Daniel, we're gonna bring so many people clean water,
42:24as we sell so many rinks.