Narrator: "Shark Tank" is for anyone who dares to dream.
Sharks, I'm asking for some serious dough.
How much debt do you have?
We're forecasting $2.1 million.
Whoa! What do you need?
Harris: I need a little bit of guidance.
If you guys like Kobee, want to bet on Kobee.
I love your dare to dream. You have that tenacity.
Narrator: And tonight, Kendra Scott,
founder of billion dollar jewelry sensation
Kendra Scott, joins the Tank.
I dared to dream that it was possible to have big dreams.
You should dream big.
I don't want a job. Okay?
I'm the chef, Mr. Wonderful.
I just need your money.
♪♪
Narrator: First in the Tank is a winter sport accessory
that is functional and fashionable.
♪♪
Hi, Sharks. My name is Kelly.
And I'm Cristina.
We're from San Francisco, California,
and today we're seeking $200,000 in exchange
for 10% equity of our company, Yardsale.
Sharks, if you've ever skied, you probably agree with us.
Ski poles kind of suck.
They're clunky and easy to drop.
[ Laughter ]
Plus, they're made of cheap materials.
They come in limited colors,
and I think we can all agree they're pretty ugly.
We're lifelong skiers and know first hand
that people are constantly looking
to upgrade their ski gear.
But when it comes to innovation,
ski poles have been, well, long forgotten.
That's why we started...
Yardsale! Yardsale!
Yardsale ski poles blend
clever design and great style for the everyday skier.
The best part about Yardsale poles?
They're magnetic.
We've hidden magnets in the handles
and the baskets so that they stick together,
making walking to and from the car or getting on
and off the lift and even easier experience.
Skiers love how Yardsale poles are fully modular,
so you can mix and match between the five eye-catching
colors on our website to create your own custom pair.
With Yardsale, we're not only making ski days easier
and more fun, but we're creating a lifestyle brand for
the millions of recreational skiers out there.
So, Sharks, who's ready to ditch your old poles in the snow
and ride the chairlifts with Yardsale?
I love it. I love that name.
I just got to ask. Is this a sample?
Why the name Yardsale?
Haven't you ever had a Yardsale on the mountain?
Are you, like, what are you, a black diamond skier?
You don't know what a Yardsale is?
It's when you lose everything, your skis come off,
your poles come off.
It's like they call it, like, you know, like a Yardsale.
Like a garage sale.
So, like, does everybody that skis know that?
It's kind of an insider term.
Kendra clearly is a skier in the room.
And clearly I've had a lot of yard sales.
And it actually goes a bit back to the origin stories of
how we actually came up with the idea.
Cristina had a infamous epic yard sale or wipeout,
and that's where she came up with the idea.
Ashbaugh: I had a bad Yardsale.
It got me thinking about my greatest frustration
with the product, which for me is when you're carrying them,
they're always crossing over. Yes.
They're falling down.
And so I thought, why has nobody put magnets on ski poles?
And are you the only one doing this?
Yes. McGee: We are.
I started tinkering with my old poles,
and I basically taped some magnets to the handles of these.
I walked around the corner to Kelly's house
because he lives very close by to me,
and I asked him what he thought.
No one has ever, in decades, rethought the humble ski pole,
yet every skier needs them to ski.
Greiner: What are your backgrounds?
I've always been passionate about design,
and so I was very fortunate to follow that pursuit to MIT,
where I studied mechanical engineering and product design.
Afterwards, I worked at Apple
as a product designer across various teams.
And as an avid skier,
I was ready to jump into a consumer product.
So are you guys full time in this?
We are. We are. Yeah.
So my background is more on the marketing side of things.
After college,
I worked for a hardware tech startup in marketing,
and then I transitioned to the venture capital side,
where I was the head of content and PR
for a VC firm in San Francisco.
One of the most important things
to note as well is that over 60% of our customers
online customize their poles,
which means that we have a huge adoption rate.
So, you're not doing any retail, right?
So we are in a few specialty stores.
So what's your price compared to a regular pole?
Absolutely.
So we just launched six months ago,
and we make the product for about $30.
We landed it for $42, and we sell it for $139.
It's 75% margin.
What are like the average poles?
Great question. We're in the upper
middle range of the market. Okay.
So on the lower end, you have about $50, $60 poles,
which are just cheap aluminum ones.
But on the upper end, you have really advanced poles.
But we sit really in the middle,
and there's other poles that are in our range,
but no one that offers features like we do.
What have you sold so far?
Great question. Yep.
In the first month, right before the holidays this past year,
we did $100,000 in sales in our first month.
Good for you. Wow. Good job.
So our fiscal year to date, $220,000 in sales.
220? Yes.
And we are forecasting to end the year,
which for us ends in September, at $300,000.
Okay. Next year, we're forecasting
$2.1 million in sales.
Cuban: Where and how did you sell them?
Yeah, so we launched D to C only.
We'll be expanding into retail next winter.
With who?
Well, what was really exciting is in our first 30 days,
we had REI reach out to us, Backcountry,
Decathlon in Europe.
