Original subtitles

Tonight on "Shark Tank," Kendra Scott,

the founder of billion‐dollar jewelry brand Kendra Scott,

joins the Tank.

I am one of 20 women in the United States

to be a founder of a billion‐dollar brand.

Our mission is to create a community

that represents all women.

‐Girl power. ‐Hell yeah, sister.

Breakfast and snacking just got a whole lot simpler.

‐Wow. ‐Who's gonna help me

save this planet one pup at a time?

You know this is gonna be a $100 million brand.

This is a home run.

If you don't nail this deal,

you don't know if there's more to come.

I'm gonna change your life.

‐Oh, my gosh! ‐Barbara, I'm sorry.

I like her more than I like you now.

First into the Tank is what the entrepreneur hopes

is a better and more affordable experience

when shopping for intimates.

Hi, Sharks. My name is Elly.

I'm from San Francisco, California,

and I am seeking $500,000

in exchange for 5% of my company...

‐Hello. ‐Wow. Wow.

‐...BootayBag. ‐Ha.

BootayBag is an affordable,

comfortable, and convenient way

for women to shop for underwear.

I started BootayBag because I was sick of going to the mall,

the semi‐annual sales,

the clearance bins, the sales clerks.

I wanted to give women that sexy feeling

of sliding on a new pair of underwear

without all the hassle or expensive price tag.

So, here's how it works.

You select how many pairs you want to receive in a month,

your size, your style option,

and for just $10, we'll deliver your new favorite undies

all without leaving

the comfort of your couch.

Our mission is to not only

bring a necessity to women at an affordable price,

but to create a community that represents all women.

This brand is made for women, by women,

and with every pair purchased, we donate to women in need.

So, Sharks, who's with me

in making all women feel good in their undies?

‐Terrific pitch. ‐Amazing.

Elly, is it a subscription service?

Yes, it is. It's a monthly subscription.

You're not committed to anything.

So, you can get one pair for $10

or two for $15.

You can get all four for $20.

And that's every month I burn through four underwear?

Yes, I knew you were gonna say that.

‐Yeah. ‐You can skip

or cancel at any time, but you can also go in

and switch your styles or downgrade or upgrade.

Two pair ‐‐ ‐Are these the samples?

‐Yes. ‐Can we, like, look at them?

'Cause I'm dying. ‐Oh, sorry, guys. Yes, yes, yes.

‐I want to ‐‐ ‐Dig in. Everyone gets some.

And this is how I get it? Yes, yes.

Like, in this ‐‐ "Hello, babe, I'm here"?

"Hello, babe, I'm here." Yeah.

So, okay. And you're manufacturing the underwear?

Yes. So, it's my design. I stuffed them extra,

so you guys have bralettes in there, as well,

which I know will look fabulous on you, Mr. Wonderful.

‐Wow. Sexy. ‐Is this making you ‐‐

You know, Elly, there's been a lot of ‐‐ Lookit.

‐Mark's blushing over there. ‐I'm not blushing!

He got a little G‐string, that's why. He's like ‐‐ Yeah, I feel like

I see you blushing a little bit.

So, how did you get started in ‐‐

I mean, where did this come from?

I know, right? Well, my parents are entrepreneurs.

So, although I thought I was not paying attention my entire life,

I clearly was.

But I also was, like, always a hustler,

always liked money, like, lemonade stands ‐‐

Girl power. Oh, my God.

Hell yeah, sister.

We have to talk. Yes.

When I turned 18, my mom owns a hair salon,

and I spent all my summers kind of, like, helping her out,

and I just felt like, "This is kind of my path.

I'm gonna take over the salon."

And I kind of stumbled upon going underwear shopping

and waiting for the five for $25

and going and digging through the bins, and I was like, "Ugh.

This is, like, such a terrible shopping experience,"

and I was like, "Hell, I'm gonna just do this.

It's gonna be easy."

I had a website within two days

and borrowed $300 and ‐‐

‐$300? ‐When was that?

2016.

And since then, what has sales looked like?

Year to date, we've done $3 million.

‐$3 million? ‐Wow!

‐Son of a gun! ‐Wow.

‐$3 million? ‐Yeah.

‐Amen, sister. You're amazing! ‐Thank you. Thank you.

That's amazing!

Well, you've inspired me.

I actually saw your panel four years ago,

and you rocked my world.

‐Oh, cool. ‐So, I have to say,

like, being here is so cool.

You know, you started with $300,

but how much have you raised since then?

So, I've raised none. I have no debt.

Wow.

You've raised no dollars?

No. I'm hoping to raise today.

How did you pay for the inventory?

I just went to the store,

I got clearance underwear, and I did the packaging.

And then I graduated from that,

and then I was like, "Oh, online,

where can I buy bulk underwear?"

And then I found a manufacturer, and I did private label,

and I graduated all the steps, and, actually, my demand

forced me to figure out how to produce my own line.

Best story I've ever heard so far, okay? I love this.

‐Wow. ‐But how did people find you

at the beginning? ‐Yeah, so,

we have a huge following on Instagram.

