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00:00.
00:30.
00:36First in the tank are sisters seeking to share an old family recipe with the world.
00:43.
00:48Hi, Sharks. I'm Casey.
00:50And I'm Vanessa.
00:51We're from Boston, Massachusetts.
00:53And we're the two sisters behind...
00:55Jaju Pierogi.
00:56Today, we're seeking $300,000 for 8% equity in our company, Jaju Pierogi.
01:02Wow.
01:03Okay.
01:04I'm actually not a pierogi.
01:06So, Sharks, do you know what our love language is?
01:09It's pierogi.
01:10Pierogi are Eastern European dumplings traditionally made with potato, cheese, and dough, boiled, and fried in butter.
01:18Growing up in Western Massachusetts, we always had pierogi from our grandfather's deli in our freezer.
01:23There was no mac and cheese.
01:24We were hungry, grab pierogi, and fry them up in some butter.
01:28When we went off to college in Boston, our mom would hand deliver these same pierogi to our dorms.
01:32And all of her friends would ask, hey, where'd you get those?
01:36Inspired, we dusted off our grandfather's handwritten recipes and got to work creating Jaju Pierogi.
01:41We used the same ingredients our grandfather used.
01:44Our dough tastes like it was rolled out on the kitchen table.
01:46Our pierogi are pre-boiled, flash-frozen, and ready to eat in 10 minutes.
01:51They're great for families and individuals alike.
01:54So, Sharks, who wants to come smell like butter with us?
01:56And make pierogi a household staple!
01:59In front of you, you'll find our lineup of flavors.
02:02Potato and cheese, sweet potato caramelized onion, jalapeno cheddar, loaded baked potato, and kielbasa red bell pepper, as well as
02:09some sour kraut and sour cream for dipping.
02:11So, Vanessa, I'm Eastern European. If I had, if I was on my deathbed, and God said to me, Robert,
02:18you can have one meal, it would be pierogies.
02:22That's amazing.
02:23I grew up in pierogies.
02:24I grew up in Pittsburgh.
02:25Yes.
02:26All right, here we go.
02:34This is a good pierogi.
02:38Yum.
02:38Let me just tell you, one of the beauties of pierogies is it's greasy and gooey. This loaded baked potato
02:43is greasy and gooey.
02:44I mean...
02:45It's so good.
02:46Thanks.
02:46It has a lot of umami.
02:47Vanessa, why is it called Jaju? It is not a Polish name.
02:52So, Jaju is the phonetic spelling of grandfather. So, in Polish, Jaju is like an affectionate way of saying grandfather.
03:00Is that your grandfather there?
03:01Yes, our grandfather is here. So, the whole inspiration for this business is that we grew up around his deli.
03:08In 2016, we went back to the deli, took our grandfather's handwritten notebook with all the delis from like 1960,
03:16and started tinkering around.
03:18That's so beautiful.
03:19We really know what to expect. The first market we went to, we brought 40 boxes, and we sold out
03:22in an hour.
03:23We're taking names, phone numbers, addresses, like trying to deliver.
03:27But up until the end of last year, I mean, it's still the two of us, so we're in 2
03:31,500 stores, and it's been the two of us.
03:33No brokers.
03:34No brokers, nothing.
03:35All of us.
03:35Oh, wow. That's an accomplishment.
03:36Good for you.
03:37Let me give you some good news, because I've done a lot of research in this space.
03:40These potstickers, dumplings, pierogies, are the fastest growing convenience food in America right now, beating pizza growth.
03:47Yep.
03:48I invested in it into Brooklyn Dumplings.
03:50When I saw the growth numbers, I couldn't believe it.
03:52And you're in the frozen section.
03:54Yeah, so frozen.
03:55And who are you in, do you mind saying?
03:57So, we're nationwide with Whole Foods, with Sprouts, and then we're in Mom's Organic, we're in Harris Teeter, we're in
04:03Fresh Market.
04:03Wow.
04:04Our sales this year will be 2.7 million.
04:07Are you guys profitable with that?
04:08So, last year we actually lost $100,000, and we would have been profitable, but we didn't negotiate for our
04:16contract with a large grocery chain like we should have.
04:19We were very emotional about getting into the chain.
04:21I knew middle of last year that we were going to run out of cash.
04:25So, I knew that that was the first time we had to go raise money.
04:27Obviously, I had no idea how to do that, but my back was against the wall.
04:30So, I felt like at the end of last year my organs were like falling out of my body because
04:35cash flow is such a problem like with food, right?
04:39Like you put, you know.
04:40And you're growing, and you're growing every year, and then you don't have no money.
04:44And there's no money.
04:563.75.
04:573.75.
04:58In less than a year.
05:00When we raised money, we were not national with Whole Foods.
05:04We are officially national with Whole Foods, and so we're projected to do 2.7, 2.8 this year.
05:11We've been at Whole Foods for three weeks nationally, and we are moving like between 12 and 15 bags, just
05:18starting without any demos, nothing a week.
05:22That's very high.
05:23Are you impressed by that?
05:25Yeah, it's very solid, but I'm not sure that it justifies at 3.75 million dollars.
05:30Shark.
05:31Listen guys, I don't see it as the right business for me right now, so I'm out.
05:36Thank you, Lauren.
05:37Per package, what does it cost you to make, and what does it cost you to, what do you sell
05:42it at Whole Foods?
05:42Okay, so for the retail bag, it's $3.89 for the bag to make.
05:48How many pierogies in it?
05:49There's 12.
05:49Okay.
05:50And then the cost of the distributor is $6.33.
05:54Wow.
05:55That's not great, that's not great margins, that's not great margins.
