The Kitchen Safe Gets Investment From Lori and Nick
Shark Tank Season 6, Episode 10 first entrants were David Krippendorf and Nick Tseng, founders of The Kitchen Safe. They came in asking for a $100,000 investment in exchange for 5% equity in their company. The Kitchen Safe is exactly what it sounds like, a time-locking safe that allows users to lock up tempting foods, electronic devices, or any variety of objects for a set amount of time. The Kitchen Safe has about $300,000 in sales, 90% of which has been from online orders, and the company has been shipping for only 11 months. The guys are looking to expand into additional outlets, and currently have a PO from HSN. The Sharks have one sticky issue with The Kitchen Safe, though, margins. The safes cost $14.50 to make and are sold for $49. While the guys think they can get the price does to $10-12 to make, that still means a sale price of about $40, higher than the $29.99 the Sharks think it should be. Kevin is the most vocal about his feelings about the company, repeatedly calling it a piece of crap. While the other Sharks attempt to step in and calm Kevin, David gets emotional and responds with an impassioned plea about how much the company matters to him personally. Daymond is first to make an offer of $100,000 for 20% equity, and Lori follows up with the same offer, although Lori’s contingency is that the guys have to take sales to QVC instead of HSN. Daymond reasons that the guys can stick with HSN if they do the deal with him, due to Daymond’s connections with HSN. Nick Woodman, CEO of GoPro, joins Lori in on her offer, adjusting it to $200,000 at 30%, but then dropping it back down to $100,000 at 20% to match Daymond’s offer. The men look to see if any of the other Sharks will make offers, which angers Daymond who says he feels ignored. Unforunately Daymond’s offer can't compete with Nick and Lori's offer that gets accepted and deal is done!
Second presenter that night was Cameron Sheldrake from Off the Cob Tortilla Chips. He came in asking for a $100,000 investment in exchange for 15% equity in his company. Off the Cob specializes in making the first and only tortilla chips made from fresh sweet corn, compared to the dried our grain corn used by competitors. The fresh sweet corn tortilla chips are made with organic and non-GMO corn, that are also gluten free, free of trans fats and low in sodium. The Sharks seem to like the taste, but the financials are a different story. Dried sweet corn costs about $5.50/lb, compared to only about $0.30/lb for the dried grain corn used by other tortilla chip companies. Still, Cameron has already managed to get on shelves with Whole Foods and Wegman’s, and sold out so quickly at Whole Foods that they couldn’t fulfill a re-order fast enough to keep their shelf space. Sales are $45,000 to date, sold for $3.49/pack at Whole Foods which costs about $0.85 to make. Cameron hopes that by working with a distributor he’ll be able to increase production and better keep up with demand. Kevin’s not so convinced, and he tells Cameron that he has 12 months to make the company a success before he should take it out behind the barn and shoot it. Nick and Mark both like the company, however they see challenges with scalability and competing within such a competitive market. Unfortunately there are no offers on the table for Cameron.
Third presntation is by The Magic Cook, a lunchbox and hot beverage mug that cooks or warms food and beverages without fire, electricity or gas. Sharon Yu came in looking for a $100,000 investment in exchange for 20% equity in The Magic Cook. The Sharks are impressed by the demonstration, where regular water is poured over a Magic Cook pack and then sealed, creating a boiling device that cooks the food inside. Sharon says the product is idea for camping or people who want to cook food at their desks, but the Sharks aren’t convinced she’s completely nailed her target audience. The products cost $4.50-$6.50 to make, and they sell for $19.99-$29.99. It costs Sharon $2 to make 5 replacement heat packs, which are sold for $9.99. The Sharks like the ongoing purchases required in order to continue using the products, but they still have concerns about the product needing to be demonstrated in order for consumers to understand how to use it. In addition, Nick just doesn’t think the product solves a problem and is trying to fix something that isn’t broken. Still, Daymond sees something in Sharon, and he makes her an offer of $100,000 for 33%, reasoning that whether The Magic Cook succeeds or fails, he’ll still be able to do something successful with Sharon’s background with manufacturing in China. Sharon asks to consult her lawyer, which Daymond shuts down. After few seconds of hesitation she makes deal with Daymond.
Last that night was Tom Sanetti, pitching his company EarthLogs. Tom is asking Sharks to invest $160,000 in exchange for 20% equity in his fire log company. EarthLogs are made of 100% recycled materials, they produce 80% less smoke than traditional fire logs, they don’t smell bad, and they burn longer. Tom admits that he knows his $200,000 in sales over the last four years isn’t impressive, but he’s hoping a Shark can help him with both marketing and distribution. Namely, he has offers and letters of intent with a number of national retailers, but he’s held off on signing deals up until this point because he simply can’t build the inventory on his own. The Sharks all like the product, but most of them don’t see the company as investable at this point. Still, Lori see a spark in Tom, and says that he reminds her of ScreenMend, whom she made a deal with last season. Lori makes an offer of $160,000 for 35% and deal is done.