And how did you garner that following?

It's all actually user‐generated content on our feed.

So, we have real women posting.

We don't edit our content, so it's as you come.

Just one last number. Yeah.

Cumulative lifetime sales.

Yeah, so, $15 million to date.

‐Wow. ‐I mean, $300

to $15 million in sales. ‐Unreal.

It really is. ‐Elly! You're a rock star!

Guys, I was so nervous! I'm so excited! Thank you!

You should be! The one thing that I think

is getting everybody so excited,

'cause it's really worth talking about,

is every other subscription service...

‐Yeah. ‐...has to raise a ton of money

early on to acquire customers. ‐Right. Right.

You should be rolling in the dough. So, yeah, so ‐‐

Why are you coming here and asking for $500,000?

Yeah. So, our production actually is ‐‐

I use a broker right now.

In a proper scenario,

if I did have the direct factory connection,

I would be able to have shorter lead times.

I'm working on extremely long lead times, because I'm just ‐‐

What are your lead times right now?

They're about eight months to nine months.

‐Whoa. Eight months? ‐Wha‐‐ Eight mo‐‐

So, you're designing a product,

and you don't get it in‐house for eight to nine months?

‐Yeah. ‐Why is that?

So, I'm kind of in their mercy.

I'm very small on some of the scales that they do.

Why don't you partner with the manufacturer

so that you never have inventory?

Well, that's why I'm kind of here.

- That's why she's here, yeah. - You know, it's my first go

at all this, and so I'm kind of just figuring it out as I go.

So, you really haven't made any money yet.

I mean, we net 5%.

Whoa.

All Sharks are still in,

but they have discovered

Elly only makes a small profit on the huge sales

of her lingerie subscription business, BootayBag.

So, you really haven't made any money yet.

I mean, we net 5%.

Whoa.

Successful clothiers that have real scale make 15% pre‐tax.

‐Yeah. Yeah. ‐You're at 5%,

so there's 10% of cost in here,

and I think I'm gonna find it all in the inventory.

Yeah. And so you got to get rid of that.

You got to partner.

It's worth giving up some of this equity to your manufacturer

to solve this problem. ‐Yes.

Yes. You nailed it.

But in order to make money, I need to be big,

and I have manufacturing problems.

You're serving almost as a retail store for them.

‐Right. ‐They manufacture,

then they wholesale it to you. ‐Right.

And you're kind of at their mercy,

'cause you're not going direct to the factory.

Yeah. Totally, and they know me, as well.

So, in the four years I've grown up with them,

they've never been "a partner" to me.

How are they treating you?

I'm just curious. ‐Terribly. Absolutely terrible.

‐They treat you terribly? ‐Unbelievable.

Are they men? ‐Yeah, are they women or men?

Um, men, yes.

‐What a surprise. ‐Yeah.

They have never, ever been flexible with me.

They've made me take product

that was actually, you know, stained or damaged,

and, like, I just had to do it.

They don't ‐‐ You should have just sent it back and said no.

Well, they know that every month,

I have to, on the 15th, put out product.

So, this is a real pain point for you?

It is, yeah, and that's why I'm here.

You know, Elly, I love you, first of all.

Oh, my God. Cool! I love you, too!

I am so impressed with you.

Thank you.

What you have created with $300,

how you have harnessed the power of social media,

you're creating a movement around your brand...

Yeah. Hell yeah. ...which is so unbelievable.

You know my story. I started with $500

out of my extra bedroom. I know.

The first few years,

my margins also were not what they are today,

because I wasn't able to harness great manufacturing deals.

I didn't have the production I needed.

But over the last 18 years,

those things have been able to change, right?

I don't want you to have to wait 18 years.

And I didn't take an investor

for the first 10 years I ran my business.

I did it on credit card debt, lines of credit, LLCs ‐‐

I mean, you name it. It was hard, right?

And one of the things I wish I would have done earlier

is bring in somebody as an investor

who had a vested interest that could have helped propel me

quicker than taking 18 years,

and I think I'm the Shark that can do that for you.

So, if it's okay, I'm gonna offer you the $500,000.

But I want 10%.

I understand subscription.

We've done that in our company. We know how to create community.

You're a female founder,

and there's not enough of us out there. Hell yeah.

I am one of 20 women in the United States

to be a founder of a billion‐dollar brand.

So I'm gonna give ‐‐ My money, I like to call it Kendra Cash.

‐Nice. ‐It's a little unicorn magic

in there sprinkled in for that 5%.

‐Okay, Lori. ‐Alright? Alright?

I want you to become a unicorn, too,

and I think I can help you get there. Thank you.

Thank you. I love that.

May I make you an offer, as well?

I could solve the two real problems you have.

You don't get any money out of this business,

and that's a problem. That's what business is for.

I have a business that's been in business five years ‐‐

Grace & Lace. They sell like gangbusters.

I'm only a 20% partner,

and last month, I got a $700,000 check.