When I get new poles, I'm in the boots in the store,
and we're sizing, and, you know, we're trying
to figure out exact -- you know, the pose, right?
Right. Totally. So what happens to you?
Those are a little long for you.
Do you need multiple different sizes
of this in inventory?
They come in five sizes.
That's an inventory nightmare, right?
Well, we got an answer for you, Mr. Wonderful.
Okay.
What you can actually see in our kids poles,
which are on the far left here, is that they're adjustable.
And we'll have adjustable poles for adults next year, as well.
Wait, so you mean they'll continue to slide?
Yeah, so actually as kids grow, they'll grow with the poles.
That is amazing!
I have kids from ages 10 to 22, by the way,
I don't see that out there.
Let me just tell you how I feel.
So, um, first of all, I don't really love the name.
I think it has a bit of a negative connotation
and an incorrect connotation for
a premium quality brand new item that's innovative.
Yardsale just feels like it's a disaster
and it's when the worst thing happens.
And then I'm not a skier
and have to feel passionate about the product.
Love the people, but don't feel it here.
So I'm sorry. I'm out.
Thank you so much, Lori. Thank you, Lori.
John: I love the name.
So when I started FUBU, they were like, "What is a FUBU?"
Is it Italian, is it Japanese? Is it number three that
won the pu pu platter? What is it?
And that's exactly became a conversation
that stood out from everybody.
You know how many times people come up here...
Yeah. ...their name is too close
to something else, and then they spend a lot
of money, and they lose it.
I will say it is one of the biggest reasons
skiers have paid attention to our brand.
I agree. I'm part of the snowboarder
community, and we hate you guys.
[ Laughter ]
So I don't know. I just don't like skiing.
Um, this is just not for me. Um, so I wish you all the best.
Great innovation. I'm out.
Thank you. Thank you, Damon.
I've never skied once in my entire life,
and I have no intention of starting.
So for those reasons, I'm out.
I love this, I love the name. This is really great.
It's catchy, but, you know, you're early.
This is six months in.
You're putting really a $2 million valuation
on a business with what you're asking.
And we realize there's a high risk behind that.
And so actually, one of the things that we did was,
we, you know, are obviously asking for $200,000 for 10%,
but we do have a lot of profit margin in our product.
And so therefore we do actually have a bit
of a secondary offer in our back pocket.
Are you about to say royalty?
Mr. Wonderful, we'd love to talk to you about.
Let's hear it. So if you're willing,
we'd love to make you an offer of $200,000 for 5%
with a $3 royalty
until you recoup your initial investment of $200,000.
That's the first time a company has ever ever offered...
Offered! ...to Kevin a royalty.
Offered a royalty!
We ain't afraid of a royalty.
That's a first.
I would prefer to model it this way.
Um... Uh-oh.
I'll do the $200,000 for 20%,
and I'll take my chances on distributions.
I want a distribution when you distribute to yourselves,
but I want to wet my beak on this one.
I want 20%. Well, yes, absolutely.
We'd love to talk about what Kevin would have to do
to roll up his sleeves and really help us.
Ooh! Well, I don't want a job, okay?
You know, you just said you need somebody
who's going to roll your sleeves up.
Honey, I've done it. I get retail, I get omnichannel.
I think you have a great direct to consumer,
but wholesale is where you can really build this business.
That's how I started Kendra Scott.
I'm going to do 20%, as well.
Plus I want the $3 back until I recoup my 200 K. Okay?
Thank you. All right?
The difference here is I really do think I can help you
with this wholesale strategy.
I'll drop my ask to 15%,
but I'll take the $3 royalty till I get back $400,000.
So it's just a 2X.
Would you be interested in doing $200,000 for 8%?
We'll drop that equity down,
but will increase your royalty to $5 a unit
until you recoup $300,000.
I'll do it at 10%.
I want the royalty, but I want a 2X on it. Right?
That's just going to put us
in a really tight position in the future.
Oh, come on. Actually, we think at $5 a unit,
we can actually get you your 300 K back,
if you will take that offer, within under two years.
Getting my money back is not why I do deals.
I want to get a multiple on it.
Kendra, would you be interested in that
sort of a royalty offer,
which is $200,000 for 8% with a $5 unit royalty
until you recoup $300,000 back?
You know what? I actually really like that.
I like that, I do like it.
Can we do 10%, and you have yourself a deal?
If you'll drop to $250,000 on the royalty payback,
you got yourself a deal.
$300,000.
Oh, my God, $50,000?
Come on!
We up the upfront cost to $250,000 at 10%
with a $5 royalty until you recoup $300,000 back.
Done. You got yourself a deal!
Yes! I'm gonna come over here.
I'm skiing over.
Thank you so much, Kendra.
Oh, my God, thank you so much.
We're gonna have so much fun.
I'm gonna have these everywhere I go.
Thank you so much.
This is so exciting.
Thank you, guys. Thank you all.
You skiers deserve each other.
[ Laughter ]
That was crazy. That was insane.