05:58What is the sell at retail?
05:59Suggested as $9.99 to $10.99.
06:01That's your problem right there, isn't it?
06:03Yeah.
06:03Because you don't have a lot of wiggle room.
06:04You need to knock off 35% off your manufacturing costs.
06:08This is a great product, I love them, I hate too many of them, that's part of the problem.
06:13I've ballooned to 600 pounds, I have no willpower when it comes to stuff like this.
06:17And I'd rather be a customer than an owner, so for those reasons I'm out.
06:20Ladies, I'm gonna crown myself the pierogi king.
06:23Yes.
06:24I love them, couldn't love them more.
06:27Here's my offer.
06:30If my fellow friend and shark, the food king, Daniel goes in, and he wants me as a partner, I
06:38will go in with him.
06:38So if you can talk him into it, I'll come along.
06:55Two sharks are out.
06:57Robert is interested in Casey and Vanessa's frozen pierogi business, Zha Zhu.
07:02But he wants to partner with Daniel for his expertise in the food space.
07:08Guys, you gotta talk Daniel into this deal.
07:11I am so excited about everything.
07:14I just think we need a food guy in this.
07:18Come on, Daniel.
07:19When we heard that you are a guest shark, I cried.
07:22I've always admired and wanted to work with you.
07:25Keep going, keep going.
07:26And like, yeah, I've watched you from afar, and like what you did with Kind, and then Somos, and like
07:31the energy with that.
07:32Robert, I think you do this deal with them, and we will find a way to cooperate together and introduce
07:37them.
07:37And if it makes sense, we join forces, and if not...
07:40My friend.
07:42Mi amigo.
07:43Mi amigo.
07:44They cried their heart out.
07:47Are you not human?
07:49Did you watch the episode last season where I did a deal with Toasted?
07:53Yeah, yeah.
07:54So, it's a sister pair like you.
07:56In some ways, it would be kind of fun to do the sister's Frozen Space.
08:01In other ways, I feel like it might be competitive because...
08:05No.
08:09I really don't think it would be fair to my partners at Toasted to do this without certainty that it
08:16won't be seen by them as competitive.
08:18We think he'd be a great partner though.
08:19We do.
08:20And it's tricky because I do think there could be synergies, but I'm not sure, so for those reasons, I
08:26think I'm out.
08:27All right.
08:28Okay, thank you.
08:28Thank you.
08:29Ladies, I...
08:30If Daniel's out, I'm out.
08:34All right, all pierogies lead to Mr. Wonderful.
08:38That's your offer.
08:38That's what happens.
08:39Here's my offer.
08:40Listen carefully to it because it's the only way I would do it.
08:44I work with the largest co-packers and distributors, number one.
08:49Number two, Luton Libre makes the most inexpensive potstickers, dumplings, and pierogies.
08:57That's how you would get your costs down.
08:59I own that business.
09:01I bought it just to give me vertical strength in Brooklyn dumplings.
09:04Those are dumplings.
09:06They're all the same.
09:07We'd add this to it.
09:08I don't know how tied you are to Jadju or not, but I'll give you the 300,000.
09:13I want 20%.
09:17I have the distribution.
09:18I have the co-packer.
09:19I have the protein maker.
09:20And I didn't bring up the fact that I do a lot of sales on QVC as Chef Wonderful in
09:25this category.
09:26In fact, I own this category in QVC.
09:28You don't own pierogies.
09:30They're all the same potstickers, pierogies.
09:32Listen, you understand what I'm talking about.
09:34The manufacturing of this category of convenient food is all done in the same mold factory.
09:39Whether it's a pierogi, whether it's a potsticker, whether it's a dumpling.
09:43I have a question.
09:45What if I went in with Kevin?
09:46No, I don't want that, Lori.
09:48Lori, will you make an offer on your own?
09:50What if I went in with Kevin?
09:52No.
09:53So the offer that we have right now is, because we have a lot of chatter, is the 20%
09:58for 300,000,
09:59and then you want to take the production to the place that you want.
10:03I want you to meet the management of Brooklyn Dumpling, and you decide which of the elements you're going to
10:08use.
10:08He just booped me away.
10:09I don't want to do the deal unless you're using my infrastructure.
10:12Okay.
10:12Otherwise, what am I doing this for?
10:15When you see the synergy of what they're building over there, you'll realize, wait a second.
10:20I want to get into the stores across America.
10:22I want Walmart.
10:23I want Costco.
10:24I want it all.
10:25By the way, you've achieved something.
10:27Was it 2,100 you have?
10:282,500.
10:29That's nothing.
10:31So because you're bringing us into the infrastructure, would you be willing to do $300,000 for 10%?
10:37Why would I do that?
10:38It's a plug and play, right?
10:40I'm the only offer you have.
10:43I appreciate it, but the answer is no.
10:45And Robert, you're completely out.
10:47I can help you eat them.
10:50Sometimes it's really great deals with other sharks, but I have everything you need.
10:55Everything.
10:55What do you want to do?
10:57I think that, you know, you can speak to the numbers, but we think that our valuation is fair and
11:04that 20% is too much for us to give up.
11:10That's how we feel right now.
11:12Good for you guys.
11:13Good for you guys.
11:13You guys are very impressive.
11:14And you will do great.
11:15Yeah.
11:15Okay.
11:15Well, thank you.
11:16Thank you guys.
11:17Thank you for sharing these with us.
11:20Good luck.
11:24We came in to make a deal, but we know the value of the work we've put into this business
11:29and the value of the emotional connection we have with our customers and the quality of our product,
11:34that we are confident we can move forward from here and continue to build our business.
