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00:01Tonight, Tony Hsu, founder of the largest food delivery platform in America, DoorDash, joins the tank.
00:07My entire entrepreneurial career is figuring out how to get mass distribution.
00:12We like to say that the mosquito is our state bird.
00:15Reimagines the ancient wisdom of my heritage.
00:18We're looking for somebody that might want to show the world how metric may work.
00:21I would be Mark.
00:22Arr!
00:23We actually have 700,000 customers to date.
00:25700,000.
00:26I didn't expect that.
00:27We're positioned to change this industry entirely.
00:29Let's reinvest back in the business and let's go for it.
00:32No wait, okay, I got called over to BS there.
00:34You're the biggest blood sucking thing up here.
00:36I'm gonna DoorDash up to you guys right now.
00:39Damn!
00:48First in the tank is a product line to protect you in the great outdoors.
00:59Hey, my name is Nicole Powell and I am seeking 250,000 for 5% of my company.
01:06Sharks, I grew up in Minnesota where we like to say that the mosquito is our state bird.
01:12So, you could say I know a thing or two about bug spray.
01:16Every time we would go outside, my parents would cover me and my brother with icky, sticky bug spray and coat us in greasy chemical sunscreens.
01:26Ew!
01:27Years later, I realized I was still using those same gross, artificial, and environmentally unfriendly products.
01:34And that is why I created Kinfield, the modern outdoor brand that is leading the revolution with clean bug sprays that work and sun care the whole family will love.
01:43Our first product was Golden Hour.
01:45It's a DEET-free bug repellent made with citronella, lemongrass, and vanilla to keep those pesky mosquitoes away and smell amazing.
01:54Since then, we've launched a biodegradable repellent wipe, recovery products, and a line of innovative mineral sunscreens.
02:02So, Sharks, who's ready to build a bug-free and sun-protected future with me?
02:07In front of you are some of our best-selling products, including our full bug and sun line.
02:12This is an entire line, you said, of sunscreen mixed with bug repellent?
02:18No, they're separate products. So, the orange products that are in front of you are part of our bug line.
02:23Your bug repellent smells so good. I'm surprised you don't attract mosquitoes.
02:26Yeah, it doesn't smell like bug repellent.
02:28And how does it compare against DEET, like, in terms of preventing the mosquitoes from biting us?
02:33So, we had the protectiveness of our repellent verified by an independent lab.
02:38The test results showed us that our bug repellent has an average of three hours of protection time.
02:43How did you come up with this idea?
02:44I went to Indonesia. It's an absolutely beautiful country.
02:47But the combination of the heat plus the rice patties means that it is an absolute mosquito paradise.
02:53And it was while I was there that I actually came across the strain of citronella that we now use for our bug repellent.
02:59Okay. So, $250,000 for 5% imputes a $5 million valuation.
03:06So, you better have some sales.
03:08So, I launched a brand in the summer of 2019. We did $45,000 in sales.
03:12Okay.
03:132020, we did $187,000 in sales.
03:16All direct to consumer?
03:17Was all of that through retail?
03:18Almost all of that was online.
03:192021, we did $565,000 in sales.
03:22Yeah. There we go.
03:23All right.
03:24Do you make any money any of these years?
03:25Not quite yet.
03:2622?
03:27So, 2022, thus far this year, we've done $1.5 million in sales.
03:31Good for you.
03:32And we are on track to do $2.1 million this year.
03:34Wow.
03:35Do you think you'll make money on the $1.5 million?
03:36We will not make money yet. We're positioned to be profitable in about a year and a half.
03:40How much are you spending on marketing?
03:42So, our customer acquisition cost right now is about $26.
03:45Okay.
03:46What I'm trying to figure out on every sale, are you losing or making money?
03:50You told me $26 for customer acquisition costs. I don't know your average margin across the product line. What is it?
03:55The products in front of you now are between 79% and 85% margins.
04:00Golden Hour costs us about $4.53 to produce and we retail that for $22.
04:05Cloud Cover, our body sunscreen, this one we pay $5.04 and we retail it for $34.
04:11What's the average sale then?
04:13Our average order value on our website is $45.
04:16So, $45.
04:17Nicole, where are you selling your product?
04:18So, about 80% of our customers buy directly with us online, but I still believe that being in both .com and in retail is important to building a healthy business.
04:28Why do you feel that way?
04:29But it seems like you're growing so quickly. I mean, Nicole, do you need to do that?
04:32I mean, you're controlling your own destiny right now.
04:35We absolutely do.
04:36And here's why.
04:37You need to have the convenience.
04:38There are things that you need because you're going outside, you have a park picnic this weekend.
04:42And so, retail has to be a part of our journey.
04:45You're going to be losing money in retail, won't you?
04:47Not necessarily because…
04:48Not necessarily is a whole lot different than no.
04:52You still have the distribution costs. You have the marketing support costs.
04:55You have to advertise more, not less.
04:57It's the fact that you're going to have to raise a lot more money for your R&D, for inventory, for scaling, for advertising.
05:03Based off the deal you're offering, we get diluted to nothing, right?
05:07Not necessarily because alongside raising investor capital, we're also doing lines of credit.
05:12How much debt do you have right now?
05:14Less than half a million.
05:15Half a million.
05:16It varies by month depending on what we're paying.
05:18Look, you're very, very, very impressive.
05:20But when it's all said and done, where we'd start versus where we'd end up, I just don't see it.
