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tv   The Profit  CNBC  August 22, 2016 12:00am-1:01am EDT

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it's -- it's not that easy, right? yeah, that was a code red. >> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ are samantha meis and connor riley, who want to make your next trip to the coffee shop a thing of the past. ♪ hello, sharks. my name is samantha meis. and i'm connor riley. our company is mistobox, and we are here today seeking a $75,000 investment in exchange for 15% equity in our company.
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everyone loves coffee, and our company mistobox is revolutionizing the way that people discover coffee from around the world. more than 400 million cups of coffee are consumed daily in the u.s. alone. coffee has never been more popular than it is today. thanks to the boom of small, local coffee shops, we've all learned it's the independent artisan coffee roaster that seeks out the world's best beans and artfully roasts a product that is far superior to anything you could find in those big box stores or huge national coffee chains. but the question is, how do we discover these coffees to brew in our own homes? lori, you live in chicago, but let's say that your perfect cup of coffee is being grown in ethiopia, then roasted in tennessee. (laughter) how are you supposed to find out about it? mistobox delivers the world's best undiscovered artisan coffee to your door every single month. each mistobox is carefully packed with four fresh roasted coffee samples from different mom-and-pop coffee roasters.
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we're coffee experts, and we hand-select only the very best of coffees to send to you. after you brew and pick a favorite, you can head back to our online shop, purchase the full-size bag, and we'll send it straight to your door. with free shipping! (laughs) we're helping these small, local coffee roasters compete with the big guys while introducing you to amazing coffee from around the world. sam's gonna pass out some fresh brewed coffee in our misto boxes for you guys to enjoy. is it sort of like doing, like, the brewery or wine by the month or something like that? it's like a book of the month. right. right. it's a subscription service. it's a subscription service. exactly, mark. tell us what we have in front of us. so, yeah. you guys have some coffee brewed from next month's mistobox. these coffees were grown in el salvador, guatemala, ethiopia, and tanzania, then they were sourced and roasted in washington, oregon, california, and colorado. okay, so, um, coffee's good, all right? (samantha) great. i'm trying it. it's delicious. i'm a coffee drinker. what's the cost of acquiring me as your customer? because i've never heard of you before, but i may be a customer. how are you gonna get me? so, so far, our cost of customer acquisition
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has been $4.60. oh, yknow that number? yes, we do. it's very rare that somebody with an online strategy walks in here and knows that number. yep. you get special bonus points for that. very good. i will take another sip then. great. thank you. (lori laughs) (mark) where are you guys from? we're from scottsdale, arizona. okay. how'd you get into this? so, we actually met at the university of arizona, and we started the company out of the entrepreneurship program. are you dating? we are not. no, we're not dating. just friends. did you ever date? no, we didn't. never dated. how would i hear about you? where are you targeting me? so right now we're really targeting the coffee community and the foodie community. we were surprised to find that the foodie-type people, not just the coffee people, were really receptive to us, because they really want to learn more about coffee. so we're targeting the bloggers, all of the different publications. all right, so grassroots. yeah. exactly. walk me through the pricing model. i hear about you. i say, "mistobox." right. so you can go back online... okay. and we have three different subscriptions, and then three different gift subscriptions. yep, just mistobox.com. what do they range in price? they range $15 for a monthly subscription
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and $14 for 6-month subscription and $12.50 for a year-long subscription. and then what do i-- how do you charge me more? so, if you get a year-long subscription, you pay $150 on day 1, and then that equates to $12.50 a month and you get that for the full year, and then at the end of the year, you're recurrently billed for the following year. there's no other cost? whether i keep it, send it back, there's--that's it? no matter what you do. and if you get a monthly subscription, it's recurring billing until you cancel. and on that $150-- let's work with that example. right. so it's $150. i paid you up front. what's your margin on that over the year? so our margin is anywhere from about 30% to 45%, and we get the coffee from the roasters at a steep, steep discount or for free. how are they giving it to you for free? (mark) so then--yeah. why would they give it to you for free? we're a sampling department. because we are putting their product in the hands of prequalified consumers that want to try new coffees. so, the advantage to the coffee guys is, i can't get my coffee out there. you're offering me a distribution channel. (both) exactly. and the hope for me as a coffee guy is that lori will start buying my coffee. (both) exactly. is that right? right. does a time come when i, the customer, says,