‐Nice. ‐They're so cash‐rich,

and they're in the exact same business you're in.

The other problem is you don't know how to manufacture in Asia.

You just don't have that experience.

Because I have that experience at Grace & Lace,

I can deliver all that to you immediately.

And so, I would like to give you the $500,000,

but I really would have to take 20%.

Well, I appreciate everybody's offer.

I didn't even say thank you. ‐Wait a sec.

Wait a second. Hold on. Wait, Barbara, what if we went in together?

At 20%, there's enough for each of us, not at 10%. At 20%. At 20%.

I would also like to make an offer.

I look at this from just the sheer economics.

I know where the 10% to 15% is missing.

It's in the manufacturing.

I also have logistics in Vietnam.

I've got three companies manufacturing there now.

So, the right price for me is to give you the $500,000.

I was gonna say 20%, but to get competitive

and kind of sit in the middle between these offers,

I'm willing to throw you, you know, a very good offer

that I wouldn't normally make.

I know. This is crazy.

$500,000 for 15%.

Just say yes, and we'll move forward.

I'm gonna go out, Elly,

because I think you've got some good choices.

Elly, there's one other thing to consider.

‐Yes. ‐I have Rounderbum,

men's augmented underwear.

Yes, you do! Remember them?

And I tell you, I'm the only Shark

in the underwear business right now,

and I make a lot of men happy.

Well, listen, I'm so proud of you

and everything that you have accomplished,

but Kendra and Barbara have made you a great offer,

so I'm going to go out.

You have to decide. We have one offer here, okay?

Kendra and I combined for 20% of your business for $500,000,

and then you have this guy, whatever he's gonna talk about.

Why give up 20%? That's so greedy.

And the valuation on that is ‐‐

But look what you're getting.

Um...

Would you guys go up to $700,000 for 20%?

‐Wow. ‐For ‐‐

$700,000 for 20%?

‐Yeah. ‐Who's a Shark?

Absolutely not.

‐Yeah. ‐No.

You're not worth $10 million today. You're not.

And when you bring on the right team,

that is worth more than you could ever put on a check.

Right.

But you have to feel comfortable with that, too.

Yeah.

You know, 20% just feels a little high,

and I'm not undervaluing you guys at all.

I appreciate both of your offers.

It just ‐‐ It was a little bit higher than I wanted to go with.

I'm willing to do it at 15%. Okay.

I'll go back to my original offer

if you're not comfortable with that.

I'll do $500,000 for 10%.

Excuse me. Did you just abandon me?

I abandoned you.

‐It sounds like ‐‐ ‐Wow.

I abandoned you, because I could see in her face

that that made her feel sick and made her feel less than

and made her worth feel not valued, and I can't ‐‐

So, you're willing to do it for 10%?

With my original offer.

I think 10% is fair

based on my experience. Done.

Let's not even think about it anymore.

Yes. It's done?

‐Done. ‐Whoo!

‐Wow. Barbara. ‐I love it! I'm so excited.

Sorry. I appreciate you guys, everybody.

Don't you apologize. Terrific partner. Oh, my gosh. Thank you.

Congratulations.

Thank you guys. Thanks.

‐Congratulations. ‐Thank you.

So excited.

Sorry. Barbara, I'm sorry.

I like her more than I like you now.

I wanted Kendra. I got Kendra.

We're ready to take over the world,

one booty at a time, baby.

Whoo! Yes!

I would have liked a piece of the Bootay.

You're not getting any Bootay.

No Bootay for you. No Bootay for you.

I was raised in a little town in Wisconsin,

one of six siblings.

My mother and father were both extremely hardworking

and have been incredible role models for me my whole life.

Since I was young, I was kind of awkward.

I was almost blind in my right eye,

so I had these big, huge glasses that I wore.

Kids sometimes bullied me,

but it taught me so many things to overcome obstacles.

I was lucky enough that I have this amazing aunt

who is a fashion director of a department store.

I would go into her closet, and fashion was magical to me.

You could put on a beautiful piece of clothing

and her jewelry,

and you could transform into anybody you wanted to be,

and that's when it hit me ‐‐

This is the business that I wanted to be in.

At age 19, I started my first company.

It was The Hat Box. I sold every kind of hat.

I realized very quickly

that this business wasn't going to be sustainable.

People wearing hats again like it was 1940 didn't happen.

I had to close that first business. It failed.

It was one of the lowest moments of my life,

and in retrospect, I look back to it now,

and it was also the greatest gift I was ever given.

What was so funny is I made jewelry for my hat store,

and it would sell the day that I'd put it in the case.

But I was so headstrong that the hat thing had to work

that I wasn't paying attention to what was working.

So, in 2001, I started to create some jewelry.

I went store to store in Austin, Texas.

I sold my sample set, and I got a check for $1,500.

And I walked in the front door,

and I remember saying to my husband,

"Baby, we got ourselves a business."

I loved beautiful semiprecious stones,

but I couldn't afford what was out there in the marketplace.

