The following are actually REAL negotiations between entrepreneurs and investors (Guppies & Sharks). The sharks invest their own money at their discretion. The guppies get devoured into a belly of finance, or spit back into the ocean of hard knocks to fend for themselves. The entrepreneurs must convince the sharks to invest the FULL AMOUNT, or walk away with NOTHING.
THE GUPPY: Stacy Erwin
THE COMPANY: Fitness Stride
WEBSITE: fitnessstride.com
SYNOPSIS: A way to get in shape while you multi-task
SEEKING: $140K for 15% equity
PRODUCT/SERVICE: A device that allows you to burn calories while not doing anything at all.
WHAT'S THE SKINNY?: They sale for $49.95, you get two sets with 36 different resistance combinations, the production costs is $10 in China. Foot locker buys it wholesale for $30. The product is in foot Locker, Lady Foot Locker, East Bay and Champs. Sales last year were $150,000 with a profit of $60,000.
BUSINESS MODEL/HOW DOES IT MAKE MONEY?: $49.95 at Foot Locker and more!
STATS: Extra-Extra! New breakthrough technology allows sharks to burn calories while floating in their office chairs lounging doing absolutely nothing. Well, not exactly but it's in ballpark range. Too bad the numbers aren't quite in close enough range for the sharks to nibble. Kevin O'Leary thinks it's a marketing nightmare and he's out. Robert is out because he thinks Stacy needs to spend hundreds and hundreds and hundreds of thousands of dollars to market the product. Kevin Harrington doesn't like the fact that there are no before and after testimonials like the other 150 fitness products he's reviewed this year. Daymond thinks Stacy evaluated the company too much and he's out on that basis. Barbara is sold on Stacy's enthusiasm and likes his hustle, but just doesn't seem interested in the product and drops out also. Stacy walks away with no investment, but I'm pretty sure that a product with the potential to help burn calories while sitting still is money in the bank for someone with a lot of capital and some innovative marketing ideas. Maybe Nike will pick it up after all the Shark Tank exposure. Who knows.......
CAME IN SEEKING: $140K for 15% equity
WALKED WITH: Free publicity
GRADE: (Guppy): D+
GRADE: (Sharks): Not Applicable
COMMENTARY: Stacey may have had an advantage with just a little bit more preparation. Maybe a few testimonials could have went a long way and helped convince the sharks. I wouldn't give up so soon on a product that Foot Locker buys wholesale though. The distribution is already there. It just needs some innovative marketing to hit the jackpot. Good luck Stacy.
"Money never starts an idea. It is always the idea that starts the money." - Owen Laughlin
CHECK OUT THE SHARK FINS SECTION FOR ARTICLES AND INTERVIEWS. ALSO CHECK OUT THE SHARK TEETH SECTION FOR HELPFUL TOOLS OF THE TRADE.
CHECK OUT THE SHARK FINS SECTION FOR ARTICLES AND INTERVIEWS. ALSO CHECK OUT THE SHARK TEETH SECTION FOR HELPFUL TOOLS OF THE TRADE.
WHAT DO YOU THINK? COULD HE HAVE GOTTEN THE SAME CAPITAL (OR HIGHER) WITH A TESTIMONIAL? DID HE REALLY OVER EVALUATE THE VALUE OF THE COMPANY? POST YOUR COMMENTS AND TEST YOUR NOODLE AT THINKING LIKE A BILLIONAIRE...........
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