Shark Tank Nearly Suffers A Cat-tastrophe
We almost spend an entire episode of Shark Tank without anyone getting any money of any sort. Did everyone leave their wallets back in 2016?
I don't know if the assembled Sharks spent too much on holiday presents or Lori Greiner's New Years resolution was to maybe let the checkbook gather dust for a little bit. But we came perilously close in this episode to the Shark Tank equivalent of a perfect game, where every single would-be entrepreneur trudges back to the green room empty-handed. And while normally that would warm my cold, cold heart, tonight it would have been a bit of a bummer, since Jason and Angelica Sweeting, the evening's final pitchers, have themselves a really nice product.
That would be Naturally Perfect Dolls, toys they created to challenge the prevailing standard of beauty -- you're not that good-looking, Barbie -- while giving their daughters a doll to play with that looks like them. The only problem with their plan to jump into the toy industry: it requires jumping into the toy industry, with its deep-pocketed companies that could churn out similar dolls with the tip money they normally spend at their three-martini banquets. None of the Sharks wants to take that risk, and it seems like we're going to end things on a sour note, when the Sweetings change their tune on retail sales -- before they were gung-ho about going into stores, but that cooled the Sharks' interest considerably -- and Daymond cuts them a deal. He'll give them $200,000 and take 30% of the company while the Sweetings have 60%. But, you're sputtering, that only adds up to 90, you math-illiterate dope. Well, the other 10% will go to a charity that supports young girls. Now who feels bad about calling me a dope?
Anyhow, the Sweetings get their money, and that's a good thing because boy howdy, was it clear that no one else was going to walk off with a sizable check during this episode. But just how clear? Let's rank the remaining Shark Tank supplicants based in descending order of who came the closest to parting the Sharks from the money.
3. Victory Coffees
Cade Courtley is a former Navy SEAL and sniper who has turned to the coffee business, as so many of our snipers do. (I mean, not to spoil the twist ending of American Sniper, but when Bradley Cooper made snow angels in that pile of Arabica beans, I thought "Give that man an Oscar.") Cade wants to set up a vet-owned, vet-operated coffee company that features organically grown, fair trade products. And in a blind taste test, most of the Sharks favor his coffee over the one from Competitor X. The exceptions? Daymond, who can't tell the difference; and Mark Cuban, who prefers lighter coffee, because he is a weirdo.
So what's the problem? Well, for starters, Cade talks about the vast size of the coffee market, which is off-putting to the Sharks, as light coffee-favoring Mark explains, since it just stresses how competitive the market is. The business also seems to be at a pretty early stage to appear on Shark Tank -- just $30,000 sales in eight months, albeit with little advertising. Some Sharks also express concern that Cade's business model is a little unfocused, and one by one, they bail out.
Which is a mildly surprising, given Shark Tank's love affair with vet-owned businesses and tendency to do theme-based shows around the topic. If nothing else, I would have expected Robert and Kevin O'Leary to team up on a deal to throw us off the scent that they are, in fact, secret Canadians. Small consolation to Cade, who wanted $250,000 in exchange for 20% equity, but he probably came the closest here to getting a deal.
2. PDX Pet Design
PDX Pet Design did not come close to getting a deal. Oh boy, did they not. But to be fair, when you show up with a tongue-shaped brush and instruct very wealthy people to stick it into their mouths so they can simulate licking a cat, you should probably not count on breaking the bank.
Tara and Jason O'Mara -- no, not that one -- have built themselves a quirky pet toy business. One toy, the Shrue, is a motorized ball your cat chases around. The other, the Licky Brush, is what it says on the label: a tongue-shaped brush you operate with your mouth so that you can pretend to be a mama cat licking your fellows clean while your relatives mutter about how maybe you're a little too into cats at the moment.
"I hate myself so much right now," Robert says, after gamely trying out the Licky Brush. Be sure to stick that endorsement on the box!
Impressively, the O'Mara's have generated $300,000 in sales. (Would it shock you to know that 80% of that comes from the perfectly sane-looking Shrue product?) Less impressive is the valuation they're asking for -- they want $300,000 for 15% of the business. Also, Lori Greiner notes, for a company that prides itself on putting out products that go viral -- and the word "viral" is uttered so often in this segment, it loses all meaning -- shouldn't sales be higher? The O'Maras are sent off without a deal, retreating to lick their wounds with all those tongue-shaped brushes they have in inventory.
1. Basic Outfitters
If you would have like to see a Shark Tank pitch go south at Usain Bolt-esque speeds, do cue up the pitch for Basic Outfitters. Laura and Michael Dweck start out well with a perfectly sensible business proposition: you give Basic Outfitters $60, and they ship back a drawer of up to 17 basics -- underweart, t-shirts, socks, and the like -- saving you the heartache of having to trudge around stores. And these are not items that are going to fall apart within seconds of coming into contact with your skin. Both Lori and Daymond enthuse about the quality.
It costs the Dwecks $25.90 to assemble a drawer full of clothes, so the margins are pretty good, and they're forecasting $500,000 in sales. So hand over that $125,000 for 10%, right?
Wrong. For starters, the Dwecks are sitting on $397,000 of inventory. "We want to be prepared," Michael explains. And I hope one of the things they wanted to be prepared for was getting scolded on TV for having too much inventory on hand. But those concerns are rapidly superseded by a more pressing matter: in an earlier investment round, the Dweck gave up 75% of their company. Robert muses that doesn't make them owners so much as they're now the hired help. "Capital management-wise, this is the worst I've seen," Mark concludes.
But Kevin sees an opportunity. He will invest that $125,000, but he wants 25%. Not the Dweck's 25%, because that would be cruel even for Kevin. No, instead that 25% would come out of the stake held by the other investors, which would at least give the Dwecks a little bit more skin in the game. That sounds good to Lori, who makes an offer identical to Kevin's.
And so we turn to that awkward moment when two people must negotiate the sale of something they do not own. The Dwecks initially seem optimistic about their ability to sell off someone else's equity, but eventually, there's so much hemming and hawing that Lori and Kevin pull out.
If you wanted a nice chaser for this nightmare of a segment, Kevin chooses this moment to proclaim that he wears $99 underwear. At least no one broke out a tongue-shaped brush, though.