Kevin has an amazing team, but Kendra was really --
Kendra is a behemoth. She's also a billionaire.
She is a billionaire.
And she seemed really excited and really,
genuinely just, like, willing to roll up our sleeves
and help us with all the things that we need help with.
Narrator: Next up are clean beauty products that
harness the power of nature.
♪♪
Hello, Sharks! My name is Kobe Harris.
I'm here today seeking $300,000 for 6% equity
in my company, Kobeesco.
We believe Mother Nature herself deserves the best kiss.
Sharks, let's talk about lips. We all have them.
We all use them. But are we treating them right?
That's why I created Kobeesco is 100% natural,
handmade and sustainable lip balms
that don't just lock in moisture, they lock in
trust and transparency
because our ingredients are so clean that you could eat them.
But don't. We source our beeswax from happy bees
who listen to classical music all day.
[ Laughter ] Our oils are pressed from plants
who have won beauty contests.
Can you believe that, Sharks? Nah, I'm just kidding.
Kobee is made from only four simple ingredients.
[ Laughter ]
Beeswax, coconut oil, sunflower seed oil,
and mango butter.
I started with lip balms,
but I've quickly expanded to a lotion bar,
lip scrub, cuticle butter, and even a hand salve.
So who's ready to pucker up, kiss the bad ingredients
and plastic packaging goodbye with Kobeesco.
Sharks, I front of you is an assortment
of Kobeesco products,
so you too can be a part of the Kobee's hive.
Wow, I love the packaging.
Yeah, I like how small these are.
Greiner: So each lip balm is a tiny little thing.
Mm-hmm. Correct. Smells very good.
Cuban: I like the flavor. Those are cool.
We have we have 10 different flavors.
I did start off with like a traditional size lip balm tube,
but since I wanted to be compostable,
you have to be able to push it up
because there's no twist function.
So it has to be a little bit shorter, it has to be
a little bit wider, so you can put your finger up there.
Yeah, that's smart.
Kobe, are you selling in retail with this?
No, it's really all online right now.
Direct to consumer on our website,
and then Amazon, as well.
Tell us about you.
I started this when I was a freshman in college.
Actually, I was doing research on packaging and bees
with one of my sustainability professors.
I went to my mom. I was like, " Hey, mom, I got this idea.
It's called Kobee's.
I want to make all natural lip balm, personal care products.
I need a little bit of money to, you know,
just get the base ingredients."
So she gave me 200 bucks, went on to Amazon,
bought, you know, all the raw ingredients that I could find,
you know, the beeswax, the butters, the oils.
Really just spent that whole summer formulating.
It was like three months.
And then I worked as a lifeguard.
So I ended up towards the end of the summer,
passing it out to, you know, everybody that I could find.
I would go home from my shift,
make 50 balms in a little hot plate on my bedroom floor,
you know, mixing up wax with the pipette,
filling them one by one, and then I would walk around
to the pools. I love that.
That is awesome. And then hand them out
to people at the pool. Whoa.
So that first summer is really
where I kind of started to figure some things out.
So I had a day where I made $3,000 in sales.
That was the most money I've ever seen
in my entire life in my bank. I remember it hit.
I was like, I was so excited. I was ecstatic.
Such a good feeling. Yeah.
And then I think a month later, I had a day
where I made $10,000 in one day.
And then towards the end of the summer,
like two weeks before classes went back up,
did the 15 grand in sales one day
and went on my campus portal, exited out of all of my classes.
Oh, my God. And since classes were
online, I just told my dad, you know, I'm still in school,
but really, I was just in the basement making lip balms
and trying to market all day.
[ Laughter ]
So, Kobe, your story is so amazing,
and it really touched me.
I did the same thing, and I dropped out of college,
I ended up starting my business.
So I hear that. My dad today obviously looks at
me, and he's like, "Honey, you made the right decision."
I bet your parents are so proud of you.
Yeah, my mom was a huge proponent of kind of help.
She started a couple businesses
when she got out of school, as well,
because I was going to school to be a doctor,
actually, at first. That's what I wanted to do.
I went to summer camps for it.
I took summer classes, shadowed surgeons.
When I went to my mom that summer, and I was like,
"Hey, Mom, I think I might want to switch from trying
to become a doctor to make lip balm."
And as crazy as it sounds, she was like, "You know, Kobe,
you know, I understand, you know, go with your gut."
And that's kind of what's propelled me
forward to have the confidence to be able to do some
of the things that I'm doing.
That year, we did about 30 grand.
The year after that, we did about $200,000.
And then last year, we did $864,000.
And this year, we've already done a little over
$1.5 million to date.
Whoo! Wow.
1.5!
Wow! Like, wow!
Greiner: That trajectory is quite, quite large.
But what was it that made that change?
Um, I just learned how to run Facebook ads,
like TikTok posting videos.
That's really what I know how to do.
I'm, you know, Gen Z, I'm a young kid.
I know social media.
Do you know your ROAS, your return on ad spend?