11:37And maybe one of the sharks will call us back one day and, you know, regret not making that deal,
11:42so.
11:45In season 15, we watched Ashley Carson and her mother, Karen Walker, make a deal with Lori Grenier for their
11:51comfortable swim goggles company, Splash Place Swim Goggles.
11:54Aiden and Jayla are having no problem putting on their swim goggles.
11:58And they're simply no more pulling and tangling your hair.
12:01Let's see what they're up to now.
12:03The sharks were really blown away with our sales and also the fact that we work with local women in
12:09our community to assemble the goggles.
12:11In the seven years before we pitched to the sharks, we had almost 7 million in lifetime sales.
12:16In less than a week after Shark Tank, we brought in over $1 million in sales.
12:21It's been less than a year since we closed and we now have over $10 million in sales.
12:27Splash Place Swim Goggles can now be found in nearly all Shields locations nationwide.
12:32And we're soon launching in REI and Buc-ee's this year.
12:35We're now in over 1,800 retail locations around the world, including Iceland, the Middle East and Australia.
12:42You know, I just love the model. Stay-at-home moms are helping make the product, pack the product.
12:49It gives them another job. You're changing their lives.
12:53Our story is a little different than most. We don't have a college background, neither one of us.
12:58We both prioritize family life, so it was important for me to give women in our community an opportunity to
13:05be able to provide for their family as well.
13:08I was a stay-at-home mom, so working with so many of you that are also stay-at-home
13:13moms really meant a lot to me.
13:15We're at the Wigwam Resort for a special dinner to thank all the women who have helped us get to
13:19this point.
13:20Tonight is the night to honor these women and to lift them up.
13:23Thank you.
13:26We are so thankful to Shark Tank, and we just want to encourage anybody out there with an entrepreneur spirit,
13:33if you have an idea, to just go for it, because you never know where it could take you.
13:53Next up is a product that ensures you'll always have an essential accessory when you need it.
14:06Howdy, Sharks. My name's Zach, and I'm from a small town just outside of Dallas, Texas.
14:10I'm seeking $350,000 in exchange for 15% of my company, Permapug.
14:16Sharks, picture this. You get home from a long day of work. You finally get comfy and better on the
14:21couch.
14:21Your phone's on 1%, so you reach for your charger. Wait. Where is it? It's missing. Again.
14:29So, what could you do to try to fix this? Maybe you could try a sticky note.
14:35Zach's charger, do not move. Use extra bold lettering and exclamation points to make sure that they know you're serious
14:41this time.
14:41Maybe you could just buy dozens of cheap chargers every few weeks and hope there's one around when you need
14:46it.
14:46Maybe you could even try superglowing your charger directly to the outlet. I'm kidding.
14:51Do not try this at home. But somehow, some way, that charger will still end up getting borrowed, but never
14:57returned.
14:58This is a daily dilemma for millions, but not for those who've been lucky enough to discover...
15:05The Permapug Charger Lock.
15:07Permapug Charger Lock is a proprietary, fully patented, locking system that secures your charger and cables into place.
15:13So they can't be moved, stolen, or accidentally unplugged. Let me show you how it works.
15:18First, you'll simply remove your existing outlet cover, assemble your Permapug system, which includes the locking cover, a dual fast
15:25charger, and up to two charging cables.
15:27Then you'll place the Permapug Charger Lock directly on your upper outlet, and then you'll screw it back in using
15:33the included standard screw, or you can upgrade to a security screw for added protection.
15:40And boom! Start charging without ever worrying about your charger or the cables, growing legs, and going missing again.
15:46So, Zach, honey, sweetie, poopsie baby.
15:48He's not done!
15:48Wait, you're getting finished!
15:49Oh, you're not done?
15:50I know you're excited. I am too.
15:52Yeah, yeah, yeah.
15:53Yeah, yeah.
15:54Good job.
15:56Phones, headphones, tablets, and other devices are a crucial part of our everyday lives.
16:00They're not going anywhere. Protecting the lifeline of these devices is a no-brainer.
16:04So, Sharks, who's ready to secure your chargers and a deal with Permapug?
16:09Good job.
16:10So, poopsie baby, the issue is this solves a problem in your home.
16:13But if you're, like, in a hotel or on the road, it's not really practical, right?
16:18It's just for permanence.
16:20Unless you're the hotel.
16:20It depends. The hotel would be the one that purchased them from us.
16:23And there is a ton of unique applications in commercial settings as well.
16:26Oh, that's an interesting point.
16:27You're saying the hotel can then do that so that the guests don't take them away.
16:32Or even their staff in the background.
16:33I want to be fair, Zach. I do not deserve to rip you to pieces if you have sales.
16:39Okay.
16:39Do you have any?
16:41I do. I have about $2,000 in sales.
16:44Okay.
16:44$2,000 back?
16:45I am now going to rip you to pieces.
16:46$2,000 in sales so far today.
16:48I have $456,000 in sales a year to date.
16:51Oh, what a great comeback!
16:55That's a great answer. That is a great answer.
16:57Thank you.
16:57That'll go down in Shark Tank history right there.
16:59Thank you.
17:00How did you get $450,000 in sales?
17:02I brought the sales in all myself.
17:04So, I originally filed the patent for this in 2019.
17:07So, it goes all the way back really to whenever I was a kid.
17:09I grew up with cousins.
17:10We all grew up on the same street.
17:11We always stole each other's chargers.
17:12And then in 2019, I went and stayed at a friend's house.
17:16And when I stayed at his house, I slept on his couch.
17:18And I had my phone plugged into his charger.
17:20It was super glued to his outlet.
17:22So, light bulbs flipped.
