Coffe Joulies and Teddy Needs a Bath Get Offers
It’s hard to believe but Shark Tank season 4 has reached its half way point. Entrepreneurs can learn a lot from watching the tank and it seems the show keeps getting more and more intriguing with every new episode. Here is what was happening on the set this past week.
First into the tank were Dave Petrillo and David Jackson, owners of Coffee Joulies. This company offers a nifty little invention of small silver beans that absorb heat to cool hot beverages, and then circulate the retained heat back into the beverage to keep it at optimal drinking temperature for hours. This product works thanks to a proprietary chemical inside, and can be used for any type of hot beverage, or even soup or oatmeal. As usual, the Sharks were eager to hear Coffee Joulies’ numbers, and the guys didn’t disappoint. Impressively, the men hit $575,000 in sales last year, much of which was put back into the company to fund patents and research. O’Leary was the first one to offer $150,000 for no equity, but he wanted a royalty of $6 per sale until his investment is recouped, and $1 in perpetuity after that. Other sharks smelling a great deal join in. Except Mark who decides to take the road less traveled, and instead offers Dave and David $250,000 for 12% with no royalties, with the intention of eventually selling the company. When Coffee Joulies’ founders step out to talk, Kevin’s group senses the deal may be slipping away from them, and they quickly revise their offer to a $3 wholesale royalty and a $6 retail royalty. Coffee Joulies accepts beefed up offer.
Next into Shark Tank was Teddy Needs a Bath, seeking a $50,000 investment in exchange for 10% equity. Owner-mom Nicole Townend was inspired to create the company by her own daughter’s dirty teddies. Teddy Needs a Bath is a reusable laundry bag for washing stuffed animals. Kevin again jumps in first and makes an offer of $50,000 for 50%, and he wants a royalty of 10% of sales each month. Cuban is right behind him with offering $100,000 for 40% of the company. Kevin quickly changes his offer to compete with Mark, he’s now asking for 30% in exchange for $50,000, and he wants the 10% sales royalty until his investment is recouped, with a 5% royalty after that. Kevin tries to make his offer more attractive but still Nicole is more interested in a deal with Mark Cuban. She counter offers Mark with $100,000 for 30%, and 10% royalty until his investment is recouped and the deal is done.
Last presenters were Jerry and Naomi Hancock asking sharks to invest into their Sub Zero Ice Cream business. The couple asked sharks for a $300,000 investment in exchange for 12% equity. Sub Zero Ice Cream is different from other ice cream stores because the treats are made right in front of customers with the help of a little liquid nitrogen. This product brings a number of advantages for ice cream store owners – no need for freezers, and it’s fun for customer to watch the ice cream being made! Initially, the sharks were impressed with Sub Zero’s $2 million in sales but then they learned that recruiting a poor business partner had cost the Hancock’s $500,000 in their buyout to regain control of the company. Hancocks have a great vision and impressive projections but past partnership blunder makes sharks hesitant to make a move. No deal was made.