And it's about 2.5 to 3.
Okay, that's a little light.
But my question is for an investor,
I look at this and say, if you know your ROAS
and you know your CAC and customer acquisition
and I give you $300,000,
why wouldn't you just use that to pour it on the fire?
In other words, you don't need anything else
other than more capital to spend more on advertising.
Sure. What does it cost you
to acquire a customer?
Um, right now blended, it's 14, 15 bucks.
What do you make on your average order?
Uh, $32.
Our main skew was like a six pack
or a six to nine pack.
It's the lip balm.
The rest of this stuff is a fraction of the sales?
Yes, so lip balm was about 75% of our sales.
The rest of it is personal care, it's about 25%.
This little unit right here costs $5?
I mean, you sell it for?
Sell for $5. Costs 26 cents to make.
What are you going to make this year?
So I think we'll finish the year with around
$3.5, $4 million.
What are you going to make on that after you pay yourself
and all your employees?
I think we'll net about $700,000 to $800,000.
So, Kobe, first of all, as a mom of sons,
I have a son about your age,
I'm blown away by your story.
Like I'm so proud of you. This is not my --
This isn't my wheelhouse. Sure.
I want to buy your products.
I'm going to use your products.
I'm going to tell everybody about it.
But it's just not the right investment for me.
so I'm out.
I appreciate it.
Kobe, what do you need?
I need somebody who can give me a little bit of guidance.
We need a little bit of help maybe with distribution.
You know, lip balm is a $5 SKU,
so it's really hard to sell a lot online
if we're not selling a huge volume.
So I think being in those checkout counters,
the point of purchase retail would be very, very helpful.
I could get you retail in pretty well every big box.
And they do sell millions of dollars a week in lip balm.
Sure. So that but to get
the shelf space at point of sale, that ain't easy.
Yeah, that's tough.
Because you're displacing somebody,
and they're going to want a listing fee for that.
I like the deal. I'll make you an offer.
I'll give you the $300,000 for 20%.
20%? Yeah.
Okay.
I don't think you're worth 5 million bucks.
Greiner: So, Kobe, I'll tell you what I think.
Sure.
I feel that it's a hard road once you try to go into retail,
because how do you stand out amongst the rest?
Because there's so many out there right now
and some with the "bees" kind of name.
Sure.
I really feel it's a great online business for you.
Sure. I love it, and you've done
a great job, but not really right
investment for me. I'm sorry. I'm out.
I appreciate it.
So I think you're going to crush it.
I just don't see the lip balm business as something
that I can really bring the value add that you really need.
And so for that reason, I'm out.
Thank you.
Man, I love this. And it reminds me of my story.
You know, my mother was the same way.
She wanted to start her own businesses.
But, uh, you know, life happens. She became a single mother,
and, uh, she had to, uh, work a bunch of jobs
to make sure that I was okay. Sure.
So she wasn't able to fulfill that dream.
So we kind of got together, and mom helped me,
so I really love this.
I love the idea.
Um, I just don't think I want to be in this business.
I want to be in the Kobe business, though.
But this is not the business I want to be in,
so I wish you all the best.
It's not for me. I'm out.
Thank you.
Well, then there was Kevin.
All roads lead back to the big bee in here.
Narrator: Four Sharks are out.
Kobe has an offer from Kevin
for his natural lip balm company,
Kobee's, but he wants a much bigger steak than the 6%
Kobe came in offering.
I would never go into the lip balm business
because it's so competitive.
The only deal I'm looking at is giving you $300,000
because I really think you're sharp, I really do.
I want to show this to my retail distribution partners,
but I don't want you to fall in love with that too fast.
Sure. Because I really want to focus,
if we're going to do this deal, on this ROAS thing,
because you've proven you've got enough gasoline going here,
that we can make the flame bigger.
But I want 20%. A lot of work.
I want to get my money back one day.
So $300,000 for 20% is $1.5 million.
We'll end the year doing almost having netting
$700,000, 800,000, so really about two times that.
And you're saying the only thing that I'm going to be
really using the money for is pouring it on marketing.
So why can I not go get a loan for $300,000...
spend it on marketing. You could.
You could. Absolutely. You know, then I'll be --
I'll be right there and keeping all 20%.
Yeah, Kobe!
What I will say is, I know lip balm is not
the traditional business, but like you said,
if you guys like Kobee, you want to bet on Kobee,
you know, this is one of those things
I would love for you guys to be a part of.
I would add one thing, though,
you could do that or you could do it the way I do it,
and there'd be a big difference in yields
because you don't have the advantage of scale.
What we do is consolidate our buys across all of our companies
and buy at a fraction of what you're paying
because you're just Kobe.
Not that you're a bad guy.
It's just you don't have the buying power.
Just between you and I, that's my deal.
You don't have to take it, Kobe.
Make a decision.
I understand. So you wouldn't do even $300,000 at 10%?
No, no.
Uh, I'm not going to give up 20% of my company today.
What would you give up?
Um, I'd be willing to take more money.