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"oh, that coffee from ethiopia is all i care about"? you know-- "that's all i want. just ship me that. "stop the madness on the mistobox coming every month. "don't want to see that anymore. just send me my ethiopian coffee"? mr. wonderful, as long as you stay our customer, we're happy. we'll send you your favorite coffee on your schedule. so say you want it every two weeks, every week-- yeah, well, that's what you said. you just go back to your web site and order whatever coffee you like, right? you go back to the web site, you order that coffee, and you can choose the recurring schedule you want, whether that's-- so it's an auto-delivery. it's an auto-delivery. auto-delivery every month. every month. it ships to you whatever you choose. exactly. yeah. and you can switch at any time. there's no commitment. 'cause your margins-- what percentage convert from that? they start on the sampler box. what percentage go to the full-time-- we have about-- right now, we have about 15% of our customers coming back online and ordering coffee. so we have two revenue streams-- both from the subscription and from the return online sales. how long have you been in business, and what have you done to date? yes, so we've been operating for about four months now, going into our fifth month. and we have a growth chart here for you guys. we just hit our 700 customer mark. so in the past 21 days, we've grown by 370% and about, uh, 551 customers. so, connor, when you say
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"customers," can i assume that those 700 people are buying some type of subscription? exactly. yes, they're buying a subscription... (robert) okay. whether it's a monthly, 6-month, or annual. and what you invested in cash so far? we actually had--are you guys familiar with kickstarter? sure. yeah. we had a successful kickstarter campaign where we raised just over $9,000. that's what kind of kickstarted us, and then we've each invested about $6,000 of our own money. that's it? just--yeah, it's just been-- it's just us two. um, we've been doing this. and you guys just box, pack, and ship them yourselves? we do it--everything-- everything ourselves. everything. web site, design... yeah. what's the game plan? what are you doing with the $75,00? what's the plan over the next 12 months? so with the $75,000, we really need to--to grow. we're gonna need to move into a bigger space. we're in her 1,200-square-foot apartment where she's living and we're working. we obviously don't have the room that we need. and we also need to hire a little bit of help. ♪ you're just a crapshoot. right. all right, here's an offer for you. ♪
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♪ ♪
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all right, here's an offer for you. $75,000 for 25%. okay. we'd like to hear if there are any other offers. (groans) you didn't tell them how many beans you want... no, it's just a-- a month. it's straight equity, and-- and it's either going to zero-- i've invested in subscription- based companies before. some have been successful, been acquired. others went to zero immediately 'cause they were run by idiots. okay.
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i'm not sure which ones you are yet. we're not idiots. we're not idiots. (laughs) so here's what i really like about your business. coffee is the number-one drug in the world. exactly! exact-- you're getting there. i think, uh, you've done a great job of finding a business... (chuckles) that i never would have thought existed. i just don't see the long-term vision of the market. i'm not the right partner, i don't think. uh, i'm out. thank you. okay, thank you. i'm not a coffee drinker, so i'm not the right partner for you. i wish you good luck, but i'm out. thank you, lori. thanks, lori. i'm--i'm not a coffee drinker, myself. i'm not into subscription model. i'm out. thank you. thanks, daymond. thank you, daymond. mark, you seem to know a lot about s.e.o. and about the subscription model. i-i think this might be a good pair. samantha, mark thinks he knows everything about everything, so... (laughter)
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so what do you think, mark? i'm not all the way there yet. okay. well, what can we do to get you there? you can keep paying attention to him, who's not all the way there, and potentially lose the one that is all the way there. you know, if you know who you want to have as an investor, and it's mark, do that. i'm happy to retract my offer. please don't retract your offer quite yet. i'll give you 30 seconds, and then i'll take my offer back. that should add some drama to your lives. okay. so either you can convince mark to make a counteroffer-- and i'm convincible. okay. so if you really wanted to do a deal with me-- mark, we'd love to do a deal with you. mark, we would really love to do a deal with you. what can we do to get you there? um, i need more equity even than what kevin offered. okay. because you're gonna take more time... ten seconds. and you're gonna take more effort from me. if you're looking for just the best deal-- can we ask for a standstill and go talk in the hall? (lori) 30 seconds. (daymond) 20 seconds. no, unfortunately, you've got 15 seconds left. (whispers indistinctly) ♪ okay, so you're gonna need more equity?