And I thought, if there was a way

that I could make beautiful hand‐crafted jewelry

but at an attainable price point for women,

that that might be something that they would want.

Today, Kendra Scott Jewelry

is valued at over a billion dollars.

To be one of 20 women in the United States

to be the founder of a billion‐dollar company

is absolutely unbelievable.

Right now, only 17% of venture capital

goes to women‐founded companies,

and I think it is my responsibility,

along with all the women of this generation,

to start to change that.

It's been a very hard year for everybody,

but to be in this seat and to see this energy and excitement,

entrepreneurship is not going anywhere.

There is nothing that is going to stop the drive

and the passion of an entrepreneur.

And I can't wait to meet these entrepreneurs,

see their business ideas, and help them achieve their goals.

Next up is a convenient and delicious way

to ensure you don't miss out

on the most important meal of the day.

Hi. My name's Nahum Jeannot,

and I'm seeking $150,000 in exchange for 10% equity

in my company, GoOats.

Sharks, we all know

breakfast is the most important meal of the day.

But in your busy morning, the last thing you want to be doing

is spending time making breakfast.

And let's be honest ‐‐ A granola bar is not a meal.

Your morning meal should be effortless.

We all know oatmeal is a hearty way to start the day,

but who wants to stand here at the stove

and whisk this slimy mess?

Who wants to juggle a spoon and a bowl as they drive?

Well, breakfast and snacking just got a whole lot simpler.

Let's get rid of this mess.

‐Whoa. ‐

Sharks, today, I give you

the first‐ever oatmeal in a ball.

Same ingredients you might put in your oatmeal at home ‐‐

milk, butter, sugar, steel‐cut oats.

We're doing the work for you,

but we're making them bite‐sized, handheld,

in a heat‐and‐eat format.

It's so simple to prepare, for creamy oatmeal within minutes.

It's that simple.

Who's ready to try GoOats' oatmeal in a ball?

‐All I need to know. ‐How did you start making

oatmeal balls? How did this start?

At 16 years old,

I had my first opportunity to work in a restaurant.

I started off as a busboy, then a food runner.

In the middle of a shift on a Saturday night, a cook ‐‐

I guess it was too busy. A cook walked off the line.

The owner comes running in.

She's like, "Hey, I need a cook."

And that was over 16 years ago, and I never looked back.

So, basically, after that stint in the restaurant,

I decided, "Okay, this is what I want to do with my life,"

and so I embarked on my culinary journey.

I got to work at awesome places

like Four Seasons Philadelphia, W Hotels,

and most recent, Hyatt Regency in Tysons Corner.

‐Wow. ‐And so, I was the head chef.

They asked me to write a breakfast menu

that our guests could easily pick up,

walk around the hotel with without making a mess.

The response that I got, I was like, "Wait a second.

There's something different about this one."

And that's ‐‐ So, that was in 2015.

I'm like, "You know what? I'm gonna share this

with the rest of the world."

Nahum, I have to interrupt you. I love that story.

This ‐‐ I'm an oatmeal lover.

Ah. This is better than oatmeal.

It is so good. It's really, really, really good, man.

It's crispy on the outside, and it's creamy on the inside.

Let me just tell you ‐‐ I don't eat breakfast.

I'm not a breakfast eater. I would eat this all day.

And I'm always running late...

Yeah. ...'cause I have three boys.

And getting them out the door in the morning is a nightmare,

so we'll do cereal bars or something if they're ‐‐

You know, I'll have breakfast sometimes served,

and they never have time. They're getting their backpacks.

They're throwing their stuff in. Yeah.

So, this is really cute as a package,

but the whole point is, is that you've got to heat it.

No. So ‐‐ So, wait for this one.

‐Okay. Waiting for it. ‐Wait for it.

That box can go into the oven and be baked.

‐Wow. ‐What?

‐Well, there you go. ‐The reason ‐‐

Okay. ‐Just like this?

Yes. Just like that. Yes.

How long do you have to bake this?

How long does that take? ‐So, from frozen,

it takes about 10 to 15 minutes.

Oh. But it says microwave for 30 to 60 seconds.

Wait, you can microwave it?

‐That's the microwave option. ‐Mark.

When you're hungry and you want something you trust,

and particularly if I could take something like this in the box,

pop it in the microwave for a minute,

grab and go and drive and eat, 'cause I'm a driver‐eater.

Me, too. It must be a Texas thing, don't you think?

‐Must be, right? ‐Yeah. Must be.

Must be. And so, that's efficiency to me.

So, do you sell them like this or only like this?

So, right now, we ‐‐ we're selling them in the pouches.

Oh. Wow.

That's what we created.

They're being sold currently in Whole Fo‐‐

This is just for ‐‐ But that keeps them good, right?

Where are they being sold? These three, when you say 170 calories,

which is what it says here... ‐Yes.

...is that three, or is that ‐‐

‐That's for three. ‐Okay.

How quickly can you get the boxes out?

‐It's already set up. ‐Okay.

‐So let's talk about your sales. ‐Sure.

First year, we did $13,000 in sales.