05:25So, for those reasons, I'm out.
05:27Nicole, I'll make you an offer.
05:31I'll give you $250,000 for 10%.
05:33And I hate to say it, but I want a $2 royalty per product.
05:37Oh!
05:38Hmm.
05:39Oh.
05:40Sat.
05:41Until it's paid back only.
05:43Thank you for your offer.
05:44Well, now that we're throwing royalties around…
05:46Oh, Mr. Royalty.
05:47Yes, exactly.
05:48I'll do the $250,000 for 5%, but it can never be diluted.
05:54In other words, Mr. Wonderful always gets his 5%.
05:57And I will also put a royalty on it, but not as greedy as Barbara.
06:01I'll do $1.50 per unit until I get back $750,000.
06:06I'm tempted by your sales and your spectacular presentation.
06:10That's like a double ratchet, Kevin.
06:12I mean, if there's anybody up here that knows how to sell a mosquito product, it's me.
06:18Thank you, Laurie.
06:19It's me.
06:20Well, you're the biggest blood sucking thing up your butt.
06:23Yeah, it's more in common with the mosquitoes, right?
06:25That's why I know this product line.
06:27We're trying to get rid of blood suckers.
06:29Okay.
06:30I did bug bite thing.
06:31Within a couple of years, we did $25 million in sales and we're in 30,000 stores.
06:35Wow.
06:36And we've had offers to sell already.
06:38So here's my offer.
06:39I'm going to give you the $250,000.
06:42I'm only going to take 5%, but I am going to want a royalty.
06:46I'm going to want $4 per the item sold until I get my money back.
06:55Just until they get the money back.
06:56That's almost as blood sucking as Kevin's offer.
06:58Until I get the money back.
06:59Let me rephrase how royalty.
07:00It's not.
07:01When someone asks for a royalty, only until I'm paid back.
07:04That is the equivalent saying, I don't really want to give you any money.
07:07No, it's not.
07:08Of course it is.
07:09It's just, here's my money.
07:10You give it right back.
07:11Mark, you're not giving an offer, so you should just sit there and be quiet.
07:13I'm just telling you how royalty is worth.
07:14All right, Laura, why don't you finish the offer?
07:15Let me explain to you why I would do that.
07:17I don't want to work for free for the next three years.
07:20For maybe down the road, when we sell it, I'm more than worth it.
07:24Well, congratulations, Nicole.
07:25You have three offers.
07:27They're all commensurate with the risk.
07:28Nicole, I'm going to add one more offer into the mix.
07:30Oh, wow.
07:31Just because.
07:32Oh, Tony.
07:33Oh, Tony.
07:34While there are obviously going to be challenges heading into the mix, I'm going to add one more
07:40offer into the mix.
07:41Oh, wow.
07:42Just because.
07:43Hey, Tony.
07:44While there are obviously going to be challenges heading into the mix, I'm going to add one more
07:45offer into the mix.
07:46Oh, wow.
07:47Oh, Tony.
07:48While there are obviously going to be challenges heading into retail, especially as we think
08:04about how to grow this business, I actually think that this business is going to be worth
08:09quite a bit.
08:10So I actually want to be with you more for the equity and not really try to take money away
08:16from you.
08:17My offer is $250,000, 10%.
08:20No royalty?
08:22Straight equity, clean deal, no ratchets, no royalty.
08:27Let's reinvest back in the business and let's go for it.
08:29Thank you for your offer.
08:31Four offers.
08:32Congratulations.
08:33Well, I would match his offer if you prefer it.
08:36So Barbara's matching him to $250,000 at 10%.
08:40Flat equity deal.
08:42So Tony did you a big favor.
08:44Wow.
08:45I am a bit overwhelmed.
08:47Well, can you make a decision?
08:49So the hard thing about royalties right now is that we already take a reduced margin when
08:56we go into retail.
08:57Nicole, this is exactly why I gave you a straight equity deal.
09:00No loans, no interest, no royalty, especially as we head into a lower margin channel that
09:06allows us to get mass distribution.
09:08Tony and Barbara, would you consider joining forces?
09:14Why not?
09:15Let's do it.
09:16You're willing to give up 10%?
09:17For 10%, you could each do $125,000 and take 5%.
09:21For 5%?
09:23You know what, Nicole?
09:24I'm sorry to say it.
09:25I'm out.
09:26I've been there as well.
09:27I know exactly how to help you scale, especially on the operating side.
09:28Mm-hmm.
09:29We'd be willing to do the deal.
09:30$250,000, both of us, 10%.
09:31What you just offered.
09:32Do we have a deal?
09:33You have a deal?
09:34Yes.
09:35Deal.
09:36Hallelujah.
09:37Good.
09:38Congrats.
09:39I'm also a fellow Midwesterner, from Illinois.
09:43Midwesterner.
09:44Oh, Illinois, Minnesota.
09:45Thank you so much.
09:46Yes, you have my outfit on and have you so much.
09:49Congratulations, you did a great job.
09:50Thank you, Nicole.
09:51Thank you all.
09:52Truly.
09:53Thank you all.
09:54Truly.
09:55Really?
09:56Thank you all.
09:58Thank you so much.
09:59Thank you so much.
10:00You have my outfit on.
10:01I'm having the same on.
10:02Congratulations, you did a great job.
10:03Thank you, Nicole.
10:04Thank you all.
10:05Thank you all, truly, sincerely.