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yes. okay. how much more equity? $75,000 for 30%. how does that sound? done. done. (daymond) nice. mark, it's a deal. sorry! (daymond, robert, and lori) ohh! appreciate it. yeah, this will be a lot of fun. congratulations. thank you so much. thank you. appreciate that, mark. thank you so much, guys. thank you so much, guys. you shoureally be thanking me. this was a great experience. you're awesome. i just held his little tootsies to the fire and helped you immensely. thank you, guys. it was great meeting you. thanks, guys, so much. we really appreciate it. that was an amazing experience. good luck. all right, guys. thanks, guys. so the reason that we went with mark at 30% rather than kevin at 25% is because sam's got a crush on mark, and i like sports, so it worked out perfect. ♪ earlier this season, abby jordan and becky app failed to make a deal with the sharks for their online ice cream company ecreamery.
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we want the capital for a production facility. i don't really think you need a partner here. why don't you just keep doing what you're doing? thank you for tasting it, for trying it, for loving it. let's see what they're up to now. ♪ there were absolutely some tears after not making a deal with the sharks. but business is now booming, and we're swimming in orders instead of swimming with the sharks. we just got 30 more orders of pistachio. before "shark tank," it took us five years to do $2 million in sales. since "shark tank's" aired, we have done a half a million dollars in sales in just three months. we have hired three new chefs. we've hired a call center to talk to each and every customer that comes our way. would you like to start out with an ice cream or a gelato base? we're forecasting to do $2 million in the next year, and by 2015, we're gonna be a $5 million business. oh, this is so great. it's bigger than our whole store! with the spike in sales, we have been able to fund our own move into a production facility. absolutely perfect. there's enough space for really everything we were thinking about. we've been touring different locations, so we're hoping very, very soon,
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we'll have that production facility completed. shark bait? all right. although we didn't get a deal with the sharks, it really taught us that a win can sometimes be disguised as a loss. and now we are really starting to make a dent in the ice cream business. ♪ when heartburn comes creeping up on you. fight back with relief so smooth and fast. tums smoothies starts dissolving the instant it touches your tongue. and neutralizes stomach acid at the source.
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hello, sharks. my name is michael j. desanti. mike d. for short. i am seeking $130,000 in exchange for 40% of my business. and my business is the squirrel boss squirrel-proof bird feeder. (sharks laughing) squirrel boss is the world's first interactive squirrel-proof bird feeder. now, we know squirrels are extremely cute, and they need to eat, too. but they are 5-pound gorillas, and they are hogs! but with squirrel boss, if you see a squirrel on your bird feeder, and he wears out his welcome, just press the remote control and deliver a harmless static-shock correction. (sharks laughing) that is similar to walking across the carpet and touching something. buh-bam! (laughs) it tingles, but it doesn't hurt you.
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who would like to challenge the squirrel boss? whoo! (laughs) you are up! please come and grab this squirrel boss. (robert) mike, can i please zap her? you may. (laughs) ♪ go ahead. ready? aah! (laughter) you know what? i missed it. would you guys do it again? hey, big shot, why don't you try it? yeah, come on, cuban! (lori) yeah! what if there's two squirrels on it? okay. ready? that's fine. two squirrels! (zap) (laughter) it's... (speaks indistinctly) kaboom! everybody! come-- okay, i gotta try it. you must feel this. (laughs) i don't feel anything. (zap) (high-pitched voice) aah! (laughter) daymond john, you are up! (zap) aah! (laughter) (lori) come on, kev.
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no, thank you! (robert) so, mike--mike d., just to be clear, i'm sitting in my house. yes. i see the little squirrel eating. yes. i think he's had too much. i zap him? that's the whole thing. when i said "wears out his welcome"-- because squirrels need to eat, too. but that means i have to be watching the bird feed-- that's our second-biggest objection that i get all of the time in public and-- what's the first? that you have to be watching-- it's too expensive, and that's why i'm here. i have a question. let's say the squirrel, named joe... (chuckles) goes on, gets zapped. does joe then never come back again? and how many shocks can joe take? no, excellent question, lori. um... it gets boring really fast. boring? boring, meaning he won't touch it after two shocks. oh, he won't touch it? he won't touch it. but, mike, wouldn't the animal rights people get all over this? you're el-- you're electrocuting the animals. actually, they like it, because they know the alternative is lethal force. people are, unfortunately, shooting squirrels to death. there's no way to stop an animal-- is that legal? it's totally legal,
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totally unethical. there's a squirrel rehabilitator in massachusetts. squirrel rehabilitator? if he finds squirrels that were orphaned, for whatever reason, he'll nurse the baby squirrels with a bottle till they're well enough to go away. (laughs) and you know what? he said to me-- he said, "mike d., i would not own your bird feeder, but i like it, because i know the alternative is terrible." mike, is there a business here? tell--tell me the business side of it. let's get serious here. okay. we have sold $196,096. it was 4,131 units. average wholesale price-- $47.47 per unit. how much money have you put into it so far? i had an angel investor. how much did he put in? $140,000. really? how much have you paid him back? all but $38,000. good for you. and i'd be in the black right now, but we spent $60,000 on "traditional marketing" that didn't work. have you put up any of your money? i--a lot of my money, and... how much?