And what year was that?

2017. 2018, we did $57,000.

Okay. And 2019?

2019 was about $54,000 to $57,000.

It was pretty much flat.

And how are you selling them?

March of 2017, I walked into a Whole Foods.

At that time, Whole Foods was allowed to bring in

local products in their region.

And so, while I still had my full‐time job,

I'm going into production during the week ‐‐

Making them yourself?

You're putting them in the package

and delivering them to the stores?

‐Yes. Yes, sir. ‐At least you're hustling

to see if there's any proof of concept, right?

Exactly. I'm proving the concept.

‐Is it selling through? ‐Yes.

So, you're working a full‐time job still?

I got laid off in March due to COVID.

All our hotel business left.

‐Oh, my. ‐I know for a lot of people,

that would be, like, a negative.

I was actually ‐‐ I looked at it as a blessing...

‐Yeah. I think so, too. ‐...you know, from God,

because I get to work on GoOats full‐time.

So, what do you sell this bag for?

I sell it into distribution at $2.66.

‐That's all? ‐Yeah.

And what does it cost you to make?

$1.35.

Well, that's the problem. You're not charging enough.

They sell it for $4.99.

That's not enough.

‐Okay. ‐That is not enough.

Everything above your cost has to have $1 added to it,

'cause you're not making enough margins to scale this business.

I'd like to make you an offer.

I'll give you the $150,000, as you asked,

but I will have to have 25%.

Ouch.

Okay. And the second thing ‐‐

I'm gonna help you with the big box stores.

Once you start getting into big box stores,

you're gonna have slotting fees.

Just getting your phone call met, it is a nightmare.

Very few people are able to navigate that and do it well.

So, for that 25%, you will have my help on that,

and I know that landscape like the back of my hand.

So, $150,000 for 25%.

What do you say? ‐Do I have the option

to kind of, like, hear out if there's anything else?

I appreciate your offer.

No, I don't want to be ‐‐

I really don't care for to be shopped around,

but you can certainly give me a counter if you wish.

So, I would ‐‐

Nahum, this is a moment of focus,

because the risk you have is, if you don't nail this deal,

you don't know if there's more to come.

‐Burn that. ‐If there isn't,

you're giving her tremendous leverage.

So, you really need help, buddy.

I mean, you really do.

Why don't you be quiet, Mr. Wonderful?

I do need the help, but ‐‐

And I love Barbara.

For that amount of equity, like,

I was hoping that maybe I could ‐‐

Like, who's your best friend on the panel?

You know, who do you get along with the most?

Like, could you pull them into it?

Well, let me tell you who I don't like.

I don't like Mr. Wonderful at all. Oka‐‐ Okay.

But I love Mark 'cause he's a billionaire.

Now, what does that have to do with it?

My hope is that, like, I can ‐‐

I was hoping we could have a conversation.

If we're gonna go that high in equity,

like, maybe you could bring one of your friend‐‐ Like ‐‐

Let me tell you what's wrong

with having two Sharks on a deal.

You wind up immediately forming a committee.

I have to check ‐‐ Let's say I bring Mark in.

I check with Mark.

Mark says, "Hey, let's see what Barbara thinks."

It goes back and forth. I try to call Lori,

it takes me two weeks to get a return call,

and that's the truth, okay? She's so full of it.

But then I call her husband,

and he calls me back,

'cause he's always wanted to date me.

So it goes on and on and on.

‐Bubba! ‐That's amazing.

I don't blame him. So, you're better off with one Shark

in the same way you're better with one wife.

You can hyper‐focus on her and make her happy.

‐Of course. ‐I can make you happy.

Okay.

Do you have a counteroffer?

Would you be willing to do 150 grand

for 15%?

No, it's just too low.

What do you say we compromise at 20%?

Big moment for you here.

You get this shot once.

Okay.

Bingo! We got a deal.

‐You made the right choice. ‐You made a great choice.

‐You made the right choice. ‐Great product.

‐I know we can't hug, but... ‐Congrats. Such a good product.

‐...I'll hug you in spirit. ‐Love your product.

Great job.

‐Love you, baby. ‐Great job.

Barbara believes not only in me, right,

but she also believes in the product,

and that's who I want on my team,

and the joke's gonna be on all the other Sharks.

Next into the Tank

is an eco‐friendly solution to a heaping problem.

Hello, Sharks. My name is Tracy Rosensteel,

and I'm from, Barbara, New York City.

‐Yeah. ‐

I'm here seeking a $250,000 investment

in exchange for 12% equity in my company.

So let's get down to "business."

We all know that dogs...

well, dogs poop, and they poop a lot.

There's an estimated 22 billion pounds of doggy doody

dropped each year in this country alone. What?

Ew. You know what that makes me think, Sharks?

That is a heaping, huge mound

of stinky... opportunity.

So, what happens to all that waste?

There are millions of pet parents

who can attest to using single‐use plastic bags

that are discarded and end up in landfills each and every day.

One common denominator of every product that's on the market

that's "eco‐friendly" is plastic.