No. I think $300,000 is enough for what you're doing.
It's a big ask, actually, for what you've got.
If I stay at $300,000, you won't meet
in the middle between 10 and 20.
That's 15.
Tough decision.
I know.
[ Sighs ] 15%.
It should be painful, Kobe.
I know. Those are great deals.
I'm suffering like an animal right now
about the 5% I just gave up.
He doesn't want to suffer like an animal, too.
Yeah. No. Me neither. Um...
Pain. Both sides, pain.
I won't do that.
I appreciate it. Thank you, Kobe.
Appreciate you guys.
Greiner: Hey, good luck, Kobe. Congrats.
So impressed by you.
Ultimately I walked out of here without a deal today.
But I think that's okay.
You know, I've turned down deals in the past
that might have seemed good at the time,
but at the end of the day,
you have to feel like you need to trust your gut.
You know your business better than anybody,
and I know my business better than anybody.
And no one person is going to build Kobee's.
Kobee is going to build Kobee's.
So I think we'll be just fine going forward.
Narrator: In season 15, we watched 8- year old
Gavin Batarse, his sister Morgan, and their dad Jon
make a deal with Michael Rubin and Mark Cuban for Glove Wrap,
which Gavin invented to help break in baseball gloves.
Just put the ball in the glove and wrap it up with Glove Wrap.
That's literally it!
Let's see what they're up to now.
Gavin: Closing a deal with Mark Cuban and Michael Rubin
has been a game changer for our business.
Before "Shark Tank", we only had $19,000 in sales,
but now it's been 10 months,
and we already have over $200,000 in sales.
Our social media has exploded.
Before, we only had 30 million views.
Now we have over 100 million views
and over 350,000 followers.
We were only selling online in six mom and pop shops.
But after "Shark Tank", we're on every shelves across
the country, and we just got our first P.O. from Dick's,
but the best was still yet to come.
Michael Rubin was able to open doors to MLB,
so now we are the official glove rep of Major League Baseball.
I saw that you had more hustle than me at 8 years old,
I said, "That's a guy we got to back and invest in."
We're at MLB All-Star Weekend, handing out product,
meeting our favorite players, couldn't be more excited.
Breaks in a baseball glove. I invented it.
Rubin: Having a deal in place with Major League Baseball
gives them the ability to access all
of Major League Baseball players.
They have the official Major League Baseball batter man
on their products, and it just gives the sense of authenticity
that he needed to take the business to the next level.
I think the company has tons of potential.
He's already doubled his business.
He's got capital behind him.
Getting this to more and more players,
team based Glove Wraps from Little League
to the top players, that's what Glove Wrap can do.
Jon: When we walk around baseball games especially,
we have a lot of parents and kids
that come up to us saying
that our story has inspired them to work on something together,
and that's been one of our favorite parts
about this whole journey.
Cuban: You know, with all the resources we have
to learn things on the internet, any kid can figure out
any business, any time.
So go out and try it, create that product,
start your own company, and you can be like Gavin.
Gavin: My advice for any little kid like me
who wants to start a business is just go for it.
If there's little problems you see, solve them.
If you find something you love,
there's a way to make a business out of it.
Thank you, Shark Tank! Thank you, MLB!
This is amazing!
♪♪
Narrator: Next up is a modern version
of an ancient beauty technique.
♪♪
Hi, Sharks.
My name is Aliyah Marandiz, and I live in Austin, Texas.
Let's be real. Hair removal sucks.
It's a tedious task that we have to do over and over again.
As a hairy, brown girl with very sensitive skin,
I've left so many waxing salons with less hair,
but my skin -- my skin was collateral damage.
Well, Sharks, hair removal has never been sweeter.
Literally.
Say hello to Sugardoh,
at home sugaring kits to remove any hair.
We like to say, "We got your back and your front, arms,
legs, and anywhere else."
Made with just sugar, water. and citrus, our all natural
sugar based dough gently pulls hair from the root
while exfoliating your skin.
People really do that?
Leaving you feeling silky smooth, and it's a gentle,
compostable alternative to waxing.
So, Sharks, I'm the sugar mama to Sugardoh,
so I'm asking for some serious dough.
I'm seeking $500,000 for 5% of the company.
John: Oh! Man, come on.
Kendra, my friend Richad here is in need
of some sugaring himself.
Do you want to come up and be his sugar mama
and sugar with me?
Do I get to like remove -- Yes, you do.
Oh, yes! Oh, my gosh, this is so exciting.
Kevin's back. Make her do Kevin's back.
Yes, I Know. Are you serious?
This is my dream come true.
So Sugardoh is made with this taffy like goop.
And it is very fun to play with.
It's kind of similar to caramel or taffy,
made with similar ingredients, as well.
Okay, what do I do?
So you can actually try on this side.
Okay, so tell me if I'm doing this right.
Okay. I'm gonna... Mold it into your skin.
I'm gonna let it heat up a minute.
Exactly. And I'm going to help it.