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thousands. not tens of thousands. do you have a patent on it? unfortunately, the--i had the worst patent attorney on planet earth. he was older than dirt. he was 15 years behind the current state of the law, so it was denied. we chose not to appeal-- was it denied because something else existed already like it? no, no, no. it says, "as seen on tv." does that say that on there? it--it does, because the news crew came to my house. so it was a news story on tv. oh, so it's a quasi-- (laughter) it's not a real "as seen on tv." well, in business, you... it's a--it's a-- (laughter) it's a imitation. ♪ (robert) mike, here's my challenge with it. sure. i see it as a quirky product. you'll sell some. you'll make a little bit of money. but i wouldn't quit my day job today. good for you for inventing it, but, uh, i don't want to get zapped again. i'm out. well, thank you. i appreciate that, but i strongly disagree. this, uh, pays for itself with the seed you save.
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it's fun every time. it's saving the lives of millions of squirrels. mike, here's my thought. to me, to zap a squirrel-- that's a little sadistic. for that reason, i'm out. guys, i really do need a deal. i can't leave without a deal. you know what, mike? it's not a product that i'm gonna put my heart into. i'm just not a squirrel whisperer, so i'm out, mike. i'm really sorry to hear that. (kevin) this may shock you, mike. i'm out. i'm not shocked, but i appreciate that. thank you. so only damon's left, i think. ♪ i'm out. i can't leave. i won't leave. you know what? put your hand on that. give me that button. you'll be gone soon. (sharks laughing) okay. thank you. (daymond) thank you so much.
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(lori) good luck. okay, have a good day. good luck. you're very clever. (robert) you know what? i think the squirrels get on there with their little hands and go, "bah!" oh, for sure. for sure! and fall right on the ground! i bet you if you went up to that squirrel and held a hazelnut in front of it afterwards, he'd have no idea what he was looking at. (laughter) i really, really, really wanted one of the sharks as my partner. i like all of the sharks in their own way--even kevin. ♪ ♪ soon, she'll type the best essays in the entire 8th grade. get back to great. sixteen gig lexar flash drives just three ninety-nine.
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next up is david glickman, who grew a hobby into a full-fledged business. ♪
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hello, sharks. it's nice to meet you. my name is david glickman, and i am the proud owner of the vermont butcher block & board company. i'm here seeking $400,000 for 25% equity stake in my business. we make the most awesome and beautiful kitchen products ever, in my opinion. my wife and i left manhattan after we burnt ourselves out in the rat race. we moved to vermont to live our lives in calmer waters. i took off my tie for the last time and decided to wear tie-dye for the rest of my life. i became a true vermontrepreneur. the bottom line-- we make premium quality products using premium quality materials, and we charge... premium pricing. can you tell i love the word "premium"? i'd like to pass out some samples. ladies first, of course. thank you. lori, you have one of our premium-grade cutting boards. it's our small size. robert, you have one of our cheese boards.
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kevin, you have a walnut salad bowl with the tiger maple rim. thank you. daymond, you have one of our medium-sized cheese trays. and, mark, you have our salad server. so you've seen the product. you've heard the spiel. who wants to join the tie-dye tribe? what's the tie-dye about? very good question. when i quit the rat race, i lived in new york city. yes. i burnt myself out. i said, "that's it. i'm gonna wear tie-dye for the rest of my life." it was just a sign of freedom for me. i don't care if you wear goat skin. i want to know if you make any money. (laughter) we are making money, kevin. okay. great question. uh, to date, we've sold $2.9 million worth of product. whoa! over what period of time? i started in 2004. last calendar year, we sold $800,000. this year, we're s-- we're slated to sell probably a million, a million 50. what are you gonna make on that million dollars? uh, we're running about 20%. what do you need us for? i need money, and i need somebody who knows business to help me grow the business. you're, uh, asking for 25% for $400,000.