10:10I got an offer from four sharks.
10:13Oh my gosh.
10:14I chose Barbara and I chose Tony
10:16because their offer of equity really told me
10:20that they were in it for the long haul
10:22and that they were just as excited
10:23about where Kinfield is going as I am.
10:26You know what, Tony?
10:27I've never gotten into bed with a man I don't know before.
10:29This is exciting.
10:30Yes, you have.
10:31Yes, you have, Barbara.
10:32That's just not true.
10:33I'm insulted.
10:35I was born in China and my family emigrated
10:36to the U.S. when I was four.
10:37My parents wanted to come to the U.S. to create a better life
10:39for our family.
10:40My mom was a doctor in China,
10:42but the U.S. didn't recognize her license.
10:44She had to give up her entire career,
10:45work three jobs a day,
10:46including as a waitress at a restaurant.
10:48My parents pretty much had to sacrifice everything.
10:51I've had a very nonlinear career.
10:52I started by studying cancer research at Berkeley,
10:54and then I decided to go to Stanford to pursue my MBA.
10:56I was born in China and my family emigrated to the U.S.
10:58when I was four.
10:59My parents wanted to come to the U.S.
11:00to create a better life for our family.
11:01My parents wanted to come to the U.S.
11:02and then I decided to go to Stanford to pursue my MBA.
11:05Stanford gave me the opportunity to think about
11:07how technology can come together with business.
11:10That's actually how I met my co-founders,
11:12and we weren't necessarily looking to start a company,
11:14but we were very excited to help local business owners,
11:17a group that all of us were passionate about.
11:19That's how DoorDash came to be.
11:21One of the things we had heard from many local business owners
11:24was that they could not offer delivery.
11:26In fact, they would refuse.
11:28To us, this was crazy.
11:29We were certainly not the first company to launch delivery,
11:32but in many cases in business, the goal isn't to be first.
11:35The goal is to be the last person standing.
11:37Technology has always been a great way to level the playing field,
11:41but usually the access isn't evenly distributed.
11:43It usually starts with the big companies.
11:45To us, DoorDash is about democratizing access to technology
11:49and to empower local economies.
11:51This pandemic hit, our business plummeted,
11:55and all the business came back through DoorDash.
11:58Local businesses really represent the best
12:00of what America has to offer.
12:02Businesses like Honey's Kettle Kitchen,
12:04it's not just the business, but the amazing community
12:07that that company has created over the years.
12:09Jumping into our batter.
12:10Especially as DoorDash gets bigger,
12:12I think it's even more important that I stay closer to our frontlines.
12:15Every employee at DoorDash does deliveries once a month, even me.
12:20Today, DoorDash is the largest local delivery platform
12:24in the United States.
12:25We serve over 25 million customers,
12:27over 500,000 local businesses.
12:30There are over a million drivers,
12:31and we've contributed almost $70 billion
12:34of economic impact in 2021 alone.
12:37The odds of someone coming to this country
12:39with $200 in the bank
12:41to them building a multi-billion dollar company,
12:43and more importantly, a positive change for the future,
12:46is only something that can happen in this country,
12:48and it is my American dream.
12:51Shark Tank is one of the greatest platforms
12:53to level the playing field for the underdogs.
12:56It gives equal access to talent everywhere,
12:59and I'm so excited to be a part of it.
13:01Part of my drive is how I grew up.
13:03Not having very much and trying to make something
13:06out of the lot that I was given in life.
13:08A lot of that drive comes from wanting to see success in others,
13:11and making sure that I can give back
13:13so that collectively we can all be successful.
13:28Next up is an accessory designed to help you maximize your workouts.
13:32Hey, Sharks. I'm MT, and these are my business partners, Braxton and Acleanus.
13:47And we're here seeking $100,000 for 5% of our company, MetricMate.
13:52Hey, guys. This is pretty tense.
13:54They're going to go get some reps in and get pumped.
13:55Woo!
13:56Let's go.
13:57Let's go.
13:58We're going to flash back a few years ago
14:00to watch Braxton do this workout before MetricMate.
14:04All right. He's in the gym.
14:05He's got a pen and paper in hand.
14:06Looks like he's going to write down his exercises and his reps.
14:09Great idea.
14:10If it was 1962, come on. Pen and paper.
14:14Strike one for that, and throw in another strike for the tight t-shirt.
14:18Okay. Moving on.
14:19It looks like he didn't even bring the paper from last time.
14:22He's guessing about everything.
14:24What is he doing today?
14:25Is he even making progress?
14:27Sorry, Braxton.
14:28Strike three.
14:29You're out.
14:32Sharks.
14:33Let me introduce you to your new best friend.
14:36MetricMate.
14:37A patented platform that allows you to turn any gym equipment into smart equipment.
14:42Not only does it seamlessly track your reps and your sets,
14:46the platform analyzes your workout to provide more useful, here we go,
14:50metrics like calorie burn, intensity, force, fatigue, even if you're at risk for injury.
14:57All of this information can be shared with your personal trainer, your coach, your physical therapist,
15:03even millions of your social media followers.
15:06All to increase accountability, but more importantly, to promote healthier lifestyles.
15:11Sharks, invest in MetricMate so we can make sure your bottom and your bottom line get in shape.
15:17Now, we've got the MetricMate technology set up, and we're looking for somebody that might want to show the world how MetricMate works.
15:23That would be Mark.
15:24You got it, big guy.