17:23And I knew that this was a good product and brought it to life.
17:26This is for anybody that has one child or more.
17:30Right.
17:30I got three teenagers.
17:31It happens by the minute.
17:33Yeah.
17:33How are you selling it today?
17:34The $450,000 soap.
17:36By the way, is that for the year?
17:38That's year to date.
17:39I'm $665,000 lifetime, which is 12 months.
17:41I launched last year.
17:42Who are you selling it to?
17:44Fully direct to consumer.
17:45My customers range all over the place.
17:47So, parents start over their kids moving the charger, siblings, roommates.
17:50And a huge one right now is schools.
17:52They're buying them so they can charge the tablets for their kids.
17:54All through social media.
17:56All on your website or Amazon?
17:57So, Amazon's a huge channel for me.
17:59And I was resistant to doing that at first.
18:01But it's actually 60% of my revenue is Amazon now.
18:03And I don't love that because I don't own the customer data.
18:06You guys know how that is.
18:07But I incentivize people to try to buy on my website with better pricing.
18:10Are you buying a lot of ads?
18:11Most of my marketing is organic.
18:12I do have a retargeting funnel set up.
18:15So, I can just retarget the people that have engaged with my organic.
18:17Good for you.
18:17Yeah, good for you.
18:18And I have an SEO background.
18:19So, I built all of these automation tools using automation and AI.
18:22So, for instance, like if I'm talking to somebody and they say, you know, what's the best Father's Day gift
18:28for 2024?
18:28I can text myself that, generate a blog post, make sure her plug is number one.
18:33I love that.
18:34Father's Day present automatically published on my site and indexed by Google.
18:37I want to go back to this.
18:38350,000, 15%.
18:40What are you going to do with the 350?
18:42I'll use it to help increase my flow.
18:43So, I've got a decent amount of money in the bank, but I am playing cat and mouse a little
18:46bit with inventory, buying, cash flow in the bank.
18:49How much inventory do you have?
18:50What's a container?
18:51I have about 80,000 worth of inventory right now.
18:53Wow.
18:54That's a lot.
18:55That's my hard cost.
18:56But, I mean, I'm selling 15,000 units, so I'm moving them pretty quickly.
18:59Are you making any money on the $465,000?
19:01Absolutely.
19:02My margin's around 58%.
19:03So, what do you put in your pocket?
19:05What does it cost and what do you sell it for?
19:07So, I buy those for about $6.50 each and I sell them for about $35 on average.
19:12Do you know your customer acquisition costs in the last few months?
19:15They're less than $15 because I'm only doing warm retargeting.
19:17If I have not engaged intensely with one of my organic videos, I'm not paying it to advertise.
19:22So, it costs you $15 to acquire a customer and the average order size?
19:25It's around $58.
19:27All right, look, I thought this was a joke.
19:29I've got to be honest with you, Zach.
19:30Obviously, sales say no.
19:32And you sound very credible.
19:34So, here's an offer for you.
19:36I'll do the $3.50, 15%.
19:37I want $2 a unit in royalties in perpetuity.
19:43I'm curious who's on your team.
19:45How much?
19:46Just you.
19:47One man band.
19:47This is all me and my wife.
19:48We have a 24-hour fulfillment promise notice.
19:51You and your wife.
19:51We're up until midnight packing orders every single night.
19:52Doing everything.
19:53It's your full-time job.
19:54Yep.
19:54And do you have any debt?
19:57Do you own it 100%?
19:59I own it 100%, zero debt.
20:00So, I am doing this full-time now.
20:02I'm living off of my savings for now.
20:03I don't plan to take any sort of profit or salary from the company until 2025 just to make sure
20:08that I have enough float for the company and there's enough inventory.
20:11And I'm not fighting with paying myself for that.
20:13So, I've saved up enough for my job to live off of until then.
20:16But I do plan on, you know, obviously taking a modest salary next year.
20:19Good for you, man.
20:20Thank you.
20:20So, everybody I meet wants to be successful, but so few people are willing to make the sacrifice and pay
20:27the price.
20:28We've made a ton of sacrifices, too, honestly.
20:30Like, I mean, we've, my wife especially, she's put in tons of work with me.
20:33She doesn't have to do any of that.
20:34She's got two full-time jobs taking care of a three-and-a-half-year-old and a two-and
20:37-a-half-month-old right now.
20:39So, and she's out there grinding with me.
20:40I'm here right now and she's at home packing orders.
20:42Zach, what's your reaction to Mr. Wonderful's not-so-wonderful offer?
20:46Well, I figured coming in here I may get an offer something like that.
20:49I would not be open to a perpetuity deal, but I would be open to giving a royalty to anybody,
20:53for that matter, until your money's paid back because I don't like borrowing money.
20:56Zach, why is that interesting to an investor?
21:00Because I give you my money, I put it at risk, I wait two-and-a-half to three years
21:03to get it back, I make nothing on it.
21:05Could be sitting in the bank making 5.24%.
21:07The only other value is an exit on the value of the patent, which may or may not play out.
21:13So you're putting your largest investor at 100% risk.
21:17Well, I'll give you your $350,000 for 25%, no royalty.
21:24Okay, if you don't mind me asking, what does that put the valuation at?
21:271.4.
21:281.4, okay.
21:29And he's doing 1.4.
21:31Zach, I have good news and I have bad news.
21:34What do you want first?
21:35Okay.
21:36That's for the bad news.
21:37I'm a delayed gratification type of guy, so I'll go bad news first.
21:40Always get the bad news first.
21:41There you go.
21:42I'm up.
21:45Want to know the good news?
21:46That's the good news?
