The second entrepreneurs into the Shark Tank this week presented their business Ora Organic and were seeking $375k in exchange for 5% of the business. They have developed a line of all-natural supplements that can be taken or used in cooking. They also talked about their plans to start selling pre-made food that uses their supplements.
As for their numbers, they saw over $400k worth of sales in under 10 months. They have also taken a $150k note at a $2.2Mill valuation.
When the Sharks started to weigh-in it started off well, but then went downhill pretty fast. They liked the samples and food that the entrepreneurs gave them, but all started giving their reasons for dropping out pretty quickly. Robert said it’s just not the product for him, Daymond said that their valuation was insane, Lori did not like the branding on their packaging, and Mark said that he thought they were selling food made from the supplements and isn’t interested since they’re not.
Kevin did want to make them an offer though. He started at $375k in exchange for 20%, but after a few counters he came down to 17%. This was still not the valuation that the entrepreneurs were looking for, so they decided to walk without a deal.
I can actually agree with some of the Sharks’ thoughts on this product. First of all, there is a lot of competition in this space, so that makes it a fairly risky investment. With that in mind, putting their value at $7.5Mill this early on is a bit optimistic and doesn’t ease the worries that the Sharks might have about the risk. As well, still on the topic of competition, I can definitely understand Lori’s worry about the packaging. It was minimalistic and clean, but that’s not what you want on the shelves of a store when you’re probably one of twenty different brands sitting there. I’m not advocating big, bold, and tacky branding, but there are ways to better design that packaging to draw a person’s eye to their product.
Beyond simply responding to the Sharks’ thoughts though, I don’t have much more to add on this one. I have never been interested in supplements of any kind and I don’t know much about them at all. I mentioned in a previous article that I have tried Nootropics before, but other than that my experience is limited.
Anyway, good luck to Ora Organic! I’m excited to see what kind of food you guys start selling alongside the supplements! I think that will be an excellent vehicle for growth in the business.