15:25So go ahead, join us at the shoulder press machine.
15:27Now, two of the things that MetricMate takes into account is one, your tempo,
15:32and two, we're looking for a full range of motion.
15:34All right, Mark.
15:35All you have to do is follow the prompts as you hear it.
15:38OK.
15:39It's going to automatically connect to the device, and all that after that.
15:42Mark, begin your workout.
15:44One.
15:45So if you're not doing the rep correctly, you don't get your rep count.
15:47Got to.
15:48Right?
15:49So you got to burst on that.
15:50Oh.
15:51On that up.
15:52Got it.
15:53That's cool.
15:54Mark said complete, but that was lackluster.
15:57Are you really a shark?
15:58Oh.
15:59Oh.
16:00Oh.
16:01Machines working.
16:02I love it.
16:03Thanks so much.
16:04So there's a device that goes on the machine, and there's an app that you guys are building?
16:08That's correct.
16:09So the device is what we use to collect the data that no other type of equipment has.
16:14But in particular, if you're traveling or if you're at a different gym, putting your pin in and letting it connect the Bluetooth was actually pretty slick.
16:21Now, the question I have is, can I do it on a phone?
16:24Because being able to see it is important.
16:26Absolutely.
16:27So most of the time, you're using it on your mobile phone.
16:30But also, you could have it in your pocket.
16:32You have your headphones in.
16:33And it's talking to you, right?
16:34You're not even thinking about that.
16:35You just not got it work out.
16:36So our metric made assistant is giving you the instructions.
16:38Right.
16:39Besides being maybe a health enthusiast, are you engineers, or how'd you get into this?
16:44Between the three of us, we have eight degrees.
16:46Eight?
16:47Eight?
16:48Yes.
16:49Wow.
16:50We have 15 plus years experience in terms of software, manufacturing, supply chain, and we got a patent lawyer over here.
16:55So you guys are real slouches.
16:57No question about it.
16:58So have you tested how accurate the device is, or is it mostly a recording product?
17:03Most of the data that we get is unique data because everything else is a wearable.
17:08You're getting the biometrics, but you're not getting what you're actually doing on the machine.
17:12We're collecting all of it and using that information along with the biometrics to bring together a full holistic picture.
17:18Okay.
17:19Well, that's an interesting statement right there.
17:20So you say along with the biometrics.
17:22So you're integrating to iWatches and what other devices, because that's where the biometrics are coming from.
17:27Yeah.
17:28We've built the technology to allow that.
17:29Right now, our focus is working with personal trainers to provide a service that is unparalleled.
17:34Like, I work the gym at every station.
17:36I want this thing.
17:37Why do I have to have a trainer involved?
17:39That's why we're here today.
17:40So our funding right now is limited.
17:43So our focus has been on personal trainers because they work with multiple clients.
17:47That means the client has to go to the gym with the trainer because he's got the device.
17:51At this point.
17:52Now, once we get the funding, we're able to proliferate the hardware to now we're able to make that available to our users.
17:58What does it cost you to make right now?
17:59It costs us $99 to produce at a quantity of a thousand units.
18:03And so we could retail it for $199, which is what we plan to do.
18:06Now that we're moving towards being able to put the device in the hands of the trainers,
18:10we've got 10 devices that we're looking to sell.
18:13We've sold five before we got on here.
18:15And the only reason we didn't sell the other five is because they're sitting over here on the stage.
18:18So as soon as we get back to Atlanta, those will be packaged and sent off to trainers to start the revenue generation process.
18:25So if I'm looking at this as just a consumer product, I can just purchase it for $199 online at your website?
18:32So as of right now, we have pre-orders available for the end consumer.
18:36But one of our biggest barriers of entry for going directly to the consumer is government certifications.
18:41So we have about five government certifications that are between $150,000 and $200,000 that are preventing us from being able to send this direct to consumer,
18:49which is why that B2B2C model that we're doing with the gyms and the personal trainers makes sense.
18:54What if I don't want any of that? You know, the cool part to me is I just want to use this as my pin and it just tracks my reps.
19:00Mark, I think what you're asking is, is there a way for just you to use it on your own?
19:03Yes.
19:04That's what I want it for.
19:05I think that's the business here, guys.
19:07Yes.
19:08I think you have a big business in consumers, but it's small business with trainers.
19:12Look, guys, I think it's a great idea as a consumer product first.
19:16I'm really, really afraid of all the analytics. Basic analytics are okay.
19:20Here's how many reps you did. This is the machine you were on, right?
19:23But when you start getting into real analytics where you have to use the biometrics, the engineering and analytics behind that are hard.
19:31Really, really hard.
19:32To me, that makes the business worse, not better. And so for those reasons, I'm out.
19:37You guys, listen, I understand your first model is to go with the trainers, and I respect that.
19:43You know your business, but I think that this would be just really great if you simplified it and just made it for consumers.
19:49Well, help us to do that, Lori. That's why we're here.
19:52Well, I actually am not a huge workout queen. I wish you good luck, but I'm out.
19:57Our roadblock for the consumer is the funding. So we're not opposed to it. The personal trainer is where we have access to.
20:04What bothers me about the deal is I don't know if the consumer is going to like it.
20:08You really haven't given us any evidence. They may, they may not. I don't know. It's early. So I'm out.
20:14Yeah, look, guys, I can see myself trying a product that actually does that, but my strong advice is get it into the hands of consumers.