21:47Yes, ma'am.
21:48I'm back in.
21:49Okay, thank goodness.
21:50Okay, my next question was going to be...
21:52I had to do that to you for like your whole, what you did to us with the...
21:55Oh, yeah, the $2,000, yeah.
21:56Yes, with the $2,000.
21:57I thought you'd appreciate that.
21:58I did.
21:59So I'm going to offer you $350,000.
22:03I would like 20%.
22:06Okay.
22:07And I'd like a royalty of $1 until I get paid back my money because I think together it'll
22:14be a powerhouse.
22:16That's my offer.
22:17All right, that's a great offer.
22:19What are you going to do?
22:20Think about it.
22:20Here's my thing.
22:21I'm like Kevin.
22:21I didn't think it was real.
22:23I thought you were...
22:24That is true.
22:24You were negligible at best, but congratulations.
22:28Thank you.
22:29You're doing great.
22:31It's just not for me.
22:32Yes, sir.
22:33I'm out.
22:33Thank you for your time.
22:34I appreciate it.
22:34Yeah, Zach, I'm kind of in the same boat.
22:36It's a great product, but you know SEO already.
22:40You know, maybe some cash flow things.
22:41You got this on lockdown and you know it, right?
22:44And so, yeah, it's just not a fit for me.
22:46So for those reasons, I'm out.
22:47Okay.
22:47You have three offers.
22:48She's got the best offer on the table.
22:50Well, no, she's not Mr. Wonderful.
22:52What does that mean?
22:53Well, it means what it is.
22:54I'm doing my research on all this.
22:55I have the best offer on the table.
22:57I am also the best partner for you.
23:00I grew up not caring about being an athlete.
23:03I didn't look up to any athletes.
23:04I didn't look up to any actors or anything.
23:06I looked up to people like you guys.
23:07So I know everything about all of you,
23:09and I know what you've done with companies and you,
23:11and everything you guys have all done is extremely motivational.
23:14It's inspirational.
23:15This is everything I've ever worked for.
23:16Lori's offer is by far, I mean, in my opinion, just, I came in and my wife wants me to
23:20work with you.
23:21So there you go.
23:22I would love to close a deal with you, Lori.
23:24Yay!
23:25Congratulations.
23:26Congrats, Zach.
23:27I love it.
23:29Thank you.
23:29It's so really good.
23:31I appreciate it.
23:31I am honored.
23:31Thank you so much.
23:33Thank you.
23:34You're blowing up.
23:35Thank you.
23:35There should be like five in every home.
23:38There will be.
23:38In every single plug.
23:39Good job.
23:40Thank you.
23:40Thank you all.
23:41I appreciate all your time.
23:42Thank you so much.
23:43Great job.
23:43You're really impressive.
23:44Thank you.
23:44I appreciate you all.
23:45Good luck.
23:45Have a good one.
23:48Thank you, Jesus.
23:50Thank you, God.
23:51I just closed a deal with Lori.
23:52I mean, that's exactly who I wanted to work with when I came in here.
23:54Lori has so much expertise.
23:55She's blown up companies like Scrub Daddy and so many others that really just needed that
24:00initial push, and that's really all I need to get this out there.
24:02I've reached a few million people on my own, but I know that she can help get that number
24:05way up higher.
24:19Next into the tank is a product designed to blow away a common cooking hazard.
24:32Wait, there's no crying in cooking?
24:34Not if we have anything to say about it.
24:37Hey, Sharks.
24:38My name is Glen Smith.
24:39And I'm his daughter and business partner, Madison Smith.
24:42And today, we are here seeking $90,000 for 15% equity in our company.
24:47Sharks, for generations, cooks around the world have sought relief from the infamous onion
24:52tears, the burning, the itching, my eyes.
24:56Cutting onions is painful, and we have tried all the hacks, and none of them have worked
25:01for us.
25:02We have tried chewing on bread while cutting.
25:06Hmm.
25:07We've put a matchstick between our teeth, and this guy has even worn yard goggles in the
25:15kitchen.
25:17And trust us, Sharks, none of these hacks have worked for us, which is why we invented the
25:23fanyan.
25:24The fanyan is a countertop, cute, cordless fan that is placed next to your cutting board,
25:29which simply blows away the fumes and vapors of eye-irritating vegetables such as onions,
25:35shallots, peppers, garlic, etc.
25:37You'll only cry tears of joy.
25:40It really is that simple.
25:41So come on, Sharks, who's ready to chop it up with the fanyan?
25:45And who's ready to be blown away?
25:47Now, Sharks, no need to get weepy.
25:49You each have a fanyan to blow those tears away.
25:52So you have an onion, a knife, and a fanyan to really put this to the test.
25:56So there's a lever on the back that'll turn it on, and you can get to chopping.
26:01And Madison, do most people cry with onions?
26:04Yes.
26:06Why would you not?
26:07Like, I don't really often cry.
26:09I don't.
26:10Why would that be?
26:11This doesn't sting me at all.
26:12Really?
26:12I am told that if you wear contacts, that could be something that would...
26:15I do wear contacts.
26:17If you wear contacts.
26:17If you wear contacts, you're lucky.
26:19You're lucky.
26:20You know, a unique attribute about vampires, I'm a vampire.
26:24We don't have to cry about onions.
26:26We can cut any kind of vegetable, no problem at all, as long as it's dark outside.
26:31Is this your full-time job?
26:33And also, please tell us about you.
26:35You go ahead.
26:36I am a vice president of a large U.S. poultry company.
26:39I buy feed ingredients, feed chickens.
26:42And Madison, what do you do?