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that's around $1.6 million you are valuing the business at. and you made a profit of $150,000 last year. yeah. i figured one and a half times sales. why did you figure that? let me go through my client-- my client list. daniel boulud is our number-one client. we have our retail store-- we have one retail store up in vermont where we can sell all of our odds and ends and we can test-market our product. it does about $400,000 a year. wow. internet, which is about 10% of our business. wholesale, which is about 10% of our business. uh, then we have restaurants. and we also just started talking to fleming's, which is a chain out here that you guys probably know. we're in the orvis catalog. we're in the frontgate catalog. we've talked to williams-sonoma three times. did they give you orders, or you talked to them? talked to them. 'cause i talked to guy named williams-sonoma three times yesterday. we was at a dice game. well, we talked to them. i don't know-- but then they approached me. they wanted 25 pieces for their top 12 stores. we couldn't make the demand. right now i have a-a 2,000-square-foot shop on my property. we need to move out to a production facility
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so i can grow the business. i can't keep selling if i can't produce. why wouldn't you focus on the one thing that you can differentiate yourself in being-- the best chopping block in america, made from the trees of vermont, and just focus on that? why do you need to make these? he has to offer more. thank you, lori. do you know how inexpensively these are made in asia? there's thousands of them. they are. they are. absolutely. and you know what? they crack, they drop, they're thin, they're bamboo. yeah, yeah, but they sell! they sell. yeah, kevin, you can't just offer chopping blocks. i sell to the premium market. why not? that sells--the-- the cheap ones sell to the-- to the people that want to walk into walmart and pay $2.99. okay. people--but people who are giving wedding gifts don't want to give a $2.99 bowl. they want a nice set of wooden bowls. i have-- i'm trying to figure out how you carve a niche in your space that is defendable. i think by expanding your business into all this stuff, you're going into some categories where there's tremendous competition. no. you--you know what? i don't normally jump in and speak for the entrepreneur... thank you, lori. i appreciate that. but, kevin, he can't just sell chopping blocks. why not? it's boring. that's right. because nobody wants just chopping blocks from a company. they want a number of s.k.u.s.
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he's got a retail store. (lori) yeah. what's he gonna do all of a sudden for his retail store, go, "i'll stop"? forget about it-- "i could sell tie-dye." i forbid you to talk about this topic anymore. david, here's where it doesn't add up for me. normally, when people want money, it's in order to lower their cost and increase their margin. your margin is fantastic. it is to increase our production capability. we're profitable. i can sell as much product as i can make. well, do you need machinery, or do you need staff? i do. we need space, we need machinery, and we probably need more people. nobody's brought this up, so i'm-- i'm gonna bring up something... sure. that might be a crushing blow. uh-oh. you're competing against-- you know, the new wave for all things that are cutting boards is antimicrobial boards. you're aware of that. i am. and they're extremely popular on the market. the whole point about it is, is that salmonella, e. coli, and other types of things will not... okay. leech into the board and therefore contaminate your food. that's not true. "cook's illustrated" came out with an article,
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and what they found was that plastic cutting boards kept the bacteria on them longer than the wood cutting boards did, because wood has a natural propensity to kill bacteria. i think you ought to ignore all the comments. i get that you're trying to grow this business. all you need is capital. basically, what you're saying-- you know your stuff. in order for me to be effective, it means i have to make a commitment to learn the butcher block and board industry. i don't feel comfortable giving advice unless i do the work. okay. i can appreciate that. and if anything, i-i do that too much. and so, for that reason, i'm out. i'm a hard worker. i am dedicated. i am loyal to this business. i know it has a potential to grow. i really do. you know, david, one of the things i really like about me is i'm always right. well, you think you're always right. i know i'm always right. it's important to know that, because in your case, my vision of your business is different than yours. i'd argue to you, when you actually allocate
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the time that you're spending, selling a spoon-- it's not really profitable at all. you don't agree with me-- i disagree-- i disagree, kevin. i disagree. we need to be at the full line-- why do you disagree? because-- numbers never lie, david. i'm not saying the numbers are wrong. what i'm saying is you'wrong. the only reason a business exists is to make money. you can be passionate about it-- i agree. i agree. you and i don't agree on the next direction. that's what happens in the shark tank. we don't have to. it's your business. but it's my money. i'm out. (daymond) dave, um, i-i love your passion. thank you. you have a good business for yourself. thank you. you're a smart guy, but i'm just not excited about it. i'm out. sorry. i appreciate that. thank you. well, not thank you for being out, but thank you for your feedback. david, um... make me an offer, robert. please. look, i-i love-- it's a great business. i love the story, and i think great businesses are built
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when somebody has the passion like you. but here--here's my challenge. as an investor, to give you a $400,000 investment, which is 50% of today's sales, that seems risky to me. and i don't know enough about your business to share your passion in it. i'm out. lori? i'll give you a bigger percentage. i want a partner who can help me grow my business. well... i think your work is beautiful. thank you. and i really respect and admire what you've done. but i am brutally honest. and i--my concern is the antimicrobial boards are really coming on strong, and they have been for years, and they're taking a larger part of the market. i agree, but you say that with no--with no... and-- uh, industry knowledge on that. i-i do have knowledge about it, and it's okay. i mean, i have my feelings, you have yours.