20:23Let them tell you what's working. Maybe all they want is just instant gratification to know how many reps they've done.
20:28Understood.
20:29But for now, I think it's a bit early for me and for those reasons, I'm out.
20:33So I have a company called PRX. PRX has sold millions and millions of dollars of gym equipment.
20:38We are very successful. We're building our own plant to manufacture now because supply chain is so broken.
20:45So here's the offer I'm going to make you. I'll give you the hundred thousand you asked for.
20:50However, I want to take advantage of my PRX investment. So we're going to manufacture. That's the contingency right here. And I want, are you ready for it? 25%.
21:02What?
21:05You guys, you guys need me so badly. And I know I have leverage here.
21:09You should count.
21:10Lori, you didn't make an offer. I'm the fourth partner. I get a quarter.
21:16Unfortunately for 25%, that's just too high for us because we put in too much. We have the patents. We have intellectual property. We have the software guy.
21:23Is there a counter offer?
21:24We want to do $100,000, but we also want to add in $150,000 line of credit that we can take advantage of. And we want to come back at 12 and a half percent.
21:34No, I'm not doing that deal. If this needs more capital, like all of my companies, I'll figure it out. But if you want to scale this thing, we got to sell 100,000 units in a year.
21:45For 100,000, the highest we could go is 7.5.
21:50Would you be willing to increase?
21:52No. What I want to get is a quarter of the business because I'm now on a journey.
21:56Guys, look, Kevin's very direct. If there was wiggle room, he'd be wiggling.
21:59Yeah.
22:00And he's not. So you guys have got to make a decision.
22:03I'll give you one quick piece of advice, then you have to make a decision.
22:06Where are you going to be a year from now if you do get the money or if you don't?
22:11Even though it may feel painful because of all you've done to get this far.
22:1575% of a watermelon is a whole lot better than 100% of a grape.
22:19Definitely appreciate your offer. We're going to counter if you could do 200K for 20%.
22:24And we'd love to work with PRX to be able to make sure that we can get this thing distributed as quickly as possible.
22:29The offer I made was $100,000 for 25%. You either accept it or you don't.
22:34We thank you for the opportunity. Appreciate it.
22:42Damn, guys.
22:43Wow.
22:44Sometimes it doesn't work out.
22:46God.
22:48Indeed.
22:49Good luck, guys.
22:50Thanks, guys. Best of luck.
22:51Good luck, guys.
22:56You good? Let's go do this thing.
22:58We have no regrets walking out without a deal today. We know it will work.
23:02We can find investors in those areas that can service us the same way.
23:05But the one thing that we won't be able to do if we went out with that deal
23:08is say that we stood on our values and what we came here for.
23:12Honestly, it was on them.
23:13No, it really wasn't.
23:14They've worked really hard. They have three utility pens.
23:16But that doesn't count. How hard does everybody that comes here?
23:18It's probably cost them a lot of money.
23:20They didn't want to give away 25%.
23:21I get it. Nobody does.
23:22They went to 20.
23:23Well, I'll tell you the good news is I'm going to buy one.
23:25I don't have to buy the company to buy the product.
23:32Next up, a modern twist on a traditional beverage with health benefits.
23:43Hi, Sharks. My name is Rosa. I'm from San Francisco, California.
23:57Growing up as a little girl in China, Grandma taught me the philosophy of food as medicine from an early age.
24:03She always brew these healing tonics with a symphony of wild herbs and botanicals that were great for my health.
24:09They worked wonders for me, soothing my stomach and lifting my spirit.
24:14Fast forward to growing up me, I worked a lot of stressful jobs and started to feel the effect on my body, mostly in my gut.
24:22So I returned to Grandma's homemade tonics and sharks.
24:25I became a true believer in gut health and had to share her wisdom with the world.
24:30And that's when I brewed up Wild Wonder, a sparkling drink that reimagines the healing tonics of my heritage by combining herbal wisdom with whimsical flavors.
24:41Our drinks have all the gut-supporting superfoods your body craves, 50% less sugar than kombucha,
24:47and best of all, it's the first drink that combines both probiotics and prebiotics.
24:52Why? Because better gut health should be as easy as popping over a can.
24:57Sip on our strawberry passion for a perfectly sweet and tart refresher.
25:02Dip into our dreamy pink drink guava roast for both floral and fruity.
25:07Try our peach ginger that gives you all the peachy vibes with a zesty kick.
25:11Or indulge your senses with mango gold for a tropical and refreshing taste.
25:16Sharks, food is my love language and I don't believe in giving up taste for health.
25:20I am seeking $500,000 for 5% of this gut-supporting and immune-boosting super drink.
25:27So who's ready to put a modern twist on ancient wisdom?
25:31And join me in drinking our way to better gut health.
25:34Sharks, in front of you are Wild Wonder drinks to sip on and enjoy.
25:39We fresh brew all the herbs and botanicals and pair that with fruit.
25:43I just drank the guava rose, which tasted to me like rose water with a little bit of bitterness, right?
25:49But we're talking probiotics.
25:50Yep.
25:51Every can has 5 grams of prebiotic fiber.
25:54That's unusual in a drink.
25:55We're a more holistic way to approach gut health.
25:58Most companies out there, like kombucha, drinking vinegar, first of all they have that really acquired fermented taste.
26:04And that's not serving the average customer.
26:07I agree with that.
26:08And we're here to really expand the market with no fermented taste and healthy alternative to soda as well.
