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 GUPPIES: The Johnson Family
THE COMPANY: Flipoutz
WEBSITE: flipoutz.com
SYNOPSIS: A silicon bracelet that holds 5 personalized coins that kids wear, trade, and track online at the flipoutz website.
SEEKING: $100K for a 20% stake
PRODUCT/SERVICE: Flipoutz is a bracelet with personalized collectors coins and a supplemental web profile that allows kids to track their coin online as it gets traded around the world. Kids can create a profile page, a blog, chat with friends, give status updates, and most importantly name, describe and track their coins online.
WHAT'S THE SKINNY?: They've sold $20K worth so far in the past six months online, also partnered with souvenir distributing company to go in theme parks, zoo's etc. It cost 69 cents to make the bracelet and 1 coin, it retails for $4.99. The coin has a code on the back, on the website you can enter that code and the coin pops up, then you can personalize the coin, write something about it, trade the coin, and create an online history with the coin and repeat the process. It has caught on with college kids already. The parents have spent $250K on website development and patent attorneys. They have a patent pending on the tracking and trading process, and they can track and trade anything related to kids collectibles.
STATS: A school of fish, a happy family of guppies swims into the tank and dangles their bated hooks in front of the sharks. Barbara is out due to the fact that she thinks the product is going to take a ton of marketing money and it's success is dependent on the applications patent and to her, this just doesn't seem to be the right application of it. Kevin Harrington doesn't think $100K is enough for the Johnson's and it's just too risky for him. The Johnson's suddenly announce that they are in the process of closing a purchase order for 25 million coins and 2 to 3 million bracelets. The company making the order will agree to pay for 30% of the inventory upfront. Daymond smells money and wants to make an offer of $100K for a 33% stake contingent on the patent. Kevin O'Leary wants to go in with Robert and shut Daymond out the deal. Robert agrees to go in with Kevin O'Leary 50/50 for the same amount Daymond offered giving the Johnson family the teamwork and funding of two sharks. But no sooner than Kevin's offer rolls off his lips, Daymond drops his equity and offers $100K for a 25% stake. It looks like the waters may get a bit turbulent in the tank for a second until Kevin O'Leary asks the Johnson family to excuse them for a moment. When the Johnson's return, the result is that Daymond, Kevin and Robert agree to come together for an offer of $100K for a 33% stake. because they see the real value in the patent. But the Johnson's have decided to counter by asking for more money! The evil face of greed has reared it's ugly head on the picture perfect family as the jaws of these little guppies snap with a counter offer of $150K for a 33% stake! But Daymond decides to step out of the deal on the counter offer and so does Robert. Kevin decides to utilize the moment to give them a lesson: "In the end, it's only about the MONEY, .... all of the time" he says. The sharks offer is a hard offer, he gives the Johnson's one last chance to take the original offer with the contingency that they clear the patent. The Johnson's finally decide to take the offer and walk away with the investment.
CAME IN SEEKING: $100K for a 20% stake.
WALKED WITH: $100K for a 33% stake.
GRADE: (Guppy): A
GRADE: (Sharks): A
COMMENTARY: Teamwork. They had a game plan, they came in prepared, and they even turned down an offer and came back with a counter (to no avail of course), but yet they've still managed to execute walking away with the investment they came for. And the kid is a rockstar! A shark in the making! Stupendous work! Good work Jake!
"Successful people make money. It's not that people who make money become successful, but that successful people attract money. They bring success to what they do." - Wayne Dyer
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 THEY HAVE GOTTEN THE SAME CAPITAL (OR HIGHER) WITH A LOWER STAKE? WHERE THE SHARKS FAIR IN THEIR NEGOTIATIONS? DID BOTH PARTIES COME OUT ON TOP? POST YOUR COMMENTS AND TEST YOUR NOODLE AT THINKING LIKE A BILLIONAIRE...........
No comments:
Post a Comment