Sharks, allow me to introduce you to Pooch Paper,

a paper alternative to plastic dog waste bags.

Pooch Paper is already recycled, non‐chlorine‐bleached paper

that's 100% compostable,

100% biodegradable,

made right here in the USA,

and manufactured using renewable energy.

So, in three very simple steps ‐‐

simply take the piece of Pooch Paper,

grab your doggie's doody, no matter how big or small...

...twist the sides of the paper,

which, by the way, on both sides is grease‐resistant,

and then toss in the trash.

So, Sharks, nature is calling,

and Pooch Paper is picking up.

Who's gonna help me save this planet one pup at a time?

That was great.

‐This is amazing. I love it. ‐Tracy ‐‐ Tracy, big issue here

about this, okay?

I'm gonna tell you a quick story,

and then you'll have to answer this question.

Okay.

When I first moved to Boston ‐‐

It was maybe the first week I was there ‐‐

I was up at 4:00, I had my lights on in the kitchen,

and a man with a Great Dane was wal‐‐

It was February, and the man was walking the dog.

He looked around,

and our eyes met,

and I knew at that moment, he was very unhappy,

because I saw him.

I saw the steaming ‐‐ And he had to pick it up.

And that piece of paper

would not even pick up half of that steaming tower.

Alright. So, these are 12x12.

Later this year, we'll be releasing a SKU that's 15x15,

so larger. ‐Now we're talking.

‐Yeah, which makes sense. ‐That's my question.

So, if you have a really big beast,

and it's laying down serious traction ‐‐ A pony.

Are you talking about you, Kevin, or a dog?

Yeah.

‐I love it! ‐I like her.

So, for me, when I walk my dog, I can't be carrying this.

So, what I like about my poop bags right now

is that they're in a very convenient little holder,

so when they do decide to go, I could just grab it out, right?

Right. And how do I hold these?

So, I've partnered with somebody who has a product,

and I just resell it,

and it's a 3x3 canvas pouch, zip‐pouch,

and then it has a snap that you can put on your leash,

you can put it on your belt buckle,

your wrist, or your stroller. And you sell those?

I do sell those, yeah.

Tell us about you. What's your background?

So, like Kevin, I've spent 20 years on Wall Street.

I work actually in trading floor technology

on the Board of Trade. ‐I get it.

Wall Street, dog poop. Same thing.

But I'm interested, Tracy.

You know, concerns flow away when you have sales.

Numbers. Are there any?

Yes, there are.

So, we have been on the market for about seven months.

Sales since inception are just shy of $50,000.

$50,000.

So, Tracy, what does one box cost,

and what does it cost you to make?

So, it costs me $3.66 landed.

I wholesale it for $6.99.

It retails at $12.99. ‐Got it.

That's a 48% margin.

Okay, so because you're from Wall Street,

this is gonna be very easy to do.

$250,000 for 12%.

I'm just ‐‐ The leap of faith to give you a $2 million valuation

when you've only got $50,000 in sales,

you see any problem with that, Wall Street Tracy?

I don't. I think that we're set to reach at least $400,000

by the end of this year.

We are now in 82 stores nationwide,

and we're selling online,

and then we're about one week away

from launching in 1,061 stores for Target nationwide.

Wow.

Tracy, I mean, it's a great business for you,

but it's not something I get excited about.

Congratulations, but for those reasons, I'm out.

I think your price point is high compared to the competition,

the common competition, which is plastic,

and I think that's an obstacle.

For those reasons, I'm out.

I think your mission is fantastic.

I think that to bring on a partner,

it doesn't seem necessary. You really know your stuff.

You're doing all the right things.

I don't think that you need to give away equity.

I'm not gonna give you an offer

because I just don't think you need it.

I'm out.

Okay, Wall Street Tracy,

I'll make you an offer in two ways, okay?

$250,000 for 50%, so we're partners,

or I'll do it for a $1 royalty in perpetuity with no equity.

Hmm.

Okay, so, I like the in‐perpetuity idea

with no equity position very much.

‐Yeah. ‐$1 is a bit steep.

Nope. I'll tell you why.

You see, our interests will be 100% aligned

if I'm getting a royalty,

even though I don't own any of the business,

because I'll do everything in my power to increase sales.

Just to show that, you know, what my thinking is,

'cause I have other deals with royalties,

Wicked Good Cupcakes just paid me

their millionth dollar royalty.

I own no equity. Our interests are totally aligned.

It's the biggest royalty deal in "Shark Tank" history,

and if you ask her, she's very happy.

So, those are my offers. I've given you two structures.

Pick one. ‐

Yeah, honestly, I think it's a good offer.

She's out. What are you listening to her for?

No, I'm saying it's a good offer!

Can you believe it? I never say that about you.

I mean, Tracy ‐‐ You got to sell 1/4 million of these.

Put him to work for you selling ‐‐

You've solved a problem.

I mean, you've solved a big problem,

and you are helping the earth.

So, thank you for that.

And people love their pets,

and they will spend crazy money on their pets.