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but for me, it's not a good investment. i think it's too risky, because i don't think that you're with the cutting edge of what's really happening. and for that reason, i'm out. ♪ 40%, mark. 40%. i do everything. that's a big change, but it's not-- it's not my--not my kind of deal, david. sure? daymond? 40%? robert, 40%. i do all the work. we e-mail once a month, you give me your input. it--i-- 45%, robert. i don't feel comfortable with giving you $400,000, which is 50% of your sales. so go in with mark. $200,000 apiece. you guys each get 22.5%. you get enough skin in the game, and you let me grow the business. david, david, you're not helping yourself. i know. i know, but i-- i'm just--i'm trying, because he's sitting on the fence. well, david, how much do you really want this? would you sell 51% and give up the spoons forever? he's playing you. (lori) oh, don't-- no, i want to know. i want to know. you know what? don't even. i'm not that desperate. i want a partner
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that i can grow the business with. don't even go there. david, thank you. don't even go there. david, you're overselling now. yeah. call me on monday. thank you, guys. i guarantee you he makes no money in spoons. zero. (laughs) ♪ not very happy right now. not very happy. i'm confident in what i do. i'm confident in my customer list. i'm confident in my product, so, you know, i'll grow my business without them. ♪
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comcast. my name is carole foster, i'm from compton, california, and i live with my 12-year-old daughter courtland. my product is mee-ma's louisiana gumbo. my gumbo is a secret recipe passed down to me by my mee-ma, and it's the best gumbo you'll ever taste. mmm, that's really good. (horn honks) my family and i decided to sell gumbo on the street corner, and when we realized how popular it was, we realized we have something really good going. don't forget to say your prayers. i've sacrificed a lot for this company. we've been through a lot of struggles, my daughter and i. financially, we've gone through a lot where we didn't have enough money just to make it through the week. i've gotten a lot of interest from a major grocery chain. they want to put my gumbo in their stores, but i just don't have the funds to produce the orders and seal the deal. i hope the sharks really do like gumbo. i hope they know what good gumbo really is. i hope that they'll see that it's a good product and they want to invest in it, 'cause we really need it.
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♪ hi. i'm carole foster, creator of mee-ma's louisiana gumbo bricks. i'm seeking $200,000 in exchange for 20% of my company. you know, good gumbo is really hard to find, and so is the time it takes to make it yourself. i've been a long-haul truck driver for the past 13 years, so i've tasted quite a bit of gumbo throughout this country. besides being a truck driver, i am a total gumbo geek. a few years ago, friends asked me to make gumbo for them for the holidays, but each in a different way. and i just didn't have time for that. because even for an experienced cook like myself, gumbo can take hours to prepare. so instead, i made for them a frozen, fully seasoned gumbo base
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that they could add whatever they like to it. and so that's how mee-ma's gumbo bricks were born. now, i'd love to have you try some of the chicken and seafood gumbo. absolutely. (robert) i'd love to try. this one's seafood. all right. i'll try that one. okay. i'll try the chicken. that one's chicken. i love gumbo, carole. the seafood one is in the front, chicken in the back. okay, i'll try the seafood. okay. (robert) ooh, it's got some jalapeño kick in there. you taste that? all right. it is delicious. thank you. it is very good. who's ready to be a gumbo geek like me? carole, has that okra been frozen, that i'm eating? that okra is frozen. damn, that's good. yeah. that's really good. and i want to say to you, mr. wonderful... yeah. you are the okra in my gumbo-- slimy though it may be, it adds character, and it adds body, and it adds richness. you're describing me. so--exactly. that's why i love okra. (laughs) i love it. it's very tasty. exactly. all right.