26:13So as you can notice, every can has 35 calories only, 90% less sugar than soda and 50% less sugar than kombucha.
26:21And there's nothing artificial in it.
26:23Everything is organic certified as well.
26:25It's very clean ingredients.
26:27Rosa, didn't we go to school together?
26:29Yeah, we did. Thank you for remembering.
26:31Tell me your background a bit more.
26:33So, yes, we both went to business school, not the same class.
26:37So let me tell you a little more about my personal background.
26:40I grew up in China.
26:42My grandparents actually raised me for the first 12 years of my life.
26:45Wow.
26:46While my parents immigrated to the U.S.
26:48I came to the States at age 12 with zero knowledge of the English language.
26:52Within three years, I joined my high school's debate team.
26:55Wow.
26:56So then I was the only sophomore from my college to secure a finance internship from Goldman Sachs.
27:01in their New York headquarters.
27:03After I graduated, I worked in private equity and venture investing.
27:07So I know a lot about scaling businesses with capital efficiency and making a return on your dollar.
27:13I launched Walt Wonder in 2020.
27:16I actually had large POs going out to offices like Facebook and Google and COVID happened.
27:21So that actually wiped out my entire revenue stream.
27:24It was a really hard time.
27:26But I basically got to work.
27:28Within three months, I knocked down 200 grocery store doors, got my website up and running.
27:34Wow.
27:35And by the end of year one, I was carried by over 100 stores, including our regional Whole Foods.
27:40Wow.
27:41Good for you.
27:42I'm always fascinated when someone comes into Shark Tank with a beverage deal with a valuation of 10 million bucks.
27:49Because I know how hard it is to get distribution.
27:52And 100 stores, with all due respect, is nothing in terms of what you have to achieve.
27:57But that was last year, right?
27:59That was 2020.
28:00Okay.
28:01We have now how many stores?
28:02So year to date, we've generated over 1.4 million revenue.
28:05We're at a run rate of 2.5 million right now.
28:07We also have some really exciting launches coming up in the next 30 days.
28:10So are you going to make any money this year?
28:12At this scale, we're not net profitable.
28:15Food and beverage is a gross margin game.
28:18I'm very focused on increasing our gross margins.
28:21Rosa, what do you sell them for and what does it cost you to make them?
28:24It costs 90 cents to make.
28:26I retail for $3.49.
28:28And within a year's time, we can get that cost down to 70 cents.
28:32How much money have you put into the business?
28:35We raised last year $2.1 million.
28:37That's all you've raised so far?
28:39So we also have investors putting in money right now.
28:42What valuation are these raises at?
28:44Last year, we raised on a safe.
28:46It's a pre-money safe $6 million cap.
28:49Look, I admire you.
28:51Your story's incredible.
28:52The product's fantastic.
28:54One of the best, I must say, I've ever tried in the tank.
28:57But at 5%, I don't even get out of bed for 5%.
29:00For me, I'm out.
29:02Sorry to hear that.
29:03For me, the risk isn't matching the reward.
29:07I think you're in a very, very, very big market.
29:10So I'm sorry.
29:11I'm out.
29:12Sorry to hear that.
29:13I can't stand kombucha.
29:14I can drink this all day long.
29:16And the utility of it, right, with the fiber and drinkability.
29:20Which one is it that I just drank the whole thing of?
29:22The strawberry passion?
29:23Yeah.
29:24It was really, really good.
29:26But the amount of money that you're going to have to continue to raise.
29:28Entrepreneurs tend to kind of try to find an equilibrium of how much they want to keep
29:33versus how much they can raise.
29:34That's right.
29:35Yeah.
29:36And it's very, very difficult.
29:37It makes it, for a small investor, just 5%.
29:39It makes it really, really hard for us to participate in all the upside.
29:44So for those reasons, I'm out.
29:45Thank you, Mark.
29:46You're welcome.
29:47I think your product presents as well as you did today.
29:50Flawless, really.
29:51I know you invested in some beverages.
29:54I did twice.
29:55There could be some synergies, Barbara.
29:56Listen, the first time, I cried when I lost the money.
30:00The second time, I put in more money to follow my bad money and lost that too.
30:05And then I wrote a note to my attorney, signed it, had it notarized saying,
30:11kill me if I ever go into another beverage company.
30:15And I'm afraid he would kill me, actually.
30:17I'm out.
30:19Well, Tony.
30:20I do think, like some of the other sharks, I think this is a category where you kind
30:27of have to achieve a minimum scale before it actually has a chance.
30:32Yeah.
30:33Your ask was 500,000 at 5%.
30:35Yeah.
30:36My counter to you is the 500,000 and 9%.
30:40And that's my final offer.
30:42You know, I'm not a beverage guy.
30:44But I do understand scaling capital efficient businesses in a very sequential way to have
30:52a chance at that success.
30:53And I think that's what you need.
30:55So the last round, we raised on pre-money save.
30:58So 6 million cap.
31:00I'm happy to meet you somewhere just so that I don't go under that.
31:05Would you be able to do 500,000?
31:106%, but I'll give you 3% advisory shares.
31:14Just so it doesn't hurt my valuation as much.
31:17But you'll get the same amount.
31:22Done.
31:23All right.
31:24Good job, guys.
31:25Awesome.
31:26Oh, my gosh.
31:27I love it.
31:28Oh, we made it happen.
31:29We made it happen.
31:30Congratulations on everything.