And then you want to pull taut with the other hand.
So pull the skin taut, and then three, two, one...
Oh, I did it!
This is so satisfying!
You did a really good job, Kendra.
Cuban: It's so satisfying.
Awesome.
I'm gonna dismiss Richad. Thank you so much.
Thank you. Good job, buddy.
O'Leary: Trying to wrap my head around the $500,000,
5%, $10 million valuation.
This innovation is ancient.
It was found in Phoenician times.
Women have been using it forever
all through the Mediterranean. Marandiz: Yes.
And I mean, there is zero proprietary elements to it.
Anybody can do this.
So help me, help me, help me get to $10 million.
We've actually worked two years to create
a proprietary manufacturing process
and also our own formulation.
So that's where we have some of our own IP to be able to...
You do. You process is the IP.
Yes, exactly.
So that would be a good time to tell us a little about sales.
Cuban: Sales! Sales!
Sales.
I would love to tell you about our sales.
I launched in September 2020 as a solo entrepreneur,
and at that point, at the end of the year,
I made 50 K in revenue.
Got it. Fast forward to 2021.
We went viral on TikTok, and we made $2.6 million in sales.
John: Whoa!
From 50,000 to 2.6?
50,000 to 2.6. Then?
That's what I'm talking about.
Then last year, we ended the year in $5.6 million in sales.
Alright. Wow, wow.
So we first started in D to C, and then we grew to Amazon.
And then at the end of 2022,
we made it in 300 Ulta Beauty stores.
Okay. Last year, we expanded full
nationwide, and into 1,300 stores.
Well, that'll do it. And so that's where
we had that big bump in sales.
Did you make money on the 5.6?
No, we didn't make money.
How's that possible? You didn't?
Marandiz: We didn't make money.
So in order to make profits in retail,
we learned the hard way that you really need
85%, 90% margins.
Our margins were around 60%.
However, this year, we updated our suppliers
and we implemented our manufacturing process.
And so our margins are now hovering around 80%.
Did you lose money or...?
Yes, we lost money last year.
How much did you lose?
We ended the year in negative-77%.
So you lost. 440-some thousand dollars?
Mm-hmm.
How did you fund all those losses?
Me and my husband invested $400,000 of our personal money.
But you lost 400.
So then that goes into our debt that we have, right?
How much debt do you have?
We have $1.5 million. Hello!
There we go.
Yeah, we also have $1 million in inventory.
But it also means that you have, like, no cash right now.
We have no cash right now.
That's why I'm here in the Shark Tank. Yeah.
That is what you need.
That is what I need right now.
Yeah. Especially if we want to get into more retailers.
You can't afford to go into more retailers.
We have debt financing,
which is at a high interest rate of 22%.
Hello! There it is.
So your total debt is 1.5.
Yeah, that's what's killing us right now,
is because 20% of the money that we borrow is just out the door.
We had all this money tied up in inventory,
and now we are rightsizing.
So, so much has changed in the last few months.
Going through hyper growth like you did is hard
Yeah. Yes.
Borrowing money to get there,
put you even further underwater because you're always --
it feels like you can never catch up and get even, right?
Yeah. I wish I had a way where
I could just say, Here you go, this is the approach."
But, you know, I thought when I walked in and saw it,
I thought this was food, and I got hungry.
I just don't know this stuff at all,
so for those reasons, I'm out, but I wish you the best.
Thank you Mark, I appreciate it.
Aliyah, the ask is too big.
Without even fighting about the evaluation,
I would never value this at $10 million right now.
You've got sales. I like that, but you got a long way to go.
You know, if you'd come in here for like 100, 150,
even 200 maybe I take the ride, change the valuation a bit,
but this is nuts.
I think it's nuts. So for that reason, I'm out.
Thank you, Kevin.
Yeah, so it's hard because you couldn't predict
that you're going to go this high.
And then as soon as you got that level,
you had to learn what you didn't know.
Right? The amount of margin on these things.
And then you got to borrow money against it.
You can't leave Ulta empty handed
when they're asking for goods.
Yeah. But, uh, you know,
to give you $500,000 for 5%,
uh, you would have to distribute $10 million, uh,
if you're doing really well.
That's to get your money back.
You just to get my money back,
that means you probably would have to do $50 million.
You'd be older than the Phoenicians
that invented this by the time you got your money back.
I'm out.
Thank you so much.
Aaliyah, you're amazing, by the way, and, you know,
as you were talking, I've been there.
Like, I made some of these same mistakes.
I did my business on a line of credit.
Yeah. I was bootstrapping everything.
I had credit card debt.
Yeah.
I mean, it was hard to get anybody to invest in me.
You know, I know what that feels like.
But what you're accomplishing is really, really exciting.
I mean, you went from 2.8 to 5.6.
I love what you're doing. This is just not my business.
And I'm a little worried about the of debt
that you have, honestly.
Before you say no, I'm willing to make a deal,
and that's why I'm here.
I have worked my butt off for the last four years
and grown super fast
to be able to get to the point where I'm at now,
and I really would like partnership.