26:43After graduating from Georgia Tech, I studied industrial engineering,
26:46and I've worked in the technology and supply chain spaces for about the last four years.
26:49So, this is a very simple product.
26:51I get it.
26:52How much to buy it?
26:53We sell them for $19.99 on our website.
26:56And what does it cost you to make them?
26:57$8.09.
26:58Well, you know your numbers.
26:59How many do you sell?
27:01We launched in November.
27:02We just launched in November.
27:03So it's about seven months.
27:05We have sold almost $1,800.
27:06We have $28,000 in sales.
27:08That's not bad.
27:09Not bad at all.
27:10How are you guys promoting it?
27:11We've predominantly done social media.
27:13We've put a lot of money into running ads.
27:15And how much money have you spent on advertising so far?
27:20On advertising, about $17,000 to $18,000.
27:22And how much money have you invested to get it to this?
27:26$468,000.
27:28Wow.
27:28Hello.
27:28That's a lot of crying over on you.
27:30Where did you get the money to spend $468,000?
27:34Cash, credit, home equity.
27:36How?
27:36Home equity too?
27:38Home equity as well.
27:39Correct.
27:39Oh!
27:41Whoa.
27:41But what did you spend that on for this?
27:44Uh, mostly inventory.
27:45How much do you have in inventory?
27:46Inventory.
27:47At your cost.
27:48How much do you have in inventory at your cost?
27:4931,000 units.
27:51Oh, okay.
27:51So that's $250,000 basically.
27:53Correct.
27:54You got 31,000 units.
27:56What is it costing you to acquire a customer right now?
27:59Do you know?
28:00How much did you spend on advertising divided by the number of units you've sold?
28:05So $17,000 divided by...
28:07Almost $1,800.
28:08Yeah.
28:09Right.
28:10So about $10 a unit.
28:11Yeah.
28:11So you're breaking even.
28:13You're not making any money.
28:15Right now you're losing some.
28:17Yes.
28:18What's the plan to sell the existing sunk inventory?
28:22That is why we are here, is that we need help with that.
28:25We really started trying to go 100% direct to consumer.
28:28Over 10,000 Google searches happen every month of people searching how to stop prying while cutting onions.
28:35I mean, there's viral TikTok videos.
28:36This is definitely...
28:37And it works.
28:38We know that it works.
28:39And there's not a product out there like it.
28:41And everybody loves a kitchen gadget.
28:42I mean, come on.
28:43Maybe there's a reason why there's not a product out there like it.
28:47Look, guys, I give you a lot of credit for diving in and going for it.
28:51But this is too niche a market, right?
28:53Because when you limit it just to onions, that's too small, right?
28:57And not a lot of people are going to spend $19.95 just to be able to do onions alone.
29:03So for those reasons, I'm out.
29:04Thank you, Bart.
29:06Here's the thing.
29:07It's something that happens all the time.
29:08I watch it with entrepreneurs.
29:10You get so excited that you don't realize one of the most perilous pitfalls
29:14when you first create a product is ordering in too much inventory without sales.
29:19You've sold 1,800 in eight months, give or take.
29:22You're sitting on 31,000.
29:24This could take you 10 years or more, right, to sell it.
29:28So what I think you should do, a suggestion, is sell it to someone at your cost just to break
29:34even,
29:35but to get money back because you don't want to sit on that big of an expense.
29:39It's not a journey that I want to take because I know it's a rough road.
29:45But I wish you good luck.
29:47I hope you try that.
29:48I'm sorry.
29:48I'm out.
29:50You've got a bunch of money tied up in inventory here, 250 grand.
29:53So if you sold these things at 999, you'd get half your money back.
29:57And you say the other was a lesson in life.
30:0031,000 units, that's worth crying about, not the onion.
30:04I can't help you because I can't help you.
30:08I'm out.
30:09All my friends have never started a business.
30:12They think that starting a business is like standing on the edge of a cliff, ordering 30,000 units, and
30:17jumping into the water.
30:18Great entrepreneurs learn about controlled risk.
30:22You never want to make a mistake that's going to kill you.
30:26It's very hard to come back from the dead.
30:30Kevin's done it.
30:32And by the way, it works.
30:34You made a big risk, and now you're stuck with it.
30:36You've got to get rid of that inventory.
30:38There is no, we're going to grow our market.
30:40We're going to sell it here.
30:41Get rid of the inventory that you have, even at a loss.
30:45Even if you get 50 cents on the dollar.
30:47I disagree.
30:48They're being very melodramatic.
30:50No.
30:50Are you in again?
30:51Not dramatic.
30:52They took a line of credit on their house to get here.
30:54Okay.
30:54Welcome to the Onion Advice Tank.
30:57It's not for me, because it's not investable.
31:00I hope you get some of that cash back.
31:01I'm out.
31:02Glenn and Madison, I love the fact that you're working together.
31:06My daughter's here watching Shark Tank today.
31:09Yeah, I love that.
31:10And it's such a special thing.
31:11This is the most important thing in the world.
31:14Because my dad is no longer here with me, and I wish he was around, and I just miss him.
31:19And I love the fact that you guys can have this journey together.
31:23Oh.
31:24I wish you the best of luck, but I'm out.
31:27Thank you very much, guys.
31:29Thank you so much.
31:29Thank you.
31:30It was nice meeting you all.
31:31Good luck, guys.
31:32I hope you make it work.
31:33Good luck.
31:33Get some of that cash back.
31:37There's onion.
31:39Is it?
31:40Onion's everywhere.
31:42Come here.
31:42The message that we just heard was get rid of them, cut your losses, and go home.