31:33Congrats on all the success.
31:34Congrats, Rosa.
31:35So fun.
31:36This is validation for my product and for my company.
31:43I worked really hard to get, well, wonder to where it is today.
31:47We've gone through a lot of challenges.
31:49And it's clear that Tony really appreciates that.
31:53And he believes in me and he believes in the company.
31:56So we're going to take it to the next level.
31:58Let's do it, buddy.
31:59Let's go, man.
32:00Next up is a company hoping to make a dent in the growing plastic waste problem.
32:15Hi, Sharks.
32:16I'm Achal.
32:17And I'm Russ.
32:18And we're Cabinet Health, the sustainable healthcare company.
32:30Did you know that the medicine industry produces 190 billion single-use plastic medicine bottles
32:37every single year?
32:38That's enough to make a line from here in Los Angeles to Australia.
32:43325 times.
32:46And of all of those bottles, only 3 to 7% are recycled.
32:51The rest end up in our oceans, our landfills, and eventually our bodies.
32:55Sharks, in my hand is the amount of microplastics that you unknowingly ingest every single year.
33:03That's 260 grams of microplastics, which is like consuming a credit card every single week.
33:11Wow.
33:12Cabinet Health is a sustainable healthcare company that's invented the world's first compostable and refillable system.
33:19Today we sell and manufacture high-quality, over-the-counter medicines and supplements,
33:24and we're on a mission to eliminate single-use plastic one cabinet at a time.
33:29We're positioned to change this industry entirely, and we're here today to ask for a $500,000 investment for a 2.5% stake in cabinet.
33:39Wow.
33:40So Sharks, are you ready to un-classic the healthcare industry?
33:44Sharks, in front of you is a sample of our products.
33:48It starts with our refillable, stackable, and super space-efficient bottles.
33:54Also right next to that is our compostable, refillable pouches that meet FDA standards,
34:00and while they might look like plastic, are made out of backyard, compostable materials.
34:05So I see you opening them, it's a child-resistant cap, and then you hear that satisfying snap, that's the closure system.
34:12Cabinet promises customers that we'll provide our products less than the brand price with more pills,
34:18and customers continually save by staying sustainable using our plastic-free refills.
34:23So they save about 20% to 30% on pricing.
34:25So the refills come in these packages, these packs, is this the idea?
34:29Absolutely.
34:30So the way that our product system works is when you buy a starter set to customers, that's around $10 to $20.
34:36That glass bottle that you have in front of you is a forever bottle.
34:39When you purchase it, you get that once.
34:41We make a 60% to 80% product margin on that.
34:44So you're selling a commodity.
34:45You're appealing to me because I care about sustainability.
34:49Is that the story?
34:50That's a really important part of it.
34:52Kevin, we actually have 700,000 customers to date.
34:55Wow.
34:56And the reason that they buy from us is, number one, we have a better value, and customers can save sustainably on refills.
35:03So the first refill becomes where the savings start, because this is an expensive package.
35:09Kevin, it's even better.
35:10So our products are priced less than the brand name.
35:13The reason we can do that, I'll let Achelle share about our supply chain advantage, but customers save on the first purchase.
35:18So I'm happy to share how we got started as well.
35:21I think that'll start to answer some of your questions here.
35:23Yes, tell us about you and your story.
35:25I'm a third generation healthcare entrepreneur.
35:28My grandfather built one of the world's first acetaminophen factories 60 years ago.
35:32Wow.
35:33So when most kids were at summer camp, I was literally in a medicine factory learning the ins and outs of this world.
35:38And as weird as it sounds, I loved it.
35:40Along the way, I started my professional career in healthcare strategy and supply chain consulting.
35:46And quite frankly, I was born to build this business.
35:49And while I have a deep personal background in healthcare, my good friend Russ's background in sustainability is really what makes our partnership special.
35:56My personal background is I'm a sustainable product specialist and a US Army officer in the Connecticut Army National Guard.
36:02And I started my career in state and federal legislatures building environmental policies.
36:07From there, I moved over to the private sector where I worked at Deloitte Consulting.
36:11That's where I met Ach.
36:12And I led and started a program that helped scale social businesses.
36:16It would be an appropriate time at this point to say 500,000 for 2.5% imputes a $20 million valuation.
36:24So I've been waiting quietly in the weeds.
36:27Unusually.
36:28Happy to share.
36:30Happy to share.
36:31Absolutely.
36:32So to answer that directly, we'll do $14 million in sales this year.
36:34There we go.
36:35$16 million.
36:36I didn't expect that.
36:37How much are you making on that?
36:38Right now, we're profitable on a unit basis.
36:40We're investing heavily in research and development to be able to bring additional sustainable products to market.
36:45When I hear $14 million in sales, what I really want to know is how much cash flow is it spinning off?
36:50Got it.
36:51So if I understand that question correctly.
36:53It's very simple.
36:54Cash flow is cash flow.
36:55Yeah.
36:56This year, we'll do $8 million in inbound cash receipts.
36:57Is that your net profit?
36:58Is $8 million that you're taking home?
37:00It is not.
37:01So net profit this year will be negative 20%.
37:03We'll be breakeven Q3 of next year.
37:05Now, why negative 20%?
37:07What's the problem?
37:08Great question.
37:09So we're investing about $2.5 million this year into research and development.
37:12No, wait.
37:13Okay.
37:14I got called over to BS there.
37:15What?
37:16Okay.
