The final entrepreneur into the Shark Tank this week was presenting his business dbest products and was seeking $350k in exchange for 5% of the business. He has developed a line of highly functional and convenient “smart carts” that can help in almost any situation you might come across. These include coolers, luggage, dollies, pet carts, stair climbers and more.
As for his numbers, his sales this year are already at $5Mill as of the filming of his episode. He projects to do $7-8Mill by the end of the year. This is up from $2.5Mill last year. Across his products he has a blended gross margin of around 50%, however on his $2.5Mill in sales last year he only saw a pre-tax profit of $250k. This was due to trade show fees, payroll, warehouse space, and other expenses. He also owns 100% of the company.
He came into the Tank looking for money to fund his inventory and a partner that will help him with further growth in the business. He has been selling products in this company for 15 years, but in 2010 he developed the Smart Cart. This product took off and he has been growing rapidly ever since. He even pulled out a $3Mill order from QVC that he said was not factored into his valuation.
This one was a little tough for me to keep up with. I echo Roberts feelings about trying to “follow the bouncing ball” and just not being able to keep up! This guy has been in business for a long time, has developed so many products, and is now seeing out of control growth that he can’t keep up with. It could be the next rocket ship investment, but it could also be a meteor that will shine bright but ultimately crash and burn. When you are dealing with so many products under one roof, things can get crazy and confusing. It’s much easier to put a value on a single idea that has proven numbers, so I can understand Robert’s hesitation.
At the same time, I am just really excited for this guy! He is so passionate and energetic! He is a born salesman and entrepreneur! Nothing is going to stop this guy! I genuinely believe that if the entire company came crumbling to the ground tomorrow, by that evening he would be out in the world selling his next idea! That’s a rare person to come across and investors are smart to put their money into that kind of person.
As the Sharks started to jump in with offers, Daymond started things off with $350k in exchange for 15% and a promise to fund all future purchase orders. Kevin then offered a $350k line of credit at 18% interest for a 5% stake. Finally, Mark and Lori teamed up to make an offer of $350k in exchange for 20% with the promise of a $2Mill minimum line of credit at 15% interest.
It was obvious that this was a tough decision for the entrepreneur. He didn’t seem to be considering Daymond or Kevin’s offers at all, but was fixated on the prospect of getting both Mark and Lori. He did try to counter for lower equity and more money, but they shot him down. Finally, he accepted their original offer.
This one was pretty crazy and had me pausing constantly to take notes! I’m so glad it ended up working out for this entrepreneur! He now has the capital he needs to fund the business and the partners that will take him to the next level. So good luck to dbest products! I know who I’ll be going to next time I’m in need of some luggage or carts!