31:49And, you know, if that's the way it ultimately comes down and that's what happens, it won't
31:52be for lack of trying, but I'm not going to punt.
32:08Next into the tank is a stylish upgrade to an everyday appliance.
32:22Oh.
32:39Oh.
32:41Oh.
32:42Oh.
32:42Oh.
32:43I hate it when that happens.
32:44I can't find anything in here.
32:46There's leftovers.
32:47There's produce.
32:47Where's the drinks?
32:48I think it should be behind the lasagna or the pizza box, maybe?
32:53Oh.
32:53That's embarrassing.
32:56Sharks, as you can see, kitchen fridges are crowded.
32:59They're cluttered.
33:00They're just plain chaotic.
33:01That's why we created the Rocco Super Smart Drinks Fridge.
33:04It's designed as furniture so you can keep all of your favorite drinks away from those leftovers.
33:10And where you actually drink them, in the living room.
33:13You might be thinking, ah, this is just another wine bridge.
33:17Sorry, Mr. Wonderful, but nobody just drinks wine anymore.
33:20We created a one-of-a-kind shelving system that accommodates all sizes of bottles and cans.
33:26Everything from ginger shots to champagne.
33:29The top doubles as a pour, serve, store station.
33:33AKA it's also a bar cart.
33:35And with our patent-pending site system, you can even see inside your fridge right from your phone.
33:40Imagine you're at the grocery store.
33:42You're having friends over later and you can't remember if you have enough beer.
33:45Now all you have to do is look at the app and you'll know exactly how much you need.
33:48So, Sharks, who's ready to do a deal and pop some champagne?
33:52Yeah.
33:53All right.
33:53I know what's coming.
33:54All right, you know what's coming.
33:55You know what's coming.
33:56Un, deux, trois.
33:58The Champagne du Testament.
34:02And in front of you are the trays that come with the fridge to kind of turn it into a
34:07bar cart.
34:08How much is the fridge?
34:09The fridge is $14.95 and we currently offer early access pricing of $12.95.
34:15Is that a lot for a basic...
34:17No.
34:17As a matter of fact, I just bought two, not of yours.
34:22I didn't know about yours, but of a different one.
34:24And I will tell you, yours is the right price.
34:27And what the guy was trying to sell me was three times as much.
34:31How does the app work?
34:32Do I actually see into the fridge?
34:35So every time you put something in or take it out, it automatically images it.
34:38No scanning whatsoever.
34:40And your app will update.
34:41So I see shelf by shelf by shelf?
34:43Why do I see shelf by shelf?
34:44That's an innovation I haven't seen.
34:46Now tell us about the two of you.
34:48Yes.
34:48So Sam and I have a combined 20 years of experience in startups.
34:51I cold emailed Casper, the mattress company, and I helped build the brand from the ground up.
34:56Then I went to Billy, the women's razor brand, which sold a few years ago to one of the biggest
34:59CPG companies.
35:00Sam spent many years at Away leading supply chain and product development.
35:04And while he was at Away, the suitcase brand, his work actually took him to fridge factories.
35:08Because believe it or not, there are manufacturing similarities between fridges and suitcases.
35:12You sell it for $12.95 or $14.95.
35:15What does it cost you to make?
35:16So our landed costs are $575.
35:19And then after shipping, which is another $130 to $160, depending on where you are in the country, it goes
35:25to around $750 to $775.
35:27So you don't have much margin?
35:28No.
35:28How do you sell it?
35:30Direct-to-consumer.
35:31How many have you sold?
35:32Just over $3,000.
35:33Sam, have you guys raised a lot of money?
35:35We raised a million dollars about two years ago.
35:39At what valuation?
35:40That was at $10 million on a Post Money Safe.
35:43Why are you telling us you're worth $20 now?
35:45So that was two years ago before we even had a prototype.
35:48We've been in market for eight months.
35:50We've done $4 million of revenue.
35:52We're profitable.
35:53In eight months?
35:54In eight months.
35:54And you've shipped that?
35:55Have you collected that already?
35:56We've shipped that.
35:57You've shipped that?
35:58That's shipped, and we've ordered enough units to be able to do a $12 million year this year, which is
36:02what we're forecasting.
36:02And on that $4 million, how much have you spent to create the buzz?
36:07So we have a return on ad spend of five times, so we spend about $250 per fridge, or 20
36:14% of our revenue.
36:15Look, I like it.
36:16I like the story.
36:16I like the pitch.
36:17I like the whole direction.
36:18You guys are great.
36:18I just don't like the valuation.
36:20So here's what I'll do.
36:21I'll give you the $600,000 for 10%.
36:24Boy, they're going to jump at that.
36:26I think they should.
36:28I think they should.
36:29Wow, that was a very loud laugh.
36:32That's what I laugh all the time.
36:33Look, I don't think you're worth more than $6 million bucks.
36:36I'm sorry.
36:37Guys, I think it's a beautiful product.
36:39I'm not sure I see the vision.
36:41I just don't see it.
36:42I'm out.
36:43Thank you.
36:44Thank you.
36:44Appreciate it.
36:45Guys, here's where I'm at.
36:47Look, great product, great company.
36:50The problem is a math problem.
36:51When you price it at a $20 million valuation, in order for me to get my $600,000 back, you
36:58have to do $20 million in net cash flow profits.
37:01$20 million cash flow profits, 3% of that is my $600,000 back.
37:06If I want to get a multiple return since it's a risky environment, let's just say three or four times,
37:11you need to do $60 million, $80 million in free cash flow to give me a return.
37:16That's the challenge of making this investment.
37:18So for those reasons, I'm out.
37:20Yeah, and I'm kind of in a similar place.
