Dreams... You have them.
Five venture capitalists want to fund them. But you're
going to have to prove to them that you are worth their
time AND money. Time to reopen the Tank...
OWNER: Nate Berkopec; New York City
PRODUCT: The Factionist
OFFER: $30K for a 20% stake
Nate's company wants to be ethically
conscious and make the world a little bit better. His target audience:
18-to-24-year-olds who want to make the world a better place. He has the
drive, but he doesn't have the capital. Will that change after tonight?
Environmentally friendly clothing is
bland and expensive. The Factionist wants to change that. His shirts
have things like "Buy Fair Trade" and "Recycle" and "Volunteer" and "If
You Don't, Who Will", and "My Religion Is To Do Good". He says that it's
a movement. So far, he's sold $3000 just getting started. There's no
business right now, only silk-screening graphics on organic shirts. And
they're not even unique. And there's no real branding on the shirt.
Robert says that there are millions of
people who have all of what Nate has, but they have more of it. What
Nate says they don't have is "authenticity". Kevin O. is the first one
out. The other Kevin is out due to no track record on sales. Robert says
he's got an incredible amount of passion... but he has to have real
data, and $3000 in sales on silk-screening is "ludicrous". He and
Barbara are out. That leaves Daymond, who knows a little bit about
T-shirts. And he's afraid he's out.
Call it a learning experience. You can
have the drive and it can get you places, but it's all about the money,
all of the time.
OWNER: Anthony & Tina Calvert; San
OFFER: $250K for a 30% stake
Anthony is a deputy sheriff for the
county who got the idea when he was injured as part of SWAT. He and his
wife have found that there's a huge demand for the product, but there's
So what's the product? A face-down
tanning/massage pillow with... pockets!
He's sold short of 6000 units for the
last two years... Each one is $29.95. They cost $7 to make. He's got
catalog distribution. He's got orders that he can't fill. But back to
the numbers. $250,000 for a third of the company. He made about $21,000
last year. There's a bit of a disconnect. The numbers are small for the
resources. He believes that with the proper know how, this will take
Robert puts in a reality check. All this
is potential. He sums up the value of the company as... $100,000. It's a
good product, but the Calverts are completely overvaluing it. So for
that reason, Kevin O is out. Kevin H says that it's both regional and
seasonal, in that it is more of a beach product. He's out. Daymond likes
the product... and he can make the Calverts so damn rich on this. BUT he
made a tactical error in the evaluation. He's out. Barbara's out for the
same reason. That leaves Robert. He suggests a small loan for $50,000 or
$100,000, but all of the Sharks are out.
I'm no venture capitalist, but I can tell
you ... anyone can see that this is a good product, but Anthony put a
huge price tag on it, not taking into account any of the product that
they moved. So if you're going to go into the Tank... make sure you
undervalue the company, not overvalue it.
REVISIT: Body Jac
Kevin H. and Barbara made an offer to
Cactus Jack for his sit-up machine, the Body Jac, with one
contingency... that he TRY the machine out to lose 30. Some time
later... he arrives in Barbara's office, which Kevin has equipped with a
scale. He's at 275. He needs to be at 245, or the deal is off. The scale
says... 243! That's a done deal, and it has Kiana Tom to go with it.
OWNER: Kimberly & Matthew Foley;
PRODUCT: Wee Can Shop
OFFER: $200K for a 30% stake
Kids shop for the ones they love, and
they learn about thinking of others. In short, it's Tiny Town for the
Wee Can Shop is a family business, owned
by the two siblings. The locals love their idea. Every year, they've
increased income 100%, with $13,000 coming in last year. Robert doesn't
think it's enough to earn a living.
At the start, they put in $120,000 from
friends and family, small loans mostly. She can have all the passion and
all the tears in the world, but the fact remains that they're not making
a profit. Kevin O says that there's no merit in a second store until the
first store makes money. "There's nothing more evil than a business that
doesn't create a profit. And the only way to fight evil is with evil.
You have to shut it down." He's out. And he's taking Barbara with him.
Kevin H says his son would probably love the shop, but he's out. Daymond
says that he's out, but they have a chance to begin again wisely. Robert
says that there's no data to support this business... All of the Sharks
are out. The data is perhaps telling her to change direction.
Kevin O says that they've got to put a
timeline on this.
OWNER: Tim Stansbury & Erin Whalen;
PRODUCT: Grease Monkey Wipes
OFFER: $40K for a 40% stake
Tim & Erin are recreational cyclists.
They got the idea for their product on the road when Erin got a flat
tire. It's not just for cyclists, but for everyone. So what is it? It's
a portable cleaning product... a wet-nap, if you will. They utilize a
natural non-toxic citrus derivative. The ingredient: citrus oils. It can
clean permanent marker, crayon, paint, and, oh yeah, grease.
Unfortunately, there's no patent. They're
a brand new company AND they have to put the formulas out there. They
want to get into the public mindviews first. But the Sharks like the
trademarked logo. That logo has translated into $7400 gross revenue. The
bike shops they sell to reorder. Tim has a solid business background.
Daymond's out. It's not a business for
him, but he loves the presentation. O'Leary has a thing about lack of
proprietary content. The only thing that's unique is the logo. He's out
on that. Kevin H doesn't think it's unique enough in the market. He's
out. Barbara doesn't think that she's gotten her hands dirty enough to
be in. Robert... looks like he's about to throw up. In the end...
HOLD ON. Barbara wants back in. 50/50
deal between Robert and her... So...
ACCEPTED: Tim & Erin's offer of $40K for
a 40% stake.
And remember... don't be afraid to play
dirty. We'll play some more next time.
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