And you are Sharks. You guys love problems.
This is a great problem to solve.
[ Laughter ]
We don't know if we love problems.
You love solving problems. Y'all are problem solvers.
Or else you wouldn't be here.
The $500,000, that's just a big ask.
And it's not even going to really put even
a little bit of damp on what you've already
got to deal with, right?
It's not going to really solve a lot of problems.
But I really do admire you. I'm out.
Okay. Thank you. I appreciate it.
One of the things that concerns me truly is
just the competitive market.
And so I wish you good luck, but I'm sorry, I'm out.
Okay. All right. Thank you guys so much. I appreciate it.
Good luck, Aliyah. Thank thank you.
I am disappointed that I'm walking out without a deal.
I really think that with the sales that we had
that they could see the potential.
But I love surprising people. I love proving people wrong.
And so I hope in two years, they see Sugardoh in tons
of different retailers, and they're like, "Oh."
♪♪
Narrator: Next up is a business
that turned a healthy ingredient into a not so guilty pleasure.
♪♪
Hi, Sharks.
My name is Kimy, and I'm from Oceanside, California.
I'm the intuitive baker extraordinaire behind Doatnut.
I'm seeking 100,000 for 10% equity in my company.
Sharks, we all know Americans struggle with salt, fat,
and sugar addiction,
but eating a sugar free, gluten free,
and/or dairy free diet can often feel
like you're eating dry cardboard with high calories
and an unappealing aftertaste.
That's why I took on the challenge to create
a healthy version from a guilty pleasure.
Say hello to Doatnut!
This might look like it's full of sugar or ingredients
that we can't pronounce,
but what if I told you that this contains no dairy,
no gluten, less than one gram of sugar
found naturally in sweet potatoes,
and you can count the ingredients with one hand?
Let me sweeten the deal for you.
It's only 90 calories.
The magic behind Doatnut is in organic groats,
which are oats in its original purest form.
Once the farmers harvest the oats,
they are tested for gluten, packed,
and shipped to my little pink store,
where I mill it into fresh oat flour.
It's a farm to finger experience.
Sharks who's ready to partner with me
and bite into the best decision of your life?
Me, me, me, me, me, me, me.
A little pink store. Is it really pink?
It is. So pretty.
So each of you has three of my Doatnuts in front of you,
representing my most popular flavors, churro.
That's what I just ate. Very good.
And it is sugar free, by the way.
It's very good.
The frosting is all sugar free dairy.
It smells so good. And what do you use?
Do you use any sugar alcohols?
It's very moist.
Are you using allulose or Stevia?
I use monk fruit as a sweetener.
Monk fruit. This is great.
That churro one. Very good.
This is just 90?
That's right. And it has two grams of fiber.
Two grams of fiber.
So ingredient wise, it's your oats, your special groats.
Oats, sweet potatoes, egg whites.
Egg whites, monk fruit. What's number five?
Baking powder. Baking powder.
I've never heard of the term groats.
So like, did you come up with that term,
or is that a term that's used in...
Yeah, that's a term. Okay.
So when the farmers harvest the oats,
when they pull it off the husk, that's a groat.
Okay. So it has not been touched at all.
So you're grinding the whole seed?
I am. The benefit of milling it yourself is one,
you're retaining the natural oils
that are found in whole grains versus it sitting on a shelf.
And then it also has almost like a brown butter,
almost taste to it.
And I mill it fresh every morning.
Well, Kimy, I will say something.
We get a lot of products like this here on "Shark Tank"
because people are concerned about sugar, salt, all of that.
These actually don't taste like [bleep] I'm amazed.
Greiner: No, they taste really good.
How are you distributing them?
Yeah, so I have a little pink store I actually --
Of course you have a pink store.
Look at how cute that is.
Greiner: Super cute.
John: That's the little pink store?
It's really cute. That's the pink store.
Yes, so I sell at my little pink store.
And I actually just turned two years old.
So how much does it cost you to make these doughnuts,
and what do you sell them for?
It cost me between $0.70 and $0.80 to make it.
Okay.
And we retell it at the store for $3.50.
Cuban: Too cheap.
You know, for a solution like this, I think $4.99 works.
I could eat half one of these for dessert.
That's 45 calories without any spiking.
That's fantastic.
The question is how to scale this business.
How many can you make if this thing blows up online?
So right now, I do all the baking,
I do all the marketing, I do all the selling,
I do everything.
How are you going to scale it?
But that's why I'm here, Mr. Wonderful,
so that I can scale it, hopefully.
Do you ship them frozen?
So I don't. I ship them fresh.
And then I put a little note card to refrigerate
or freeze right away.
And are you shipping to other bakeries or other businesses?
So when I first started, I went from gym to gym,
uh, selling my Doatnuts.
And as a matter of fact,
this is a full circle moment for me
because my very first pop up event,
I set up my table next to this most beautiful table
that had some gorgeous jewelry on it,
and I walked over to introduce myself to the gal
and she said, "This is Kendra Scott Jewelry."