37:23It's very hard to imagine that things could pan out in a way that would be good for you and
37:27for us.
37:28I also was thinking about how I could add value to you, and I probably could find a few ways,
37:33but I don't know that I would be the best shot for you for this deal, so for those reasons,
37:36I'm out.
37:37Thank you.
37:38Lori?
37:39You know, listen, I love you both.
37:41The real problem for me is your valuation.
37:43I mean, it's rough.
37:45Mark said it all.
37:45I'm not even going to try to repeat it, because he really said it all quite squarely.
37:49What would you consider to be reasonable?
37:51Yeah, we're open.
37:53Oh, you guys would not want to even know.
37:56Kevin was at 10.
37:57I'm going to be honest.
37:58Like, to me, you're so startup, I would have been at 20, which you're never going to consider.
38:03It just doesn't feel like the right deal, so I'm sorry I'm out.
38:07All roads lead to Mr. Wonderful.
38:11Well, I really think you heard it from everybody in the same succinct way.
38:16Valuation is a huge problem.
38:18I actually think your offer is generous.
38:20I do.
38:21I gave him a $6 million valuation with no path to liquidity, so there's a lot of risk in it.
38:25I just happen to think my social would blow this up so huge if you were able to figure out
38:30a way to fulfill.
38:31And I also think I can reduce your CAC.
38:34Do you mind if we talk about your offer for a second?
38:36Speak amongst yourselves.
38:49A lot of whispering going on.
38:51No, I've actually been thinking about your free cash flow comment.
38:54Uh-huh.
38:54But this is a category where the free cash flows of, say Whirlpool, it's a billion dollars.
38:59Higher, who bought out GE, it's $2 billion.
39:01And how many products do they have?
39:03They have five.
39:04How long did it take them to get there?
39:05A hundred years?
39:05What's happening here?
39:07He didn't make the offer.
39:08Kevin has an offer on the table, which doesn't always stay there.
39:12Actually, I have to be honest with you guys, I'm out.
39:26All five sharks are out.
39:28Sam and Elise had an offer on the table from Kevin for their designer beverage fridge, Rocco.
39:33But their hesitation led to a change of heart.
39:35The only offer you had was me.
39:38And then you're talking to Cuban again.
39:40You know, Mr. Wonderful doesn't feel good about that.
39:44You hurt his feelings.
39:45I now will forget who you are tomorrow morning because there's going to be five more deals coming through that
39:50door.
39:51Yeah, man.
39:51I'm out.
39:51See you guys later.
39:52Ciao.
39:54We wanted to offer a royalty.
39:55I'm not sure if there's a way to get you back in.
39:57What's your offer?
39:58What is it?
40:01We want to, we can be a little flexible on the valuation.
40:05What's the offer?
40:06Do you have a royalty, particularly tying to your channels?
40:09No, I'm not doing that.
40:10The minute my name is on this, it's every unit gets a royalty because all of a sudden it's a
40:15Mr. Wonderful deal.
40:16If you don't believe that, talk to my 54 CEOs.
40:20See what they see.
40:20What's the royalty you would give?
40:22Yeah, but only on what Kevin generates is what he's saying.
40:24No, I'm not doing that.
40:25I'm not even, I'm not, I don't need a job.
40:26He's making him a commissioned salesperson.
40:27I'm an investor with a huge brand.
40:29I'm just curious, what's the royalty you would give?
40:30What would you give?
40:32You do the marketing numbers?
40:34I'm not doing that deal.
40:36I'm not for hires.
40:37I'm the one asking.
40:39Where's the fridge?
40:39Where's the fridge?
40:40It was 50.
40:41$50 a fridge?
40:43$50 a fridge.
40:43Until you get your money back?
40:45I just want to throw something back at you, okay?
40:47No qualifiers, but $600,000, $50 a fridge, that's it?
40:53If we can keep the regular equity ask, we'll do $50 every fridge.
40:583%.
40:58$50 every fridge.
41:00Would you do it at 5%?
41:024%?
41:035%?
41:044%?
41:065%?
41:07Can we talk about that for one second?
41:08I'd do it at 3% in perpetuity.
41:14Which is forever.
41:15Take the deal.
41:17I mean, you're going to live.
41:18I mean, we plan to be around for a long time.
41:19I do too, I hope.
41:20It's a long time.
41:21As long as we're all full.
41:244% and until you get your money back.
41:26We'll meet you in the middle.
41:28How about 4% until I get my money back plus another $300,000?
41:34Done.
41:34Done.
41:35There you go.
41:36Wonderful.
41:38Boom.
41:38Ooh, who knew?
41:40Now I bought that other fridge, oh my God.
41:42Well, we're going to have to replace them.
41:43Thank you.
41:44Thank you so much.
41:44Thank you.
41:45Good deal.
41:46Thank you.
41:47Congratulations, guys.
41:48Thank you.
41:49Thank you, everyone.
41:50We did it!
41:51I'm hungry.
41:54We got a shark.
41:56Then we'll have him then.
41:57She came back in.
42:00I thought it was a great deal.
42:01So you're making three...
42:02I don't have anything to lose.
42:03They're already selling that much within a year.
42:08I'm going to make my money back.
42:11I think that deal sucks.
42:11Well, of course she'll think it sucks.
42:13I'll never do that deal.
42:13Because you didn't get it.
42:14It's a good deal, Lori.
42:15Thank you, Mark.
42:16You're welcome, Lori.
42:45You're welcome, Lori.
42:46We'll be right back.
42:49You're welcome, Lori.
42:50I'll be right back.
42:52We'll be right back.
42:52We'll be right back.
42:52We'll be right back.
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