37:17You've got your sustainable packaging.
37:18You're using OEM medications.
37:20You're not inventing any medications that are going to go through FDA approval.
37:23The products do have to go through rigorous stability testing by drug molecule because we're
37:29completely changing the packaging.
37:30And that's where your research and development money is going right now?
37:33Yes, correct.
37:34We need to invest heavily that the packaging that we've made is safe.
37:38You have to get FDA approval for different packaging.
37:40Absolutely.
37:41Every time you release every single pill count and every single packaging.
37:46Let me save you a little time.
37:47Yeah.
37:48It feels to me like the kind of business that I'd wait forever to get my money out.
37:52There's too much risk in this.
37:53There's always something else to spend money on.
37:56So for those reasons, I'm out.
37:59The next 12 months, what do you project your revenues and your profits to be?
38:03Yeah.
38:04Next 12 months, we're projecting around $25 million.
38:06We'll do about a negative 10% net income.
38:08And then we'll have a break-even point of October 2023.
38:11Can you tell us about the fundraising history?
38:13Absolutely.
38:14So we've raised $13 million from mission-focused investors that believe in eliminating single-use
38:20plastic from medicine.
38:21What was the latest valuation?
38:23$81 million post-money.
38:24So we're here offering you a deal that's four times better than that because we believe
38:28in a valuation.
38:29Wow.
38:30Guys, I'll clear the deck.
38:31I appreciate what you're trying to do on sustainability.
38:34But a lot of what you're doing does not add up to me.
38:37It's just not a fit for me.
38:39I appreciate what you're doing.
38:40But for those reasons, I'm out.
38:42I'm in this space and I believe in the power of sustainability being a motivator for consumers.
38:47I've seen it happen with Blue Land.
38:49But I can't do this deal with your valuation.
38:52It's insane.
38:53Even now, you say it's a discount from when you did it at $81 million if that was the number.
38:57I'll give you the $500,000.
38:58I want 12 and a half percent.
39:00Kevin, first of all, really appreciate the offer.
39:03Thank you so much.
39:04Let me get to the punchline for you guys.
39:06I think the packaging is great.
39:08You're playing in a space with highly recurring business activity.
39:12I'm a big believer in sustainability in general.
39:15That said, here's my offer.
39:31Two sharks are out.
39:32Russ and Ocho have an offer on the table from Kevin for their sustainable medicine company,
39:37Cabinet Health.
39:38But Tony is also interested.
39:40Here's my offer.
39:41I'll do $500,000 and I'll do it at 10%.
39:47Yeah.
39:48I think where you're really going to need help is in the operational excellence of scaling up.
39:53And that's really what, you know, the business at DoorDash, we're all about.
39:56And in terms of what I've done, you know, in terms of my entire entrepreneurial career,
40:00is figuring out every single way to actually optimize that process.
40:06So that's what I actually think, you know, we can do together.
40:10And I think it'd be a huge business.
40:11We do think that your investment and your investments are wonderful.
40:14Could be worth a lot more if we partnered together.
40:16And so I want to get a sense of you be open to doing a deal together.
40:19Or Lori, if you'd want to come in on that.
40:21I think what you've done is really brilliant.
40:24You can get rid of so many plastic bottles.
40:27You did a beautiful job of it.
40:29So I really, really like that.
40:31But I think the valuation is out of this world.
40:35I hate it.
40:36So I wish you guys both good luck.
40:39I'm sorry. I'm out.
40:42Guys, it's time to make a decision, guys.
40:44You can counter, say yes, say no.
40:46It's up to you.
40:47Tony and Kevin will be curious if you'd be open to a creative deal structure
40:51where we can give you an opportunity to earn that equity investment back,
40:55and you guys come in together.
40:56Go ahead and make your counter and see what they say.
40:58How about a deal where you do 3.5% each in terms of equity,
41:02but we give you a royalty where you actually earn your initial investment back.
41:06What's the royalty on each unit's sale?
41:08We can do up to 2% of top-line revenue until you have that initial investment repaid.
41:13I'll tell you what we would do, and I'm speaking on Tony's behalf.
41:15If you let us double our money, okay, and this is not being a savage at all,
41:20so 500k each, then the royalty stops.
41:23Does that work for you, Tony?
41:24I think it works, although the equity feels light.
41:27It is light, except now you've got 2%.
41:29But you put the 2x return threshold.
41:31Exactly.
41:32Yeah, I can get behind that.
41:34You got a deal.
41:35That's the lowest I'd go.
41:41You guys got a deal.
41:42Done.
41:43Deal.
41:44I'm going to DoorDash up to you guys right now.
41:47So nice to meet you.
41:48You're wonderful doing a deal.
41:50You too.
41:51Congrats, guys.
41:52We'll blow it up for you.
41:53That's fantastic.
41:54Congrats, guys.
41:55Thank you very much.
41:56Congrats.
41:57Love it.
41:58You know, every time I get a royalty, I feel warm and fuzzy.
42:02Sometimes you are actually wonderful.
42:05Never.
42:06Never.
42:07With Kevin and Tony on board, we can bring sustainable packaging
42:10to so many more medicine cabinets and learn from the best.
42:13We took a slight valuation hit, but what's really important
42:16is we're on a mission to eliminate single-use plastic from medicine.
42:19To have two sharks on our side to be able to do that
42:22is exactly what we need to be able to solve the problem.
42:25We'll see you next time.
42:40You choose your passion.