[ Laughter ]
I love it.
And she went on to tell the story about
how you started in your spare bedroom with $500.
Yep. And that you went from
boutique to boutique,
and at that moment, I dared to dream.
Aw. I dared to dream
that it was possible to have big dreams.
Now here I am.
And I just feel like things happen for a reason.
They absolutely do. I mean, what an amazing story.
And you should dream big.
You were destined to be next to our little table that day.
I love that.
But you're a single operator, Kimy.
I am.
You're coming in here for 100 grand,
and investors want to see returns.
Yes. And you're not worth a million bucks yet.
Listen, the product --
We don't even know her numbers yet.
Well, Mr. Wonderful, let me tell you,
my total sales have been $350,000.
Since the beginning of time?
From 2021. What about this year?
Lifetime. Yeah.
For sales this year, are $50,000.
Okay, that's not a lot of sales, Kimy.
Narrator: All Sharks are still in.
They're impressed with the taste of Kimy's healthier doughnuts,
Doatnuts, but they're not impressed with her low sales.
Okay, that's not a lot of sales, Kimy,
to be honest with you.
From my point of view, the product's spectacular.
I will become a customer,
but you're not worth a million bucks right now.
I don't see doing this deal
because there's no plan for me to get a return.
But I'll be a customer.
Well, Mr. Wonderful, but we could do
wonderful things together!
I know, but I don't need a job as a chef.
I'm already a chef.
I'm the chef, Mr. Wonderful. I just need your money.
No, listen, it's a great product
without a business plan. That's what it is.
You just have a great product.
That's a great place to start
because this is actually a good product.
And I never say that unless it's true.
It's a very good product. I'm sorry, but I'm out.
John: Kimy, I, um, I like I like it,
but this is not my type of business.
I think there's some more qualified Sharks up here
with better experience in that area,
so I wish you luck.
I'm out.
Thank you, Damon.
Scott: Do you see, like,
part of your plan is to open more little pink stores?
Like, is that part of the dream?
Oh, absolutely.
Well, listen, Kimy, I had one store in Austin, Texas,
and I could have never dreamt that today I would have 138.
So I love your dare to dream because it is possible.
It is possible with a great product and dedication to it.
You're doing all those things.
I'm sitting here, and I'm struggling.
One, I love you, and I look at you,
and I see so much similarity going into a market that is,
you know, a very big market.
You have that tenacity. You have that passion.
I can see it.
I can feel it from sitting here with you.
And the product is really, really good.
I'm just -- this is not something that
I'm as familiar with.
I don't sell into grocery stores, right?
I don't think that I'm the right investor
to help you expand the way you need to expand.
And for that reason, I'm out.
Kimy, do you have any debt or any, like,
other crazy stuff we should know about?
I have $70,000 in debt.
Okay. 70 K. Anything else?
No, no, I actually have invested every last penny.
I mortgaged my house, and the rest, I just...
So you're still living in the same house?
Before Mark says more to you, I just want to say something.
Okay.
This is completely my cup of tea.
Like I am your customer.
I haven't eaten a doughnut from a normal store in 20 years.
Like I don't eat doughnuts.
Um, no offense, doughnut community,
but I just don't -- I don't eat doughnuts.
This is not a doughnut.
And this is not a doughnut. This is delicious.
I love that it's all healthy ingredients,
like you check, check, check, check, check to the moon
all the boxes that I love, and Mark loves those boxes, too.
So we are both your perfect customer.
I can see -- Oh, I'll blow these up.
And partner. Blow these up for sure.
Yes. Like, we would love to make you an offer
and to blow this up in a variety of ways.
Scott: Two Sharks.
The offer is?
So the offer is boom.
$150,000 for 30%. So we each get 15%.
We give you a little bit more cash,
and we'll be your biggest advocates
and your biggest salespeople.
And we will make this big.
Like this needs to be everywhere.
Thank you so much. I really appreciate that.
Would you be willing to do it for 20%?
I mean, it's going to take a lot of work.
Right. I'd be willing to go to
$200,000 to help you pay off your debt.
So we get the 30%. $200,000 for 30%.
Yes, yes!
Oh, I love it! I'm happy for you.
Let's go, Kimy. Let's go!
Scott: I'm so happy for you!
Aw, so good.
Oh, my gosh. Thank you so much.
I love it. It's a great product.
Great product.
Mr. Wonderful, I expect an order from you.
You'll get one. Congrats, Kimy.
Thank you so much.
Wow! So good.
Boom. Love it.
The success of my business means everything to me.
But it's had a slow growth.
It's just me doing everything.
But now with the Sharks,
we are going to conquer the world
because they believe in this product just as much as I do.
And I just love them, and I'm so happy!
Just at night after dinner,
have two of these, 180 calories.
I like at the breakfast.
180 calories for two doughnuts.
That's insane.
It's insane.
This could be our biggest deal ever.
That's how big it could be. Wow.
Wow!
♪♪