So I think you're onto something,

but I do think that

Mr. Wonderful's offer is fantastic.

I think he'd be a great partner for you.

He's a better Shark for this, so I'm out.

What do you want to do, Tracy?

‐I'd like to counter. ‐Go ahead.

I do very much like your in‐perpetuity deal, no equity,

but it's going to put a damper a little bit also

on my short‐term cash flow.

‐Tracy understands cash flow! ‐She does.

‐I like it. ‐She does.

No, no. I'll tell you why it won't ‐‐

because I will be doing two things.

I think I got to figure out a way

to lower your costs somewhere.

You got to pick one. I'll do either deal.

Alright, so it's non‐negotiable if we do ‐‐

Non‐‐ No.

Then I accept.

‐You're taking the royalty deal? ‐Which deal?

‐The royalty deal. ‐Done.

‐Yes. ‐Done.

‐Thank you. ‐Kevin gets the deal!

‐Kevin! ‐Good job, Tracy!

‐Hallelujah. ‐Congratulations.

‐Congrats. ‐I'm very much excited...

‐Thank you. ‐...about working with you,

Wall Street Tracy.

Congratulations, Tracy. Well done.

‐Congratulations. ‐Thank you very much.

Thank you.

This is a home run for you.

No, I think it's good.

For Kevin to come in right now

at such a critical moment,

but I still am in a position of protecting 100% of my equity,

and Kevin's also on the book with me in perpetuity.

Next up is a scientist

who's developed a healthier way to snack.

Hello, Sharks.

My name is Dr. Juan Salinas,

and I'm the founder and CEO of Perfect Life Nutrition.

Sharks, I have a PhD in food science.

For 25 years, I created snacks

with some of the largest food companies in the United States.

The problem was, none of the stuff we made was healthy.

We only made stuff to taste good.

Being that I'm also a certified sports nutritionist,

I decided to make something better.

I want to introduce you to P‐nuff Crunch.

It's the first nutrition‐based crunchy peanut puff snack.

It's not only delicious,

but it's also healthy and nutritious.

But, Sharks, why do I care about that?

'Cause I'm not just a doctor.

I'm also a former competitive bodybuilder.

Now we're talking.

Now we're talking. Oh, excuse me!

And I care what I put in my body.

And so should you.

Oh!

I like this pitch.

Sharks, it's made from high‐quality

plant‐based protein, healthy carbohydrate, and fiber.

Now, these components are essential

for long‐lasting energy and satisfaction,

but they're also good for, uh, building muscle...

Cut it out.

Oof! ...and staying fit.

Oh, oh!

If Kevin eats this, is he gonna look like you?

If I make a deal with Kevin,

I will have you look like this in three months.

Sharks, I'm seeking $300,000

in exchange for 10% equity in my company.

Now, who's ready to get fit...

‐Whoa.

Oh.

‐Wow. ‐...and tough...

Oh.

‐...with P‐nuff? ‐Ohh!

Okay, so, try them all, right?

No, before that, I'm gonna give you $300,000 for 10%.

Oh, my, oh, my. Okay, let me calm down.

So, you have three flavors there.

The original is the orange,

which is roasted peanut. Mmm.

The other one's a roasted peanut and cinnamon,

and then, we have a roasted peanut and cocoa.

How much sugar is in this stuff?

3 grams in the original, which is very low.

What's the price for these at retail,

and what's it cost you to make?

So, retail, we sell between $3.29 and $3.99,

which is in line with everything else on the healthy snack area.

‐Okay. ‐It costs $1.70...

‐$1.70 landed? ‐...to the distributor.

It costs me to make 75 cents.

Hello! Okay, $1.70 to the distributor.

55% margins.

‐75 cents, all in? ‐All in.

Okay, you have 3 grams of fiber, 5 grams of protein.

‐Yes. ‐Calories aren't bad,

130 calories. So, that's all good.

This is what's so cool about this product, right?

It's beyond the healthy snacking.

It goes into nutritious snacking.

So, the protein is high‐quality complete protein,

which for a plant‐based product is very difficult to get.

Juan, did you say you were a doctor, nutritionalist,

and a bodybuilder?

‐Yes. ‐What's your story?

So, I came here when I was 16 years old.

I'm from Honduras,

and I came really to realize the American dream.

I didn't know English.

I flew right into Newark, New Jersey,

and I wanted to go back home.

I don't blame you.

My dad really instilled into us

that education was the most important thing,

and that's what I did.

I went to Rutgers University.

I got my degree there with honors.

Then I got my Master's in food science

and a PhD in food science.

‐Wow. ‐Wow.

I worked for the largest food company in the United States,

then I worked for the second‐largest food company,

and then I became the go‐to guy

because I was combining chocolates with gels

and puddings and bars and cereals.

So, you were a formulator?

I'm a formulator. If you have a food company,

I know how to make your stuff.

To me, this is almost like a dessert snack.

‐Right. ‐But you're selling this

next to potato chips.

Where is this sitting,

and who are you distributing it to right now?