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carole, who's the lady in the photo? that's my grandmother. she lived to be 97. she's gone to glory now, but she's the one who taught me how to make gumbo. the recipe is really inspired by her. when i buy the brick... yes. do i add more to it, or can i just serve that up as is? no. this one allows you to put what you like in it. so you've got the base? this is the base. could we see the packages? sure. sure. what do i do once i get the base, carole? you're gonna add 6 to 8 cups of water to every gumbo brick... thank you. and up to 5 pounds of meat of your choice. and how long does it take before i'm eating the gumbo? 45 minutes or less. carole, do you have sales of your product today? yes, i do. we've sold gumbo bricks at the church. (lori) wow. however, my latest success is, this has been selling at various costcos in the area for the last two years, and i have about a half a million dollars in sales. wow. in the last two years? yes. but that's being in one costco a week, for only three days a week.
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so you're setting up and serving it and presenting it? right. as a road show item. right. that's where a lot of the money that we've generated over the last two and a half years has gone to. wow. sounds like you're doing great. well... you've gotten into costco. mm-hmm. you're selling half a million a year. yes. what--what do you need money for? we need money so that we can increase our inventory and get it into more stores. i currently have a, uh, buy doc from costco. (papers rustling) and they are ready and willing to accept 15 pallets of product right now. the problem-- 15 pallets? correct. it's gonna have to be frozen, though, right? it is frozen. so is that a permanent listing, or they're gonna put it... they're gonna put it in as a permanent item. as a matter of fact, we were accepted as a permanent item earlier this year, and our problem was, we couldn't keep up with inventory. they wanted us to keep that freezer full. we weren't able to do that. congratulations. what a wonderful problem you have. (laughs) exactly. is that in costcos nationwide, or is that in just a region? no. just in the region, here in l.a. can we see your order, that you had referenced? yes, absolutely.
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so, carole, you were in costco, and you were giving out samples... correct. and people were loving it? yes. we sold 50,000 units. so do you think that you would be able to get your gumbo into the costcos nationwide? yes. costco has about 600 clubs nationwide. even if i were only able to get into a third of those stores, the numbers would be... incredible. well, tell us about your costs and what you're selling them for. that gumbo brick costs about $4 to make. okay, and that's with packaging, everything? correct. out the door. um, we sell it to costco for $9.99. can you get that cost down? uh, if i could make bigger quantities. i can only afford to make small quantities. you're doing great at costco. mm-hmm. have you gotten into any other retailers? i've not gotten into retail. we really wanna target the box clubs. because what--what they do when they merchandise our product, they put it in a coffin freezer next to some $180 boxes of lobster tails and scallops. so we-- that's smart. they're positioning just right in there. yes, absolutely.
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well, it's a actually a platform for all the ingredients... absolutely. exactly. which is even smarter. very interesting. yes, we've actually-- you have a commercial kitchen doing this, right? uh, we have a... commercial... (daymond) co-packer? co-packer, yes. carole, you obviously have a great product. you're working hard. it's obviously your life, and that's a beautiful thing. but in order to take $200,000 from an investor, particularly me, you've gotta be ready to take the $200,000. i just don't think you're ready to take someone's money and try to scale as big as you wanna go yet. so for that reason, i'm out. (whispers) okay. but the gumbo's great. thanks. i appreciate it. i came here because i need the business acumen. i don't have that. i just know that i make a great product. and it's a good idea. um, i just--i need help with that. you have decent margins. have you talked to anybody else about giving them a little bit more incentive to make the product? actually, this particular co-packer
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is willing to become the vendor of record. what their requirement is is that i pay for the packaging. and i don't have money for that. the packaging for just that order alone is about $10,000. but you made $100,000 this year. where'd the money go? we're living off of it. that's all we have. we don't have anything else. i have six brothers and sisters. we're all doing this business together. we're crowded up in one house trying to make it happen. okay. i-i-i got that. as an outside investor, how can we understand if we're actually really making money or losing money with you? yes. i need-- i'm so--i'm so busy with my guys, trying to take care of my numbers. okay. i need help in that--in that area. and you will get there... i definitely do. and you're on a great path. but as of now, i'm out. (clicks teeth) okay. any other offers? carole, by asking for $200,000 for 20%, you're telling me that your business is worth a million dollars. yes. which it isn't right now. i-i... you know, i rarely get this kind of angst
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in--in the-- in the shark tank, 'cause i'm very definitive. the product is so fantastic, but the infrastructure isn't there. and i know that that's one of my weaknesses. i definitely do. yeah, it is--it is a problem. (robert) carole, i, uh... i love gumbo. if it's on the menu anywhere i go, i order it. the spicier the better. okay. here's the thing about food-- the margins are actually not very good. once you scale, it's a very challenging business to run. 'cause the margins get smaller and smaller, and you've really gotta run a tight business. mm-hmm. i'd rather see you take your equity, bring in an industry partner who can guide you to that next step, 'cause you'll always find the money. i'm out. i understand. i understand.
