Daymond John Cleans Up Nicely On Shark Tank
Sharks may come and Sharks may go, but tonight's episode shows why Daymond John is at the head of this particular shiver.
Let us take a moment to appreciate Daymond John, keeper of bees and holder of the keys to our otherwise flinty heart. A Shark Tank without the promise of a Daymond appearance is a grim prospect indeed. Without him, the show's just a scowling Kevin O'Leary or a preening Mark Cuban or Lori Greiner workshopping new catchphrases. To the rest of the Sharks, this is show business, baby, but Daymond is here to make money first and foremost. You have to admire that singular focus on display week after week.
And in this episode, we got the full Daymond, his Sharkly skills on display in every segment of the show. In fact, years from now, when we erect the statue of Daymond John -- and if I have anything to say about it, that day comes sooner rather than later -- they will show this episode as Exhibit A in how he managed to win our dumb admiration.
Let's count down tonight's Shark Tank pitches in terms of the four Daymond-esque principles on display.
4. Little Nomad
Daymond's Lesson: Know when to walk away.
Elizabeth Granados starts off her pitch with an anecdote that really does not paint her in a particularly flattering light. Elizabeth recounts the time a "stylish mom" friend invited her over, and she was "horrified" to learn this supposed taste-maker had allowed a déclassé child's foam play mat to befoul this shrine of elegance. Oh, the horror! Oh, the shame!
Sadly, the story does not end with Elizabeth's aggrieved friend banishing Elizabeth from the house until she learns some goddamn manners, but rather with Elizabeth deciding that it was her mission in life to develop a printed play mat with stylized designs that makes it "look like an heirloom rug." And all you have to do is pay twice what you'd pay for a regular play mat, just to spare yourself the withering judgments of people like Elizabeth. Anyhow, Elizabeth wants $80,000 in exchange for 15 percent of her company.
Hard pass, says this father of a kid who was a toddler within the past Olympiad and knows that paying up for stylish baby paraphernalia is a fool's game as your child will either a) poop all over it; b) spill things on it; or c) outgrow it. And Daymond is among the first Sharks to realize this, dropping out since Elizabeth is touting a product that "95 percent of the country can't afford."
The other Sharks soon join him in dropping out, for various and sundry reasons. Mark thinks she's better off going solo at this point, Kevin frets about the competition, and Robert Herjavec is stuck on the fact that Elizabeth's still in the presales phase. Lori bails, too, for much the same reason, and I hope that stylish mom friend of Elizabeth's who was subject to so much scorn got some measure of satisfaction from this result.
3. Dbest Products
Daymond's Lesson: Know when to run.
Richard Elden of Dbest Products is...energetic. I mean, to the point where someone probably should have called the Henson Company to ask if a Muppet had escaped. Of course, he has reason to be excited, as California regulations outlawing plastic bags have meant a booming business for his cart and dolly operations. He's racked up $5 million in sales year to date -- double what he did last year -- and he should finish up between $7 and $8 million before the year is done.
But Richard also needs cash, since he only turned a $250,000 profit on his $2.5 million in sales last year. That's not good, especially when you're in a business with 50-percent margins. Richard's trouble is that all the money he makes from selling product then gets funneled back into ordering more product to fulfill orders, so he'd very much like a large infusion of cash, please, to the tune of $350,000 for 5 percent equity.
Two concerns there: at the rate Richard's going through cash, that $350,000 isn't going to make much of a difference, and 5 percent equity isn't going to pique any Shark's interest. Nevertheless, Daymond is the first to toss out an offer -- $350,000, but for 15 percent and a guarantee that he'll finance all future orders. Kevin floats one of his sinister debt deals (a $350,000 line of credit at 18 percent interest plus 5 percent equity on top of that), while Lori essentially matches Daymond's offer. Mark snorts that Lori is underselling herself and jumps in on the deal: the two of them will go in on $350,000 for a 20 percent stake plus a $2 million line of credit at 15 percent interest.
This is when Daymond wisely abandons ship. For one thing, the Lori-Mark deal is exactly the one Richard should take. And for another, Richard starts hemming and hawing and making half-hearted counteroffers. Yeah: run, don't walk, Daymond, especially after Richard eventually takes the Mark-Lori offer, but only after milking his camera time for all the contrived drama he can wring out of this segment. ("WHAT AM I GOING TO DO?" he bellows at one point, as if the answer is not screamingly obvious.) Yeah, good luck working with that, Mark and Lori. Every meeting's going to be Shakespeare in the Park with that guy.
2. The Kooler
Daymond's Lesson: Know when you hold all the cards.
Open up the dictionary to the word "swole," and there's Stan Efferding staring back at you. He's a bodybuilding champion, and he can lift 200-pound dumbbells and flip over giant tractor tires like I can lift up very compact phone books, so if you think I'm going to say anything sarcastic about him for your amusement, think again. "That sure was some biting commentary Phil made about the bodybuilder who appeared on Shark Tank," you'll say. "I'll miss his recaps now that he's been ground into paste."
Also, Stan's product is pretty clever. It's a cooler that carries a gallon of water, but it also tucks in other containers that are kept cold by the water. Stan touts this as a product for bodybuilders -- those extra containers can haul around smoothies and protein-heavy snacks, for example -- but honestly, this could be a nice thing to tote around for anyone who spends a lot of time outdoors. So hell, man, I'd give Stan $50,000 for 15 percent if I had it on me and not just because he could crush me like a cocktail olive.
The other Sharks do not agree with anything I've just said, because they're all tough guys, I suppose. Lori think it's too niche a product; Robert thinks it's not niche enough. And both Kevin and Mark has also dropped out, which leaves only Daymond. Daymond may not be able to dead lift 600 pounds, but he knows when he's negotiating from a position of strength. He wants a third of the company for his $50,000, and Stan, who is clearly no meathead, agrees without so much as a counteroffer.
Daymond's Lesson: Know when to close the deal.
Speaking of products made for the great outdoors, Chris Crawford has come up with something that lets you hose yourself down whenever you've been surfing or camping or otherwise, getting nature's stink all over you. You fill the 2-gallon RinseKit with water, and in short order, you've got a pressurized system that can spray you with a shower-like stream of water for 5 minutes; switch over to mist mode and you've got a half-hour of cooling water.
The good news is that Chris has racked up $800,000 of sales. The bad news? He's also got about $550,000 in debt. And while he still retains 60 percent of the company, other entities control the rest, including Eric Fagan, who's here on behalf of the interests who hold a 10 percent stake in RinseKit.
Chris and Eric want $250,000 for 5 percent of RinseKit, which would give them a $5 million valuation. By Kevin's math, it would also value the company at 18x sales two years from now. Nevertheless, several Sharks are game to make an offer. Robert will pony up $250,000 for 20 percent, while Kevin's got another debt deal in mind -- he'll loan out $250,000 in exchange for 5 percent equity. That sounds pretty good to Lori, who wants the same deal, but with a sales commission.
Up until now, we've heard from every Shark (Mark dropped out quickly), except for Daymond, who decides now's the time to strike. With Lori and Kevin both proposing Chris take on more debt and Robert asking for far too much equity, Daymond says he'll only as for 7.5 percent equity for his $250,000; he'll also want a commission on any retailers he brings into the RinseKit universe, and everyone agrees that's a very good offer for all concerned -- so good that Chris and Eric take it with a minimum of fuss. As well they should if Daymond is involved.