Yeah, so, on the shelf,

it actually sits next to the healthier options.

And we sell through distributors right now.

We're in 450 stores.

We're actually also overseas.

What do your sales amount to?

That's a wide distribution. Yes.

So, last year, we did $104,000.

Let me tell you a little bit about ‐‐

That's not that impressive in the snack category.

It's not. But I started 4 1/2 years ago with this brand.

Now I own a manufacturing facility,

and there's a reason for that.

The peanuts, it's a great product,

but my core manufacturers hate it.

They hate it because it contaminates

everything else that they make in the same line.

‐Oh. ‐Right?

Because of the contamination of peanut oils, right?

Correct. It got to a point

it was like, "I need to buy my own line,"

because there isn't any company in the East Coast

that could make this product.

And we didn't get going until 2019,

and, therefore, that's why the sales are there.

So, because you got kicked out of facility after facility,

you decided to open your own facility? Yeah, so I decided

to borrow $250,000 from my brothers.

Wow.

And I put in my own line.

So, you put 250K into that?

And $135,000 of my own, so $375,000 total.

And what's your business been like year to date?

‐You said you did ‐‐ ‐Oh, we're $65,000.

So, what, you've done $65,000 halfway through the year?

Right. COVID‐19 had a big effect on us.

It sounds like you're gonna be flat

if you do another $100,000, $110,000 this year.

$200,000 by the end of the year.

$1.5 million by next year. ‐But it's hard to get excited

about valuing this business at $3 million,

even though you're a very credible entrepreneur

in this space.

Plant‐based snacks right now are a $35 billion business.

I get that.

‐Growing a 9% ‐‐ ‐I don't have to tell you,

the snack business is primarily shelf placement.

And at eye level, you see all the guys you used to work for.

Yeah, it is brutal. It is brutal. They control that space,

and they don't like giving up shelf space to anybody.

Is there anybody else

who is making a peanut, plant‐based puff?

We're the only manufacturing that can make this product.

That's one of the reasons why I'm here

looking at you guys as strategic partners.

My strength is not in marketing or sales.

I don't know. I think you did a fantastic job

when you came out. ‐

I don't know about ‐‐ Right?

So, I'm gonna tell you a quick story.

One day, I come home, and these things are in the pantry.

My wife had bought them.

So, I do what I always do ‐‐ gluten‐free, 130 calories.

I ate the whole frickin' bag.

I loved it. My wife was so pissed...

Wow. ...because she couldn't find it

anywhere else. Who knew?

I wanted more. So, I'm gonna make you an offer,

and it's either yes or no.

So, I'll give you the 300K. I want 25%.

Whew!

I'm gonna change your life.

All Sharks are still in.

Juan is seeking $300,000

for a 10% stake in P‐nuff Crunch,

a healthy peanut‐based snack.

Mark is offering $300,000 for 25%.

You just got to let me know, right?

Because it's gonna be worth a whole lot more.

Listen, Mark, I know you know

this is gonna be a $100 million brand

in five, six years. Right, but not just with you.

Mark, I would love to work with you.

I know you have other brands that are just in the same area.

I know I can even help you with these other brands.

Trust me. I know food. I know food science.

How about 15%?

No.

No. It's just not worth it.

I got a load of money.

So it's got to be worth it for me

to grow this into something special.

And it's gonna take time, because I'm gonna be the one

out there going on all the podcasts

and doing the interviews and mentioning it.

That's the difference.

Will you meet me a little bit more in the middle?

I'll tell you what.

I'll increase the cash to 400K for the 25%,

'cause it's got to be worth my while.

‐Juan, are you crazy? ‐Wow.

I've been working with Mark for over a decade now,

and I've never seen him more excited about a product.

What are you waiting for?

That is an amazing offer.

Juan, there's nothing to think about.

20%, Mark.

Come on.

Let's do this.

Wow.

20%, man.

$400,000 for 25%, Juan.

Ah, Let's do it.

Let's go!

$400,000 for 25%. Yeah!

Wow, that was scary.

‐Good! ‐I'll get naked. Come on.

‐Scary. ‐You don't want to see this.

‐Yeah, yeah, yeah. ‐Oh, my God.

‐I don't want to embarrass him. ‐I love that. I love that.

Congrats, Juan. We're gonna make a lot of money. Amazing.

We're gonna make a lot of money. That's a great deal.

Juan, I'm gonna invite you to my beach house

to give you my best advice.

‐Thank you, guys. ‐Thank you, Juan.

‐Congrats. ‐Great job.

Yes! Got him.

So, my parents really sacrificed a lot for me to be here today.

They have given so much for me

just to be here right now.

They sacrificed so much to send me to school.

It's been 35 years since I got here,

and finally, you know,

you get to a stage where you're just like,

everything ‐‐ all the work and all the sacrifices

are finally working, you know?

They're coming to a point where you're just like ‐‐

Yes, this is a big milestone.

And there's much to do, much more.

And they're gonna be so proud.

I can't wait to tell them.

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