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lori, what are you gonna do? i think she wants more gumbo. ♪
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you don't have to worry about the science. you can just put it in your pie hole. mmm peanuts, pecans, cashews. i'll have another helping of science, please! so whether it's energy or heart health you're after, start optimizing your nutrition with my specially mixed nutrition. planters. nutrition starts with nut. three sharks are out. lori and kevin are carole's last chance to get a deal. lori, what are you gonna do? well, i have to say, i love you, and i love your gumbo. thank you. i was not even hungry, and my gumbo's almost gone. (laughs) okay. so that's a testament to your gumbo. okay.
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um, but i'm kind of on the fence. because $200,000 is a lot of money. as kevin said, your valuation's at a million. and, uh, that's kind of hard for me. i-i-i don't think you're there. this is the smartest thing i've ever come up with to do. it's my life. it's all that i do. um, right now, um, i'm homeless. i'm staying with friends right now. and when i'm not with them, i go over to my sister's house and stay with them. and if not, i have a van. (chuckles) but... where does your daughter live? she's with me. she's always been with me. and by her being with me all this time, she knows how to write a business plan, she knows how to, you know, check prices on different items that we use. she's, uh, she's been there for me. when i decided to become a truck driver and reinvent myself, i felt empowered, because i was doing a "man's job."
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but i was taking care of my baby at the same time. and that's why i'm here, because i'm here for her. this isn't right. i'll put up half. this is crazy. what do you wanna do? she's got a product. i know. wow. come in with me. so the offer is $200,000 for 50%. for 50%? what you have is a lot of drive and a great product. the problem is you don't have a business. and we're gonna fix that for you. absolutely. i need that. and so we feel it's important that we run it, and we help to make sure that we make you very, very successful. oh, my god. (laughs) you're not worth a million bucks, but we're gonna put you in business, okay? that's what happens here in the shark tank if you're willing to work. that's what makes america great--people like you.
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thank you so much. wait a minute, carole-- do you accept their offer? i take your offer. you got it. oh... get ready to work your ass off. yes! and make a lot of gumbo. yes! yes, yes. (laughs) thank you. (lori) you're welcome. you're welcome. this is great. this is great. thank you so much. put you back in business. tell costco we're coming. all right. oh, my god, yes. thank you so much. that's terrific. oh, god. congratulations, carole. thank you so much. awesome. oh, i appreciate it. oh, god. i don't know what to do. congratulations on finding a heart in the grinch. (laughs) okay. no, no, no. that was shocking. no, the food's good. i'd never do this if i didn't like your product. it's a great product. thank you so much. i appreciate it so much. thank you. congratulations. congratulations. oh, yes! congratulations. aah! she called you a slimy something, and... i like that. (laughs) what do you know? kevin has a heart. let's not go that far. she had me from the moment she called me slimy. (laughs) this deal means everything to us. this means that we can actually have a real life now. um, it just means that we can move forward,
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and i can provide for my daughter. l-that was pretty good. -mike: [ laughs ].. lemonis: ...a custom drum company can't find the rhythm to meet supply and demand. mike: our turnaround time is six to seven months. -lemonis: six to seven months? -mike: yeah. that's created a backlog of unpaid bills and serious cash-flow problems. chris: we don't have enough money to cover payroll for next week. lemonis: i mean, you're kind of closed. chris: yeah. lemonis: the owner and his right-hand man are out of sync. louie: the lack of communication, i think, between chris and mike, it's like -- it's just...exactly. lemonis: and the two brothers who started this business have split up... scott: what did i ever do to you? mike: i really don't want to get into all that. lemonis: ...causing a whole nother layer of crippling issues. if they can't fix their process and their relationship... mike: fixing the business and this [bleep] is hard enough. lemonis: ...they'll be forced to close their doors forever.

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